A New Discipline: Supplier Marketing
By now it is clear that Procurement is about much more than just cost savings, and as such leading organizations are continuously trying to prove its wider value, elevate the function, and build long-lasting relationships with all their stakeholders, including suppliers.
According to Dr. Elouise Epstein, Partner at Kearney, “As we think about supplier experience, and certainly from an enterprise point of view, the greatest risks to your organizations come through your third parties, your suppliers. And the greatest opportunities come through your suppliers. And so, we have to be able to get better at engaging with suppliers when we talk about supplier experience.”
This need for change has led to a new discipline within Supplier Experience Management (SXM), that is, supplier marketing. But what is supplier marketing exactly?
of suppliers say, “We find it challenging to do our best work for this customer.”
of suppliers say they find it difficult to resolve queries with their most important customers.
of suppliers would go the extra mile for their customer-of-choice.
of suppliers agree that their most important customer is also their customer-of-choice.
Supplier Marketing 101 – What procurement can learn from marketing.
Becoming a customer-of-choice
Philip Kotler, often referred to as the Father of Modern Marketing, defines marketing as “The process by which companies engage customers, build strong customer relationships and create customer value in order to capture value from customers in return.”
By flipping the script and giving the suppliers a similar level of importance as to their customers, organizations can reap many benefits. As such, supplier marketing can be defined as “The process by which companies engage suppliers, build strong supplier relationships and create supplier value in order to capture value from suppliers in return.”
Leading organizations which adopt and practice supplier marketing, understand that:
- They themselves cannot be successful if their suppliers are not successful
- By taking care of their suppliers, the suppliers will return the favor
- Their suppliers must be seen and treated as an extension of the organization, in order to become a customer-of-choice
Marketing the benefits suppliers would gain in working with the buying organization, such as providing a personalized experience, caring about their perspective and removing various friction points of the relationships, can go a long way in becoming a customer-of-choice.
What Is Supplier Marketing and Why Will It Become So Important?
In this article, we take a look at a definition of supplier marketing and evaluate how current trends in Procurement, combined with the evolution of digitalization, will shape this new way of engaging suppliers as a central aspect of supplier experience management (SXM).
The Voice of the Supplier Survey
In this white paper, we explore the results of the survey, with recommendations for priorities based on the supplier view.
- The survey results from the suppliers’ perspective
- Why considering the suppliers’ experience is important
- What makes or breaks the supplier experience
- The benefits of addressing the suppliers’ perspective
Giving and getting value out of supplier marketing
Supplier Marketing, just like marketing, is the art of seeking to influence behaviors of the target audience (in this case, the suppliers) through positive supplier experiences in a way that positively benefits the enterprise, including ensuring technology adoption, securing ongoing supplier engagement and improving outcomes. Some of them include:
- Better quality of data
- Better levels of collaboration
- Closer relationships
- Higher supplier engagement
- Lower risk and prices but higher compliance
Ultimately, supplier marketing is about adoption, engagement and outcomes, all being tightly linked to supplier experience, which is currently strained.
Did you know:
73% of suppliers would go the extra mile for their customer-of-choice.
Download the Infographic
Step into the future of Procurement with our visually captivating infographic that highlights the significance of Supplier Marketing.
Download now to discover how Supplier Marketing can bridge the divide and revolutionize your approach to Procurement.
Where and how to start?
HICX’s recent Voice of the Supplier Survey revealed suppliers need one-on-one, personalized relationships, which suggests focusing on the most strategic suppliers is no longer effective. It is only natural that a large supplier with hundreds of customers is not going to have the same wants, needs, and experiences as a small business supplier with a few customers.
As a result, buying organizations need to segment their suppliers by size, revenue, influence, industry, goals, and others. Segmentation is the foundation of marketing and is the underlying principle used in the consumer world. The same can be applied with supplier segmentation in order to:
- Scale and create better journeys for suppliers interacting with lots of initiatives
- Target suppliers with the right content, e.g. with the most suitable and relevant surveys
- Tailor experiences, e.g. with a supplier portal.
“As we think about supplier experience, and certainly from an enterprise point of view, the greatest risks to your organizations come through your third parties, your suppliers. And the greatest opportunities come through your suppliers. And so, we have to be able to get better at engaging with suppliers when we talk about supplier experience.”
Dr Elouise Epstein, Partner at Kearney
“Supplier marketing is not about being different or unique, but distinctive. So, if you are competing for the very best suppliers, to give you the best possible result, you will need to be distinctive in your appeal. You don’t necessarily need to be different, but there needs to be something about you, the way that you are, act, speak, or the way that you deal with your suppliers, that is distinctive.”
Nathan Hodges, Managing Director at TrinityP3
“Simplification and efficiency is key for the end users in both of the organizations. With the advancement in terms of the technology on one side, and the evolution of Procurement as a function and the challenges that we face on the other, we don’t have a choice. There’s no other way to be successful than to be more simplified in our approach and to be more efficient in the future.”
Manikandan PY , Procurement Digital Leader, Global Supply Chain at Schneider Electric
“Procurement is the Salesforce of the bottom line. We are selling our ability to buy stuff. We want to be the customer-of-choice because it means we are that customer that everybody wants to work with. It means we’re going to get the best deals, the best flexibility and the best working relationship, throughout the duration, with all the trust.”
Adam Brown, Procurement Strategy & Transformation at Maersk
“Supplier marketing is about the continuous desire to be a customer-of-choice. So, asking yourself ‘How can we be a friendly face?’, ‘How can we offer a friction free experience?’, ‘How can we make it easier for suppliers to do business with us?’, in order to get this status of a customer-of-choice.”
Anthony Payne, CMO of HICX