Our Biggest Customer Is A Bully. Help!

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On June 20, 2014, By ,

In this month’s edition of Management Today there is an interesting article about bullying. No, not online bullying or workplace bullying, but B2Bullying.

B2Bullying is what happens when a (typically large) buyer makes continued unreasonable demands on a (typically small) supplier. In many cases, the buyer represents a significant proportion of the supplier’s business.
Management Today

Here’s the scenario:

“Our biggest customer is a bully. It never pays us on time – every piece of work we do for it has to be followed by a flurry of emails and phone calls demanding payment – and the boss of the company is rude and arrogant. If I had my way, I’d tell them to shove it, but the work we do for them represents 35% of our sales. Help!”

Jeremy Bullmore, former chairman of J Walter Thompson, is the agony aunt who dispenses sound management advice about how to handle such a client.

Jeremy’s response (you can read it here) is solid and pragmatic, but it begs the wider question about what a typical or even excellent buyer-supplier relationship should look like.

Here’s our take on the subject.

In the business-to-business (B2B) world, long-term relationships are built on a foundation of mutual trust and cooperation. Academics talk about exchange theory (think of an exchange between two equal partners rather than a traditional buyer-seller model) and equity theory (the exchange has to be seen to be fair and equitable by both parties involved in the transaction. Indeed, a long-term relationship is based on a series of such fair and equitable exchanges.

That’s not to say that from time to time one or other party gets the short end of the stick on a particular transaction, but in the long run, it evens out and both parties feel pretty comfortable with a bit of give and take. You scratch my back and I’ll scratch yours. Or maybe more accurate: “You need to help me out this time but don’t worry, I’ll make it up to you.”

Upon such transactions are long-term relationships made. But if one party (often the larger party and typically the buyer) starts to B2Bully his way or continues to usurp his position of power, the relationship is doomed and will eventually fizzle out. What Jeremy is saying in his response – if you read between the lines – is that this is a one-sided arrangement and not a true partnership and that the supplier either lay down some ultimatums to the buyer if in a position to do so. If not, grin and bear it for the moment while working towards a dissolution of the so-called partnership when the timing is right.

On the other hand, an excellent buyer-supplier relationship is on that will stand the test of time and will be based on those principles of exchange and equity. You’ll recognise the signs. The parties in the relationship trust each other implicitly and are committed to helping each other. They collaborate on joint initiatives. They innovate together. They don’t wait for RFPs to be issued – they bring ideas to each other. They have an emotional bond that makes it extremely difficult for a competitor to get a look-in.

So, what’s the quality of your relationship with your top clients? If you’re unsure, why not contact us today and we’ll check out your Customer Relationship Quality (CRQ) for you.

 

Peter Lavers is Deep-Insight’s UK MD.