Honest and fair with customers and suppliers
Seeks to build lasting relationships
- The starting point for relationships is a sense of respect and the opportunity to contribute or co-create by being part of something bigger and achieve more than you can do alone.
- The intent is to go beyond a relationship that is purely contractual and transactional – this requires thinking about how that relationship is maintained and deepened and is of mutual benefit. This builds trust and trusted relationships. This is discussed in some detail as part of our discussion of the behaviours outlined in the Blueprint Framework – see: Freedom with responsibility (subsidiarity)
- The approach is to think about mutuality of benefit and how to help customers and suppliers achieve what they need and want whilst contributing to the prosperity of the business.
- For customers that may be through not selling a product or service they initially requested when it is clear to the seller that it is not what they really need or asking about how product or service design could better meet their needs.
- For suppliers this may be longer-term contracts, agreeing on reasonable margins, co-creating and co-designing products and services or providing support or insight the company has to the supplier e.g. large companies supporting smaller suppliers in their supply chains to be purpose-led by helping, enabling and empowering them be more sustainable (vs setting targets on small suppliers and not providing adequate support).
Example:
When he was running Marks & Spencers, Marcus Seiff was apparently forensic in his examination of sales margins on individual product lines. He would naturally be curious when they were too low. But he was also curious when they were too high, wanting to know if customers were being overcharged or suppliers underpaid. He had an instinctive sense of fairness and wanted trusted relationships, not transactions.
Deals honestly with customers….treats suppliers fairly
- The core actions in support of the relationships are basic honesty, integrity and delivering what is expected, such as good and safe products and services to customers and fair treatment of suppliers, for example by prompt payment.
- A sense of using influence in a responsible way, which is the stewardship ethos, leads the business to require that responsible treatment of suppliers is reciprocated down the supply chain.
- By implication, this influence towards responsible behaviour extends to customers and so efforts can be made to encourage customers to be responsible, perhaps encouraging responsible consumption and encouraging discerning buying behaviour by favouring their spending with responsible businesses.
Openly shares its knowledge to enable … better-informed choices
- One of the difficulties with relationships is the asymmetry of power and information between people. The knowledge and experience that accumulates to a successful business is an asset that can be shared generously to help people stay with the business by choice rather than through inertia, or by being misled as they simply don’t have the knowledge and information the business has.
Example:
Sharing of knowledge with customers could be:
- providing clear contractual terms
- better labelling to understand how and what materials are sourced, how damage to society and the environment in the business operations are mitigated, the meaning of different deals and tariffs and easy ways to access advice or to complain and claim compensation when it is due
For suppliers:
- access to information they need about quality standards
- information on anticipated product demand and delivery needs to help them better manage their operations and supply chain.
- The asymmetry of information is very pronounced when a customer or supplier does not know the use to which information they provide is being put. A supplier can unknowingly, or indeed be required to, provide information that can be used to unfairly undermine their own business sustainability through price negotiation or transfer of intellectual property. A customer can be manipulated by supplying data on preferences or indeed unknowingly agreeing to surveillance to gain access to a product or service. Companies have a choice to be inclusive, respectful and collaborative, or to dominate people’s lives through using customer data in return for perceived free or subsidised benefits with unexplained and unforeseen implications.