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Honesty Rules But Quality Rocks

When it comes to forging strong buyer-supplier relationships, it’s all about honesty. Attendees at BITAC® Int’l Luxury are learning quality is in and cheap is not chic.

Tuesday, March 23, 2010
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In an ideal situation, the buyer/supplier relationship is symbiotic bliss. After all, buyers need goods and services and suppliers need to, well, supply. Of course it doesn’t always work out that way. Like anything in life there are always challenges, missteps and unexpected change.

But most interesting is the fact that industry buyers and suppliers are reporting that the relationship between these two groups is anything but contentious. In fact, they’re getting along better than ever, according to attendees here at the latest Buyer Interactive Trade Alliance and Conference (BITAC®), which began last night at the extremely lush and elegant Fairmont Mayakoba in Playa Del Carmen Mexico.

Take the last 22 months or so, for example, as the hotel industry slipped into a deep malaise due to the sudden crash of customer demand. It put the pinch on everyone on both sides of the equation, but it’s also set the stage to reaffirm relationships and forge new ones.

In all 70 percent of buyers and suppliers say their relationship with their buyer or supplier counterpart has strengthened during this downturn. That’s according to a real time poll of BITAC® attendees taken yesterday afternoon during a panel focusing on cultivating the ideal buyer- supplier relationship. Only 9 percent said their supplier/buyer relationship has weakened.

“These have been tough times and during tough times is when we need to help each other most, said Fausto Jimenez, Director of Procurement with Grupo Posadas, a hotel company.

Warren Pearl, President of Lefroy Brooks USA agreed. “You have to work as a team to get the job done; then you are looked at as a member of the team later,” said Pearl.

So it seems that everyone is taking a “we’re in this together” approach. And that’s a good thing. However, it’s still critical to understand the fundamental thing buyers are looking for is being forthright and honest.

“It’s all about honesty,” said Mitchell Gold, Co-Founder and CEO, Mitchell Gold Bob Williams. “Customers need to feel suppliers are being honest with them. But it’s also important for us not to go to the design firms and tell them what we are going to do; we need to listen to them.”

And believe it or not, that honesty and ability to listen to the buyer’s needs will help immune suppliers from competing solely on cost. Interestingly panelists said that money isn’t really everything; it is the relationship that means the most.

Just 19 percent of buyers said the most important aspect when making a purchase was price. Quality was the number one thing sought and got 40 percent of the votes.

“There is no champagne that costs one dollar. You have to be realistic,” said Jimenez, regarding his preference for quality over the cheapest price.

The relationship with a sales representative received 27 percent while warranty/support was found to be most important by 14 percent of respondents.

When you have a strong relationship it’ll especially help if something goes wrong, said Marla Davis, Vice President Procurement & Design with Remington Hotels. “We rely on suppliers to help “value engineer” a project if funding scenarios have changed,” said Davis.

Jon Johnston, Vice President of Electric Mirror agreed. “Performance is everything and you have to work as a team to solve problems,” he said.

As a design firm, Matt Mars, Partner with Flick Mars, said that he actively seeks for suppliers to be involved in even the earliest stages of a project. It’s a crucial part of the process that eliminates many potential problems if the suppliers were brought in later in the process.

“We are a large proponent of getting involved ASAP. It gives us an opportunity to set the boundaries such as expectations and budget early,” said Mars, noting that eliminates surprises.

The more custom a product is, the earlier a supplier should be brought on, noted Johnson.

But what is it that gets buyers most excited about a supplier’s goods or services? Something new and different.

“Differentiation and innovation is what gets us excited. That’s what gets our creative juices flowing. That’s what energizes our relationship,” said Mars.

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