Trust – a small but enormously important word

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At the centre of our Customer Attuned model of B2B customer management lie three words – trust, interdependence and equitability. It could be argued that the most important of these is trust.

Trust in B2B customer relationships is fundamental – customers who now operate with minimal stocks for example need to TRUST their suppliers to deliver on time in full and to a very tight schedule – alternatively they enter into Vendor Managed Inventory type arrangements where they TRUST the supplier to take responsibility for stock management/replenishment.

Suppliers of branded FMCG products need to TRUST retailers to respect their brand price positioning and marketing strategies if brand equity is not to be destroyed.

Where do we see evidence of lost trust most strongly?

When the national media picked up the story of Tyrrells Crisps demanding that Tesco remove their product from shelves, enormous damage was done to the Tesco reputation. Why were Tyrrells so adamant that the UK’s biggest retailer did not sell their product? Because they did not TRUST Tesco to respect their brand and deal equitably with them (EQUITABILITY is another core foundation of Customer Attuned and a subject to which we will talk in other blogs) in the long term. We now know of many suppliers of premium products who actively choose not to deal with the major retailers as a result of lack of trust.

The ultimate reflection of lost trust came in the imposition of GSCOP (Grocery Suppliers Code of Practice) legislation in 2010 – this legislation came about as a result of a Competition Commission receiving multiple complaints from suppliers who complained not of tough negotiations with major retailers (this is expected in B2B) but a destruction of trust and ability to plan ahead through unfair, unexpected and unreasonable demands from retailers. Again the damage to retailers’ reputations through the media coverage is enormous and a legal/ombudsman straightjacket has been imposed.

Looking forward we believe that major B2B customers have realised that they had pushed trust to breaking point and that their businesses were being damaged – we expect to see them working hard to ensure that trust improves through ‘fair (but tough) dealings’ with suppliers and greater joint working in future.