23 January, 2020

6 ways to build better commercial relationships

6 ways to build better commercial relationships

The Advantage Group’s John McLoughlin has given his insights on building better supplier relationships at the drinks association’s final Network Breakfast for 2017.

After nine years working with the drinks association on the annual Trade Survey – which determines the winner of Supplier of the Year at the Australian drinks Awards – McLoughlin said he has found behaviour far outweighs technical accomplishments when it comes to the satisfaction levels of interviewees.

He said suppliers needed to stop thinking “it’s all about margin”.  

“I can unequivocably say it’s not all about margin,” he told Network Breakfast attendees.

He then played a Bananarama song – “It ain’t what you do, it’s the way that you do it” – to emphasise his point!

What drives effective commercial relationships?

McLoughlin insists trust, collaboration and communication are key to effective relationships. Providing timely, proactive communication about status, adjustments and changes rates highly with on and off trade in the Survey.

“I never hear someone say ‘these guys are over-communicating’,” he said. He also noted that the important message is the one that's received - in terms of understanding - not the one that's sent. 

When it comes to collaboration: if you love them they'll love you. Plus, showing enthusiasm for what you do and how you do it is contagious.

“If they know you’re passionate about what you do, they will become advocates for your business,” he added. 

The critical behaviours for collaborative success.

McLoughlin outlined six behaviours that Advantage has found drive successful communication:

>> Building trust

Do what you say you are going to do; be consistent and transparent; think of your business as a brand – what is your positioning, how good is your reputation.

>> Being easy to do business with

Reduce bureaucracy, simplify business processes.

>> Being responsive

Set goals and protocols around responsiveness; empower your teams to make decisions.

>> Being an effective communicator

Communicate early and regularly at both big picture and weekly level.

>> Understanding your partner’s business

Make sure you know their strategy and what are they trying to achieve?

>> Building advocacy – making your business partner your biggest supporter

Have you created the sense you are on the same team and that your success is their success?

Liquor leads the way

McLoughin praised the liquor industry for being “some of the most advanced retailers in the world.” When asked how liquor stacked up against FMCG, he noted that the grocery sector was “tougher and a lot less collegiate”.

However, he said liquor was headed for tougher times as it faced the disruption of ecommerce and the entry of Amazon into the market.   

Here are some photographs from the event: