Advantage Group's John McLoughlin revealed how suppliers can stand out from the crowd at The Drinks Association's latest Network Breakfast.
Taking the latest data from the 2018 Drinks Association Advantage Trade engagement program, McLoughlin examined why it’s important for a business to understand the key attributes of successful business relationships and how to translate this into a differentiated positioning that is clear in the mind of their business partner.
Advantage Group is a Corporate Partner of The Drinks Association and one of the leading business-to-business market research companies operating worldwide. Advantage helps clients create more rewarding business relationships through benchmarking.
At the recent 2018 Australian Drinks Awards, Advantage's benchmark surveys helped determine the winners of three Supplier awards - Supplier of the Year (Diageo), Most Improved Supplier (Diageo) and Supply Chain Partnership (Lion).
On and off-premise retailers, including hundreds of participants at all levels of seniority and with all supplier-facing functions with every major retailer in the liquor industry, gave their feedback in the surveys.
Over the 10 years Advantage has been conducting its survey, it has seen a 17% increase in customer satisfaction. In 2018, the gap between the highest and lowest performing suppliers is the highest it has been since inception.
According to McLoughlin the top third of suppliers have really lifted their game. And it's paying off: Advantage statistics show that the top third of businesses are growing at around 3.7%, while the bottom third are declining at around 4.1%.
Areas that have seen the most improvement over the past decade include the use of appropriately qualified and empowered personnel, the agility of response rates, streamlined supply chain management and strong relationship building.
"So what's holding us back?" McLoughlin asked. "Category management hasn't progressed - too many suppliers are focussed on their brand rather than category growth."
He also said retailers aren't seeing a shift in brand marketing, while digital strategy is also perceived as being weak.
McLoughlin also asked attendees: "What kind of business partner do you want to be?"
He noted that retailers see up to 15 suppliers a day, which means suppliers must play to their strengths and create a unique offering.
He named four dominant positions businesses could take: availability, strategy, engagement and agility.
Engagement is about being people led and easy to working with. As an example, an Advantage survey respondent noted: "This business has great people who we can trust. They are hungry for business and work at a pace that means we can get round a table, agree on something and get it done."
Agility means having a focus on delivering to retailer strategy. A respondent noted: "This business is always my first port of call when it comes to opportunities. I know they will be up for the challenge and willing to think differently to get to the solution. They understand us and have a great track record vs others so we call them first every time."
Strategy is a focus on planning, partnering and leading the category. One retailer example was: "This business really stands out for its understanding of the category. We can rely on them to provide the insight into shopper behaviour and developing the products and promotions to exploit the opportunities."
Availability is related to excellence in supply and engagement on strategic supply chain issues. As a retailer described it: "This business has got both its demand planning and supply chain right. Not only does that mean they perform at a really high standard week inweek out, but they are also pushing us on the strategic supply chain agenda."
McLoughlin said it was important to have a dominant position among the four.
"Don't try and be good at everything," he explained. "For example, you're not going to be great at agility if you're focussed on lowest cost. Think about what your customer wants most from you."
Here are some photographs from the event:
Pictured main: Supplier of the Year winner Diageo's Andrew Clarke with John McLoughlin and The Drinks Association CEO Georgia Lennon.
The Drinks Association is a not-for-profit organisation that offers everything from industry data to targeted forums and a broad spectrum of events, publications and websites, including Drinks Trade, Drinks Bulletin and Drinks Guide. It works to build a stronger, more informed Australian drinks industry by providing commonly required services.