Creating a better supplier/operator relationship

by Ron Holub

For many years the relationship between car wash suppliers and operators was based primarily on the personal relationship between the operator and the supplier. Most operators were reluctant to change suppliers as long as they felt they were getting a good deal for products and service and liked the people they were doing business with. While some of this still exists to a certain extent today it has become more the exception than the rule. To be competitive in a highly competitive industry like car washing, operators have come to view their suppliers in a much different light. Long-term relationships are not found as easily, since operators often seek the “latest and greatest” products or programs from their suppliers rather than having a long-term relationship. The gap between the operators needs for service and products supplied has become wider and wider. While quality products are important, the demand for better service and support has become an even greater consideration than in the past. Ultimately, when both those elements exist they create a positive business experience and a better business relationship for both parties.

To understand this, look at the gap between company and customer as revealed in a recent Convergys survey. To determine what people really think about customer service, they surveyed 2,000 customers, 1,592 employees and 127 senior executives of large companies in the U.S. and the United Kingdom across 10 major industry segments (nine in the U.K.). The results tell us that we have shifted from a service economy to the experience economy, where customers are in control, brands are becoming commodities and successful companies create consistently superior experiences. Customers have more power in the marketplace than ever before, but they are harder to reach, harder to impress and more likely to take their business elsewhere without notice.

While the importance of the dynamics of this relationship is obvious, there are a number of factors, which complicate it. Many companies or manufacturers do not deal directly with the ultimate users of their products or services; they deal through distributors. For those companies and manufacturers these distributors have needs, which are as important to satisfy as those of the ultimate customers. In fact, distributors are often in a better position than the companies and manufacturers they represent to know how the operator feels about a product or service. Thus the dynamic between them and distributor often creates the climate between the distributor and the operator and the experiences that result from that dynamic.

What then creates a positive business experience? Let’s examine what both parties needs are to consider what creates the atmosphere for a positive business experience.

For the Supplier

Trust—can the operator trust that the supplier will provide them with the products, programs and service that will enable them to operate their washes in an effective manner. Many will say that trust is found in very small quantities in today’s car wash market. Rightfully so, operators are reluctant to put their trust in any supplier until they prove that they can be an asset to their business and act in their best interest. Be aware that there may be a difference between their perceived needs and what you feel are their needs. Your ability to reconcile those is critical to creating a positive business experience for the operator. As a supplier you need to not only do what you say you will do but make your efforts known to the operator with good follow up work and documented reports of it. Operators are often too busy to notice every effort you make for them. Little reminders or brief reports of your efforts keep them informed and reinforces your relationship.

Service & Support—whether it is chemicals or equipment can the operator rely on their supplier to keep them up to date and running well. Often service makes the difference between a positive business experience and a bad one. Most chemical product lines perform well if applied properly and most equipment will give years of good service is they are well maintained. I am often asked what chemical should I be using or which equipment line is the best. My answer is always the same. Even the best chemicals at times need to be adjusted and the best equipment can break down. To avoid many problems, an operator needs to find the best supplier in their area and buy their products or services.

Pricing—place a fair market price on your service or products and avoid the “different price for each customer” syndrome. It is very tempting to try to meet everyone’s demands for pricing as an easy way to gain business. Most operators like to see a written price list or structure when dealing with a supplier. It is not unreasonable to offer better pricing for those who use your service as well as your products or purchase in larger quantities but do it on an established basis. The easiest way to create a negative business experience and ultimately lose an operator’s business is to have them find out that they are paying more than others for the same service or products.

Another issue is how to deal with price increases. Unfortunately annual price increases are a fact of life in today’s world. Most good business people realize that there are times when this cannot be avoided but no one likes it. While a price increase makes it difficult to create a positive experience it can easily create a negative one. Just as an operator would become upset at paying more for the same products or services than others, they may become equally upset if they find out that they are paying more than they used to by noticing it themselves or being told by their bookkeeper. While it may be a strong test of your relationship you should always notify an operator of any increase and state the reason for it. In most cases, since most companies or manufacturers in our industry use the same raw materials, even competitors will usually have to increase pricing within the same time frame as you will.

Confidentiality—while often overlooked, no one likes to deal with a supplier that lets details of their business be known to others, especially potential or existing competition. If you want to use an operator as a reference it makes good business sense and is common courtesy to ask them for permission to do so. Most operators do not want specific details of their business to be given to others like their volume or average per car revenue. Obviously others will know they are your customer by the products they are using or equipment they have but other details of their business should be considered confidential unless they agree to allow you to reveal them. Even if they do, be sure to be specific with who and when you are going to share information with.

For the Operator

Good Communication—most suppliers try their best to keep their customers happy. It is important for them to be told when they are not meeting their customers’ needs before they decide to make a change. In most cases a supplier will try to meet what a competitor has to offer as best they can. There may be cases where this is not possible for instance not having access to a particular product or parts for a piece of equipment. If that is the case you owe it to your supplier to discuss it openly with them to see if there is a way to meet both your needs. If your supplier is really on your side they will see that you may need to purchase something from another source instead of trying to convince you that you don’t really need what you are asking for. Good communication is essential for a positive business experience.

Be Reasonable—making unreasonable requests that are beyond the supplier’s ability to meet them makes life miserable for both parties. In most cases suppliers are middle-men between a company or manufacturer they represent and the customer. In many cases they are limited as to what they can do to resolve issues unless they get the cooperation of those that supply them. It is not unreasonable to ask them to either allow you to contact the company or manufacturer directly or allow you to be involved in their conversations with them. Most suppliers are not really enthused about having their customers to have contact with their suppliers but will not mind as much if they feel that this will either support their position or help get the company or manufacturer to cooperate with them.

Pricing—I have listed this on both sides because this is a “two way street.” No one likes to play “let’s make a deal” when it comes to providing products or service. Haggling over prices could be perceived as both a lack of trust and an indication that you will always be looking for a “better deal” rather than building a good relationship and a positive business experience. While it is certainly a good practice to get the best pricing possible you should be willing to work within the pricing structure the supplier offers. You may get a better deal if you can order a little more each time or sign a contract for a specified period of time.

I have already mentioned price increases. There are times when they simply cannot be avoided. You are certainly entitled as a customer for a reason for the increase. Not many suppliers are willing to risk loss of business just to make more money from their customers. If you do decide to switch due to a price increase make sure that the supplier you decide to use offers you some concrete guarantee that they will not increase their price to you in the near future. In competitive markets, most distributors try to withhold any price increase until after all the others have made theirs. If you switch to another supplier due to a price increase only to have them do the same in a short period of time is not good business.

Pay Promptly—no one likes to hound someone to pay their bill on time. Keeping current with your account makes you a good customer—one that means a lot to a supplier. Even if everyone pays within the established time frame it is normally a 60 to 90 day period when the transaction between the company or manufacturer that supplies the distributor is paid for. Any good supplier not only pays their bills in a timely manner but, expects their customers to do likewise to enable them to keep their suppliers happy. They cannot afford to endanger their relationship with the companies or manufacturers they deal with. In the same fashion, as a customer of theirs you enable them to continue in the good graces of their suppliers by keeping your account current.

A Final Word to Suppliers & Operators

Jumping around from supplier to supplier does not create a good working relationship for the operator to depend on. If a supplier fails to look out for the best interest of operators it creates bad experiences and weakens or even destroys the business relationship. Looking at both sides of the supplier/operator relationship really can be summed up in terms of a positive experience for both parties involved. When the supplier can realize what the operator is looking for and how they want to operate and the operator can be aware of the supplier’s needs and the manner in which they conduct their business a positive experience should be the result of the interaction of the two. When both parties work toward that goal the relationship builds with each positive experience.

Ron Holub has been involved in the car wash industry for 30 years working for several national car wash chemical companies, owning a car wash and detail supply company, and serving as a general manager for a national car wash chain. He is currently national sales manager for Private Label Products for Transchem and can be reached at rholub@transchem.com.