Global training organisation Kantar Consulting uses a bowtie image in their key account training to describe why. Known as the bowtie effect, this image depicts a common situation in customer-supplier relationships—where the brunt of the relationship is controlled between the seller (supplier sales) and buyer (customer procurement).
The sales and procurement people are thought to be the controlling point of contact for all their respective company functions, and they manage the relationship through their own unique set of lenses. But herein lies the essence of this major pitfall regarding the nature of margin erosion.
From the supplier side, the reality is that, besides the sales team, there are many other functions which interact regularly with their customer-opposing equals. On a daily basis, those people in the centre of the bowtie with commercial accountability for the relationship are simply bypassed by others in the wings of the bowtie as they get on with “doing their jobs.”
But what does it really mean to be “doing their jobs,” as it pertains to each of them servicing a particular customer? Is it to make the client happy at any costs? Or is it to “push back” when a customer employee keeps asking for a little more here and a little more there and doesn’t want to pay for the privilege?
How you look at customer service and, more importantly, how your team responds to it plays a huge role in retaining the margin that is rightfully yours.