By Hans Schmolke
What has changed in customer relations during Covid? TIA members gave an insight that shows when you compare the areas of major challenges before and after Covid.
There were enough reasons that can seriously strain a supplier-customer relationship. Covid caused suppliers to lose up to 40% of their workforce because they were afraid of being infected in the production facilities. Where this was not the case, the supply of raw materials came to a standstill, and when supplies finally started again, prices skyrocketed. If this did not stop the delivery, all of a sudden it was no longer possible to ship. Or the customer was now restricted in his shops because of Covid in his area.
Contracts were broken at all ends, payments were suspended, orders were canceled. This leads to smaller or larger problems, depending on whether they could be repaired quickly.
‘Various COVID and climate events (i.e., Texas) caused disruption in supplies and increased lead times. We had to plan ahead and deal with delivery delays to our customers because of missing supplies.’
Communication helps in difficult situations. But that has also proven to be a problem.
‘Service provision by means of face-to-face visit can obtain higher customer experience. However, COVID-19 reduced the possibility of visits.’
But Covid had - and has - the ability to bring about profound changes that don't need to be fixed, but rather want to be respected in future business.
The bars in the picture at the top of the page show the key difference. Before Covid, the picture was clear. It was about sales, about understanding customer expectations and keeping the competition at a distance.
After Covid, the biggest challenge is no longer generating income, but rather the “new buying behavior” on the customer side. This is a problem on the way to revenue as it changes the terms of revenue generation.
‘Post covid, compared to before, has significant challenges for our product mix. We need to customize to suit the current demands and expectations.’
‘Some customers are not buying from us, some are buying differently. In order to retain business, we are dropping lead times in certain product lines and customers. In order to do this, we will make ahead and store a significant volume of product. This stresses our floor-space and our ability to store and maintain product according to our existing specifications and customer expectations.’
As one other member concludes: ‘Important is elasticity.’
But it's easier to talk about elasticity than finding the right level of elasticity at the right time. And that brings us back to the stress that this has caused for customer relationships. With all the broken contracts, there must have been a question of style that influenced many customer-supplier relationships to a greater or lesser extent.
What we see is just the business changes without always knowing the reason. But some members tell a story that goes down this path.
'The customer-supplier style of behavior during the crisis has a significant impact.’
‘The morals and the social elements have greater impact on the business than people imagined.’
The particular challenge for managers is that the "deep" changes do not follow a clear development process. They are the result of many small and large shifts and refractions of values that just happen. Where is this development taking us? One member has raised concerns on this and suggests another form of elasticity: ‘Risk management will be required after covid 19 is over’.
Because at this point, we don’t recognize all the details of the big challenges in the future. Some patterns however are already visible.