Improving the Procurement Customer Experience
We talk a great deal about customer experience when it comes to industries such as retail, but we rarely think too carefully about the topic when it comes to the business of procurement.
This makes perfect sense of course. Procurement is not a customer facing function in the traditional sense of the term – dealing with suppliers instead of customers. In fact, in a typical procurement interaction, it is the procurement function which is the customer and the supplier the one providing the B2B service.
However, we are now seeing customer experience becoming an ever more important part of the procurement interaction and many companies are demonstrating how focusing on the concept in this area can boost customer experience throughout the entire organization.
John Lewis Partnership
Take retail brand John Lewis Partnership for example. This is a company which, through its John Lewis department store and Waitrose supermarket brands, consistently ranks among the absolute best retailers for customer experience.
Of course, the retail buyers at the organization have been making product choices which directly affect its ability to turn a profit for many years, but an area the company had not focused on until relatively recently was the procurement of goods and services not for resale.
"Up until that point, Waitrose and John Lewis had treated GNFR with an emphasis on goods, rather than services,” said former chief procurement officer (CPO), responsible for GNFR procurement at John Lewis and Waitrose, Paul Bestford. "They had people buying consumable items and bits and pieces, but more of the procurement just happened within the business, usually undertaken by budget-holders.”
However, through a significant restructuring, procurement now serves a key role in how John Lewis Partnership delivers customer experience, in part due to procurement’s main function of delivering value for an organization. By adding value to the products and services it purchases – both through direct and indirect procurement – the procurement function at John Lewis Partners is now a completely different beast. Supporting the direct procurement of products for sale is the indirect procurement of several billion worth of products and services which add value and improve the customer experience relating to them.
Whether its product selection, marketing, merchandising, customer service features, presentation, or more, the indirect procurement function is now supercharged to support customer experience and add value to the goods for purchase procurement function.
"The purpose of that resource investment is exactly the same,” added Bestford. "We’re trying to maximize the added value to those goods for resale. The same way that our partners in branches have a role to play in maximizing the customer experience, many of our suppliers have a very similar role. There might be suppliers giving marketing advice, in call centers, in logistics. Many of these services directly touch our customers and are critical to providing a total value service proposition that justifies our customers coming to us rather than Tesco or Amazon.”
Supply Chain Customer Experience
Now we’ve seen how the procurement function can impact customer experience at one end of the value chain, let’s take a look at how the concept of customer experience is changing within supply chains themselves.
A 2021 Gartner survey of 983 supply chain leaders found that 62% are investing in technologies and other capabilities for the capture, analysis, and actioning of customer satisfaction data which is specific to supply chain organizations. Gartner claims this data points to a shift in thinking which suggests even B2B supply chain interactions should now be adding customer experience to their list of investment and strategic priorities.
"Supply chain customers today are looking for improvements in areas such as on-time, in-full (OTIF). They also expect shorter lead time and personalized products and packaging,” said Senior Director Analyst with the Gartner Supply Chain practice, Beth Coppinger in a statement. "Organizations must adapt quickly, as failing to understand and meet customer needs can result in the loss of exactly those customers.”
Like any customer experience venture, this journey must begin with customer understanding. This is perhaps why a similar proportion (60%) of those same supply chain leaders are also investing in technology which allows them to develop and maintain access to voice of the customer data which can be deployed to identify touchpoints which need attention and other key drivers of customer satisfaction.
We are also seeing an increase in the number of supply chain organizations better establishing a customer-centric culture across the entire supply network and partnering with executive peers to create alignment on where efforts should be focused to create a better customer experience up and down the value chain.
"To embed customer-centricity in the supply chain, it is important to make the customer come alive in everyday business practices,” concludes Coppinger. "For example, at the start or end of each team meeting, one person gives a first-hand account of an exceptional experience that was delivered to a customer, and the team then explores if this is something that could be beneficial to the whole organization.”
Final Thoughts
Customer experience is going to become an ever more critical arm of the procurement function as we move forward. As we’ve demonstrated, prioritizing customer experience within the procurement function can resonate up and down the value chain – creating an increase in value and profitability in both the customer facing sectors of the business and within the supply chain itself.
Improving customer experience with the procurement function is certain to be part of the conversation at ProcureCon Indirect West 2023, being held in February and March at the Hilton San Diego Bayfront, San Diego, CA.
Download the agenda today for more information and insights.