When I blogged my earlier post on Suppliers, I received a great comment from Pierre Martell, the CEO of Martell Home Builders in Moncton, Canada, that I want to share with everyone. Their mission is to build customized homes in 99 days on budget. Their website is their primary selling tool.
To accomplish this, they use a network of subcontractors. As a start up in a very competitive industry, Pierre quickly realized how critical the performance of his suppliers was to his success — thus his 100% agreement with my supplier post.
So to attract maximum supplier cooperation over his competitors, he came up with what I think is a simple but brilliant concept. I know from experience that the single best action you can take to be a great customer to a supplier is to PAY YOUR BILLS ON TIME.
Pierre brought this maxim to a new level by creating the idea of paying all of his supplier invoices via Electric Fund Transfer (EFT). According to Pierre, this has worked to perfection and helped propel his company to formidable success in a short period of time.
Many times in my life, I have heard of a new idea and said to myself, “This is so simple, why didn’t I think of it?” This is one of them. I would have jumped on this idea in my earlier businesses. Where were you Pierre?
I can just imagine the suppliers’ reactions. They had their payments much sooner as there is no mail delivery time which historically gets slower, no clearing the check time, no running to the bank to deposit time, etc. It also clearly sends a message that this customer is committed to pay their bills on time. The end result is loyalty to the customer and 5 star service to satisfy him. Pierre tells me that as of this date, none of his competitors have adopted electronic payments. Amazing, as surely they have heard about it from the suppliers.
You might want to think of another way to employ this idea. Reward your best suppliers by creating a special club for them that you could call Suppliers Platinum Club. (My guess is you can come up with a better name.) You could spell out the criteria for the supplier performance you expect. These special suppliers will feel honored, while getting their cash faster.
This is an example of the Entrepreneurial thinking that Small Businesses need to adopt to better compete with their wealthier rivals.
Thanks for sharing, Pierre.
Photo by Sharon McCutcheon on Unsplash
