STRENGTHEN CUSTOMER AND SUPPLIER INTIMACY

STRENGTHEN CUSTOMER AND SUPPLIER INTIMACY

Customer and supplier intimacy strategy use information systems to develop strong ties and loyalty with customers and suppliers. Both of its, customers and suppliers is important to firm.Strengthening customer and supplier intimacy can be an extremely effective strategy in itself. Through making transactions and conditions in general easier and more user friendly for both customers and suppliers, the intimacy of the firm and customer/supplier will increase. This offers great incentive for both customer and supplier to continue doing business with the firm.
Customers control the core of a successful firm if they are essentially denied substitute products or services and have little power. When the power of a customer increases, the ability to retain and control prices decreases.
Suppliers have tremendous market power. If a firm has only one supplier, it has little control over the price, quality and delivery schedule of the goods or services. As the number of suppliers increases so does the control of the firm over the suppliers.
Customer intimacy is a concept from marketing, which describes the ability of a supplier to become accepted and known as the regular partner with its customer. Customer intimacy creates a virtuous circle: the better the supplier knows the customer company with its objectives and difficulties, the better able he is to provide an optimal solution.
Customer intimacy is the largest source of your growth, sustainable competitive advantage, and profit. Everyone in your organization should practice it. Customer-intimate companies bring an entirely fresh perspective. They discover unsuspected problems, detect unrealized potential, and create a dynamic synergy with customers. They often merge their operations with those of their customers. In the integration of their operations, suppliers become more than merely useful
Strengthen Customer and Supplier Intimacy: apply information systems to tighten long-term relationship and create brand loyalty with customers and suppliers, including increasing switching costs.
Example:
In addition, competition becomes fierce owing to imitating strategies and encouraging new competitors to enter into the industry. However, the companies gain opportunities for brand building and loyal customer base creating. For instance, Thai Airways and Emirates increase switching costs for their customers by initiating the collection of airline miles to amplify the number of loyal customers.
The other example is Chrysler (Custom published magazine from customers’ database) and Amazon (Customers’ personal customization by book recommendation based on purchase and website visiting history)