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June 22, 2009

The Collapse of Supplier Trust – and Four Steps to Rebuild It

Published by Nick Wassenberg at June 12, 2009
Categories
  • Best Practices
  • Customer Feedback
  • Point of View
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A recent article from the Harvard Business Review states that the level of trust organizations have in their suppliers is a casualty of the economic downturn. It’s tough to disagree with that, especially considering “one-fifth [of senior business leaders surveyed] admitted that their trust in suppliers had been shaken over the past 12 months.”

It’s no secret that this trust is critical for the majority of organizations that operate in the business-to-business space, but the global economic downturn has resulted in many suppliers cutting manpower, reducing production capacity, or simply disappearing.

If you’re a supplier that’s facing shrinking margins, supply chain difficulties, and the challenges of doing more with less, how can you rebuild (or maintain) your key customers’ trust?

We’ve seen suppliers successfully build trust using these four steps:

  1. Start by getting it right
    Address the issues that you know your customers are already facing. Building trust without meeting your customers’ core needs is impossible, so put out the immediate fires and work to meet their expectations. If there are issues that will need long-term repair, communicate your plans to your customers.

  2. Proactively listen to you customers
    Collecting feedback from customers does two things: first, it lets you solve problems that you may not have known about and, secondly, it reinforces the fact that you’re working with your customers, not against them. Doing this positions you as a trustworthy supplier because you are making a concerted effort to listen proactively instead of merely reacting to issues. When possible, the most effective way to emphasize these messages is in a face-to-face setting.

  3. Act on your customers’ feedback
    Taking targeted action on what your customers tell you may seem like common sense, but it’s not always common practice. Build a comprehensive plan for action before collecting the feedback. Align the appropriate resources, instill accountability, and be diligent. Your customers’ trust depends on it.

  4. Close the loop
    This is the step that builds trust. Listen, take action, and let your customers know what actions you’ve taken as a result of their feedback. If you can’t solve all their problems, tell them that, too. Demonstrate that you heard what they said and that you’re making efforts to help them. Just taking action isn’t always enough; you need to make it clear to your customers that they can trust you to improve.


Engaging and listening to your customers is essential in sustaining their confidence that you can meet their current and future needs. With supplier trust crumbling in many industries, now is the chance to make credibility and trust part of your value proposition.

Today’s environment presents an opportunity. Taking the steps to build your customers’ trust now, in the toughest times, will pay off in the short and long term.

Nick Wassenberg
Research Analyst

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Nick Wassenberg
Nick Wassenberg

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