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Moving Up the Perception Pyramid

Written by: Ed Delia

Article Overview: You don’t have to be a lifelong student of an industry to know that suppliers of products and services fall into definite categories in the minds of today’s buyers. Based on perception more than reality, buyers see each industry supplier differently. Each has a role in the buyer’s mind, and each is seen at a different level in terms of perceived value.

Moving Up the Perception Pyramid

You don’t have to be a lifelong student of an industry to know that suppliers of products and services fall into definite categories in the minds of today’s buyers. Based on perception more than reality, buyers see each industry supplier differently. Each has a role in the buyer’s mind, and each is seen at a different level in terms of perceived value.

From a marketing point of view, the big question is how to change those perceptions and climb from one level to the next within your industry. But before that question can be addressed, someone has to tackle the task of defining each supplier level.

So from bottom to top, here’s how I see the “Perception Pyramid.” Of course, everyone attempting this breakdown would end up with a slightly different number of categories, and would assign certain common attributes to players in more than one category. But more or less, most of my colleagues believe I’ve structured the pyramid accurately: from “Commodity Supplier” at the low end to “Strategic Partner” at the pinnacle.

Commodity Supplier: A commodity supplier is one that can readily source a certain type of container or component, based on a customer-driven request. They’re all about price and efficiency, and wait on the demands of the marketplace to strike. To put it simply, a commodity supplier can get you what you want, when you want it, and at really good pricing. Buyers that seek out commodity suppliers are usually looking for a “deal.” They’re after a relatively generic solution, at the best possible price. While quality is somewhat important, as long as the supplied products are not severely dysfunctional, they are considered acceptable.

Trusted Supplier: A trusted supplier is one that has built something of a reputation for consistently meeting commitments. This supplier lives up to its promise, and does what it says it is going to do -- maintaining a consistently high standard of quality. This supplier is the one buyers turn to in a pinch, because they trust the supplier to “deliver the goods.”

Valued Supplier: A valued supplier is one that provides a product or solution that has direct relevance to the success of the buyer’s business. Buyers perceive the valued supplier as bringing a little something extra to the table that will help establish a true competitive edge in the mind of the consumer. This supplier is often valued for a clear understanding of each buyer’s brand attributes, and has a sense of selling through to the end-user. This being the case, a valued supplier will stay on top of potential opportunities in the marketplace and be more proactive and vocal about product improvements.

Preferred Supplier: A preferred supplier is one that lives and breathes continuous improvement. This supplier is always looking for ways to enhance product or service design and performance. From an operations standpoint, this supplier is directly linked to the everyday business of each buyer. Preferred suppliers are the clear top choice for a product or service, or in many cases, multiple offerings. There is a demonstrated excellence in operations, design, manufacturing and a depth of resources capable of providing technical support and troubleshooting serious problems.

Innovative Supplier: An innovative supplier is idea driven, actually playing a hand in driving the demands of the market. There is a continuous flow of new thinking that has direct relevance to both the needs of their buyers and to the end consumer. This supplier not only has the big idea approach to the business, but the resources and know-how required to take a big idea into commercial production. This leads to the perception of being a source of knowledge, as well as a quality supplier of products or services.

Partner: A partner is a supplier that has earned the trust of buyers to the point where there is an open sharing of information. This supplier becomes a co-creator, combining its R&D team with the buyer’s, and becoming a vital link in the buyer’s supply chain or business operation. This supplier is not at all considered an outside vendor, but rather an integral part of the buyer’s team. The lines between supplier and buyer are completely blurred. This supplier is not the clear choice of the buyer, but the one and only choice for a certain type, or types, of products or services.

Strategic Partner: The term “strategic partner” is overused and under-delivered in many industries. True strategic partners are truly a rarity. In fact, there are only a handful that meet the following criteria. A strategic partner is a supplier that actually joint-ventures on concepts with buyers. There is a complete sharing of resources that extends beyond conceptual development. There is, in fact, sharing in the success or failure of the consumer product or service. Although rare now, this type of supplier may emerge at the top of the pyramid more often in the future. This is because buyers are turning to their supply chain partners for greater assistance in meeting consumer demands.


HOW TO MOVE UP THE PYRAMID?
If you are an industry supplier, no matter what your position on this or any other pyramid defining perceived performance, maintaining the status quo is not a real option. Move up the pyramid and prosper. Stay put and be blown away by the next wave of competitors that are already nipping at your heals. All talk of perception aside, the reality of our world is that to simply keep your position within the industry, you have to adapt to changes and make improvements.

But most industry suppliers aspire to more than survival, and most want to move to the next level. Many of them, however, believe that they are so permanently type cast, that it will cost a fortune to advance. I say, “not so.”

Consider the size and scope of your industry. If it is a relatively fixed industry, that is both good and bad. It’s bad because there seems to be a bit of “everybody knows us” syndrome going around. It’s good because it doesn’t take as much effort to change what they know you for. It’s just a perception shift, and it can be accomplished in three easy steps.



MOVING UP THE PYRAMID
Step 1 - Communicate. The first step in working your way up the perception pyramid is to communicate your intention to become more of a resource. State what you are going to do, what your new capacity is going to be, what new services you now offer.

Step 2 – Keep your promise. The next is to make it real. Simply live up to your promises.

Step 3 – Reinforce it. The final step is to leverage the new reality of your company’s performance capability into a new perception of your company’s place within your industry. Now that you’ve shown that you can meet your commitments at a higher level, makes sure “everybody” knows it.

Of course, the process requires certain investments. But if yours is a competitive business, to stay in the game, you have to adopt an advance-or-die attitude. You have to invest in process improvements. You have to invest in top talent that has already helped other companies get where you want to be. And, most important, you have to make certain the world that is your industry knows about it.

None of this requires a massive investment. It requires the desire to change perceptions and a willingness to carefully invest in affecting those changes, one step at a time.

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