In a down economy, the importance of loyalty-building customer satisfaction is crucial. While customer attrition at anytime is a problem, in a recession it can be catastrophic. In the world of foodservice supply chains, customer service also extends to trading partners, including restaurant chains, manufacturers and distributors. How well you collaborate with your trading partners affects your ability to serve your customers.

It’s always good to be reminded how valuable good customer service is. The cost of losing a customer is high and the cost of acquiring new ones is higher still. Take, for example, what the best-selling book The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value revealed more than a decade ago: Winning a new customer costs a business five times as much as it does to keep an existing one. As this historic recession loosens its grip on the economy, all businesses need to tighten their grip on high customer and trading partner satisfaction.

At ArrowStream, customer satisfaction is our highest priority in all economies-weak, strong and anything in between. The unique and collaborative approach we use when working with our customers is one of the most important ways we fuel innovation. Just as our customers depend on ArrowStream supply chain technologies and solutions to transform operational efficiency and slash business costs, we count on our customers to help us develop and refine our solutions to maximum effectiveness.

So how do we tackle the important work of achieving high levels of customer satisfaction and loyalty? First, we have adopted an everyday approach to cultivating customer satisfaction and loyalty. Not “everyday” in terms of ordinary, but “everyday” in terms of occurrence. Our entire team-from executive leadership and senior managers to help desk specialists and administrative staff-is trained to make listening to our clients a key aspect of their workday. Whether through regular client check-in calls and meetings, site visits, quarterly business reviews or reading industry trade publications, ArrowStream staff members are engaged and listening  to clients. We know that one of our constant jobs is to stay apprised of the challenges our clients face so ArrowStream can always be a part of the solution.

We believe this is a very smart approach to trading partner relationships as well. Taking time to step back and listen to your trading partners’ issues and concerns can lead to clever solutions you may not have arrived at on your own.

ArrowStream also uses regular surveys and conferences to improve our understanding of client needs. Our biannual customer satisfaction surveys allow us to receive candid, thoughtful feedback from clients into our performance, what we can do better and where ArrowStream is making the biggest difference in their operations. Because we conduct the survey twice a year, we can measure our progress and ensure we are using the insights clients give us to improve our performance.

Our Annual Customer Conference brings together ArrowStream clients from across the country to one central industry forum. Now going into our third year, the two-day event gives ArrowStream’s business leaders, developers, account managers and service professionals the chance to sit down face-to-face with individual clients to get detailed business insights, discuss needs and look at opportunities to improve solutions and results. Clients have the opportunity to share what is working well, ask tough questions to our team and share ideas for innovations and advancements. Also, in bringing the leaders from across the foodservice industry together, we create an exceptional brain trust of experts, whose ideas and industry knowledge invigorate and challenge our team.

Because supply chain trading partners will not have time to survey and conference all year long, they should take advantage of built-in collaboration systems, such as the ArrowStream Network, - the largest, most extensive trading system of 4,000+ restaurant chains, distributors and manufacturers in the foodservice industry.  Representing almost 10 percent of the industry and moving more than $15 billion of product annually, ArrowStream Network members gain operational benefits, take advantage of economies of scale and share information on product, contract, pricing, inventory and freight.

Whether your business likes it or not, your trading partners play a role in your customer satisfaction capabilities. So let them in on your plans and goals and listen to theirs. Collaboration across the supply chain only improves performance for the better of all.  And, in our constant quest to know our clients and keep them tremendously satisfied, ArrowStream has found that every tiny bit of effort that goes into client satisfaction is returned in the highest and best of dividends. The bottom line-the more you invest in improving customer satisfaction, the more engaged, collaborative and happy your clients are. And who can argue with an ROI like that?

According to a mid-February report in the Wall Street Journal a return to food-price inflation is not too far around the corner. In the article, reporter John Jannarone notes that retailers, including Winn-Dixie and Walmart, are forecasting an end to falling food prices in the months ahead and a near-term return to food-price inflation. The article explains how grocers predict that the rise in prices will likely begin with perishables, such as milk. However, packaged food prices could continue to fall even if raw ingredient costs begin to rise because many manufacturers have locked in lower raw-material prices using hedges.

For restaurant chains also facing rising prices, these predictions signal a need to find effective ways to entice customers into the store especially if customers are opting for prepackaged meals from the grocer. Restaurant chains will need to give consumers new, cost-effective options -even post recession- to lure them into the store.  A time-tested, extremely effective way to do that is with strategic, well-managed Limited-time Offers (LTOs).

LTOs have been essential to keeping restaurant chains competitive in this challenging economy. At COEX 2010 earlier this month, ArrowStream hosted an executive roundtable in which leaders from national restaurant chains discussed their challenges and strategies.  Panelist Glenn Douglas, vice president of supply chain for Einstein Noah Restaurant Group, said that his company plans on managing 10 LTOs per year compared to their usual annual average of four. 

Despite the increased reliance on LTOs to drive traffic and sales, restaurant chains reported serious inefficiencies in the execution of LTOs in ArrowStream’s 2nd Annual Foodservice Industry Survey. Nearly 77 percent of restaurant chains cited problems with LTO demand planning. A majority, 62 percent, said that difficulties in getting the right product in the right store at the right time hurt LTO effectiveness. Another 56 percent revealed that they struggled to successfully predict supply and demand - a critical variable in the effectiveness of LTOs.

Improving the management, forecasting and results of LTOs is one of the best ways for restaurant chains to effectively increase traffic, sales and profits while offsetting food-price inflation when it does return. Well-managed LTOs make restaurant chains happy, gain loyal customers location by location and allow the business to carefully synchronize supply and demand in order to maximize every dollar spent.   

Where does greater LTO effectiveness begin? With supply chain excellence and smart management systems able to deliver real-time visibility that informs, accelerates and improves decision making. And for an industry greatly exposed to some of today’s biggest X factors (commodity prices, weather, political instability, etc.), an investment in greater visibility and insight is an investment in a more flexible and responsive supply chain. What does that mean for you? Two things: lower obsolescence and happier customers. You can put a price on obsolescence but who can put a price on customer satisfaction?