Attention all suppliers. What do your biggest retail customers really think of your business? What do they think your strengths and weaknesses are? What are the key criteria on which they evaluate you? Do you know why they score you at that level? And is that higher or lower than your main competitors? It's amazing just how many suppliers don't know the answers. While these same people would never be without research data meticulously tracking how they're doing in the marketplace, they're happy to muddle through with no idea of how retailers really perceive them until they get the shock of their lives by becoming an ex-supplier. While many people take the view that UK retailers are a tough bunch who love beating suppliers around the head and therefore would never be shy about communicating shortfalls, it's incredible just how many major issues go unmentioned until it is too late. To cite some examples: one soft drinks supplier spent ages developing a fantastic new idea for its top retailer. It knew the concept would add to labour costs, but thought the sales increase was so great there would be a fantastic payback ­ it's a pity the retailer's key performance indicator was reducing labour costs. Another supplier wanted to identify the steps needed to grow its business with certain key customers. A study revealed that one main reason it wasn't growing was that retailers believed the supplier had reached full production capacity. They were convinced the supplier wouldn't be able to cope with any increase in volume and therefore had chosen to give additional business to a rival. The recent Grocer own label supplier survey (May 11) showed how organisations such as Yeo Valley, Robert McBride and Hazlewood got some great scores ­ yet, on some criteria, even the best suppliers were only scoring seven out of 10. It begs the question: How did the middle or lower performing suppliers score? Some retailers such as Tesco and, more recently, Marks and Spencer have recognised that by being proactive they can help suppliers (and themselves) address this issue. They've introduced formal measurement systems to rate suppliers, which help a lot but often don't explain what companies need to do to increase this rating or give an idea of how they stack up against competitors. Retailer benchmarking can answer some of these questions by sending in independent organisations to interview key customers about their suppliers. They rate firms quantitatively and are probed on the reasons for high and low scores. The process takes about eight to 10 weeks to complete and covers areas such as professionalism and proactivity, along with category management abilities, supply chain expertise and innovation capabilities. Retailers are usually happy to give up their time, provided suppliers are committed to following up the study by addressing the issues identified. They're also usually frank and open because they realise the more feedback they can give to their suppliers the better they'll become. And they'll often tell suppliers how they compare with competitors as they want all of them to get better. Firms involved in retail benchmarking then take all this input and make "external and objective" recommendations on what they should do to improve their position. But it's usually the case that many suppliers don't bother to ask ­ only about a third of medium and large companies go in for retail benchmarking every two or three years. Recently, one supplier installed a new management team to stem years of decline in the face of very aggressive competition; it had lost the number one spot (in sales terms) a few years before and faced becoming a non-player. A benchmarking study revealed that it was rated fourth out of five key players in the category and, while this was not a surprise to the new management, the study showed where it was weak and, more importantly, where its competitors were weak. It also found out that the retailers did not want the market leader to totally dominate the category (a direction it was heading). As a result of the study, the supplier changed some of its people, invested in category insight and planning, trained the whole team and approached customers in a totally different way. Two years later it was number one and, two years on, it's still trading profitably, whereas one of its competitors has gone bust and at least one other is struggling. Using retailer benchmarking also shows a commitment to your customers. Mel Bugler, md of business development at frozen ready meal supplier Rye Valley, says the process is seen as a positive sign of a progressive company. "It gave our customers the opportunity to review how we are operating versus others, consider if we are meeting their needs and communicate back concerns that otherwise might have remained dormant. In particular it showed we care and that we are prepared to take time out to get their views." Even in these tough times, retailers often don't tell suppliers about real issues they have with them ­ until it is too late. Make sure your company isn't the next one to find out the hard way. n l Andy Thornton is md of the consultancy SRCG {{FEATURES }}