This article's topic will be controversial with some people. Why? Many business thinkers advocate that suppliers should simply work at making life easy and pleasant for customers so that they receive more and more benefits while only making minimal efforts of their own.

If your customer has an ideal business model, that's good advice. However, such advice doesn't apply if your customer could make great improvements: If your customer is going to lose market share, have problems, or even fail, you should clearly step in to help your customer to survive and to prosper. If you are tactful in such circumstances, your advice will be welcome.

Beyond that, the most demanding customers today expect their suppliers to add more value... including contributions to improved business models. What's more, you can't know how a customer will respond to an improved business model until you share a desirable alternative. You may even be receiving low grades as a supplier for not helping some customers in this way.

While customers are making mistakes, a supplier's silence is almost always harmful to customers. If you simply do whatever they ask without telling them the consequences, you'll end up with customers who will make many mistakes that will hurt them and your organization.

Here's an example of harmful supplier silence. A company owned a winery and had contracted for large amounts of grapes to be provided over many years. The company either had to turn all those grapes into wine and profitably sell the wine, or take a huge loss on the unsold portion.

The company felt that it would help if it owned a glass-bottle-making plant based on learning that in many years the profits from making glass bottles exceeded the profits on the wine for our major competitor, Gallo. Having learned that some companies had failed to make new glass-bottle plants operate successfully, the company decided to hedge its bets by forming a joint venture with a bottle-making company. Thinking that such a structure would reduce costs, the company offered the partner a cost-plus management contract to make the bottles.

On the surface, the venture appeared to work well. The company regularly won awards for innovative packages, it was able to make anything the designers specified, and the glassmaking joint venture reported huge profits.

However, the joint-venture partner failed to explain what it was costing to accomplish those results. Because of making so many different kinds of complicated bottles in small volumes, costs to make many of these bottles were enormous. In fact, the company was financially worse off than if it had not been making glass bottles... but bought standard bottles instead. The joint-venture partner didn't mind because the misguided approach increased the profits it earned while crushing the winery's bottom line. The company was doubly hurt, by high packaging costs and by paying way too much to have the plant "managed."

As soon as the company understood the economics of glass-bottle making, it was able to standardize into a very few, low-cost... but attractive... designs and to slash our costs. As a result, the plant made more bottles... and eventually the partner made more money than ever before. But I believe that partner would never have told what to do, even if the winery had continued to struggle for profits.

In other cases, customers need a wake-up call because they are harming themselves in ways they should realize on their own. A consulting client kept its consultants very busy. But the client seldom followed the advice. And not following the advice was costing him a fortune.

The consultants invited him to lunch and told him that they quit. There was no point in him paying the consultants if he wasn't going to follow my advice. He shouldn't have the cost of making bad decisions and the cost of acquiring unused advice. Startled, he vowed to do better... and he did. Within five years, he turned a net worth of $200,000 into more than $25,000,000.

Here's another example. An MBA student was taking a course intended to help him make better use of his time. After he made all the changes he learned about, it was clear that he would still be taking three times as long as he should to complete each course. Yet he was eager to race ahead and to start on a particularly difficult academic course. His professor told the student that he first needed to learn to read and write better and faster. The student agreed to study these skills on his own while starting the course he wanted to take.

There's a problem we all have. We cannot see ourselves as others see us... which is usually closer to how we really are than our own perceptions. It's as though we have a large spot on the back of our clothes that we cannot see without first removing our clothes or looking at our backs in a mirror. Anyone who sees the back of our clothes knows that we need to change into something clean, but we don't change until someone says something to us.

Many suppliers attempt to load customers with the most offerings they can at the least marketing cost for them. Such a practice will come to an unhappy end if the customer goes out of business or cannot afford to pay for what isn't really needed.

Other suppliers are quite open about telling customers ways to obtain more benefit out of working together. But if the customer's business model is going to undermine the results, such advice isn't enough for a customer to prosper.

You may also be concerned about customers reacting negatively to your making suggestions about their business models. After all, they are the customers... your kings, as it were.

Here's a good way to begin: If your customer has any kind of supplier council, ask if you may join it. If that's not possible, ask if you may speak to that group. If that is rejected, ask if you may contact people on the council.

What if your customer doesn't have a supplier council? Well, most companies have some sort of customer council. You might ask your customer if the customer council has been helpful. If the answer is positive, then you could ask if the customer might also like to put together a supplier council. You could offer to help organize the activity. Chances are good that your suggestion would be welcomed.

Once you have access to such a supplier council, you can naturally ask the members if they have thought about evaluating the customer's business model. If you are knowledgeable in this subject (as you surely are after all these lessons), it will be natural for you to be a leading contributor to the evaluation. In the process, you can propose business-model improvements that will ultimately carry the weight of the council's recommendation. Your customer will probably pay attention, particularly if you also sit on similar councils doing parallel investigations for competitors who are also your customers.

If you don't succeed in such efforts to communicate with or to form a customer council, invite your customer to join your customer council. Be sure that the other customer council members include those who have superior business models of the sort this customer needs. Choose agenda items at such meetings that will include your organization doing more to support improved business models for your customers.

You need only apply what you have learned to help create substantial cost reductions throughout the economic system that supports and benefits from your customer. If you share information effectively, at some point you should also present this very article and persuade your customer to help improve the business models of your customer's customers. In this way, you'll be able to encourage improvements in organizations that you would normally not be able to access. In doing so, be sure to let your customer know that you are happy to be a resource to your customer's customers.

What's the key point about helping customers develop superior business models? You can use zero-based analysis to create 2,000 percent cost-reduction solutions to help customers develop superior business models that will almost instantly expand stakeholders and your profits after implementation by only supplying the minimum core offering while helping them and you reduce costs by more than 96 percent or to increase social benefits by more than twenty times of what you will be spending.

Author's Bio: 

Donald Mitchell is the author of Business Basics which provides 52 lessons in how to create a new enterprise that will have 400 times more profit and 8,000 times more cash flow and value. To learn more, you can read excerpts from the book at: http://www.amazon.com/Business-Basics-Customers-Investments-Stakeholders...