Make the most of vendor relationships
Even if you’re in the smallest of small businesses (typically a sole proprietorship), you almost certainly rely on one or more vendors. A software consultant, an office supply contact, or maybe a strategy guru or even a freelancer in your field to whom you send overflow work. And if you have employees and a dedicated location, your reliance on vendors increases exponentially.
Establishing and maintaining relationships with the best among these people is worth your time. Just as you nurture your relationships with your own Customers and Clients, your vendors have a built-in incentive to go deeper than just selling to you.
The best vendors are more than plug-and-play sales people. In the right circumstances, they can be extensions of you and your team. They can pull off miracles that reflect on your business (think impossible deadlines in a pinch) and help you succeed in the short and long terms. With a little effort, a strong vendor relationship can work like a mutually beneficial partnership.
Consider these tactics for building and nurturing win-win vendor relationships:
• Be selective. Potential vendor-partners worth nurturing will reveal themselves. They’re the ones who deliver on their promises consistently, who demonstrate a proactive eagerness to learn your needs and outperform on your expectations. Choose these people, not the ones who act like they’re doing you a favor or the ones mainly interested in selling or upselling things you don’t need.
• Be clear about expectations. Have a sit-down with potential key vendors so you can both outline what you’re looking for and what you can deliver. Keep your ears tuned to the unexpected. You may be able to take advantage of expertise and synergies that go beyond the products or services the vendor already provides for you.
• Put it in writing—even if it’s just an email. Get the vendor to sign off on any informal agreements you reach that don’t require an actual contract. It’s a perfect way to confirm that you heard each other accurately and demonstrate that you mean business. If the vendor beats you to the punch and offers to summarize your understanding in writing, that’s ideal.
• Be respectful of time and bandwidth, and expect the same. Don’t ask for work completed on a compressed timeframe if you don’t need to. On the other hand, don’t hesitate to ask for above-and-beyond performance if that’s what you need. A vendor who’s willing to help you out of a jam—and follows through—is a vendor worth keeping.
• Help the vendor grow their business, and expect the same. Offer to introduce top-performing vendors to colleagues if you see potential. And invite them to send potential Customers and Clients your way if appropriate. If your company uses social media like LinkedIn or Facebook, consider endorsing each other’s businesses. But be careful: your seal of approval puts your reputation on the line. Only offer it if you’re reasonably certain the endorsement won’t come back to bite you.
• Be mindful about pricing. When you partner with a preferred vendor, you’re not dealing with a discounter. You’re dealing with someone who, like you, has an eye on the long-term rewards of a business relationship. While you might need a price break occasionally on a particular product or service, don’t make a habit of demanding it all the time. You shouldn’t have to pay top-dollar or rock-bottom. In a preferred vendor relationship, pricing should be fair.
If you have questions about establishing and nurturing key vendor relationships, contact us at Expansion Capital Group or call us at (877) 204-9203. Our small business financing professionals can help you make the most of these important alliances, so your business can thrive.