Choosing the right vendor isn’t just a matter of going with the cheapest bid. Strong vendor relationships are crucial to any successful vendor management strategy, and you need to choose vendors you can collaborate with effectively.
That’s not an easy or fast process — it takes time to foster strong relationships with vendors, as these connections are built one deal at a time over years. But you can start right away by being transparent with your prospective vendors about your business goals, dedicating a manager to growing and strengthening the relationship, addressing conflicts as they arise, and giving your vendors what they need to make your relationship work for them, too.
1) Share Your Business Goals
When you start a new vendor relationship, start on the right foot by clearly communicating your business goals, vision, and expectations. Your vendor will be best equipped to help you meet your goals if they know what they are. Before you sign the first contract, ask any prospective vendor to clarify how they can help you meet your goals. Their response may contain some good advice, but that’s not the only reason you’re asking. You also need to know how their own business vision lines up with yours — and if they have any goals of their own that you can help with to make the relationship mutually beneficial.
2) Dedicate a Manager to the Relationship
You should choose a dedicated project manager or team leader to work with each vendor, including regular phone calls to check in and regular site visits to get feedback. He or she should prioritize addressing vendor concerns and answering questions, and keep communication lines open between your organization and theirs.
Because they’re more personal than email, phone calls will strengthen the relationship between your organization and any given vendor, and site visits are essential both to let the vendor know you value them as part of the team and to keep tabs on what the vendor is doing to stay abreast of your needs. You should use vendor management software to keep track of which vendors are supplying what and who’s in charge of each of them.
3) Provide Plenty of Lead Time
Whether you’re thinking of starting a new promotional event, developing new business goals, or taking things in a different direction, keep your vendors in the loop and make sure they have plenty of lead time to address your changing needs. This will minimize stress on your vendors’ part and show them that you respect their time. It’ll also give them plenty of opportunities to prepare for large orders, and offer new suggestions that might work for your changing needs. Use software solutions to keep track of what products and supplies need to be restocked and when, so you can give vendors plenty of advanced notice on new orders.
4) Refer Your Vendor to Colleagues When You Can
There’s no bigger compliment to an excellent vendor than to refer them to your colleagues. A referral is the best way to show gratitude while wholeheartedly endorsing the vendor’s work. It can help strengthen a vendor’s loyalty to your organization, and they may even be moved to return the favor.
5) Address Conflicts Head-On
Conflicts are bound to come up in any relationship, no matter how strong or how long-standing. When they do, it’s best to address them right away. Avoiding conflict will never make it go away — or rather, it will, but it will take your vendor with it.
Common conflicts you might have with a vendor include late payments (on your own part or theirs), returns of damaged or defective products, late delivery, poor product performance, and just plain misunderstandings. You can’t run a successful business when you let conflicts go unresolved. Most of the time, a respectful conversation is all that’s needed to resolve a conflict — even when you’re having problems making payments, most vendors will be willing to work with you, at least to some extent. Learn conflict resolution skills for vendor relationships and apply them religiously.
The quality of your vendor relationships can make or break your business, and that’s why it’s so important to always work towards strong relationships with your vendors. Build vendor relationships on trust, transparency, and meeting mutual needs, so you can find success together.
Ryan Kh is an experienced blogger, digital content & social marketer. Founder of Catalyst For Business and contributor to search giants like Yahoo Finance and MSN. He is passionate about covering topics like big data, business intelligence, startups & entrepreneurship. Follow him on twitter: @ryankhgb.