3 Keys to a Long Lasting Relationship (Vendor relationship that is)
Let me start off by saying, I hate the term “Vendor Relationship Management”. Like the old adage, if you have to spend time “managing and motivating” an employee, you probably have the wrong employee; I would extend that to vendors as well. I want fewer vendors and more partners.
Webster’s defines a partnership as:
A relationship resembling a legal partnership and usually involving close cooperation between parties having specified joint rights and responsibilities.
To me, that means several things. First of all “joint rights and responsibilities”, in other words both parties need to have skin in the game. If I am taking all the risk, there is no partnership. Second, it means fair contracts. If a contract has a clause prohibiting me from hiring their staff, it should extend to cover my staff as well. (I could talk forever about fair contracts, I have certainly seen some pretty one-side tomes) Third, it means, take some time to invest in the relationship. Get to know me, get to know my company. As an example, don’t try to sell me services that my company provides (yes that happens more often than you would believe). Some of my best business relationships didn’t turn into a “sale” for years, but have since become very fruitful for the companies involved. (thanks Jeff, Eric, Julie…) Finally, it means flexibility, to again offer a paraphrase “stuff happens”. When “stuff happens” be willing to talk through all options, not just rely on the T’s and C’s. During the economic crisis of 2008, 2009 I had the opportunity to work with several vendors to try to re-work the our deal to provide my company some relief. One firm, flatly refused to discuss options, even though I offered to extend the terms of the contract several years. Another firm, brought their senior executives to our offices, sat down with us, and worked through several scenarios that proved to be wins for both firms. Fast forward to 2012, I am now at a different company, guess which vendor I am doing business with at this organization?
That brings me to the second key: transparency. Defined as:
Characterized by visibility or accessibility of information.
What does this mean in a business relationship? It means both parties being open and honest about all aspects of the relationship, pricing, budgets, profit margins, goals, objectives, everything. Be honest about your services. If it is not in your wheel house, you will gain much more credibility by admitting that than you will by trying to “fake it till you make it”. Don’t try to be all things to all people. Awhile back I had a vendor calling on me trying to get his foot in the door. Coincidentally, I had a need at the time for a resource with a very specific skill set. “Of course, we have someone. They are one of the tops in the field. They will be a little expensive, but worth it.” I thought I would give them a shot. Only later did I learn, the resource didn’t actually work for them, they sub-contracted them from another company, marked up the rate and put them on my project. To make matters worse, the resource actually came from another firm with whom I do business. One of these firms was invited to our partner summit, one has not been back in my office since.
The third key is trust. Trust is:
Assured reliance on the character, ability, strength, or truth of someone or something.
Trust is probably the hardest of the three, very difficult to gain, very easy to lose. One way to earn my trust is to tell me when I am wrong. Believe it or not, the customer is not always right, especially when that customer is me! I rely very heavily on the expertise of my partners. If I am getting ready to do something you know darn well I should not, TELL ME! Along the same lines, tell me what I need to hear, not what you think I want to hear. We had a vendor a few years ago responsible for large software upgrade. We asked time and time again, if our hardware was OK. We were assured it was. Low and behold a year later, our hardware was end of life and we had to upgrade again. I truly believe the vendor was trying to save us money on the original project, but trust me, I would rather do one upgrade than two. Another quick way to earn my trust is to advise me down a path that saves me time, effort, or money even when it impacts your bottom line; even when it leads to another vendor or solution. Again, it is an investment in the long term.
By now you are asking WIIFM – What’s in it for me? What does all this get you (other than a ticked off sales manager when you don’t hit your quota)? It gets you a seat at the table as a trusted adviser. It gets you full transparency into roadmaps and budgets. And, it gets you a relationship with someone who wants fewer vendors and more partners.
The beauty of business: it’s a microcosm of life. The people in life I trust and value their opinions are the ones who aren’t afraid to tell me the truth at all times, regardless if it may result in temporary friction in our relationship. Great point about the upfront honesty garnering you respect. A seat at the table. And what goes around comes around. It’s a big world, but it’s a small one too. Each relationship should be nurtured not only selflessly, but selfishly as well as it will affect every single one you have thereafter. The poor vendor refusing to renegotiate during economic hardship should have been a little more selfless at the time…
Love learning from you. This is great. Keep it up!!
Thanks B! What you say is so true!