By Bob Ronan

Creating strong partnerships with vendors can be an important factor in determining whether an organization achieves its objectives. Here are six steps companies can take to maximize the results they get from their vendors.

Are your vendors one of the most important reasons why your organization is successful? If not, you may have a huge opportunity to unleash untapped capabilities that are already at your disposal. The ideas in this article will help you differentiate your organization in the eyes of your vendors so they pay more attention to your problems and help you achieve better results.

1) Limit the number of vendors you use. It is hard to have “special” relationships if you have many vendors providing similar services. Smaller numbers allow you to spend more money with each vendor and build strong relationships which will result in better service. The point here is not to get to a single vendor for a specific service, because you do want to encourage competition between vendors, but it is easier to create great vendor relationships if you can focus on a few firms.

2) Take the time to get to know your vendors. Most vendors are interested in developing personal relationships, and they will often ask for your social time, with the most popular options being dinner, sporting events or golf. The problem for most executives is the time conflict; off work activities take away family time while during work activities take away work time. However, taking the time to meet socially with vendors will help you build relationships that will make your work interactions better. And, if you limit your vendors as suggested, this time commitment can be managed to a few outings a year.

3) Help your vendors grow their business. There is no faster way to a vendor’s heart than helping them obtain more business. The obvious ways to do this are to give them more work in your organization or agreeing to be a reference for them. However, helping them does not need to be so limited. You know what is going on across your company, and you have friends at other companies with problems they need to solve. Have you ever picked up the phone to tell one of your vendor partners that there might be an opportunity outside of your organization? Of course, you only want to do this if you know the other area would want you to do it. But, if you have a great vendor and you know they could be an option somewhere else, why not be a matchmaker?

4) Give your vendors a chance to solve any problems you might have with their performance. This sounds obvious, but many organizations do not want to address performance issues. It may seem easier to replace people or products that are not working than to confront the issues, but it is often more difficult to make changes than expected. If you have built a great relationship with a vendor, these discussions do not need to be confrontational, and you may be surprised how creative a good vendor can be in solving your issues.

5) Treat on-site vendors as part of your team. Too many managers segregate their workforce into employees and non-employees. To give an example, some executives exclude contractors from all hands meetings, but I suggest inviting both employees and contractors. I want the contractors to know what is going on and to feel like they are a part of the team. Yes, I know they are going to go back to their desks and file a report with their organization, but I think the benefits are worth it. Are you really going to talk about something at an all hands meeting that you don’t want to get out? Probably not.

6) Share your business strategies with your vendors. Lots of people do this, but in my experience, much of it is “check the box” on both sides. I did this early in my career by giving the vendors a recent presentation on the organization. While this might have been interesting, I think most of it was forgotten by the time the vendors reached their cars. Instead, it is worth the time to customize a presentation. Talk about the problems you have that you don’t know how you are going to solve. You may be surprised at the result. As an example, I once had a team that maintained an old mainframe system. At a vendor briefing, I told the vendor I was worried about how fragile the system was and I wasn’t sure how to improve the stability
without introducing additional problems. The vendor shocked me by saying they had a legacy modernization team in India that took systems like ours, managed the production processes for three years, reengineered the system into modern technology during this time and then handed back the “new” system. While we ultimately decided not to use their services, they
provided me with a viable option that I never knew existed.

I have a good friend who has been a successful vendor for many years. In his opinion, there are three keys to a great vendor relationship: trust between the vendor and client is the foundation of all vendor relationships; honesty is required on both sides so tough questions receive the right answer (even if they are not the answers that were hoped for) and responsiveness to each other’s issues and concerns is critical. The tips in this article will help you build these satisfying long-term relationships and make a big difference in the results you achieve with your vendors.

There’s more where this came from! If you enjoyed this chapter, download our FREE ebook, Mulligan Funding’s Ultimate Guide to Business Relationships, to access 9 additional chapters jam packed with practical tips and guidelines to maximize your business relationships.

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.