Tips to Manage Successful Vendor Relationships
Successful vendor relationships are essential for the growth of your organization. The ways you regard and behave towards each other, with either strengthen or weaken your business operations. It is, therefore, in the best interest of the organization and vendor to create and manage good working relations.
Other reasons that should encourage you to foster healthy relationships are cost efficiency, market development, and quality development. A good vendor will always work to ensure that their products or services meet your organizational needs, and if the current ones do not, they will customize them. The relationship will be more of a partnership.
With that in mind, here are tips that can help your department manage successful vendor partnerships.
Understand Who You Are
The first step is for you to know who you are. What are your business goals? What are the organization’s priorities and boundaries? Depending on the vendor you are seeking to start a relationship with, they need to know who you are and what is important to you.
Your company vision, mission, and core values explain who you are. However, you need to take it a step further with the vendor so that they can gain more insight into who you are and what you are looking for. When you have a clear understanding of who you are, you will transfer the same knowledge to the vendor and thus start the relationship well.
Know your Vendor
Next, know who your vendor is. Given that it is a business relationship, you need to know your vendors company well. Seek to go deeper than what the sales representative takes you through or what they state in their business profile.
Other than making a sale, what else are they interested in offering your company? What is their record of accomplishment with other firms? That information will help you know and decide whether they have what you need or not and whether you will work well together.
Have Proper Communication Channels
Nothing will get done without proper communication, including the first two steps of knowing each other’s companies. Through open communication, you will build trust, which will glue the relationship.
Keep the communication lines open and frequent so that you can resolve anything that comes up immediately instead of pushing it until you have a meeting. Other than phone calls and emails, physical meetings are essential. You can assign a manager for each vendor who will be a liaison between the organization and the vendor.
Before commencing the project, it is vital to put everything in writing. The vendor needs to know what their roles and responsibilities are, the consequences of not following through on their promises and the rewards of a success project. The organization needs also to outline how they are going to support the project and any other important role.
Every detail should be in that contract and both parties to agree and sign. Doing this will help the company and the vendor avoid miscommunications or misunderstanding, and they can easily reference it as the project progresses.
Acknowledge Good Performance
When the vendor does an excellent job, acknowledge it and encourage them to keep doing it. Yes, you are paying them for a product or service, but they will be motivated to go the extra mile because of your appreciation.
Remember, the human factor in the vendor relationship. The vendor representatives will feel valued and appreciated leading to improved performance.
These five tips, understanding who you are, knowing your vendor, having proper communication channels, documenting everything and acknowledging good performance will build a successful vendor relationship. When both parties are accountable to each other and respectful, the partnership will be stable.