If your business were your body, your customers would be its heart. Your vendors, however, would be its skeleton, holding it upright with strong bones when times get tough. For that reason, quality vendors should be adored, not abused, says Entrepreneur.com guest writer Brian Fielkow.
"Business leaders must give up on that old-fashioned 'kiss your customers and kick your vendors' philosophy. Core vendor relationships must be defined by long-term engagement and measurable value-added contribution," Fielkow says. "Attempting to squeeze the last nickel out of critical vendors is not a smart strategy. In many cases, the cheapest vendor adds the least value. You could be counting pennies while dollar bills march out the door. If you commoditize your vendors, then expect commoditized service in return. In the end, that race-to-the-bottom thinking will limit a vendor's ability or willingness to truly add value to your business."
To build vendor relationships that yield maximal value, Fielkow says business owners and managers should embrace "constant communication" and "continuous improvement."
"Have an initial startup meeting with your vendor to establish expectations. Document those expectations in writing. Then commit to periodic reviews to measure performance and value added and to define areas for improvement," Fielkow advises. "When dealing with vendor service issues, I look for accountability. I expect the vendor to prepare a root cause report as to why the failure occurred as well as a corrective action plan. If the vendor fails to be proactive in their approach, that is my signal to change vendors. It's not the service failure. It's how the vendor handles it."
Companies must expect accountability from themselves, as well. "Abandon the mentality that the customer is always right when reviewing vendor service issues," Fielkow concludes. "Take a hard look in the mirror. Are there issues in your organization that are preventing vendor peak performance? … Customers who partner in the solution will find improvement almost overnight. Those who refuse to accept any accountability will rotate vendors with the same unfortunate result."