Cropper: The Importance of Vendor Relations
With so much discussion surrounding proper communication with the customer, one area that’s often overlooked by many shop owners is the relationship with your vendors. We take a very serious approach to vendor relations, and the outlook we have is that everyone is a customer, and vendors are no different. When it comes to outside vendors, we take a very deliberate approach to always ensure their needs are met to ensure we can get our work completed as well. For us we want to know what’s the most important thing for that specific vendor.
For some smaller vendors, payment is everything. And for bigger vendors it might not be about payment, but maybe it’s the percentage of return rates. When you communicate with your vendors, think of them as “what do you need from us” type meetings. We do these with employees and vendors and truly identify what their needs are. It’s not right for me to assume I know what’s most important for every vendor or customer relation situation we have because everyone is different.
So it’s most important when we talk about any type of communication that we do our best to identify how people want to be communicated with and what’s important for their specific business. We could have a small glass vendor that every time he puts in a piece of glass the money comes out of his pocket, and all that’s on his mind is the money side and how soon he is going to get paid.
Take the time to break apart your business and all the intricate parts that make it happen, and find out what’s important to those vendors and do your best every day to meet those needs.The more you meet those needs in the good times, the more that your business needs can be met in the times you need a favor.
There are different parts to this, too. If you’re looking at a parts vendor, you need to look at what’s important to the accounting department, what’s important to the person at the parts counter who’s actually helping you, and the needs of all parts of that organization. Just paying the bill on time may not help the parts person who’s most concerned about electronic ordering or getting a follow-up email. This applies to our everyday lives, too. We often assume what’s important to another person rather than asking them first.
Our goal is to contact all our daily vendors at least on a yearly basis and make sure there are no changes and get to the bottom of any concerns they have. There was a time, for example, when it was especially important to me to use a credit card to pay the most amount of bills we could. It was easier on our accounting department, and just generally easier on our end in a lot of ways. So we had a couple of vendors who said they wouldn’t take credit card payment; they’d only take a check, money order, etc. We used that opportunity to ask them why they didn’t like being paid that way. After listening to their concerns, we were able to come to an agreement with certain vendors that there were cash flow issues and credit card fee issues, so maybe if we paid them more often, it wouldn’t have such a big toll on them to pay the credit card fees. So what we learned with the credit card was that it didn’t matter if I paid them once a week, once a month or every other week. It resulted in more entries for us to process, but once we streamlined that process it didn’t really matter to us. What mattered more was that we were doing our best to operate without a line of credit, and to operate with a credit card as a line of credit. We had vendors we were paying every Friday instead of once a month, and they were happy as can be, because they didn’t have cash flow issues and my cash flow didn’t change.
In addition, my accounting system was able to work seamlessly and not have to rely on a check, which was cumbersome because at the time I was the only person in my company who could sign a check. It was much easier for me to say here’s my credit card number, be sure to pay this bill every Friday. And we were able to develop some really good relationships that way, and it was all about getting to the bottom of what was important to them, what were the drawbacks and what can we do on our end to get past all that stuff.
I believe that communicating with your vendors is just as vital as fostering customer relations. You can’t fix a car if you don’t have parts. And if you’re not fixing a car, you’ve got one less customer and less money in your pocket. Your vendor relationships should be examined just like you would with your CSI score; you should be doing the same type of measurements with people you’re spending millions of dollars a year with. The bottom line is that when there’s poor communication in any relationship it drives negative issues. So anything you can do to clear it up and figure out what’s important to them will always foster a better relationship, which will pay off for you in the end.