In the hustle and bustle of today’s world, we are all battling for an advantage over our competition. Yet, too often we miss one of the most significant competitive opportunities for growth that’s staring us right in the face: having a strong supplier relationship.
As businesses, each of us is dependent on our suppliers. Developing strong supplier relationships can be as important as your relationships with consumers or contractors. While there are instances when being forceful and direct with a supplier are necessary, taking a professional and respectful approach to your communications will yield greater long-term results.
While it’s true that suppliers want your business and need you to buy their goods and services, in many ways we need them just as much. Good and reliable suppliers can be hard to find, especially in an economy like the one we are currently experiencing. Building a strong relationship can be a lynchpin to your future success.
At the heart of this relationship must be balance and fairness, and finding the “win-win.”
Too often business owners look at their supply chain as a one-way street. Yet suppliers can provide you with much more than just goods and services. They are a rich source of information on the market and even on competitive products and services. Suppliers should proactively engage you and provide information that further enables your success.
In a column in Entrepreneur, author Bob Reiss lists five ways suppliers can help grow your business: quality, timeliness, competitiveness, innovation and financing1. Although he relates these to bootstrapping a business, I think they apply to our current discussion.
The right supplier helps you deliver better customer satisfaction by solving problems through quality products and timely service. They provide you inventory when you need it most. Great suppliers continually innovate, providing the right products, at the right price. The result: a mutually beneficial relationship that adds more profit to your bottom line.
Here are some thoughts on how to build stronger, closer relationships with your supplier base:
- Alter your perspective – Try to look through the lens of your supplier from time to time and consider what mutually benefits both you and them. You are still the customer, but in order to reap more rewards, find opportunities where you both benefit.
- Get personal – As I’ve said before in building customer relationships, healthy business relationships come from building a more personal one. As with your brand, investing into the building of a personal bond builds trust. Building business relationships can be time-intensive and you may not see it as relevant to your success. Fight that thought!
- Build two-way and timely communications – Suppliers can provide a wealth of good competitive information and industry insights. As can you. Every strong relationship starts with solid communications. Build open and honest communications with your top vendors, and they’ll return the favour.
- Be respectful – Just like you have expectations of your suppliers, remember they have expectations of you. Bullying to manipulate a relationship to your benefit is a short-term strategy. If you’re seeking leverage in a supplier relationship, be committed to understanding the market better than any of your competition. Knowledge, professionalism and integrity will lead to greater opportunity. Why? People like doing business with people they like. It’s what every successful retailer truly understands.
- Be fair – Let’s be honest, you’re going to have times where situations in the supply-chain are less than ideal – shortages, price increases, sales support, quality issues. Rather than leave your valued supplier and compromise your position, consider what went wrong – from all angles. It might be them, it might not. Remember, success is not simply identifying the problem. Great synergies can evolve through solving challenges.
- It’s important to hold your suppliers to their agreements, but remember, too, that we have a habit of only acknowledging when things go wrong. Which brings us to…
- Be grateful – If I have to harp on one thing in business, it’s this: say thank you! I’m sure your best suppliers thank you for your business all the time, as retailers should, in turn, thank their customers at every opportunity. Thank your suppliers when they go above and beyond to help you succeed.
Ask yourself, how do my suppliers currently view our relationship? Am I at the top of their list of preferred clients, or somewhere in the middle? Which of my suppliers will go to bat for me if I need special consideration? Would you go to bat for them when they need your help? I believe strongly in stepping back occasionally from the day-to-day activity of working in the business to assess how you’re working on the business. Make supplier relationships a focus as you commence planning for a new year.
In the beginning of this article, I spoke about a win-win solution. Our business model has flourished as we have proactively engaged our supplier network in the spirit of creating greater mutual success. While not always successful, it is an integral part to our core business philosophy. Business is not a zero-sum game. It’s about lifting all boats in a rising tide. Think about it. The more you help your supplier succeed, the more likely the favour will be returned. The rewards may surprise you!