| When engaging vendors to provide products or | | | | answered is; as the customer, how do I know I am |
| services to support some part of your business, it is | | | | getting the best value possible by "partnering with my |
| critical that you understand the motives of your | | | | vendor? |
| potential vendors. If your organization provides | | | | Comparative shopping is one answer to get a feel of |
| business-to-business services, you can evaluate the | | | | what's available in the marketplace. In my experience |
| following article in terms of your own motivations as | | | | as a vendor, comparative shopping, although a |
| well. | | | | necessary step, will not reveal the answer to the |
| From my twenty three years spent as a vendor, I | | | | question concerning the value you receive from your |
| have a clear idea of what motivates vendor | | | | vendor? The reason is that vendors monitor other |
| companies as well as vendor salespeople. On top of | | | | vendors' pricing and service offerings closely and |
| the motivation list is increasing sales. In order to do that, | | | | provide quotes in a very similar manner. As a potential |
| a vendor must attract new customers, as well as | | | | customer, you can only choose the best value from |
| increase the business they conduct with current clients. | | | | the quotes evaluated and you will never know if the |
| Potential customers are attracted to vendor solutions | | | | industry can offer more. |
| that address business problems they know they have | | | | The only two ways I have observed that you can get |
| and/or solutions to problems that the vendor brings to | | | | an answer to the question; "Am I receiving the best |
| their attention. The latter is most easily accomplished | | | | value" is to either enter into a "true partnership" with a |
| with customers that vendors already work with and | | | | vendor, or hire a performance-based consultant to |
| therefore know something about. | | | | guide you. A "True Partnership" is defined as creating |
| Although a vendor provides solutions to your business | | | | an agreement with your vendor where the vendor |
| problems, their primary focus is increasing their | | | | benefits financially by helping you to accomplish |
| revenue. A second and very important motive for a | | | | measurable results within your business. In this way |
| vendor is increasing sales at the highest profit margin | | | | your vendor partner now has a vested interest in |
| (probably, just like you). | | | | helping you meet your organizations objectives, not |
| Back in the 1990's, I began hearing prospective clients | | | | just making a sale. |
| say that they wanted to find a vendor to "partner" | | | | Engaging a performance-based consultant is similar to |
| with. It sounded good at the time, but with further | | | | entering into a "true partnership" because this type of |
| examination, I believe it is a flawed request without the | | | | consultant is rewarded by helping you achieve a |
| presence of a specific ingredient (more about that in a | | | | measurable result. A knowledgeable, |
| moment). As stated above, a vendor is ultimately most | | | | performance-based consultant will know all the |
| interested in growing their business at the highest profit | | | | intricacies of their industry and will be able to assist you |
| margins possible. Many vendors at the time saw | | | | in setting up "partnering like" agreements with vendors |
| "partnering" as opportunity to secure more new | | | | without the need to share profits with the vendors. |
| business and turn those relationships into loyal and | | | | You and your cost reduction consultant are motivated |
| therefore long-term (and profitable) clients. | | | | by exactly the same goal, which is to reduce the Total |
| In speaking with prospective clients at that time, their | | | | Cost of Ownership (TCO) of your equipment and/or |
| motivation was described as wanting to attract a | | | | services while simultaneously improving vendor |
| vendor that would provide superior value in exchange | | | | performance. |
| for the promise of a long term relationship. | | | | If vendor performance expectations are set up |
| On the surface, this "partnering relationship" appears | | | | correctly, within the context of a properly designed |
| like it should work. Upon closer examination, the | | | | Service Level Agreement, you will receive the |
| challenge becomes apparent. The vendor's goals and | | | | exceptional value that you are seeking. Since all |
| your goals are opposed to each other! You want the | | | | vendor performance criteria are identified up front, the |
| best possible value, which is usually defined as the | | | | vendor knows what is expected and focuses on |
| best service with the lowest price. The vendor wants | | | | delivering on those expectations. The vendor in-turn |
| to earn your business, long-term, at the highest profit | | | | earns what they are seeking, which is a long term |
| margin possible. An important question not being | | | | relationship that they can grow. |