8 Strategies to Manage Your Vendor Relationships

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Vendors play an essential role in the success of your business, making fostering strong and healthy relationships a critical component of any successful business strategy. It doesn’t matter if you’re a small business owner, large corporation, or large household name, your vendors remain an important piece to reaching your business goals.

Strong vendor relationships enable you to manage costs, maintain a reliable supply of products or services, and keep your customers happy! Some useful strategies for managing vendor relationships include maintaining active communication, setting clear KPIs, and having a market director capable of efficiently bridging the gap between your vendors and team.

Global competition is at an all-time high, meaning missed deadlines, low-quality products, and damaged reputation a potential nail in the coffin when it comes to building a successful brand and business. Understanding the key factors to managing vendor relationships and developing effective strategies to spur growth that helps to keep you ahead of the curve. 

Valuing & Maintaining Active Communication

It’s highly likely that you will need steady communciation with your vendors to make product adjustments, relay marketing objectives, and other administrative or promotional tasks. Good communication is not a one-way street, but ongoing and effective.

Here are some tips for improving communication among your team and vendors:

  • Attempt to make messaging personal and customized to the vendor being contacted to engage with them in a more meaningful way 
  • Ensure every message, email, or text sent out has your own contact information attached for any questions or comments
  • Try and condense information to be easily understood and readable 
  • Figure out what means of communication is most effective with your vendors i.e, emails, SMS

Your style of communication and the means in which your business voices its needs and wants may change, but the fact remains that being easily contactable and clear in your messaging is quintessential to a productive relationship.

Determining & Setting Clear KPIs

Carefully analyzing and tracking KPIs is a great way to ensure that your vendor relationships are helping move your business along and not withhold growth. Here are some of the vendor management KPIs that you may want to consider tracking:

Supplier Lead Time

Supplier lead time refers to the time it takes for a vendor to ship your order after it has been sent and received. In most cases, the time can be measured in days after they have confirmed availability, and you can begin to track the time it takes for the goods to be received.

Compliance Rate

Compliance rate typically refers to how well your vendors meet the requirements in yoru contract. For example, how often do they deliver on or before the promised date, what is the quality of goods or services delivered, or how much does pricing vary?

Vendor Availability

Your business will go through ups and downs, making it helpful to have a vendor that can respond quickly to emergencies or issues. We recommend tracking how well your vendors respond to emergencies and can adapt to more pressing situations.

Pricing

It is important to keep an eye on pricing and competition among vendors. Evaluate how much your vendor charges for a product or service versus competitors. You want to pay a fair price for the quality and service being provided.

Defect Rate

It’s crucial to actively evaluate the quality of your vendor’s supply by tracking how many failed products or services may have been received against the total amount ordered.

Order Capacity

Are your vendors able to keep up with your growing needs? We advise tracking the times your vendors were able to meet demand and if they will continue to be valuable partners as your business grows.

Return on Investment

ROI can be measured in multiple ways, and each is potentially important for the success of your business. For example, you may look at savings versus budget, customer increases, overall customer satisfaction, or risk mitigation. Identify the ones most closely related to your needs and actively manage their success with your vendors.

Customer Service

Customer satisfaction can make or break your business. Track your suppliers’ ability to manage complaints and issues brought up by your team with issues in products or services.

Having a Proper Team in Charge

Like a marketing analyst’s importance to data collecting or content strategists to SEO, an internal manager or marketing director is a pivotal step to managing vendor relationships and maintaining a healthy partnership. An internal director should deeply understand your company’s goals, values, and overall message. Therefore, they can work with the vendors to ensure the company’s marketing efforts align with these values and goals. The marketing director will be the primary contact, responsible for negotiating contracts, budgets and verifying that vendors deliver on their promises.

Ultimately, an internal marketing director or manager is a critical player in ensuring that your vendor relationships are healthy because they deeply understand the company’s marketing goals, internal processes, and overall brand message. Therefore, they are best suited to verify that the company’s marketing efforts are executed effectively, with vendors meeting the high quality of work expected.

Finding an effective marketing director is an important key to managing vendor relationships. We recommend reading our blog on outsourcing marketing work and booking an appointment with CJAM to discuss how we can connect you with the right person for the job.

Understanding Your Vendors Strengths & Weaknesses

Understanding your vendor’s strengths and weaknesses ensures that you are making informed decisions about which partnerships to enter and when it might be time to leave one. Here are a few reasons why:

  • Knowing your vendor’s strengths and weaknesses lets you decide which is best suited to meet your specific needs.
  • It enables you to set realistic expectations and plan more accurately for the future
  • You can leverage their strengths to accomplish your goals and ensure your business is on track for success
  • It allows you to optimize resources and extract the most value you can from the partnership. For example, a vendor that performs better in customer service can have more of that responsibility allocated to them 
  • It builds trust by being transparent with accountability and actions that need to be taken to maintain healthy and prosperous relationships 
  • When managing marketing partners and vendors, understanding their strengths and weaknesses allows you to avoid potential problems and set guidelines to stay on track

Value Education & Growth

Vendors impact your reputation and brand, making it vital that they are on the same page and understand your business’s values and processes. Therefore, we recommend taking steps to help them improve and grow to meet customer demands.

Please take advantage of educational tools and transform them into interactive and engaging ways of helping your vendors to learn and build a greater understanding of your brand. Here are some methods you might consider using:

  • Educational webinars or conferences
  • Online classes or instructional videos 
  • eBooks and infographics 
  • Coaching calls 
  • In-person or virtual training sessions 
  • Podcasts 
  • YouTube videos  

Book a Call with CJAM Today

If your business is considering hiring outside marketing services or looking for a marketing director to manage your vendor relationships, don’t wait to speak with CJAM Marketing to find the right partners for your business. Having vetted over 625+ agencies and worked with 80+ highly-qualified partners that are experts in their field, we can save your business time and money by booking a call today to get started!

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What’s Next?

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We specialise in helping people just like you to find the perfect agency to help them out, so reach out to us today to find out more. You can also leave a comment to keep the discussion going or follow us on your favorite social networking sites for more. We’ll see you soon!

 

Written By
Picture of Behdad Jamshidi
Behdad Jamshidi
Behdad Jamshidi started CJAM Marketing after realizing that most business owners don’t know how to evaluate the value of a marketing agency or assess their own needs. Since every business is different not only in their needs but where they are at in the growth process, it isn’t a one size fits all. In the past 5 years, Behdad (or Bee) has met with and assessed 800+ marketing agencies and vetted them down to a lean 100 preferred partners across all marketing niches. After pairing hundreds of businesses with the right partners, he’s found his skillset lies in the matchmaking process. Featured in MarketWatch, Bloomberg, National Post and the Financial Post, Bee’s unique background in marketing, engineering, consulting, leadership, sales and strategy, has allowed him to serve as the conduit between business owners and the marketing teams they need.
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