Vendor Management: A Business Owner’s Job

Vendor Management

Your Vendors Might Not Care About You

But they should, and you should make darn sure they do.

Vendors can shift the pace of the constant customer service dance. Your reputation gets blindly shipped out when handing-off a package to a company like UPS, USPS, or FedEx. Whatever commitment you may have made to client satisfaction can very quickly be lost if your vendor doesn’t share your customer service standards. When the USPS leaves that package on the stoop in the rain (ahem, happens often), the customer calls you to complain about it. Not only is the business owner left dealing with an irate customer, they’re also left with the associated fallout from the lost revenue and damaged reputation.

In a similar sense, if you’re business is entirely dependent on receiving supplies from an unreliable vendor, the customer suffers even more. Delays to you mean delays to the customer. Add shipping and handling problems on top of the supply delays, and you’re going to be faced with an essentially unmanageable and unresolvable situation from the outset.

The quality of service your customers receive from your vendors is clearly the most difficult variable to manage for small business owners. Too often pricing decisions affect a small business owner’s selection of vendors. Using third-party charges as the sole determinant in vendor choice is a huge error. Cheaper does not mean less expensive, and least expensive is not always better. Your choice of vendor should come down to a few key areas:

  1. Do they mirror your commitment to customer service?
  2. What is their own reputation for customer service?
  3. Are they easily approachable when things go wild weasel?
  4. How quickly do they partner with you to resolve issues?

Vendor issues are almost always the most frequent source of customer woes. Unless they function as an extension of your business, they will not care one iota about fixing what’s broken. Once again, prevention is the key. You have the responsibility to have very specific remedies for dealing with your vendors in place before you commit to using them. You should skip all the basic call center complaints and be able to direct-dial the account rep or a Corporate entity for resolution. Although I have my FedEx reps email, desk number, and cell phone, I also made sure to get her boss’s information. When I am forced to call a vendor with a problem, I address my concerns in direct, factual, and pragmatic terms. To make sure any promises that have been made to me are fulfilled, I follow-up the phone chat with an email to memorialize the issues and loss of revenue. These few simple steps often get some attention and action.

Case in point – Amanda has slowly migrated to the most reliable shipper we could find, and negotiated substantial business and volume discounts. These discounts make her choice of shipper not only the most trustworthy, but also keeps her costs in-line with even the least expensive shipping alternatives. Even if the pricing to ship with a dependable vendor may be a little higher, a clear and concise disclaimer on your e-commerce website explaining your vendor choice goes a long way to mitigating customer inquiries. By the way, ensuring your shipping charges have zero mark-up is also a very easy and transparent way to earn trust and accolades with your clients.

We all have options where we spend money, and those options are much more important in this economy. I am committed to small businesses and make every effort to give them my sales, but interacting with a small business shouldn’t turn into another part-time job for me. Likewise, hitting the button to finalize an order shouldn’t come with a sense of dread over what’s most likely to fail this time around. If the customer’s anticipation is that something will go awry, then you’ve already lost them. They will be finding an alternative provider, and they should.

Customers will take their dollars elsewhere, just so they can have some assurance their hard-earned money won’t be taken for granted by a company that focuses on anything other than customer satisfaction. Take loving care of your customers – the volume and revenue will come on it’s own. Disregard the importance of your customers’ happiness and risk everything.

One thought on “Vendor Management: A Business Owner’s Job

  1. i love this article. It completely rings true. Not every vendor has the same commitment to your business as you do. It is very important to find the ones who do and be loyal them as they will be to you. Vendor relationships are always an on going process and very important to the success of each other’s business, that why I think it is better to work with companies that have the same values as you do as a business owner.

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