4. Negotiate, clarify, and enforce every detail
As coach John Wooden famously said, “It's the little details that are vital. Little things make big things happen.” Nowhere is this more true than in enduring, impactful business relationships. Fortunately, we have a lot of influence over the little things.
Negotiate: Navigate to “yes”
There are always ways to come together, so both parties win. All it takes is a little creativity and benevolence. For example, paper checks can take up to two months to clear, so go digital and split the fees. One business leader wires money to an overseas vendor and pays the cost but lets his vendor pay the PayPal fees for using that medium.
Another example is the conundrum of volume discounts. You want that lower price, but your vendor can’t justify swallowing the cost.
You may find yourself in this catch-22, where suppliers won’t give you the volume discounts they offer enterprise-level organizations. In this situation, consider forming a small consortium with other professional peers. Inspirational real-life models of this include:
In his classic book The 7 Habits of Highly Effective People, Stephen Covey says this about negotiations: “Anything less than Win/Win in an interdependent reality is a poor second best that will have impact in the long-term relationship. The cost of that impact needs to be carefully considered. If you can’t reach a true Win/Win, you are very often better off to go for No Deal.”
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Clarify: Prioritize documentation
Among supplier relationship specialists, 37% report higher vendor engagement when they create documented processes for their team to follow.
We’ve already discussed the perils of paying vendors late. You can preempt doubt by asking what terms your vendor prefers — and then honoring them. Use your new vendor management software to set up payment schedules according to your supplier’s wishes. Consider recording your oral affirmations of understanding to supplement your signature on agreements.
Finally, demonstrate your understanding of payment options by paying early the first few times and whenever you can in the future. Talk with your accountant to ensure your cash flow can handle a proactive move like this.
Remember, no one regrets having good records of what happened in business (unless, of course, they’re trying to hide something). One of the best ways to document your strengthening vendor relationship is to create and keep favorable payment schedules.
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Enforce: Comply yourself before imposing rules on your vendors
When business customers hear “enforce,” they often assume the vendor needs accountability. But building profitable vendor relationships means you tackle and prevent your own shortcomings first.
Survey your own adherence to your vendor agreement before questioning your suppliers’ — assume your processes need tightening first. Once fixed, then deal with your vendor’s noncompliance.
Ask your vendors about their self-review process and implement a scorecard of your own (together) that’s unique to your partnership and specific goals.
Then, add a routine time to your calendar to review this and congratulate your supplier or agency on any improvements or wins you see. This lays a foundation of trust, so it’s solid when you do need to mention any grievances.
Negotiating, clarifying, and enforcing your vendor agreements prevents costly miscommunications and missteps. These savings can also be used to fund customer acquisition or retention, directly driving growth that lasts.
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