Retention

Vendor Retention

By Chris Cooper

President

Alternative Capital

OK, so now you’ve got a good one, but how do you keep them?

We all spend countless hours prospecting for vendors. We call them, send them mailers and fax information to them. We explain how we provide the “greatest service in the industry”, yet the most difficult task we have is to get a vendor to try us.

Once that hurdle is cleared and the applications start coming over the fax machine, what are you doing to insure that they don’t make a move to another company with the “greatest service in the industry”? This is an extremely important question to ask yourself, unless you enjoy all the hours spent cold calling.

Vendor accounts are so important to our business, yet they can be so fragile. Have you ever had an account that left for a competitor? If you’re like me, there have been plenty of them. The reasons a vendor would leave and do business with someone else are countless. The biggest mistake most of us make is not finding out why they left. Ask them, they will tell you!

I have found that it usually boils down to two things.

First, you have oversold your company and service during your prospecting. Your vendors expectations of your company are so high that you could never do all the things he now expects from you.

Secondly, you have not established the rapport necessary to overcome the ups and downs that happen in all relationships. Your vendor needs to have complete confidence in you and your work to appreciate the value that you bring to their company.

These problems can be answered with one simple action; Do what you say and say what you do.

If you go through your marketing approach describing the type of business you are really looking for, as well as the typical actions of you and your company, you will find that that is exactly what your vendor will come to expect from you. Nothing more, nothing less. By continually following these guidelines, they will begin to understand how you and your company work. Understanding will grow confidence. Confidence will grow trust.

Confidence and trust help build the foundation for any long-term relationship.

Relationship…that’s the key.

Consider the vendors you work with now. Surely, there are a handful that you really enjoy working with. Maybe it’s because they send the cleanest business or because you get along with your contact so well or because of the way they stand behind their products. Whatever the reason, these are the accounts you should be focusing on for the long haul.

I believe that the personal touches really make the difference in developing relationships. Know your vendor’s people that you come in contact with. Not just the sales people, but the receptionists, billing people and administrative staff. Take the time with each person to learn about his or her families and interests. Pay attention to the details in your conversations with these people. Find out when their birthdays and anniversaries are and send cards or make the surprise phone call. Most importantly, take good notes and use a contact management program to help you manage this information. Send thank-you cards to your vendors for great months and to the staff members that help close the deals. If you are working with a local vendor, stop by frequently to say “Hello” or to have a cup of coffee. Buy them lunch. Buy their office lunch. If your vendor isn’t local, surprise them with a gift certificate for a local restaurant or send pizza in for the whole staff. Make trips to their office to meet with them personally. Do the little things that help differentiate you from the next leasing company, who is surely prospecting your account.

All of these things will help you build a solid relationship with your vendor, as well as the folks there you work with frequently.

Now, don’t be fooled. This will not instantly win you new vendor accounts. If you are genuine and patient, you will work your way in over time. You really, truly are simply looking to make some new friends. Business friends. Profitable friends. But friends, just the same. Make it difficult for your vendor to picture themselves using any other leasing company. Why would they?

By becoming a friend, as well as their leasing expert, you are helping to set their expectations of what a leasing company should be. You will find that most of your competitors are not willing to (or just plain can’t) live up to these standards.

As you establish your relationship with your vendor, ask questions and try to understand their selling process. Find out what their typical customer is like. Train and educate the salespeople on closing techniques using your products. Work with your vendor on specific programs that will help them sell more equipment. Become a part of their team. Your goal should be on complementing one another’s businesses. Make sure your vendor understands exactly how important they are to you and exactly how much value you bring to their company.

Another area that can effect the relationship you have with your vendor is the way you handle their applicants. It is critical to treat their customers professionally, whether they are approved or declined transactions. Your conduct with their customers will almost surely be reiterated back to your vendor. When a positive experience is shared, your vendor will become more and more confident in you and your organization. If the applicant indicates a poor experience with you, it will make your vendor hesitant to send more applicants to you. It could even cost you that account.

Remember, your goal with a vendor should always be focused on their sale, not yours. Hopefully, their customer will be one you can approve and close. If not, your focus should be to do nothing to disrupt the vendor’s sale. Declining transactions will not hurt a relationship like chasing your vendor’s customers away. If you lose the deal to their bank or they decide to pay cash, and your vendor still makes the sale, you haven’t done anything to hurt your relationship. In fact, in most cases, you will have enhanced it.

I have had the luxury and privilege of working with a core group of vendors for years. They are confident in the way I do business and trust the decisions my company makes. They are quality people with different stories and backgrounds. I have come to develop a friendship with each of them. I know their birthday’s, anniversaries, spouse’s names, kids names and ages, hobbies, favorite sports and teams, etc. and they know all of these things about me too. It is very hard for me to picture any of them doing business with a competitor. I believe these are relationships that could whether most storms.

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