Without suppliers, businesses just can’t operate. Good and bad suppliers can be make or break, particularly in the SME space where projects rely on suppliers delivering on the job. In order to find the right one, businesses need to consider a number of critical factors – and it isn’t just the price. Relationships are of utmost importance; from experience to cultural fit, flexibility to responsiveness, good supplier relationships are based on shared values and can contribute to increased success for both involved.
Irrespective of size, few companies will choose to undertake every aspect of business operations internally. From the required third party relationships with auditors and lawyers, to the optional with web designers and marketing experts, IT services and logistics providers, external supplier services underpin essential aspects of the organisation. As such, the way in which companies procure, brief and interact with suppliers is vitally important.
Businesses want their suppliers to feel like an extension of their team and this is where supplier relationships become rewarding on both sides. Whether procuring a three-month website redesign project or embarking upon a five-year IT services contract, the principle is the same: good client/supplier relationships are more effective, productive and rewarding – on both sides – than bad. In order to attain this model and hit those service level agreements, there are three key issues to consider:
1. There’s more to success than the right price
When companies are trying to cut costs, it’s often tough for them to look beyond contract prices. But if cost is the primary concern, it could hinder the process of finding a supplier. Why? Because managers are unable to look for suppliers that are a cultural fit and that would tie in neatly with the company’s day-to-day operation. The result is unlikely to be a seamless working experience.
To make sure that you don’t subconsciously put cost at the top of your agenda, avoid asking for a full comprehensive quote at the outset just to compare costs. Comparing costs with other potential suppliers is important, but if it means hiring a supplier that isn’t compatible or able to understand your requirements, what’s the point? It is crazy to limit options up front; Ask for a ballpark instead, and explain that the procurement process will require a far deeper ‘getting to know’ aspect to determine skills, expertise and fit. Critically, undertake some due diligence beforehand: from websites to social media presence, it is easier than ever these days to get a true feel for a company’s attitude and business focus.
Ensuring a cultural match should be a first step.
2. Sharing is caring
Like a good friendship, a good client-supplier relationship is a two-way street. It should bring out the best in both, but this can only be achieved if the two organisations share cultural attitudes and goals – and that means work on both sides! Simply crossing your fingers and hoping a third party can take a problem away is unlikely to be successful; nor is expecting prospective suppliers to pitch for a contract or job with no clear brief or insight into desired outcomes.
It is crucial that both companies are prepared to put effort in to understand the skills, experience and outlook of the other. Your potential supplier shouldn’t be afraid to ask questions about the business, or reference shared contacts or market experience. Such questions will make it clear whether or not the two organisations share common working practices and cultural objectives. A good prospective supplier should also be willing to share common sense advice up front, rather than insisting on a contract. Good relationships rely on trust so if neither side is willing to be open, the relationship is unlikely to succeed.
3. Communication is everything
It is important to keep communicating with each other. It sounds like a no-brainer, but email communication and remote working make it far too easy for third party relationships to slip down the list of priorities. Ensure you keep your supplier updated – and vice versa.
An initial briefing session is an essential starting point to ensure the supplier has an in-depth understanding of the requirements – for example, a web design agency needs to know not only design preferences but also the audience and the key messages to create the right design.
Continual feedback, clear objectives and a good line of communication will continue to reinforce the quality and depth of the relationship to ensure it lasts longer than that initial ‘honeymoon’ period. Out of sight should never be out of mind – even if face-to-face meetings are not geographically viable, opt for routine video calls; and if the supplier has done good work, recognise it!
4. And finally, stand your ground
Pressure can often make it difficult to stand your ground when it comes to making a decision based on something other than price. But this will inevitably start the relationship on the wrong footing. If both sides can be open and flexible, the relationship will deliver a mutual benefit. In theory, the foundations for a good relationship need to be put in place before a contract is signed so that both parties know what is expected of each other. With good communication based on clearly understood, shared objectives and a desire to work well for and with each other, the relationship has a great chance of success.
Keren Lerner is founder and managing director of Top Left Design.