Maximize your vendor relationship benefits – beyond the obvious


I have been on the vendor side of the table almost all my professional life . I have done development , support , relationship management , sales and so on . Throughout my career – irrespective of my employer – a recurring issue I have seen is that customers feel they don’t get adequate value from their vendor contacts. And I hear from my account colleagues “I don’t even know what the issue is – they never told me before escalation “.

So here are a dozen thoughts about that – as usual, just my personal opinions only. Maybe some of this will help you – and I am looking forward to learn from your experiences.

1. First things first – and pardon me for saying this bluntly – you get what you pay for . So choose your software , consulting and support model wisely . Vendors typically think highly of customers – but remember they run a profit making business . The analogy I use is the one of cheap airline and hotel tickets – the provider doesn’t make any money on the ticket itself . But they will charge you a lot for changing travel dates or a change in destination. So know what you are buying into . Haggle all you want when you buy – but buy with your eyes open .

2. Have a master agreement in place up front with every vendor . Negotiate all you want with the general framework of all future contracts for the life of that document . This will prevent you the grief of wasting time on boiler plate stuff on every transaction .

3. Treat your vendor representative as a partner – understand their goals and share your goals . Remember that he or she is not there to just sell to you . The vendor pays them to be your advocate too within the vendor company . Use that to your advantage . Every CXO I worked with when I had a sales goal in past knew my targets . In many cases I knew what their goals were too . You wouldn’t believe how easy life becomes when trust is based on transparency .

In most companies , the vendor sales guys are only allowed to talk to procurement team or best case with IT team. And that conversation typically happens when vendor tries to sell the customer something – including contract renewal . If that is all you do with the account executive – you will not maximize the benefits the vendor can give you .

Pull these people into steering committees – maybe without a vote if you so choose . This will let them know of problems before they become emergencies, and they can arrange right people to support you . If they know at the last minute – they will still try, but might not be able to help you get the help you need quickly .

4. Help each other – there are ways the vendor can help you, like early access to roadmaps , helping you get relationships at other customers , getting you extra quick support etc . In return , the most important thing you can help with is to expose vendor to other parts of your organization . You don’t need to casually give away your business at all – That would be dumb . But let the vendor get a big picture of how your business is run . Whether he sells or not should be dependent on his value proposition – not just on relationship alone.

5. Be a reasonable reference . If the product sucks , by all means call the vendor on it . But when it does something well – try to help the vendor by offering to be a reference on your terms . It goes a long way in cementing the relationship . Set the terms you are comfortable with in the master agreement . Every time a Customer asks me for a reference , I ask them back “glad to do that for you, but will you be kind enough to do the same for another customer ?”. In most cases – my request meets stiff resistance . But I generally turn this around with time – it is mostly because customers think a lot of stuff they do in their project are unique . But as a vendor guy I see multiple such projects to know that 80% of what is considered unique is not so unique .

6. Be active in the community and drag your vendor representative with you there . Remember – not all account executives are community driven , but they will get the “what is working and what is not” quickly if they see you there . Encourage them to get active along with their product and engineering colleagues . Good things have happened – and can happen in future too .

7. Encourage vendors to play together – where applicable , ad always for your benefit only . End of the day – you need solutions, not bits and pieces . Encourage all your vendors to work together – supervise them a few times if needed to get them started . The idea is not to eliminate competition – just use competition wisely where needed . For example – let your consulting company and product companies offer you bundled deals . What they need to do is convince you that you get a better deal than if you bought separately . This is not easy for a lot of procurement teams because their KPIs do not align . It can work in your favor if done thoughtfully – get the help of a buyers agent if needed . Give it a shot .

8. Innovate at your pace – but remember there is always budget to make/save money . A lot of customers have told me that they have no money left to buy what I am selling . I don’t have a problem with that at all. If I cannot express the value of what I selling in quantitative terms with reasonable assumptions we both agree – I haven’t earned your business . So give me the information on how I can help you , let’s build a business case together . If it doesn’t satisfy you – don’t buy at all. If I look like I am just wasting your time – tell me on my face .

9. Be creative if and when it makes sense . Many customers do not understand there are many ways to write contracts . Vendors can arrange financing – which can save your cash flow . Vendors might agree to fair risk-reward contracts – including holdbacks , charge backs and so on . A lot of customers who think they have no money do not consider these options . And of course not all vendor sales people bring these up either . You don’t lose anything by asking – so ask any way . May be it will work for you :)

10. Don’t hide behind procurement or your consulting teams . Often I hear from customer IT and business teams something like “I don’t even know who to ask this question at the vendor . So I have asked out consultants and our procurement team”. Nothing wrong with this per se – but remember that consultants and procurement people won’t know the problem like you do . So their ability to help might be limited and they might even confuse the vendor . Cut the middleman and get introduced to the vendor . Don’t do this by breaking governance policies – help set up a governance policy that lets people close to problems to talk directly with vendors . Remember – policies are set up to increase efficiency , not to decrease it .

11. Business is personal – it is always done between two (teams of) people at the end , not by two companies whose names appear on the contract . The point being – if you are not comfortable with your vendor representative , it is fair to ask the vendor for another person to work with . This is completely a valid thing – and as long as you are fair and professional , there is no reason to hesitate . You need to be comfortable with the people you are dealing with .

12. Use peer networks effectively . If you are not convinced with the solution the sales guy is offering you for office of the CMO – ask your CMO to call the vendors CMO and ask directly for her experience with this solution . More often than not – this will help both sides . Your account team should be happy to set up such peer meetings for you all the way from developers to CEOs . Use it to your advantage – within fair limits .

That is it – I am done . Probably longer than I expected it when I started typing it . Let me know what you think

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