Large or small, no business venture is an island. A host of other companies supplies goods, machinery, services, advice and expertise that allow you to serve your customers and grow your business. No matter the industry — whether you specialize in power and energy, telecommunications, precious metals, biotechnology or wedding planning — you operate within a complicated networking interplay of skilled individuals, providers and suppliers several levels deep. Business consultants and CEOs all agree: Businesses literally live and die by their vendors. Contemplate your ability to prosper without them, and the picture turns quite grim.
Business-Vendor, Vendor-Business — Perspectives
A number of studies have attempted to quantify the value of vendors to a business. While statistics for customer satisfaction, retention and impact are easily calculated based on repeat purchases and customer surveys, the business-vendor relationship is far more complex. Vendors operate as part of your business, but they aren’t employees. You are their client, but you’re a large-scale client, most likely one of many others. If your vendors are experienced, specialized and top-of-the-line in their field, it is likely that their services are in high demand, and they may even have to turn work away. Before you think that you can simply replace them, consider the true value of a top-notch supplier or service provider. In a trillion-dollar arena of million-dollar specialization, you may not be able to afford losing them.
Their Timeline Is Your Timeline
Windows of opportunity can vanish in the blink of an eye. Weather, equipment breakdowns, technical glitches, legislation, new technologies, environmental concerns or even competitors can foul the best-laid plans. Many industries rely on an intricate process of exploring options, identifying resource availability, setting up equipment, extracting resources, transporting raw and refined product, and marketing to consumers. If you’re a priority client for your seismic geology team or drilling contractors, you want them available when you need them. If your rigs are in the path of severe weather, you need to know that the transportation service will move your equipment first, preventing otherwise staggering financial losses. When a new area opens for exploration, the logistics of dispatching a small army of reliable contractors can quickly establish a pecking order with long-term repercussions. You can only act or react as quickly as your slowest vendor; their delays are your delays.
Their Prices Are Your Prices
You can’t sell something for less than what your supplier charges. In fact, you need a decent margin to pay your own overhead costs and produce profit, too. In the energy industry, often the greatest distinguisher between companies is price down to the last fraction of a penny. Expenses come in many forms, however, from meterage to day rates as well as the cost of goods, equipment repairs, overhead and time lost. Having vendors who run a tight operation, stay organized, maintain their equipment, schedule work efficiently and avoid employee turnover — even if they are a little more expensive than others —— will save you in the long run. Any price breaks or financial advantages they allow are benefits that can increase your margins and maybe even let you beat competitors’ prices.
Their Contacts Are Your Contacts
Your vendors are specialists. They know more about what they do than you do; that’s why you hire them. They also know the best talent in their industry. They can refer you to affiliated contractors or service providers they’ve worked with before — or even ones other clients have hired. If you need a directional drilling team that specializes in ultra-short and zero-radius accesses for an area that may be geologically fractured — or a high-risk diving team that specializes in seismic acquisition — one of your regular vendors may be instrumental in scheduling them. In a much simpler vein, one of your contractors may also know a hungry, up-and-coming lawyer-accountant who’s a numerical wizard at a bargain rate no one else can touch. The business world turns on word of mouth, and vendors can open doors you didn’t know existed.
Their Experience Is Your Experience
Just as you’ve seen triumphs and failures, so have your vendors. You’re paying for their ability to employ the expert, technique or material most effective for a task. Someone who has jacked up hundreds of triangle platforms knows exactly how high waves will jump. A team that has mapped thousands of miles of sea floor may have a sixth sense — and experience — to mark a certain formation in the fold as the mother lode, despite what readings indicate. When technological systems hit a glitch, a loyal vendor may offer cost-saving stopgap strategies or overrides and save you thousands of dollars in delays and ineffective measures that a less experienced team may attempt. Remember the old adage: “Good decisions come from experience, and experience comes from bad decisions.” Chances are, your vendors may have already seen the bad decisions and can spare you from many of them.
Their Innovation Is Your Innovation
As your vendors purchase the latest cutting-edge technology or — even better — develop it themselves, you gain access to those benefits, too. Whether it’s exponentially increasing a pumping rate, streamlining a step in the refining process, or simply having the capital to finally buy that fleet of million-dollar trucks or new high-traction tires, their advances can save you time, money and overhead. Form a true partnership, and you may have opportunities to invest or even become reciprocal investors in a mutually beneficial financial enterprise. As your vendors advance, grow and expand in capability, so do you.
Their Quality Is Your Quality
For most industries, quality is non-negotiable, especially when safety, reliability, discipline and trust are involved. Every facet of the business is fraught with risk, from successfully identifying resources to safely exploiting and delivering them. Shoddy work, substandard equipment, high employee turnover and disregard for safety protocols can domino through a supply line, sending projected progress and profits off course. In contrast, vendors who hire qualified people and pay them what they’re worth tend to retain top talent. Professionals who know they have the best equipment and that safety protocols are a priority can focus on the task at hand without fear or distraction. The quality that you can offer to your customers is directly proportional to that of your vendor.
The Essentials of a Partnership Relationship
When asked what they value most — what makes them prioritize one client over another — vendors consistently identified three things that conveyed a sense of partnership: payment, communication and thanks.
Prompt, Agreed-Upon Payment
Vendors have suppliers, service providers and expenses, too. Just like the businesses they serve, they calculate prices based on their costs for services or goods requested. Changing task requirements midstream or failing to pay them on time for services rendered increases their costs and often wastes investments in time, too. Paying your vendors keeps them in business and cultivates goodwill and willingness to contribute to your success. If you must change terms, consider the wisdom of making it worth their while. On the other hand, if you regularly pay well, they may be more inclined to adapt.
The primary cause of disconnect between services expected and serviced delivered is lack of communication. Sharing with your vendor exactly what you’re hoping to accomplish is vital. If they understand the challenges and time frames involved, they’ll be better able to structure their workload and order supplies. They may even save you countless headaches by admitting a particular job is beyond their capabilities, hiring additional specialists or investing in that upgrade they’ve been putting off. They want to maintain their stellar reputation every bit as much as you want to protect yours.
The Third Element of Partnership — Thanks
Money changes hands, and orders are given, but a standing relationship built on the trust of repeated give and take is what earns vendor loyalty and the willingness to go the extra mile. Your vendors have lives outside of their work, families who love them, and responsibilities and challenges to face. A simple invitation to company parties or team-building outings is acknowledgement that you recognize them as an important part of your team. Inclusion at events, a quick thank you, or a remembered birthday or business anniversary can carry the weight of a referral. What’s most curious is that large gestures aren’t necessary to earn loyalty. It’s the small moments and simplest of vendor gifts that convey relevance and nurture business partnerships. The loyalty can’t be bought, and the respect can’t be faked. The bond of partnership is a sign of mutual investment in future successes.
Corporate Gift Giving
Cane River Pecan Company is an expert in corporate gifting and specializes in appropriate, ethical vendor gifts that let you express your deep appreciation and highest regard in the most unmistakable and appreciated of gestures — mouthwatering deliciousness. We offer the sweet and the salty, the chewy and crunchy, and the tasty decadence of premium pecans in all their wholesome goodness and Southern tradition.
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Keeping your business ahead of the curve means developing strong relationships — and lots of them. From clients and customers to business partners, vendors, employees and more, your list of vital players is ever growing and increasingly harder to handle. With professional gifting tips and industry insights, Cane River Pecan Company is here to help.