Wednesday, December 28, 2011

Vendor Stakeholder

Nearly every company in the world pumps in millions of dollars into serving their customers better and even further millions to repair the wrongs committed on them. But very few seem to have the same attitude towards their vendors. So when a company has one strategy to bring in customers and a completely counter-productive strategy towards its vendors, the question really is – Who is winning?

Companies take great effort in understanding the needs of a customer, learn to talk their language and help deliver a product which in turn will bring them revenues. Why can’t they do the same for a vendor too? After all a vendor also helps in bringing in revenues. In fact better relations with a vendor can result in more leads, better support, greater engagement, protection in key accounts, and recognition that can help a company generate more business.

Consequently companies should look at ways and means of building strategies to maintain relationships with vendors as they would with customers. A simple strategy would be to just replicate your customer sales cycle with your vendors and in the process make your vendor, a stakeholder. Such a strategy can only help forge a relationship of mutual benefit that in turn can be routed back to a customer in terms of price, product features and overall service.

And in the process, everyone wins!

1 comment:

  1. A very useful idea....I agree that many companies don't do enough to better align vendors with customers. Firms would do well to explore ways to adapt the strategies they currently use to strengthen their relationships with their customers to do likewise with their vendors as well. Better alignment of vendors and customers is an important, but often ignored, facet of customer centricity.

    Incidentally, in the context of market segmentation in the B2B space I had written an article (in the distant past!) that contains some related ideas. An abstract of this article follows.

    Vendor Segmentation: An Additional Level of
    Market Segmentation

    A. Parasuraman

    This article describes a new conceptual approach, called "vendor segmentation," which will be useful to industrial marketers in making their vendor evaluation and selection
    procedures more customer oriented, and hence more profitable,than conventional procedures. A practical approach for doing vendor segmentation analysis is outlined as a stepwise
    procedure, and the potential benefits and limitations of using this approach are discussed.

    © Elsevier North Holland, Inc., 1980 Industrial Marketing Management 9, 59-62 (1980)