We all know what a vendor relationship is. We have them, cultivate them, and use them to operate the business. But in trying economic times, many of us are tasked with finding ways to do more with less. Does this require existing vendor relationships to cease? Do companies suddenly have to do everything internally? For many, that simply is not feasible. Luckily, there is another way.
Change the dynamic
First, take a hard look at where your revenue stream has traditionally come from in the past. Is it from the large ticket, large cap ex sales? Or from recurring revenues and/or service contracts? Then look to see how that fits into your spending habits. Why is this exercise important? It is important because it helps you identify areas of large expense and determine where you could leverage an existing vendor relationship to benefit both parties.
By changing a “vendor” into a strategic partner, both sides can profit from shared infrastructure and lower costs of entry. After all, both entities have a financial stake in the outcome and both will want the partnership or alliance to succeed.
The question now becomes, how can you do this?
Start by systematically approaching vendors and sharing business models. This includes road maps, strengths, weaknesses, revenue structures, and reasoning for the paradigm shift. Discuss pricing and what changes (if any) would need to be in place to make a strategic partnership possible and how a joint offering would benefit both organizations.
At first, people might think you’re crazy for sharing so much information. And it can seem crazy to partner with what could be seen as your competition. However, many more opportunities will present themselves and hopefully, they translate into more wins. The true value is that now you can approach the market with a more robust offering while combining the selling and marketing skills of two organizations.
Immediate and long-term rewards
Not all vendors will want to make the switch and that’s fine. Some businesses have too much corporate bureaucracy or other limiting factors to make such a shift. However, you will start to reap the rewards from those that do become strategic partners and others will begin knocking on the door saying “We think you guys are onto something here and we want to be part of it. We don’t see where you have a solution in place for “X”; can we talk?”
And that’s just what strategic partnerships are all about. You’ve probably heard the phrase ‘it’s better to have a little of something than a whole lot of nothing’. What’s surprising is how many more opportunities your company will receive and how stronger your overall solutions will become through strategic partnerships.
So go ahead, lose the vendor relationship.
Tags: Strategic partnerships, vendors
^ This post was written by: Walter
