5 Keys to Create a Healthy Vendor Relationship

Posted by PS Energy Group on Apr 23, 2019 10:30:00 AM

VendorBlogThere are obvious factors that can help drive a fleet’s strong bottom line, such as controlling fuel costs, optimizing maintenance, ramping up safety initiatives, and monitoring driver behavior. Yet, there’s one factor, maybe not as obvious but equally important — if not more important — to overall success, and that’s maintaining good vendor relationships.

Think about the numerous vendors that fleets depend on for products and services to keep operations running efficiently and profitably. There are vendors for fuel, vehicle parts, maintenance services, fleet management services, vehicle financing, and technology, to name a few.

If all is well in the fleet/vendor relationship, there can be bottom line boosting benefits to be gained, such as better pricing, on-time deliveries, responsiveness, and preferential treatment for product availability and services. But, should the relationship go south, those benefits can quickly go away, and numerous problems can develop that have the potential to negatively affect fleet operations.

A vendor relationship should be maintained just like other business relationships. The relationship should be based on honesty, trust, respect, collaboration, and teamwork. Vendors should be treated as valued members of your team, with the goal being a successful, effective, and lasting relationship where both parties walk away happy at the end of the day.

 

Five Key Tips For Vendor Relationships

1. Keep Lines of Communication Open, Honest and Ongoing

Effective communication is key to any successful relationship, and the fleet/vendor relationship is no different. The more a vendor knows about your operations and needs, the better they can provide cost-effective and winning solutions. Cultivate familiarity, respect, and trust by scheduling regular meetings with vendors as time allows, preferably in person or by phone. Don’t wait until there’s a problem to reach out to a vendor. Respect that they also have a business to run.

2. Set Clear Goals and Expectations

While this is always important, it’s especially critical at the beginning of the vendor relationship, so the vendor has a clear understanding of what’s important to your operations. Knowing exactly what you want and what you expect allows a vendor to make the best decisions to help ensure your goals and expectations are met. When selecting a vendor, chose wisely by determining which vendor can most cost-effectively meet your goals and provide products or services when, where, and how you need them.

3. Be Loyal

No one is perfect. Mistakes, miscommunications, or misunderstandings happen. Sticking with a vendor through “hiccups” by consistently giving them business can work in your favor. Most vendors reward loyalty with discounts, incentives, delivery of needed products or services when natural disasters strike, or in times of crisis. 

4. Develop Relationships with Senior-Level Contacts

Personnel turnover is constant in any business. It can be pretty frustrating when your contact person at a vendor company keeps changing. Establishing contacts at the highest level possible and then developing relationships early in the vendor relationship can help soften the transition. Friends in high places can be key to continuity of service and for going above and beyond to push through out-of-the-ordinary or special requests.

5. Don’t Focus Entirely on Cost

Sure, cost is important, but basing your decision to partner with a vendor primarily on cost can prove to be an expensive mistake. You may get what seems like a great price upfront, but down the road, there may be hidden costs, poor customer service, and late/early delivery times. To get the most ROI, do your homework and consider the following factors when vetting potential vendors:

  • Proven track record
  • Positive online presence
  • Transparency
  • In-person compatibility with your team
  • Focus on customer support
 

Take Time To Review

Getting the most out of your vendor partnerships means holding vendors accountable. Conduct quarterly, bi-annual, or annual reviews and grade each vendor.

Questions to cover include:

  • How well did the vendor deliver on customer support, quality and timeliness?
  • Did the vendor help you manage costs and stick to the agreed budget?
  • Did the vendor have new ideas to reduce the future costs of doing business with them?
  • Is the vendor easy to work with and can you reach them in a timely manner?
  • Does the vendor keep up with industry trends and bring innovative ideas to the table? 

The New Oxford Dictionary defines a vendor as a person or company offering something for sale. And, while true, vendors are so much more than that — they’re your partners and without them, you simply could not run your operations. Choose them carefully and treat them respectfully and you’ll both prosper.

 

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Tags: Fuel Management

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