Your business must maintain fantastic relationships with all suppliers. Why? We’ll talk about that in this post after showing you how to do it. Before we begin with any of that, that’s define what we mean by a “supplier”.
Suppliers come in many forms but they all have one thing in common – they supply your business with something integral for its operations. Some common suppliers include:
- Equipment/machinery suppliers
- Office equipment suppliers
- Parts suppliers
- IT services suppliers
- Software suppliers
- Marketing/advertising suppliers
Put it this way; if you’re paying a company or individual to provide a product/service for your business, they’re a supplier.
Looking at it like that, you’re starting to realise the scope of good supplier relationships. How can you achieve this? Here are some of our favourite and most successful strategies to keep good supplier relationships and guarantee long-term business success:
#1 Utilise supplier management software
Kick things off with a solution to manage suppliers all in one place. 99% of companies handle this via emails – but that’s never the smartest idea. Think about how many emails you get per week and then you see how easy it is for suppliers to get lost amongst the junk. That’s why opting for supplier compliance software is a far more intelligent move. This gives you a system to collect all of your suppliers and manage relationships with them.
In other words, it’s a platform to see all supplier messages, meaning they don’t get lost amongst your wave of normal emails. You see messages pop up immediately and can seamlessly reply. You’re maintaining better communication with suppliers, which reduces the chances of mix-ups happening or making a supplier angry because you didn’t respond to their message.
#2 Always pay suppliers on time
Missed or delayed payments are the easiest ways to get on a supplier’s bad side. Remember, every supplier runs its own business, so they depend on a steady cash flow just like you. They can’t afford to chase up clients who haven’t paid on time and will be pretty angry if you’re constantly missing payments or unable to fulfil payment terms.
Suppliers are likely to charge you in one of two ways:
- They bill you for products/services via an invoice
- They charge through a subscription service
“Traditional” suppliers – like equipment or parts providers – are more likely to use invoices for payments. You ask them for something, they supply it, and then you get an invoice explaining how much you need to pay. Always pay your invoices immediately – or as quickly as possible. If you can’t pay the moment an invoice comes through, set a reminder in your calendar once a week until the due date. This will ensure you’re constantly reminded of the payment and should pay it way before it’s due, remaining on your supplier’s good side. Immediate invoice payments are always preferred but we appreciate this isn’t always possible depending on cash flow.
As for subscriptions, you should have a standing order or direct debit set up to cover them. Make sure there’s enough money in the dedicated billing account every month, quarter or year to cover the subscription costs. This is a common payment option from tech suppliers – particularly those providing you with software solutions. You’ll either pay for a year’s use or be on a rolling monthly contract. Either way, you need money in your account to avoid missing subscription payments and angering the supplier.
#3 Give your suppliers a shout-out
Suppliers play a big role in how successful your company is. Without them, you wouldn’t be able to reach your potential – in many cases, your suppliers directly help you secure customers and make money. So, it makes sense to give them some credit now and then – shout them out and you’ll maintain excellent relationships. This can lead to long-term, mutually beneficial partnerships.
How can you shout out a supplier?
A few ideas spring to mind and it largely depends on what they’re supplying and what your business is doing. For example, you could try either of the following:
- Shout out your supplier on social media if they helped you with a specific project. E.g. you run a construction company and you used a timber supplier to help you construct a lovely shed in someone’s garden. Tagging the supplier in the project photos and giving your thanks in the image caption means everyone knows who supplied the timber and the supplier will be thankful for the spotlight.
- Add your suppliers to your business website. This has dual benefits for both you and your suppliers! Putting their logos on your homepage or having a page dedicated to suppliers can be a form of social proof. It proves to audiences and leads that your business is reputable as you’re using great software from a renowned provider, etc. It also benefits the supplier by ensuring anyone who visits your site sees their logo and can even click it to be sent to their site.
Shouting out suppliers is a form of free advertising for the supplier and an acknowledgement from you that you appreciate your work. Neglecting this is a surefire way to develop bad relationships that don’t last long or aren’t as prosperous.
#4 Provide useful feedback for suppliers
The supplier-business relationship should always be a two-way street. Yes, you’re paying the supplier and it’s how they make money, but you’re also gaining something from their products/services. As such, it makes sense to offer useful feedback whenever possible to help both your supplier and your business.
For instance, leave positive reviews on their Google Business page. The supplier will appreciate it and be more likely to want to work with you in the future. It also technically aids you by boosting their ratings, so if customers see you work with the supplier, they know you’re working with a top-class one!
But that’s not the only way feedback should be given. Don’t be afraid to communicate with suppliers and provide constructive criticism on what they could improve. Help them get better at their job and they’ll end up helping you be better at yours. As we said, it’s a two-way street; if you’re open and honest with one another – and willing to accept feedback – both parties will end up happy.
Why maintaining excellent supplier relationships is essential for businesses?
You’ve had insights into how you can maintain good relationships, now it’s time for the why portion of this post.
Why bother with this? If you’re paying someone to provide products/services, why do you need to have a good relationship with them? It turns out that positive supplier relationships result in one major benefit: your supplier becomes more loyal to your business.
Having a loyal supplier that enjoys working with your company will then create these advantages:
- Discounted rates – When a supplier likes working with you and appreciates your business, they’re far more likely to introduce discounted rates to honour your loyalty. They’ll want a long-term partnership as they value what they’re getting from this relationship. Especially if they see an influx of traffic or customers from your shout-outs. It’s beneficial for them, so they encourage you to stick around and avoid jumping ship by giving better rates. You save money and they keep reaping the rewards.
- The best possible service – Suppliers that are loyal to you will want to keep your business, so they’re going to provide the best service possible. Discounted rates are only beneficial if the company getting them enjoys the service/products they’re receiving. You will jump ship if other suppliers do a better job than your current one, which is why so many are keen to uphold the best service imaginable. Therefore, you’re seeing huge benefits by getting the best suppliers around.
- Avoid downtime – What happens when a supplier decides not to supply you anymore? Perhaps they up their rates or just don’t want to do business with you because of how you treated them. It means you’re in a pickle where you need supplies but don’t have them. Downtime proceeds and this eats into your bottom line as you lose money because your company can’t function. Great supplier relationships ensure you avoid downtime and keep your business moving.
- Get the latest products/services – When suppliers release new products or services, they’re more likely to share them with long-term partners. You could get a sneak peek at new things or be able to test different services before anyone else. You’re then able to use these to promote your business by saying “Look, we’ve got the latest product/service and all of our customers can benefit from it” which could drive new leads and sales.
Summary
We’ll summarise this post by saying that excellent supplier relationships are essential for all businesses. They will be mutually beneficial with a particular focus on improving your business operations and helping you save money. Maintaining a positive relationship with suppliers is easier than it sounds – it’s mainly about respecting the supplier, paying them on time and giving them credit when it’s due.
