How do you treat your vendors? Are they partners that are interested and engaged in your success or just a resource you use as needed? Many companies are too focused on having the upper hand and squeezing every last dollar out of vendor relationships. Both customers and vendors are guilty of this. When a relationship is focused on money and status, the rules change. If vendors gave their best price on the first quote and companies didn’t try to squeeze them, they could get money out of the way and focus on results.
People as well as companies have relationships with two general focuses, social and financial. Social relationships display the social rules of the culture they are in, financial relationships exhibit a more self centered, win or loose focus. We know from empirical research done in the fields of Psychology and Behavioral Economics that the further a financial transaction is from a social one, the more likely that social rules will apply.
It’s better for companies and vendors to have social relationships so that both parties are interested and engaged in each others success. Many companies don’t trust their vendors and vice versa. Why would anyone do business with a vendor or company they don’t trust? There are situations when a company or vendor is the only game in town and if that’s the case and they’re not trustworthy, then you can put them in the financial relationship category. Other than that it doesn’t make sense to do business with people you don’t trust.
If companies and vendors form social relationships, it’s more likely that both companies will be more successful. Look at
, they treat their vendors like partners, they invite them to company meetings and outings and are interested in mutual success. In times of economic downturn Semco has helped employees that they needed to layoff to start their own businesses that supply Semco or any other company they want to do business with. Talk about building loyalty!
Engagement, loyalty and satisfactions are not just good metrics for employees and customers, they are important in all your companies relationships.