Irene Rosenfeld, retired CEO of Kraft Foods once said:
To build and sustain brands people love and trust, one must focus not only on today but also on tomorrow. It’s not easy…but balancing the short and long term is key to delivering sustainable, profitable growth.
To be sure, it can be hard to look past the demands of the moment—especially with market uncertainty raising the stakes on our decisions. This is especially true when selecting who we partner with when serving our customers.
Now, more than ever, pricing has tremendous influence over vendor decisions. While cost has the greatest impact on short-term profitability, is it the most effective way to measure the long-term value of a partnership? I would suggest that other factors play an even greater role in creating mutual success.
How critical are your vendor relationships to your operation? An enormous amount of value is gained (or lost) in how well a vendor performs after the proposals have been approved and the contracts are signed. How valuable is a partner that you can count on to have your best interest in mind and to go the extra mile to ensure success? Vendors who perform are a priceless asset because they free up bandwidth for other profitable activities. Personable vendors that provide great service boost morale and make the workday better. By contrast, what is the cost, in dollars and productivity, of an unreliable vendor or a vendor that requires enormous amounts of hand-holding?
Things being as they are in our industry, everybody is evaluating the value of their partnerships. When doing so, questions such as, “Do they help me do my job better?” and “Can I count on them to deal fairly in tough situations?” should be just as important as “What do they cost?” With so much capacity in the market right now everybody is open to new relationships. If your current partners don’t check those less tangible, but extremely valuable boxes it’s worth taking a look around. If they do, strengthen those relationships. A quality partner found or kept during slow times will be an invaluable resource when things get busy and you need to count on them.