Finance News & Insights

Want more vendor buy-in? Categorize suppliers into these 4 groups

In Finance, continuous improvement is always the goal. You’re constantly looking to streamline processes, maximize contract terms, increase discount capture and more.

But often, improvements can’t be made without a little movement from the other side – your trading partners. Staffers have to get them on board with changes your company wants to make.

That’s where “vendor campaigns” come into play. By having your staff dedicate themselves to a specific task and goal, like converting more vendors to e-payments, they can better track and reach results.

Your best strategy

When your company embarks on a new vendor campaign, it’s tempting to just send out a blanket request to all your vendors and be done with it.

But your team is much better off catering the message based on vendor specifics, says Steve Riordan of Source-to-Pay services company PRGX. Setting a goal and expecting to get similar results from all your vendors doesn’t work, he explains. Instead, your staff should first categorize vendors in groups.

4 groups to gauge

To achieve maximum results with vendor campaigns, Riordan organizes suppliers into four main groups. You can share this tactic with A/P and Purchasing to use for your company’s vendor campaigns:

1. The Agreeables. Your company knows that these vendors need you more than you need them. And for that reason, they’re usually not in a position to refuse your requests.

That make your staff’s job easy. Just be sure staffers still explain all the details fully, so when they do accept your request, the change is carried out smoothly.

2. The Squeaky Wheels. These vendors may complain about requests A/P and Purchasing make … but eventually, you know you’ll be able to come to an agreement.

What’s the best way to get them onboard? Engage these vendors in live meetings, Riordan recommends. An in-person session or a video call will help your staffers move along an otherwise long process.

Before you talk, think about the kind of complaints you know they may bring up – and prepare your team with tactful responses to those gripes. Once they see all the benefits on their side, they’ll be more likely to acquiesce.

3. The Good Soldiers. Similar to the Squeaky Wheels, these vendors will “scream and yell and make lots of noise,” Riordan says. But in the end, after all that, they’ll comply.

Your best approach with these vendors may just be to let them react emotionally and say their piece. Then, once they’ve gotten it all out, your team can circle back to them and reiterate the realistic, business-focused outlook that’ll get them on board.

4. The Untouchables. Maybe they never answer your staffers’ calls, or constantly say, “We’re not interested.” Whatever the reason, you just know you aren’t likely to get buy-in from these vendors.

Should you disregard them? Not completely, of course. But they’re not the ones your staffers should spend too much time trying to convince, since you know their efforts may be in vain. If anything, staffers may want to go above vendor reps’ heads and talk to someone higher up who may have more interest and more pull. (If it’s a key vendor, your involvement in this discussion could help, too.)

 

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