It is crucial to find a common definition of 'value' in a buyer-supplier relationship. Value in the business market is the worth in financial terms of the technical, economic, service and social benefit a customer's company receives in exchange for the price it pays for a market offering.
If you want to have exceptional vendor relationships, follow these principles:
- Learn what drives your customer's business and their challenges. Don't solely focus on your customer's needs, but also their requirements.
- Be competitive in every aspect from product functionality, price and impeccable service.
- For a strategic relationship, vendors must accept fair and reasonable terms, even if they don't fit the vendor's sales model. If a vendor is not willing to accept the terms, the customers only option is to 'exit' the relationship.
- Agree to terms that ensure risk sharing and accountability. This is essential for ensuring the vendor is as concerned about the customer's success as the customer is.
- The vendor is willing to discuss difficult issues and make everyone aware of possible problems that may arise. There must be open communication for a successful relationship.
How do buyers choose new vendors?
1/4 of buyers skip the research
Claiming they already know what they need when it comes to searching for a new supplier could cost potential customers a lot of money.
Who is the competition?
There are typically three ways buyers search for new vendors:
Networking or asking a friend/colleague
Already know what you need to
Use formal process/internal list
Reputations and branding hold more weight than existing relationships when it comes to choosing a vendor, even though both are strong factors in the selection process. 71% of buyers turn to their business networks to single out potential suppliers, research their referrals and do some investigating on details of the supplier.
According to Pardot, about 72% of buyers turn to google during their initial research for things like educational information and reviews. Once the initial research has been conducted, 41% of buyers consider good reputation, 16% more check the company's existing approved vendor lists and an additional 10% check referrals.
Puera, O. (March 22, 2017). How Buyers Choose Vendors: Top 5 Selection Criteria. Retrieved
Bryar, M. (August 18, 2015). 5 Principles for great vendor relationships. Retrieved From: www.cio.com/article/2971717/governance/5-principles-for-great-vendor-relationships
Anderson, J. & Narus, J. (Nov/Dec. 1998). Business Marketing: Understand What Customers Value. Retrieved From: www.hbr.org/1998/11/business-marketing-understand-what-customers-value