For many companies, maintaining great relationships with consumers is the main priority, often neglecting supplier relationships in the process.
While customers are vital to the success of your business, suppliers play an equally important role, which is why these partnerships should be nurtured as well. Great relationships with suppliers can affect everything from expenses and production processes to customer satisfaction and the overall success of your business.
So, aim to maintain a good supplier relationship following these effective tips:
1. Evaluate potential risks
Before focusing on building relationships, it might be wise to develop the habit of identifying and evaluating the risks associated with working with each supplier.
Ask potential partners about their industry experience, previous work, expertise, crisis management mechanisms, as well as relevant references. Using this information, determine whether they have the right background, credibility, and capacity to fulfil your needs.
When you examine the potential risks that come with each supplier, you will be able to choose the best partners, mitigate any threats, and prepare for all possibilities.
2. Choose suitable suppliers
Experience, references, and business operations aren’t the only relevant factors; it may be helpful to choose suppliers that align with your goals and values as well.
For instance, if exceptional customer service is vital to you, select a supplier that also prioritizes this aspect. That way, any products, services, or materials you offer your clients will have good return policies and warranties similar to your own, thus improving customer relations.
It is nearly impossible to build strong relationships with business partners who have opposite core values to your own, so make sure you consider their positioning, ethics, and reputation when choosing suppliers.
3. Understand your suppliers
In an effort to maintain good relationships, consider what’s important to your suppliers. Do they require you to follow a certain set of processes or do you need to complete your paperwork in a specific way?
As long as the demands are reasonable, aim to respect their business operations and simplify their work by adhering to the determined procedures and timelines.
Stay on top of important factors such as business information, purchase order numbers, and insurance certificates. Give your suppliers what they need in a timely manner, and you will surely build a strong relationship.
4. Prevent cash flow obstacles
Cash flow issues can quickly damage relationships with suppliers. When you are unable to make payments on time and fulfil your obligations, you may be seen as an unprofessional and unreliable partner.
Apart from disrupting partnerships, this could also negatively affect your supply chain and end-user experience, creating new obstacles in the process. For that reason, filling up any financial gaps should be your top priority.
You can achieve this by choosing an effective trade finance solution that suits the needs of your business. This can provide you with a quick and convenient cash injection to pay suppliers without creating a large financial burden.
5. Focus on communication
Efficient communication is key to all relationships, including the ones you build with your suppliers. Keep in touch with your partners and schedule regular meetings with them, both formal and informal ones.
Reflect on your partnership, go over the aspects that are working well, and talk about potential areas of improvement.
Communicating in such a way and giving one another assessments of efficient or difficult processes can allow you to come up with more innovative solutions that can improve your partnership even further.
6. Be a good business partner
Think about all the qualities you value in your consumers, and try to provide the same to your suppliers.
Along with making payments on time and providing necessary information, this could also mean offering constructive feedback, showing appreciation to suppliers, and advocating for valuable business partners, for example.
In the same way, you try harder to retain good customers, your suppliers will go the extra mile for your company if you are an excellent business partner. Not only will this help to strengthen your relationship, but it could also aid in aspects such as supply chain network optimization.
7. Reward service with loyalty
Many companies today complain that their consumers aren’t loyal, but rather chasing the best deals. Make sure you aren’t doing the same with your suppliers.
If the suppliers you work with have rewarded you with great service, provide them with your loyalty in return, the same way you might want to be rewarded by your own customers. Professional relationships have to be reciprocal in order to work.
Both parties have to be mature, committed, and ready to make an effort if they want to build a lasting partnership.
How do you manage supplier relationships effectively?
Evidently, maintaining good relationships with your suppliers is just as crucial as those you establish with your consumers. Here are some good supplier relationship management strategies to follow:
- Evaluate potential risks.
- Choose suitable suppliers.
- Understand your suppliers.
- Prevent cash flow obstacles.
- Focus on communication.
- Be a good business partner.
- Reward service with loyalty.
Choose good partners, focus on communication, and reward them with loyalty and efficiency to ensure the growth and success of your company.
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Lilly Miller is a Sydney-based graphic designer and a passionate writer. Loves everything about home decor, art history, and baking. She shares a home with two loving dogs and a gecko named Rodney.