How to Develop and Maintain Strong Vendor Relationships

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Strong vendor relationships are essential to business success, as vendors offer critical support and services that organizations rely on to not only thrive but advance and compete with others in the industry. As with any successful relationship, vendor and client relationships require effort and commitment from both sides. This is sometimes easier said than done – so, how can you develop and maintain a lasting working relationship with your vendors?

Start with selecting the right vendors.

vendor and human resources leader going over agreement on paper at deskPartnering with vendors whose values and mission align with those of your organization increases the likelihood of a successful working relationship. Avoid selecting vendors based on the likeability of a single person or sales representative from the provider, as turnover and role changes are unavoidable.

Further, make sure your business strategy and goals are the major drivers during the selection process. If your organization is gearing up for significant growth, for example, choose to partner with a vendor that can easily grow with you – you do not want to outgrow your provider as soon as you select them. Make sure they can serve more than just your current needs.

Lastly, vendor selection and contracting should always include mutually agreed upon terms, known as Service Level Agreements (SLAs). The SLA defines the specific services and deliverables that the vendor is responsible for and outlines the vendor’s objectives and Key Performance Indicators (KPIs). The terms within an SLA should be clearly stated, measurable and include “fees at risk” if the vendor’s services do not meet the stated metrics.

Ensure alignment of your expectations and accountability.

While a vendor’s role is to support your company (and the right one will be particularly good at this), they cannot fix every problem within an organization and should not be regarded as a magic bullet.

It is crucial to establish expectations at the onset of a new vendor relationship so that all parties are in alignment. This should include defining the roles and responsibilities of the vendor and your team, addressing anticipated response times to requests, and understanding critical maintenance, training, and updates required for success. There is a fine line between holding your vendors accountable and imposing unrealistic expectations on them; the latter of which will result in both parties becoming frustrated and unhappy.

Maintain regular communication.

Maintaining regular and open communication with your vendors is also critical for success. Make sure you have regular meetings or check-ins so you can stay in touch with your vendors. This will allow vendors to provide more proactive and effective support in return. At least quarterly (sometimes monthly), it is important to review your SLA with your vendors, too.

Additionally, be apprised of your vendor’s business, as they will make sure to know yours, by staying up to date on major events that could impact your organization, such as compliance updates or M&A activity.

Lastly, and most importantly, always remain transparent and provide feedback (positive and negative) to your vendor so they can intervene, as necessary. If your organization really enjoys a new service or product feature, let your vendor know. If you are unhappy with a change or lack of attention, share your experience and explain your dissatisfaction. Feedback, both ways, should be offered in real-time and delivered in a respectful and productive manner. While no one enjoys having difficult conversations, you cannot expect a vendor to change without sharing honest feedback.

Take the next step.

Strong and healthy vendor relationships add critical skills, services and knowledge to your organization, lasting many years. Partnering with vendors with expertise strengthens your organization without having to scale up resources as well. Maintaining these relationships should be thoughtful, factual and measurable. For more information or for support with vendor evaluation, selection or management, contact our experts.

About our authors

Laura Fischer

Laura Fischer

Laura Fischer has an extensive background in Human Resources and Organizational Development. She is recognized for building strategic partner relationships by using her keen industry knowledge, strong business acumen and innovative approach to provide unparalleled client service.

Richard Lawler

Richard Lawler

Richard Lawler provides clients with strategic planning, technology assessment, project management, and business process design and improvement support. He also works with organizations to offer objective, independent advice on the identification, design and deployment of HR business processes.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.


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