When Customers Can't All Be Vendors

As an organization with over 9,000 customers, it’s highly likely in a typical day that we’re going to conduct business with some of them or be asked to do so. But it became more apparent the day we announced we would be building a new corporate headquarters. That’s why I wanted to answer this question from John:

 “How do you decline making a client a vendor when you already have a primary relationship in their line of business?”

While it’s often expected of us to do business with customers, it’s an equation we cannot always satisfy. We interact with customers every day that could provide products and services to Marco; however, having one primary provider almost always makes the most sense.

If we changed our vendors every time we made a sale, that would not be considered a best practice. Here’s how we try to handle it:

  • Make intentions clear. When a transaction with a potential customer becomes contingent on our company doing business with them, we communicate that these are two separate decisions and accept the fact that the business will be won or lost based on the merits of the proposal. Win or lose, this doesn’t preclude them from proposing their services to us. We look at this as a long-term potential relationship that is not based on a single transaction.
  • Acknowledge customer requests. It’s not uncommon for someone to remind me they are a customer and to let me know they are competing to do business with Marco. First of all, I thank them for their business and commit to timely follow-up, the same as I would expect. Then, I personally research their proposal and gather facts to evaluate their request. It may not always work in their favor, but they’ll always get full consideration and a professional response, just as they deserve.
  • Know the facts before a decision is made. Often times, we find ourselves in a situation where we are required to select one customer over another. These can become real sensitive issues; therefore, I make sure I’m familiar with all the facts related to their proposals prior to making a selection. There have been times when not selecting a customer resulted in the loss of that relationship. It does not happen often; but when it does, first and foremost, I make sure the decision was made in the best interest of our company.

Playing the Card
Conversely, there are times when I have told clients that we believe we deserve their business. I do not do it often and I must admit it is not my favorite task to do.

But when Marco becomes a large customer of a particular provider and they are not doing a significant amount of business with us, I am willing to play that card, too. Most times, this is prompted by our sales representative telling me they are not getting an opportunity with a client that we are doing business with. Again, I make sure to gather all the facts to determine the significance of our business to them. I only intervene if I know we can deliver value and are positioned to service them as well or better than their current provider.

It is not my expectation that all of our vendors do business with us, as it doesn’t always make sense. But when it does, I would expect the last right of refusal on proposals and I would extend the same to our customers.

Topics: Customer Relationships, Vendors