A partnership is always a two-way street and takes time and effort from both parties to be successful.
Building and maintaining a both ways beneficial partnership between customer and supplier demands trust, mutual understanding and goals, and open communication.
There are some basic principles to consider before closing a deal for a new customer–supplier relationship or expanding the existing relationship. There is nothing new about these, but still worth reminding oneself every now and then.
1) Know what you want.
In every business transaction, there are multiple goals and objectives, but often there is one that is more important than the others. If you are looking for a supplier, who will take your business or ways of working to a new level, you may not want to go for the same reliable partner who has been serving you for years but whose services have turned into a commodity. Especially so if the incumbent has never displayed much innovation. However, if what you value most is consolidating partners for ease of managing your services or just plain reducing costs, an existing supplier may be a good choice. The important thing is to spend enough time with your key stakeholders to understand what you really should be looking for. A good Advisor can help in finding new avenues to explore and defining the key objectives.
2) Do not push for what is not available.
As a customer, trying to squeeze out of your preferred supplier something that they really cannot provide or what is not in their global roadmap is most likely a lose-lose scenario for both of you – even if you get that on paper. If the element that is missing is crucial for you, look for another vendor even if they are less familiar to you but have a proven track record. As a supplier, do not sell what you do not have or even worse – what your organization is not even planning on developing. Doing this is the best way to ruin your relationship with your customer.
3) Do not forget the contract after it is signed.
Often you hear people say that in good business relationships contracts can be forgotten when signed. This should not be the case especially when contracting for services. Even if many of the more “legal” clauses could be set aside, a good agreement should include a playbook for joint follow up of performance and continuous improvement of services. These are often quite well drafted but when forgotten will easily derail the business relationship.
4) Be open about your difficulties.
As a supplier, if you are running out of resources or having difficulties to set up your services make sure you share them with your customer early on. More importantly – always come up with an alternative solution if that is possible or find another way to make up for the shortcoming. Not fulfilling your responsibilities and just assuming, that the other party will suck it up because they may not have a realistic choice to opt-out of the deal is a bad start for any business. Organisations – like people – have a long memory and you can do permanent damage to your reputation in the market by not owning up to the situation.
5) As a consultant, customer or supplier – do not try to “crush the opponent”.
If you feel like you ruled the negotiation with an iron fist you have potentially already caused harm to the future relationship. Having losers on the other side will end up with unhappy customers and squeezed out suppliers whose only concern is how to skim the services to meet the profit expectations. This does not mean that you should not bargain hard at times but understanding that both parties are in this for business is a healthy starting point. This is again an area where good Advisor can help in balancing the expectations and achieving the best outcome.
To summarize, I do believe that it is possible to form good win-win business relationships, but that requires fairness and trust, and willingness to go the extra mile when needed. All good building blocks for any relationship.
Senior Advisor, COO