Why “Vendor” is a Four Letter Word

Any brand worth its salt knows that vendors are essential to your company’s success. Over and over again, we see how relying on a vendor who doesn’t take your business as seriously as you do can put you in a vulnerable position with customers.

In one infamous example, Virgin Airlines left 50,000 passengers stranded due to a failure in the third party SaaS software that managed their booking, reservation, check-in and boarding systems, costing the company an estimated 20 million dollars and doing untold damage to their reputation and relationships with customers.

This might seem like an extreme example, but the truth is your relationship with vendors is profoundly connected to your relationships with the customers and clients you depend on. And one foundational issue might be the term “vendor” itself. Here’s why we think vendor is a four letter word—and how changing your mindset when it comes to your vendor relationships can have a transformational impact on your reputation and bottom line.

The Classic Approach to the Vendor Relationship

In the traditional approach to the vendor/client relationship, the hierarchy of power is clear. Vendors are there to provide a service that your company is unable or unwilling to do in-house.

The use of vendors to meet the essential needs of businesses is a fundamental part of capitalism as we know it. In the early days, these vendors might have been the farmers who supplied raw material to cotton mills and small-scale factories. Or if we go even further back, the women who did piecework, sewing clothing and other soft goods within the confines of their home. As capitalism expanded, so did the network of vendors needed to make it run smoothly, and the traditional conception of the vendor/client relationship became more firmly cemented within this hierarchical structure.

From suppliers who bring the raw materials you need to create, to experts hired to create more intangible assets like marketing strategies, historically businesses have thought of vendors as fundamentally external in nature. They’re not a part of your business, the reasoning goes. Why should they feel committed to your bottom line?

But in truth, vendors play a critical role in advancing, or in some cases impeding, your organization’s higher purpose. When your interests and goals align, they’ll be as invested as you are in your company’s success. And, when they don’t, disaster can strike as we see in the case of vendor failures resulting from miscommunication or simple disinterest that cause untold damage to your company’s bottom line.

Reframing Vendors as Partners

It’s clear that building successful vendor relationships is the key to creating a functional ecosystem of interlocking interests, where everyone is equally invested in supporting your organization’s long term goals for their mutual benefit. But how to introduce this framework into a new vendor/client relationship? You might want to start with your terminology.

When we think of vendors as partners instead of outside sources of labor, we’re able to center the relationship in a way that makes them willing to go the extra mile, for a transformative effect on our organizations.

It can all start with your onboarding process. When you introduce a new vendor relationship, dedicate time and resources to immersing your new “vendor partner” in your brand, so they’ll be able to develop a deeper understanding of your organization’s values, goals and processes.

Explain your shared purpose, mission, vision and the core values that unite your company as a team. Just like a successful employee onboarding, a vendor partner onboarding helps your vendor feel aligned to the larger purpose of your organization and ensures that you’re on the same page from day one.

Shared goals and a shared understanding of how to reach them will move you a long way towards building a vendor/client relationship that functions like a partnership, producing superior results and creating meaningful connections that improve your reputation, output and bottom line.

Thinking Big Picture: A Focus on Collaboration

Once you’ve reframed your vendors as partners, what kind of impact can you expect?

We believe that reframing your approach to vendors can have a transformational effect on your organization as a whole. Not only does the transformation of vendors to partners send the message that you value your vendor relationships, it centers collaboration as a key value of your organization for employees and vendors at all levels of your company. The University of Tennessee conducted a case study into McDonald’s, one of the most notable and long-running fast food chains, to emphasize the importance of partner relationships for success. The company maintains  “long-term transparent relationships based on the unwavering belief that everyone in the McDonald’s ‘System’ can and should win”, ensuring mutual success for all parties involved.

When we focus on relationships rather than individual projects, we set ourselves up to achieve on a higher level. That last minute deadline that a vendor would ordinarily be unable to accommodate becomes achievable when it’s for a purpose they understand and care about.

The output of work is at a higher level, with higher quality results, as vendors frame their interactions with your organization within a larger context that has meaning outside of any individual transaction. And in turn, treating projects as partnerships allows us to go above and beyond for clients, effectively paying it forward.

When we center collaboration above control, partnerships over hierarchies, we’re at the risk of going against the conventional wisdom of how things “should” be done. But we’re also creating unprecedented opportunities for individual and organizational growth.

Learn more about helping your organization create more meaningful relationships.  BrandCulture’s Shared Purpose framework can help companies reach their highest potential.