Strengthening Vendor Relationships Through Incentives

Posted by Elliot Jolesch on October 11, 2017

It may seem cliché to say that “business is all about relationships,” but there is a reason clichés like this exist. Business is, in fact, all about the relationships you build from your partners and investors to your staff and employees to customers and vendors. Every business interaction is also a personal interaction, and you should capitalize on every opportunity to strengthen relationships in every area of business.

One of the key relationships– and one that is often overlooked– is that with your vendors and suppliers. Entrepreneurs rightly focus largely on relationships with customers and clients, but your vendors provide the fundamental materials that make your business possible. For many small businesses, relationships with vendors consist of a monthly transaction– a routine in which there is little to no improvement in the relationship.

While your company may be able to survive with this type of mentality, you would be missing a key opportunity for growth and branding. The vendors and suppliers with whom you work provide the chance for cooperative growth, as they have a vested interest in the success of your business. As your company expands, the business you give them grows as well, and you should use this to your advantage.

The best way to strengthen vendor relationships and capitalize on the opportunities therein is through affiliate and incentive programs. These programs not only reward vendors for their business, they also encourage competition and increased business with performance-based incentives.

In case you are inexperienced in building affiliate programs, here is a step-by-step guide:

  1. Begin building your program from the perspective of the vendor. What would they want to gain? What rewards would encourage business?
  2. Create a program that is generous towards vendors, specifically encouraging new business and increased performance.
  3. Develop an email campaign to let all current and potential vendors know about the benefits of your new program.
  4. Develop a clear and concise tracking system that the vendors can view. Allowing vendors to see their own– and others’– contributions and progress will encourage competition.
  5. Create monthly bonuses, programs and additional incentives to encourage further performance, enrollment, and participation.

Try to think of vendor relationships similarly to your customer relationships. Keep things exciting; encourage further business, and take advantage of every opportunity to strengthen the relationship.

 

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