Right now, you are busy planning for the run-up to the 2023 holiday season. Likely, you are focused on your marketing plan, balance sheet, inventory, and capturing new, and repeat customers.
As you share the warmth of the season with your team, don’t forget about your most important internal customers – your Suppliers!
These important partners keep your business going through it all – bad weather, challenging economic conditions, and even global pandemics. But are you showing them the love they need to future-proof your business? Now is the perfect time to take stock of your supplier relationships and double down on what’s important to them, while making them feel even more valued!
Here's the key to understanding the supplier relationship - suppliers prioritize their commitments based on the quality of your relationship with them!
Six strategies for strengthening your supplier relationships for the long term:
1. Pay Your Suppliers On Time (Always) – This is the most important aspect of your supplier relationship. According to a recent survey by Quickbooks Intelligence, 61% of small businesses named cash flow as a significant struggle. Cash flow is top-of-mind for your suppliers, just as it is for you.
2. Be Responsive to their Needs – Understanding your supplier's success triggers and challenges, and how you can be supportive goes a long way.
3. Regular Communications – Meet with your Suppliers regularly to share insights, challenges, and opportunities. You might want to consider one of the many collaborative software tools on the market to accelerate your teamwork.
4. Never Overpromise. Ensure the accuracy of your commitments – and hold your word as a sacred trust that must never be broken.
5. Treat your Suppliers as an Integrated Member of your Team. After all, they are!
6. Build a Supplier Incentive Plan -- to motivate them through bonuses, rewards, recognitions, referrals, and learning opportunities.
So, let’s drill down a bit on our first and last strategy for strengthening your supplier relationships. First, paying on time. There is probably no single factor that’s more important to your suppliers than honoring your contractual obligations and payment terms.
All of us like predictability in our business, and suppliers are no different.
And here’s the payoff – When your supplier is faced with difficult choices on prioritizing customers due to scarcity or logistical challenges, who are they going to prioritize? Of course, it will always be the enterprise that consistently pays on time!
Further, building a supplier incentive plan is a great way to differentiate your business and motivate your suppliers. In turn, you will earn your spot at the top of their list when they are prioritizing customers’ needs. Be creative here. Consider a special award that is branded with your company logo, pay for specific training, offer cash bonuses, and other recognition awards. Understand your suppliers so that you can make the rewards meaningful.
You will also want to discuss this strategy with your legal team to be sure the awards are in line with any ethics or code of conduct guidelines your company has in place.
And you will need capital to make these smart, strategic investments with your suppliers. Financial capital gives you the flexibility to differentiate yourself while strengthening your supplier relationships. But what if you are having cash-flow challenges and are facing a cash gap?
Be smart. Show the love. And accelerate your business by putting a bow around your suppliers this holiday season!
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