6 Steps Toward Better Vendor Management

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When it comes to managing relationships with vendors, too often businesses focus solely on getting the lowest price and neglect other actions that can help develop strong business relationships. While that may seem prudent from a short­term “bottom line” perspective over time it’s an approach that can backfire and wind up costing you more. Building strong vendor relationships isn’t rocket science, but it does take some special skills and understanding. Here are six tips to help you get started:

● Share your goals. Your vendors are in business too, which means they may share at least some of the same goals as your company. When you explain your overall goals and priorities, you create a feeling of partnership that can help strengthen relationships and ensure the services or products they provide will be more focused on those needs. For instance, letting vendors know about a new products launch that may require quicker turnaround or other resources from their end helps them anticipate your needs so you both achieve a mutually beneficial outcome. And don’t forget to show your interest in their company by asking them questions about their own goals and look for ways to provide knowledge or guidance when you can.

● If you have a vendor who supplies a service or product critical to your business, ask them for their opinion on strategic moves like roll­out dates or minimum thresholds for buying that can help your business run more efficiently. Your vendor will be more likely to work harder when they feel they’re essential to your company.

● Remain loyal – as long as it doesn’t come with significant costs. Just like you, vendors want long­term relationships with their customers, and if you demonstrate your willingness to remain loyal month after month, you’re more likely to get better deals as well as access to expert or “insider” knowledge about products or services you use. Of course, that doesn’t mean you should pay exorbitantly higher prices for that privilege, but it does mean you should avoid switching from one vendor to another just to save a few nickels and dimes. By remaining with the same vendors over time, you can potentially reap much larger savings.

● If you have the resources, assign one person to manage your vendors. Duties include reaching out to each vendor with phone calls and in­person visits when possible, as well as resolving issues and answering questions to ensure the relationship remains as strong as possible.

● Have a written agreement for each vendor that spells out your company’s policies as well as expectations to set the tone initially, then follow up with specific expectations, including pricing and turnaround times, for each order. Make sure you have a record that shows the paperwork (or emailattachments) was received and by whom to avoid miscommunication or mistakes that can cast a cloud over vendor relationships.

● Remember: Sometimes, you have to give something to get something. While getting a good price is important, be willing to negotiate a win­win agreement that benefits both you and your vendor, especially if you have special needs like an unusually fast turnaround time or unexpectedly high volume. Building any relationship is a two ­way street, and it takes time to make sure it’s strong and mutually beneficial. Considering the relationship from the vendor’s side and then working toward solutions and actions that satisfy both your needs will help you strengthen your bond so you both can profit. BankTEL’s agile software applications provide robust solutions for managing vendor relationships and managing risks. Learn more about BankTEL Systems by visiting our solutions page or use our online contact form to speak with a representative.

Capturing the Elusive Bank Account Switcher

Capturing the elusive bank account

Capturing the Elusive Account Switcher

       In the American banking market, customers have a high rate of switching accounts, seeking after new incentives or better offerings and leaving their current bank behind. How can your bank capture these customers and cause them to choose your bank, or, in the case of current customers, stay with your bank? This begins with understanding how these customers think, and it may not be the way you think they do. AOL and Oliver Wyman recently did a survey and study of account switchers, first-time applicants and account abandoners. The study looked at the clickstream history of over 1,700 participants while also asking them some survey questions. The results can help today’s banks understand how account switchers think, and change their own thinking to be in alignment.

Account Switchers Typically Choose the Bank They Already Like

       According to the study, two out of every three of these potential account switchers had a bank in mind before they started their research, and 90 percent of those who had a definite interest chose that bank they liked. This means that banks who wish to capture account switchers need to stay at the forefront of their target market’s mind, before shopping begins. Your branding, then, needs to be “always on” so your bank comes to mind when the first thought of making a switch occurs.

Account Switchers Are Not Influenced by Cash Offers

       Offering a cash incentive for opening a new checking account may not be as effective as it seems at first. The survey found that 40 percent of switchers were influenced by these offers, the offers themselves were not enough to cause people to make a switch. Instead, your company must have differentiators that are well understood and clearly show how your bank is different. Simply offering some money is not enough.

Client Experience Causes Majority of Switches

       Is your bank operating on the fact that life changes cause the majority of account switches? Getting married, moving, having a child and other life changes can cause people to switch accounts, but surprisingly the survey found that negative experience was the most common cause. Your customers demand a positive experience at your bank, and if they don’t have it, they will move on. So how does this knowledge help you capture account switchers? When people have a negative experience at a bank, they turn to the experiences of their friends and family to help them find a new one. This means that you need to cultivate advocacy from your current customers. When account switchers learn about your bank from their personal network, it becomes a verified candidate in their minds.

People Want to Open Accounts Online, but Can’t

       Finally, the survey found that people are running into a roadblock preventing them from opening accounts conveniently online. One out of every five first-time checking account clients surveyed tried but failed to open an account online. As a result, 40 percent stopped trying to switch banks altogether, indicating that the hassle was too great. To capture that 40 percent, consider making your online account opening simpler. Some banks avoid this because they want to have the customer come into the bank for a face-to-face meeting. Rest assured these meetings will still happen. A full 60 percent of those surveyed indicated that they preferred to open at a branch to speak to a person who can answer questions. You will still get your customers into your bank, but allowing account opening easily online can prevent losing those who want that convenience. So how can your bank capture the elusive account switcher? Learn more about how they think, and make changes to your marketing plan accordingly, and you can land these accounts at your own bank.