Enter your text here..For any organization, ensuring that your vendors are able to meet your requirements and expectations is critical. However, this is not just a matter of choosing partners and then passively waiting for them to delight or disappoint: how you manage your vendor relationships can have a major influence on whether they succeed or fail.
One action customers can take to improve vendor performance is to consistently collect feedback from internal stakeholders. This proactive approach increases visibility into your vendor’s performance throughout the contract lifecycle, and ultimately enhances the business relationship.
Let’s delve into the nitty-gritty details of how feedback can improve vendor relationships with the explore the top 3 reasons to keep your lines of communication open.
- It helps clarify expectations between yourself and vendors
A study published in the Washington Post states that frequent feedback can help boost employee performance by as much as 12 percent. Why? A manager who is able to clarify his/her expectations to employees reduces the risk of miscommunication.
The same can be applied to vendors. Although you have a contract that may cover the basic service terms, it can leave a lot of room for confusion given the fast-paced nature of conducting business. Regularly scheduled performance evaluations can help to align expectations and ensure that operational and performance issues are addressed.
- It facilitates proactive performance management
According to a study conducted by the Harvard Business Review, “negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”
In the context of procurement, it’s typical for companies to provide performance surveys at the end of a contract. However, while useful for future reference, the retrospective nature of such an inquiry means that vendors are unable to address and possibly correct deficiencies as they arise, particularly if they are not specifically articulated. With regular periodic feedback, vendors can proactively address performance failures, thereby improving their operations in real time.
Doing otherwise could be a missed opportunity to strengthen your vendor relationships.
- It gives companies a chance to recognize good performance
Feedback need not be negative: buyers can certainly provide positive reinforcement as well. In general, people are more willing to go the extra mile if their efforts are recognized. It’s a great motivational tool.
However, it’s difficult to acknowledge a job well done if you are unable to pinpoint the reasons a particular operational flow is successful or showing marked improvement. If you wait to long to analyze and recognize successful outcomes, the key stakeholders might forget important context. Collecting feedback in the midst of an engagement allows buyers to accurately document strong performance and recognize it.
Good vendor relationships - with a strong focus on vendor performance - foster smooth operations, and promote relationship growth and longevity. Consistent feedback is one of the best ways you can facilitate such relationships. Intermittent feedback is better than no feedback, but a frequent, open, constructive dialogue - supported by stakeholder data - is best of all.
Technology has proven itself to be a game changer for many industries. Therefore, it’s no surprise that it has made a significant impact even in the very niche aspects of business operations, like vendor management. Platforms like Vendorful can make this process easy, painless and automatic. (And if you can think of ways to gather insightful feedback from your vendors, tell us about it below!)
For a comprehensive explanation on how to improve vendor relationships, get in touch with us today.