- June 23, 2008
- Posted by: admin
- Category: Blog
Like you need to work hard to win your status as a vendor with your customer, you have to work even harder and smarter to establish yourself as a partner. Transition from vendor to partner doesn’t just happen (not even in due course of 2-4 years) – it takes a strong vision like “Customer for Life” and the related mind-set and delivery passion at all levels in your company to really convert your vendorship into a partnership.
I’ve seen many a deals on which the providers greedily hop on, considering them short-term HIGH profit makers without putting due consideration and effort to build “value” in the contracts and the delivery to their customers. Such one-way deals although get hard on customers right away, they don’t take much time to become a LOSS to the providers as well – I am not just referring to a long-term loss caused by bad word-of-mouth but also the short-term $ loss.
The strategic value of the project and the level of your service/product in the customer’s value-chain also to an extent determines your vendor vs partner status. However, this should not be considered the only determinant for the value of the relationship. I’ve experienced multiple scenarios where the provider although starts with a humble project, but based on the pain they’ve taken to deliver value in to the relationship have finally ended up being the preferred-vendors in their customer’s most strategic projects.
Unless you are a monopoly, which no one can really be in the outsourcing arena, you have to align your services and commercials to the business objectives of your customer – and the best (and the least painful) way of achieving this is by thinking yourself as a partner than just a vendor. The more you think, the more you’ll realize that in this open outsourcing market of the “flat world” – you got to look success from the same view-point as your customer – else you’re looking at a doom to (ultimate) failure!
Lets just face it for a fact – in the outsourcing services market (however BIG you may become), your cash-flows are only as stable as the stability of the cumulative cash-flows of your customers – so why not make them succeed and reach your success as a cumulative effect, rather than following a self-acclaimed individualistic success theory!
I would suggest to create your customer portfolio more carefully than your stock-investment-portfolio! Also, where possible try to negotiate for a stake in the project’s success – however small % it might be – and link that success to your employee’s success/monetary benefits. You’ll see the magic that will follow for yourself!
In a globally and socially-networked economy (which it has fast become) I am sure its not far away when something like ROR (Return On Relationship) will become an important corporate-performance parameter. Not sure if ROR will ever be quantitatively calculated, but does it really have to? as far as one also believes in quality and can think outside an accountant’s hat!