It may seem cliche to say that “business is all about relationships,” but there is a reason cliches 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,” says one business relationships expert from SmartOwner, India’s leading marketplace for investors. “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.
Vendor Relationships
For many small businesses, relationships with vendors consist of a monthly transaction– a routine in which there is little to no improvement on the relationship. They may drop off a delivery, ship supplies and (maybe) exchange slight pleasantries with you through email or over the phone. Unfortunately, even these exchanges are few and far in between, as many business owners only speak to vendors when something goes wrong.
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 utilize this parallel growth for cooperation and additional operations.
Strengthening Relationships
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 increase business with performance-based incentives.
Affiliate programs (also known as associate programs, partner programs and similar terms) are essentially a way for those who already work together or in the same industry to combine their efforts and work more closely together on something specific. In the modern age of digital marketing, the term affiliate generally refers to online merchants, bloggers or others who get paid for sending traffic to a partner site.
While this is a beneficial arrangement where entrepreneurs and businesses can work together to earn passive income, it is not the only type of affiliate program that can be utilized to your advantage. In case you are inexperienced in building affiliate programs, here is a step-by-step guide for developing an effective strategy for any business, in any industry:
- Begin building your program through the perspective of the vendor. What would they want to gain? What rewards would encourage business? What would incentivize them to bring you more business?
- Create a program that is generous towards vendors, specifically encouraging new business and increased performance.
- Develop an email campaign to let all current and potential vendors know about the benefits of your new program. You should also develop monthly email campaigns– like an affiliate newsletter– that will continuously encourage further participation.
- Develop a clear and concise tracking system the vendors can view. Allowing vendors to see their own– and others’– contributions and progress will encourage competition.
- Create monthly bonuses, programs and additional incentives to encourage further performance, enrollment and participation.
Everybody Wins!
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. One key element is to ensure the relationship is always mutually beneficial and never too lopsided in your favor.
This can be a difficult balance, but if everybody wins, vendors will only work harder to drive new business, new vendors will want to work with you and competition will build for your business. The best affiliate programs are the ones that everyone wants to be a part of!
