Over the last couple years that we've been growing ENKI, we've seen how important it is for us to pick vendors that we're really excited about doing business with - vendors we can see as partners in our business that help it grow.  As a small business, our partners have a huge effect on our business and the overall impression we can make on our clients, so picking good ones is critical for us.  I was talking to Dave about this at lunch the other day and we realized there's a pattern to good and bad vendors that we could see early on and would help us pick partners that naturally fit in with our win/win business approach in the future. 

First of all, I'm not going to name many names here - that's not the point.  But if I rave about a vendor, you can take that as a recommendation :)  The best vendors are ones where there isn't any drama in our relationship: we can trust them to deliver their product or service and we never feel betrayed or taken advantage of by them, nor do we feel we have to keep asking (or begging) for some sort of change in our relationship in order to run our business.  We can always enthusiastically recommend them.  The worst vendors keep us constantly looking out for a replacement vendor, or wishing we could because we're locked in to a relationship that we can't easily extricate ourselves from.  It's hard to recommend them to others.  Unfortunately, despite our best efforts so far, the majority of our vendors fall into the group which we'd have trouble recommending.  (If you read my Small Business CRM Challenge blog articles, you can see how frustrating this can be.)

So by now you're probably wondering what the patterns are that we've seen, and how you can use them to pick your vendors.  The strongest and most determining pattern seems to be where the vendor lies on the scale of expedience versus complacency.  Both states seem to stem from their views of their own financial success.   The expedient vendors will put on a happy face and say what it takes to get your business, since they are on the financial edge and need business badly to stay afloat.  In their mind, doing anything for the sale is justified, but you rapidly become cynical of their promises since they can't live up to them - often because they're just too strapped to do so.  Just as troubling are the complacent ones, who have a history of success or a lock-in business model and think they're entitled to your business as a result, without working to earn it.  These vendors betray your trust by acting unilaterally in their own interest, since they think they're the only game in town. 

So how do you see these patterns in advance?  In my experience, the expedient vendors are visible up-front because they offer large discounts or a complex pricing structure with lots of add-on packages that obscure the final cost to you behind a low buy-in price.  In other words, they're thinking, "just sign the contract!!!"  The complacent vendors are more difficult to spot: you'll probably need to do some research on their existing customer base, perhaps by searching online discusion groups.  One telltale is a high buy-in price or inflexibility in negotiating a contract.  They're thinking, "we're the only game in town." It's not always easy to see these patterns, but I'm learning to be a more feel-my-way-through-it kind of guy and if I feel cynical or betrayed in my initial contacts with the vendor, I stay away, since these feelings are harbingers of what is to come.  What's going on here in either case is that the vendor or their representative is avoiding some sort of humiliating experience of loss by the way they're dealing with you - and that's a powerful motivator to keep on practicing this dysfunctional behavior.  So the ultimate thing to look out for is loss-focus (or its littermate, gain-focus.)

What about the opposite - a vendor you can't say enough good things about? If I'm to believe my own analysis, these are vendors who are neither complacent nor expedient.  What does that look like?  I thought about this for a long time and realized it meant that the preoccupation with the humiliation of loss isn't foremost in their minds.  They're having fun, they're passionate about their work and product, and they're connected to their source of internal strength and resources rather than in a relationship of dependence with their customers.  The one word I could think of to describe this was "Courage."  Good vendors exemplify courage.  I know this sounds like one of those kitschy motivational posters you sometimes see in executive offices, but there's some truth to it.  If your vendor is courageous, they aren't focused on milking your business like a cow, but rather building a partnership that benefits both parties: a win/win relationship.  The relationship stops being about them and how they can survive, and starts being about exploring success together because business is about drawing on each others' strengths.  This aligns with the practices that most highly successful executives embody.

OK, so how do you recognize a courageous vendor?  In my experience, they're willing to listen and then act on that listening - not just look like they're acting. This takes a lot of humility - knowing that you don't have all the answers - and that's rare. In our lives, we usually get humility from humiliation and given that we spend most of our time avoiding it, it's a dearly-learned state!   Lately, businesses have realized that looking like you're listening is important, and have created customer relationship management systems, customer surveys, and customer service agents dripping with faux humility to give the impression they listen.  Don't get me wrong: these are good practices, but they have to be backed up with the courage to truly listen and act.  As a small or medium-sized business principal, you know the value of relationships.  So it pays to create a personal relationship up-front and see if your vendor is listening.

I had an experience this week with a vendor I already am enthusiastic about: Kerio Technologies.  Their product just works, and is easy to use.  Their support is effective and doesn't waste your time.  Their pricing is reasonable and easy to understand.  We went to their offices to talk about sales synergies and while we were standing in the hall, their CEO, Scott Schreiman, walked by on his way to get a soda.  He stopped, and listened.  Really listened.  And then he asked us into a conference room to listen some more, without making our time together about him or his company.  He wasn't selling or trying to get rid of us, even though we're a small customer of his.  He was relaxed and open to what was transpiring.  It just reinforced my desire to do more business with his company.  I know that whatever partnership I create with him, even if it isn't working at the time, will be able to move forward because of that orientation to listen.

Finally, my personal observation is that Gandhi's famous words, "Be the change you want to see in the world," still apply more than ever to your business dealings.  If you can be courageous, you'll attract similar partners to yourself since you will all know what's important in a relationship.

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