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May 31, 2024 Nathan Flowers

Leveraging Vendors as Strategic Partners - A Hidden Potential

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As we enter into Industry Era 4.0, traditional relationships between clients and vendors need to evolve. Where vendors were once there to simply provide a service, their exposure across multiple sectors, businesses, and depth is causing the relationship to shift to strategic partnerships. Parties, be they vendor or client, that embrace this approach see significantly better results and have an advantage as new technology continues to drive evolution. 

There are several reasons that you would engage a strategic partnership with vendors.  

Traditionally, vendors were mostly seen as suppliers who only provided pre-defined services, goods, KPIs, raw materials, etc. But this narrow view limited business growth and the value of their scale for idea generation. Companies are now looking to create long-term strategic partnerships with their vendors to gain a competitive advantage in the market.

These partnerships not only help businesses grow, save time and budget, but can also improve the overall quality of the customer journey. Imagine having extra staff members who are skilled at certain tasks, leaving you free to focus on other aspects of your operation. According to a study by Impact.com, companies that invested in partnership from 2020-2022 saw 29% revenue growth per year over the two years.

Here are a few key benefits: 

1. Access to Expertise: Partnering with vendors who have specialized skills and knowledge can help businesses address their current challenges, bring in new perspectives, insights, as well as best practices that can improve quality. With most vendors providing support across multiple industries and customer bases they have exposure to many different practices and their outcomes. 

For example, HP enterprise, a tech company collaborates with SAP, a software company, to develop cutting-edge solutions and AI, enhancing the products and services they offer. In return, they get to maintain their market leadership. Same goes with Microsoft. In fact, according to their report, 95% of its revenue flows through its partners.
2. Value Creation: Strategic Partnerships help businesses optimize value outside of their own capabilities. Utilizing the expertise and resources of vendors can greatly boost operational efficiency, and cut costs. Plus, their cross industry exposure means they will have, or be aware of, technology that a single function in an organization will not. 

BNSF Railway, the largest rail provider in North America and a subsidiary of Berkshire Hathaway, Inc and  J.B. Hunt Transport Services, one of the largest supply chain solutions provider in North America, continually expand their intermodal service through their strategic partnership. “Built on a long-standing strategic partnership foundation and decades of intermodal capacity expansion investments, Quantum will provide a faster and more consistent intermodal solution to customers,” said Tom Williams, group vice president of consumer products at BNSF. Similarly, Amazon, being a key player collaborating with a logistics company, like UPS and Intelcom, optimizes their delivery efficiency and customer satisfaction.

3. Overall Customer Experience: A Strategic Partnership with vendors can directly impact overall customer experience. Vendors who understand your business and its customer base can provide tailored solutions, improving your CSAT and CES scores. Additionally, they can help you to avoid pitfalls that they have seen others fall into.  

For example, Read Advantage Communications Success Stories

So, how do you find the right vendor to partner with?  
1. Expectations and Goal Alignment: The first step is establishing clear goals and expectations for a business function.

According to a study by McKinsey, 47% of managers responded that success of a business depended on alignment of business objective with partners. Open and transparent communication, clearly defined goals, and mutually beneficial agreements are key to a strong relationship. 

2. Identify and Select the Right Vendor for Partnership: Ask the question – Does the partner align to my goals and values? 

Tap into your current partners, research the market, read the reviews, extend your search into your professional network. Consider what they have to offer, their capabilities, resources, and reputation. It is important to select a vendor that aligns with your business goals and values. 

Partnerships are all about teamwork, mutual growth, and enjoying those you are working with. At Advantage Communications, we understand the importance of building strong relationships with partners. Contact us today today to learn more about how we can help you!

Published by Nathan Flowers May 31, 2024
Nathan Flowers