Vendor Retention in a Downturn (cont’d)

Frankly, I believe this is stupid and immature. Just because executives find their company in difficulty is no reason to clam up and try to pretend everything is all right. Vendors aren’t dumb, and they know what’s happening. It’s happening to everyone. So why refuse to communicate? Do you think if a vendor’s bills are 30 days overdue the vendor won’t notice it if you keep silent and don’t mention the subject? Come on; get real!

No one likes to be stiffed, but after all, if a vendor’s been a partner in good times, they’ll be one in bad times, too, if you keep the lines of communication open. So instead of retreating to your office and refusing to take their calls, why don’t you take the initiative? ‘Hi, Bob, this is Amelia at Acme. You know that the business slump is really hitting us hard. Our volumes are off and cash flow is really slow. Can you help us out? I know it’s hard, but can we work out a delayed payment schedule for the amount we owe you?’

Bob won’t like it, but the alternatives are worse, so he will try to work out a plan.

And what are the alternatives for you? If you don’t tell him what’s going on, he may be sore enough to take legal action. He may put you on C.O.D. And when times get better (and they will), you’ll be at the bottom of Bob’s list when it comes to getting his product. ‘Hi, Bob this is Amelia at Acme. I wonder if we can get 5,000 of your MCX3118’s in two weeks?’

Guess what Bob’s answer will be?

How you treat people, whether vendors, employees, friends or family, is a function of your MAP (mindset, attitude, philosophy™) as is susceptibility to outside pressure.

If your basic MAP is one of ‘every company for itself’ then you’re more likely to shaft your vendors when problems arise—and suffer the consequences down the road.

But even MAP that understands and believes in the importance of team effort can be pressured into the wrong actions by outside forces in the form of investors, media, etc.

Although wise MAP knows that no good comes from mushroom management it still needs to be strong enough to stand up to the short-term, fast buck attitudes so rife in today’s business world.

What have you done to successfully negotiate an economic slowdown path?

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This entry was posted on Tuesday, January 22nd, 2008 at 4:00 am and is filed under Business info, Communication, Culture, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
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