Management 101 – The care and feeding of vendors

Most managers are well trained and adept in maintaining professional relationships with the bank’s customers.  They have learned how to relate to other employees and subordinates in a businesslike manner.  Certainly, they know what’s appropriate in interacting with executives above them.  So why do so many managers, particularly at the lower levels, do such a poor job in their relations with the bank’s vendors?

We’ve all seen it, and most of us have been there.  Eloise just got promoted to “Assistant Marketing Manager for Debit Card Services to 55+ Customers in Northeast Wisconsin.”  Try printing that on a business card.

Anyway, she has finally made it big in the banking industry.  Her parents are proud.  It’s now time for El to spread her wings, and enjoy the sweet taste of power that comes with her elevated position.

The trouble is, of course, that she is still answering to everyone, just like she did when she was a marketing assistant.  No one reports to her.  She’s doing other people’s projects.  The branches and product managers are all making unreasonable demands.  And, if a customer misunderstands her efforts… well, we all know that the customer is always right.  But take heart.  There is one group out there who can be subjugated; the bank’s vendors.

Let me digress with a personal story.  Back in the ‘70s when I was promoted to branch manager at a mid-sized Illinois bank, I was pretty impressed.  A few people had to do what I said, and I looked like an authority; white shirt and tie, wing-tips.  I would often observe various vendors who came in and out of the bank, and wonder “where did these people go wrong?  Why aren’t they successful like me?”  Not only did I look down on them, I treated them like indentured servants.  Make me happy, or I’ll get someone else to rent me a copier, plow the snow, or fix my furnaces.

As time went by, however, I came to realize how much I depended on those people; and how much power they had over me.  I relied on them to help me be successful, and I learned to treat them… well, like I’d like to be treated.

Later I was promoted to SVP of Administration.  If you think you have lots of vendors, try managing DP, facilities management, HR, technology, and office services.  My experience taught me some valuable fundamentals:

1)  The smaller the vendor, the better you treat them.  Sounds counter intuitive, but it’s true.  I developed good relationships with dozens of one man vendors, and usually was able to build a relationship where a handshake between us was as good as a contract. 

I recall a cabinet maker who did some odd remodeling jobs for the bank.  He was living hand to mouth, and had a wife and baby at home.  When he’d bring me an invoice, I’d always ask him if he wanted to wait while we cut a check.  When I’d call him with a job to do, somehow he was always available immediately.

2)  Don’t look down your nose too hard.  The vendor probably used to do what you do, but left because he or she needed more money.  One of our most senior branch managers left us after twenty years.  We all felt bad to find out Julia was selling cellular phones.  Eventually, when we decided to purchase the devices for some of our outside sales people, I gave her a chance to bid the job… poor thing.  Several months later at a weekly staff meeting we were going over jumbo loan requests, and there was Julia’s application.  Poor Julia, indeed.

3)  Not all customers pay the same price for services; particularly with smaller vendors.  Suppliers of services often price, based on the quality of the relationship with the customers.  This is especially true with rush jobs, do-overs based on a client error, or a special project with extra work.  If it’s a client with a good professional relationship, the vendor will often waive such extra fees.

4)  The most important reason to treat vendors well, is because, if you didn’t need them, they wouldn’t be your vendor.  One constant to which all vendors will testify, is this.  When the client finally decides to buy the product or service, it is often with a great deal of urgency.  Something has happened at the bank.  There was a meeting.  Sales projections are dismal.  A bank was acquired.  A goal is not being met.  There is now a sudden panic to do something yesterday, because the boss is pounding his or her fist.  Now is not the time to foster good relations with those who can help you resolve the issue.

Back to Eloise.  Don’t let her ruin the good relations that your bank has built with the partners who have helped you succeed. 

Make sure all your staff is mature enough to:

1)  Treat vendors as if they were another employee of the bank.

2)  Not use vendors as a scapegoat for their own mistakes.

3)  Use the free knowledge and wisdom available from vendors to make smart decisions.

4)  Be in the position to ask for special treatment.

Oh, and one more thing.  If you ever find yourself downsized, and looking for another job, your relationship with your vendors can be a great asset.  They know what’s going on in many banks in your area, and can be a valuable source for leads.  Make sure the vendors want to work with you again.

Creston Harris, President,
Financial Marketing Systems, Inc.
Estero, Florida

For more information, Contact Bob Singer, Financial Marketing Systems, Inc., (239) 498-7363