In 2004 I started my own MSP company. Over a 10 year period, we built a very successful and profitable organization which we eventually sold to a large US-based cloud services provider.
There were many reasons why my company was successful, but one key area we optimized was vendor management. Vendor management can be time-consuming and resource-intensive, so it’s important that you choose your partnerships and management strategies wisely.
We not only chose our vendor partners very carefully, but we leveraged them properly as well. There are two main strategies we used to maximize our vendor partnerships.
By the way, I leveraged my MSP ownership experience to develop my eight/elements of Success methodology and best practices, you can learn more HERE.
Easing the Burden of Vendor Management
Vendor Management can be time-consuming and resource-intensive. Here are 2 simple strategies to make it easier:
- Choose the very best vendor in each solution segment, and partner exclusively.
- Fully engage, embrace, and trust your vendors like an extension of your team.
2 Simple Strategies to Optimize Your Vendor Management
Here are the 2 simple strategies to optimize your vendor management:
1. Choose the Very Best Vendor in Each Solution Segment, and Partner Exclusively
Many MSPs/resellers pride themselves in the “vendor agnostic approach.” Their premise is that “we are unbiased consultants. We will provide three different quotes and we’ll leave it up to the customer to decide what brand or vendor they prefer. Then we’ll implement that.”
I personally never understood this philosophy. The reason businesses were enlisting our help was because they truly valued our opinions.
We did the research up front. We chose what we believed to be the best technology for that particular purpose. If they insisted that we use a different technology, we walked. They weren’t a good fit as a customer.
And you know what? Our customers respected our approach. They appreciated our experience and expertise, and they trusted our recommendation because it made their life easier. They assumed that we knew what we were talking about, and they also appreciated that we had deep expertise with those particular technologies, not a jack-of-all-trades/master-of-none situation.
You know who else appreciated our approach? THE VENDORS. Knowing that we were loyal to them made a world of difference in our relationship. Each vendor understood where they fit in with our overall portfolio, and they accepted their place because they trusted us.
When they understood they didn’t have to worry about us swapping their quote out in front of our customer for their competitor’s quote, it strengthened our trust together and they provided better support.
Choosing a single vendor for each segment also simplified our vendor management process. I like it simple. I’m not saying that we didn’t make mistakes and choose the wrong vendors. Sometimes we did. But when we realized that a certain vendor or technology was not working out, we switched.
Our business flourished as a result.
2. Fully Engage, Embrace, and Trust Your Vendors Like an Extension of Your Team
Many MSPs/resellers are very guarded with their business, and some I would even describe as extremely over-protective and secretive. These extreme resellers operate in a closed environment, insisting on doing things themselves, with their own people, processes and procedures.
With respect to their vendor partners, they maintain an adversarial relationship at all times. They treat them more like suppliers, to be called in for favors when needed, always trying to leverage the lowest price, and to limit information exchange on sales deals for fear that corporate secrets or customer identities would get leaked.
My company had a different philosophy. We were very open with our vendors, and we accepted all the help we could get from anyone that was willing to invest in us (and I don’t mean financially invest, I mean invest their time and energy).
Now don’t get me wrong, my company was proud of the business we built, we had exceptional people and methodologies which we were protective of. But we also understood that we didn’t have all the answers, and we were a small team. If a vendor partner was prepared to share resources with us to propel our business, we always accepted the help.
This help came in different forms including sales assistance, technical knowledge, marketing support, access to high level executives within their organization, and financial support for various customer initiatives.
Why were they so generous with their investment? Because we treated them with complete respect. We ensured that our lines of communication were always open, we constantly provided proactive updates on sales deals and other company initiatives, and we never lied to them nor hid any information from them. In fact we made sure most of them had direct access to our customers if they deemed it necessary.
Some people may criticize this philosophy as being “too trusting”, but I can proudly say we never had a single breach of trust. We always knew that if a vendor were to abuse our trust even just one time, we would terminate our relationship immediately. But we never had to.
To summarize our vendor partner approach, we carefully chose the vendors we worked with and we dove into the deep end with them, sink or swim. If you can’t completely trust your vendor partners with sensitive information, you have the wrong partners. It’s as simple as that.
For deeper insight and to gain advice at no charge from a seasoned professional, you can schedule a free strategy session.
Conclusion
Vendor management is an important aspect of your business. Utilizing simple strategies will save you time, reduce burden on your team, and improve your results.
