As a smaller sales office, one of the biggest challenges we face is selecting vendors. We're in an industry with many different products and many different vendors. There are even many major and many subtle differences between vendors within the same product category. In a perfect world one vendor would have every program we want, provide efficient account set up, great service, top notch training, top notch ISO support, sales materials and most of all, pay us as promised. Many times this is far from the truth. So how does the smaller sales office find vendors that perform to their expectations?
We've started to look at our vendors the same way we recommend that our customers sort through the clutter to select processors. Because, as a sales office you're the customer of the processor, check company, gift/loyalty company, equipment vendor etc. They are trying to get your business (new customers) just like you're trying to add new customers to your portfolio. Like sales offices, there are some vendors that give you full disclosure and then provide what they promise and some that tell you what you want to hear to get you signed up. Following are some suggestions to help you figure out which is which?
First determine what your company is looking for in an arrangement with a vendor? What's more important, an up front pay-out or long term residual? Determine what sort of terms you want in your agreement with your vendor, and then in your vendors agreement with your end users? In our case we want vendors with fair terms for our customers, decent pricing for us and we look for companies that are not so big that we're not important to them!
Next, make a list of all the relevant questions you want to know. Make sure you get the same information from each vendor so you can make an apples to apples comparison. Vendors will always emphasize their strong points and minimize their weaknesses. It's your responsibility to find those weaknesses before it's too late for you and your customers. You may need to get information from a few vendors before making your list so you have a better understanding of what questions to ask. Some good basic questions that apply to everyone are; how long in business, live tech support hours, private or publicly held, sales volume, number of employees? Etc.
Next, pick a few vendors in that category and get the questions on your list answered. You can get literature and agreement copies from the ones that look good. Remember to always read the vendors agreement and ask for adjustments that suit your business style. Keep in mind the agreement sent to you is written by the vendor for them. It's your job to make sure it's fair! Also, always ask for and read the agreement your customers will be entering into and try to negotiate on behalf of your customers. If you wouldn't want to sign it, others may feel the same way? These little details can give you a great competitive advantage selling. One example of this is what happens when a customer lease comes to the end of its term. The leasing companies we use continues on a month-to-month basis, but some leasing programs automatically renew for one full year! Believe me that little tidbit will get you the deal every time if your in a competitive situation.
Once you have all of your questions answered, completed your negotiations and done a little investigation, pick the vendor that best suits your needs. You can always do your research by checking references, asking others and checking online. A good source is www.sbs.dnb.com where you can run Dunn & Bradstreet's business profile or credit reports on prospective vendors. Always call the other vendors you spoke with and inform them of your decision. You don't want to burn any bridges in case your first choice doesn't work out. We found one of our best vendors just his way. Calling back to say "thanks but no thanks" this vendor caved in on one important negotiating point and emphatically told me I'd be making a mistake if I didn't try them. Thank goodness he did as they've turned out to be one of our bread and butter vendors over the years!
Last, you should always "Beta Test" a new vendor before sending them lots of business. Early on in this business we made the mistake of shifting high volume to a new vendor only to find out almost everything got screwed up. We've always found it's easier to get it right the first time than to have to go back and fix it. You'll never reach your full potential in this business if you have to keep going back to your customers rewriting lost paperwork or trouble shooting installation and technical problems. So start with a few deals and ramp up to volume. Keep checking to make sure that everything flows the way it should and when something goes wrong (which it will) you can get it corrected the first time. Most importantly make sure the customers are being served and that you're paid on time and correctly. Remember, if it starts off wrong it will seldom get any better!
If it sounds to good to be true it almost always is. As much as our customers want processing at 1.25% with great customer service, anyone signing up on such a program ends up being exploited by what they're not told. There's a sales office we know of that will switch vendors for a few dollars less than cost or a few % more in profit, but often ends up spending more time trying to save deals than writing new ones.
We owe it to ourselves and to our customers to send volume to reputable, financially sound vendors. Again, like we tell our customers, NEVER make a decision based on price alone. It's easy for someone to promise you something if they never intend on delivering!