Dan Fisher
Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.

Vendor Management 101 (Rules to live by)

Trust—the single most important element of any relationship, whether it be banker and customer or banker and vendor. Relationships based on trust are key to forging a solid business foundation. When a relationship is built on trust it becomes reliable, dependable, and durable. The unfortunate fact of business life is as a consultant, we more frequently encounter vendor sales staff trying to undermine the client/consultant relationship. Only two people look out for your interests … and one you must hire. No matter how you look at it, there is value in having an experienced, independent, and knowledgeable third party to provide insight to you and your team when working on a significant vendor decision.  Too often vendors see a consultant as a threat. In fact, they will do just about anything to convince or persuade the client that they do not need a consultant.

Here are three rules I recommend you adopt:

Rule #1: If a vendor suggests to you that you do not need a consultant, hire a consultant right away!

There is clearly something they do not want you to know.

Rule #2: If a vendor tells you that the deal they just presented to you is the best deal that you can get and that they have offered you everything … hire a consultant right away!

Otherwise you are leaving money on the table … and they know it.

Rule #3: If a vendor tells you that they only sign seven year contracts … hire a consultant right away!

No deal is good for seven years without some very specific incentives and performance criteria.

Rule #4: If a vendor contacts you (the client) directly under the guise that it is not related to the contract discussions, you immediately will have an integrity problem with the vendor.

Disengage the conversation right away.

More often than not, no matter how innocent the conversation appears, the intent of the vendor is to take the conversion to the topic that the vendor specifically wants to go to. These things do not happen by accident and once this is done, the contract objective has been compromised.

Rule #5: The vendor will always represent the vendor.

They will always look out after their best interests, not yours!

They will never inform you that you have just negotiated (on your own) a contract that is 50% more expensive and twice as long as the competition in your town that is on the same platform.

Rule #6: Vendors negotiate deals every day. You don’t. Hire a consultant!

Vendors do a much better job at negotiating than you do, no matter how good you think you are.

Why these are the rules

At the end of the day:

  • Vendors inherently are opposed to consultants because they are experienced, informed, and independently work for their clients.
  • Consultants understand the marketplace, have a understanding of industry best practices, and assert expectations on your behalf.
  • You will never receive anything not asked for.
  • Note that vendors will never provide you a list of things you should ask for at the beginning of the contract negotiations. Never! Your consultant, on the other hand, knows what to ask for and will tell you.

Why? Because at the end of the day… we work for you.

—The Wombat!

Dan Fisher
Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.

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