We are a society of customization. From the heated seats in our cars, to the hundreds of stations on Pandora, to the vast array of similar food products found on grocery store shelves; we like to customize the products we buy and the services we choose. Our relationships are the same, customized to fit our lifestyle.
Even the social media giant FaceBook offers an “it’s complicated” choice for relationship statuses, because relationships are complex, living organisms which require attention and finesse – and that includes business relationships. Some relationships are quick- for example, we probably do not put a lot of time and effort selecting the vendor who supplies a few yards of mulch for our Spring yard clean up, and some are more complex- many of us think long and hard before we dive into a relationship with a contractor to rebuild our dream kitchen. Business relationships vary in dynamic depending on the needs they fulfill.
Educational institutions are giants in the need for services. Schools, colleges and universities supply a vast array of services and require the assistance of many other business types to meet the demands of campus life. Food services, construction, payment services, on-campus living requirements, athletics services, bookstores- from the business office to the cafeteria, the needs are endless. So, how do you know what type of relationship your institution requires to meet each need? That can be a tricky question.
There are basically two main choices of business relationships- a vendor and a partner. By definition, a vendor provides a service or product that requires no personal customization or relationship to perform as needed – it is usually a business which exchanges goods or services for payment; a partner provides a more customized experience, where both parties in the relationship are equal in status and many times services are provided over a sustained period of time. Think of a fast food provider you visit between the dash to the basketball game after work vs. a fine dining experience selected to celebrate a wedding anniversary of significance- both establishments fill a specific need, both are useful for specific services. We select the establishment based on the need to be fulfilled and the longevity of the relationship is based on the services provided. Each type of relationship holds value and is important to a business in its own way. So, how do you know whether your institution is best served by a vendor or a partner for a specific product or service?
One way to think about it is- what do you need? Here are some items to consider:
- Vendors provide data; partners may also provide data, while helping the institution interpret the data and using it to help select future services and products.
- Vendors often provide a product, but many times do not provide extensive service to support the product. This can be beneficial, based on the job you require- not all jobs require high level service needs. Partners often support their products with service options that fit the needs of your audience.
- Vendors may provide the lowest cost on a single item, while partners often provide the lowest total cost based on holistic relationship and services provided.
- Vendors provide a standard product and may not integrate with your current systems/procedures; partners provide a customized offering and are willing to integrate with current systems and procedures.
- Vendors provide services based on requests, whereas partners respond to requests in addition to proactively reviewing your relationship and provide suggestions for services and product needs for the future.
- Long term business relationships are formed with partners who understand your business and can continue to meet your needs.
- Vendors provide products and updates based on sales needs; partners update products based on voice of customer feedback and two way conversations with their customer base. This leads to product flexibility and customization.
- Vendors provide goods and services based on the ability to pay; partners understand and carefully select their ideal audience- not every potential client is a good fit for partnership. This ensures the relationship is a good one and can last the test of time.
Another way to decide if you require a vendor or a partner’s assistance for a service or product is to consider if you want to ‘outsource’ the service. Outsourcing can sound like a negative action at times, because it often means relinquishing control over a specific function in order to fulfill it, but when done correctly, it can be a beneficial and very positive business maneuver. Oftentimes companies outsource specific functions to business partners for a variety of positive reasons:
- Outsourcing may save the institution time
- Outsourcing may create efficiencies to focus on other tasks
- Outsourcing may create additional cash flow for the institution
- Outsourcing may provide a better customer experience through service or flexible, customized options
If a function requires outsourcing, generally it requires a strategic partnership to ensure the function is provided with quality, efficiency and provides the same type of service your business would want your name on. When successfully orchestrated, customers may not even notice a change in service – the product or service is provided so cohesively that the experience is contiguous for all involved. That is a sign of a successful partnership.1
How to choose a partner for your business
It stands to reason that in an institution as complex as your campus, with the variety of services you provide to your staff, students and families, the sheer numbers of business relationships you hold are overwhelmingly large. To best provide efficiency for your institution, a key factor of success includes looking for partners who can sustain a positive relationship while managing a wide range of services. A partnership which can manage multiple functions not only creates continuity, but it streamlines service both to the school and the school’s customers, creates deeper relationships and benefits from the understanding of the businesses’ overall goals.
Whether providing a service that requires a “quick hit” use from a vendor (like office supplies ), or one that requires a sustained relationship from a partner (such as a contractor that handles all of your building needs), understanding the difference between a vendor and a partner, and how each can fit into the business needs of your school, will help you to build business relationships that benefit not only the short and long term goals of the school, but also your customers’ overall experience and satisfaction.
Understanding the best type of service provider for each task you require outside assistance for is important to the overall success of your campus. Take a closer look at the Vendor vs. Partner checklist to help you define the right business relationship required for your specific needs.
1Frederick Turk,” Resourcing to Optimize and Leverage Value”, The Business Value Web, by Donald M. Norris and Mark A. Olson