Date a Vendor; Marry a Partner
Accelerating Growth Through Dynamic 3rd-Party Relationships
Most businesses need 3rd-party relationships to supplement skill gaps or provide services that do not warrant an FTE. However, most companies also have high supplier turnover which wastes dollars and time and is frustrating. Our experience shows that the root causes of high supplier turnover are failing to gain alignment on the problem to be solved, determining the types of relationships required, and subsequently defining the types of interaction, integration and investment required to be successful. It’s kind of like the difference between dating and going steady – or being married. All types of relationships are important, and the goal is to have the right kinds of relationships in every situation that create value for all parties.
There are many types of 3rd-party relationships. At one end of the spectrum are vendors, more transactional relationships where responsiveness, flexibility, speed and low cost are the priorities. At the other end of the spectrum are partners. At the other end of the spectrum are marketing partners who provide strategic solutions that tend to focus on the brand, customer, and consumer solutions, and these relationships are usually deeper and longer-term.
Understanding the type of relationship required for the business opportunity and investing in a relationship’s success will help grow the relationships and accelerate business results. The first step is identifying the key priorities of the project and mapping the type of relationship needed.
Relationship Mapping Spectrum
The second step is to identify third parties that meet business objectives and relationship criteria. Talk to several and assess how you feel about their capabilities and a potential relationship. Ask them for feedback. Are the objectives clear? Are the timing and compensation reasonable? What type of client interactions will make this project succeed? Do they think they can do a great job (and why)? You may not agree with their answers, but this will provide valuable information on the third party and their fit with your organization. It may also help you tighten the brief.
The third step is to set up the relationship for success from the start.
- Budget the money, personnel, and time needed to succeed.
- Create contracts that are clear and fair. A good contract ensures that both parties understand what is expected and will help track the progress of the project. Compensation should be fair for both parties.
- Invest in two-way communication.
- Before: Have a kick-off where both parties are clear on the deliverables, timing, and plan. Be clear on expectations and set up check-in points along the way.
- During: Check-in regularly, formally, and informally, to share what is working and what is not, using two-way communication tools. Re-work plans if needed and develop an ‘even better if’ list.
- After: Do a postmortem – again two-way - to understand how the future interactions can be even better
Relationships deserve the preparation required to create value and minimize frustration. Understanding the type of relationship needed for the job and creating the ecosystem for outstanding collaboration helps increase productivity and work quality and allows everyone to focus on winning in the marketplace.
About The CMO Syndicate
The CMO Syndicate is a diverse group of world-class Chief Marketing Officers who rapidly solve growth and profit problems for CEOs, VCs, CMOs, and PE firms. As global CMOs from the world’s top companies, The CMO Syndicate is not a traditional marketing consulting agency, and we are not typical marketing or growth consultants. We are growth experts and operators who actually do the work on a part-time or project basis as outsourced fractional and interim CMOs.