The Expense Category Manager Doesn’t Know How The Vendors’ Motivations Change Throughout The Year

From personal experience as a vendor, I know that vendors’ motivations change throughout the year.

Any vendor welcomes adding a new customer at any time during the year, yet there are incentives invisible to you that motivate vendors differently throughout the year.

Vendors have quotas that are set by the manufacturers of the products/services they distribute. Quarter-end and year-end are typical measurement periods, yet they may not line up with a calendar year.

Then you have the vendors’ own goals which trickle down to division managers, sales managers, and individual sales representatives. These, too, are measured by quarter-end and year-end, but these align with the vendors’ fiscal year, which is frequently different than the calendar year as well as being different from their manufacturer’s fiscal year.

Although different vendor team member positions are rewarded differently, everyone on the vendor side of the equation has an interest and a stake in adding your company as their customer, especially toward the end of one of their measurement periods.

Customer pricing and vendor support levels that aren’t interesting to either the sales rep or vendor management become very interesting when either or both of them are just shy of achieving their next bonus level.

There are multiple bonuses available to the sales rep and vendor that are very valuable to them. They are quite happy to improve the value (often significantly) to your company in order to qualify for their next level bonus.

Knowing the motivation cycle of your vendors enables you to align your product/service acquisition with when vendors are the most motivated to provide you with the best possible value (as I’ve mentioned, I consider “best possible value” to be the optimum mix of pricing, product/service quality, and vendor support as judged by you).

Next week…Reason # 10