Aligning your vendors to a common business vision is a daunting task. In many cases, vendors for retail outlets number in the hundreds, if not thousands. How is it expected of the retailer to manage all of them? The key is to take control and focus the vendors to your business vision, not theirs. The retailer must lead, rather than be led.
This does not mean to ride roughshod over your vendors, but rather point them in the correct direction in unison with other vendors. When the vendor community aligns with a common vision, it clearly allows for a “rising tide that lifts all boats.” Retailers that can pull off this feat are blessed with the benefits of competition and its impact on driving sales. Vendors that know the end game of the retailer can bring more aligned resources to their category and ultimately grow their brands.
So, how does a retailer pull off this task of vendor alignment? I am a big believer in a transparent communication event that provides the platform to articulate a common business vision. In years past, I used to organize an autumn annual vendor conference that allowed our company to explain where we were headed in the upcoming year. At this event, hundreds of vendors would be in attendance, hearing firsthand from the senior team what our financial and key initiative projections were for the upcoming year. Vendors were asked to participate—and invest—in the initiatives in order to achieve these goals. This annual event grew each and every year and provided a format for efficient communication for both the retailer and vendor.
Align To A Common Vision: The key is alignment with your vendors. The annual vendor conference provides the ultimate platform to efficiently inform, educate and align your vendors for the upcoming year. Vendors get to hear firsthand on the vision from the senior team and in a consistent manner. Questions are answered, and plan details are articulated to the attending group. The vendors that attend are “in the know” and potentially have a leg up on vendors that are not in attendance.
Force Your Team To Plan: From an internal standpoint, the annual vendor conference creates a budget and planning deadline that your team must meet in order to be effective at the event. This deadline is hard and usually ahead of when most complete their upcoming annual planning. In our case, I always liked to conduct our annual conference in October—either a few weeks before or after the industry national convention. This allowed for our team to use the national convention as a secondary communication avenue with our vendors by either prepping them for our upcoming conference or finalizing plans that began with our annual event.
Apply Peer Pressure: There is nothing better than having competing vendors in the same audience hearing a common business vision and determining how they will outflank one another. This peer pressure is gold for the retailer since it puts them in the best possible negotiating stance to align vendors within a category. Vendors with representatives from the sales level to senior management will want to ensure that their companies are well represented in your plans throughout the upcoming year.
Negotiate While In The Zone: Feel the vision and act on the vision. When the vendors are all “hyped up” after the senior management presentations, now is the time to close the deal. The expectation should be set in advance that the annual conference is the place where “deals get made” and vendors should be ready to sign on the dotted line. Clearly, this is an opportune negotiating tactic for the retailer, but more importantly, it creates a sense of urgency to finalize the plans with vendor commitments allowing for a focus on executing those plans. There is no reason to delay this process other than the fact of being woefully unprepared.
Senior Management Attracts Senior Management: Your top brass will attract your vendors top brass. Use the draw of access to your senior team to attract the senior teams of your vendors. The more aligned you are “up the chain of command” at your vendors, the more attention— and resources— will come your way. Sell the senior management and access to programs and incremental budgets will soon follow.
Invest Dollars For Returns: An annual vendor conference is a critical strategy to not only align your vendors, but provides a “sense of urgency” for your team to plan for the upcoming year. While there are dollars to be invested to court and entertain vendors, the resulting impact of an efficient platform is substantial in the return of investment by your vendors. The squeaky wheel gets the oil, and if you can pull off a well-orchestrated annual vendor conference, the investment will return handsomely.
John Matthews is the founder and president of Gray Cat Enterprises Inc., a strategic planning and marketing services firm that specializes in helping businesses grow in the restaurant, convenience and general retail industries. With more than 20 years of senior-level experience in retail and a speaker at retail-group events throughout the U.S., Matthews has recently written two step-by-step manuals, Local Store Marketing Manual for Retailers and Grand Opening Manual for Retailers, which are available at www.graycatenterprises.com.