March 1, 2013
How Can Retailers and Vendors Build Win-Win Relationships?
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine. A long-time Harris Teeter executive, Mr. Harris is a former chairman of the National Frozen & Refrigerated Foods Association and a member of the Refrigerated Foods Hall of Fame.
When I started in this business, my boss said, "Johnny, it is important that we have great vendor relations. Does that mean you give them everything they want? No. You keep them all competitive. But with each vendor, go for win-win."
Here are a few things I’ve learned:
Doing the Hustle: Once, I had a rep for a major company working with me who went out of his way to promote his product and increase sales for both of us. He only had a few years in the business, but he hustled. His competitor, also a major manufacturer, was a veteran who mailed or e-mailed his promotions to me. He’d call only when new products came out and also complain when he got heat because his numbers were down. Now, who do you think I’m more likely to favor?
Manufacturers need to be alert about whether their reps are making the calls, replacing them if necessary. I was never one to tell a manufacturer to replace a rep — that’s something they should know by themselves.
Communication Breakdown: In my last couple of years, a lot of brokers and manufacturers started using "team leaders." Reps would call on the category manager and the team leaders called on the vice president every few weeks or once a quarter. Trouble is, the team leaders would take programs to the vice president, but never even tell the category manager about them. It should be obvious that the category manager needs to be in the loop. We need to know if we’re suddenly going to be committed to a lot of ads in the summer that will leave us out of budget in November and December!
If you really want win-win, both sides need to meet regularly. At Harris Teeter before I left, there would be annual top-to-top meetings with major vendors at our headquarters, including presidents right on down to reps and category managers. This kept everybody informed, which is crucial since turnover is rapid with both vendor reps and brokers.
Just Can’t Get Enough: Finally, I’ve tried my hand at some sales since retiring. My biggest complaint? The number of VPs and category managers who tell you first thing, "I have a good working relationship with my current supplier, and I don’t need to look at anybody else."
I was always trained to meet with everyone, even if I only told the rep that his prices were too high for the market. As a retailer, it’s your obligation to see all that’s available to grow your business. Don’t just say, "Okay, send me some samples." There are companies out there that can help you. Do your job and build relationships. That’s what it’s all about.
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Discussion Questions
Which of the three issues in retailer/vendor relationships cited by Johnny Harris is most important to resolve? Do you have other recommendations for getting to win-win that would benefit trading partners?
Poll
Retailers and vendors, otherwise known as brands, have a couple of conflicting mindsets. For one, brands are always thinking long-term building for the future, while retailers live and act only in the present moment. But if both parties are willing to agree that both parties need to make a profit from the relationship, and if both parties are willing to openly define what that means, then a good partnership will start to evolve. Meaningful communication is the key.
Here is how I see it. You need to establish the relationship with the retailer first, and prove that you can be trusted to do the right thing. I don’t need the vendor physically at my store every month pushing every SKU that they sell. The internet, cell phones, and digital information available to us is awesome. If the vendor treats us right, there is no need to drive 200 miles to push their new product.
More work can get done digitally than ever before, and I’ll buy tons of deals from those ESTABLISHED vendors, no problem.
It is all about the relationship I have with them, and it saves all of us time. A lot of vendors are doing No-Show Food Shows, which I love. Just fill in the quantities you want, and they get sent to you with outstanding savings. A win-win situation, and I pass the savings to my customers. You gain my trust, and I’ll let you sell to me from California or whatever golf course you sent the e-mail from. Just back up what you sell, and I am fine with it.
Some excellent advice, particularly the communications comments. In my research on the relationship between manufacturer and retailer there still is considerable lack of trust between the parties. In analyzing the causation of this situation this emanates from a lack of understanding which is further caused by a lack of engagement and transparency.
The key is to develop collaborative relationships. Collaboration comes from the Latin word “collaborate” which means “to labor with.” Win-Win requires real engagement and transparency to enhance mutual understanding and ultimately, trust.
What Johnny stated about meeting with people is so valuable. No, you can’t meet with every person that calls on you, there’s not enough hours in the day. But allowing a vetted meeting to explore possible solutions is what keeps the industry honest and competitive. If your vendors know you’re regularly taking meetings, not to necessarily replace them, but just keeping your finger on the pulse of the industry, they’re more likely to become a value-added partner, bringing solutions along with issues, raising their hands before it’s too late, and keeping lines of communication open and honest, which takes care of the other two points simultaneously as well.
All three suggestions are spot on. These same insights are equally relevant when dealing with enabling technologies. Having worked both sides of the aisle (so to speak) keeping informed and aware of all options from the retailer’s point of view resonated with me. All too often I’ve seen retailers become complacent and ‘comfortable’ with the status quo. Your shoppers and customers want to be surprised and delighted. If (and when) they come to your store and and it becomes too comfortable—as in stale and boring—they’ll find, or be attracted to the new place in town.
As a consultant with a ‘steamer trunk’ full of varied real world experiences and perspectives of many brands and retailers, the good, the bad and the ugly, I am confounded when I hear that “I have a good working relationship with my current supplier” line. More often than not, it’s more about being comfortable and easier as opposed to exploring the best path for the company.
Non-obtrusive persistence, patience, true sincerity and time-establishing trust are glues that hold retailers and vendors together. When retailers and vendors work together in that earned mode, win-win situations can be developed.
Win-win situations aren’t easy to come by. In recent decades we have seen retailers and vendors come and go or merger into other companies. Fiscal pressures and the rules for win-win relationships can get modified with each contraction and that’s where non-obtrusive persistence comes in … and that’s when Johnny Harris’ three issues can productive interplay.
They are three faces of the same issue—effective, transparent, honest communication. If you don’t have that, you don’t have anything.
As Ryan has indicated, communication is the key. Each side of the relationship understands that their agendas may not exactly match, but as long as both are working towards their mutual goals, it can be a win-win.
I love Johnny’s taste in music, first of all.
All of the above… are some reasons for lack of collaboration. Old problems still exists, and they are not all resolved with technology. Humans are still dealing with humans. It’s a two-way street, and both parties, as well as all the other ecosystem partners (wholesalers, etc.) need to find the right ways to make this business win-win-win….
Communicating with the relevant people, communicating in person, and continuing to communicate. Are there really three issues? Showing up, meeting with the category manager and VP, and talking about how to improve business for the retailer and manufacturer are critical for success.
I think Johnny has highlighted a great issue for focus. I have worked with some progressive companies on how to improve; trust, relationship building, collaboration, business planning, etc. We (as an industry) have LOST that edge—even though we have far more sophisticated tools in place. What is missing is the ability to connect with each other. I think the crux of the issue is contained in Johnny’s article—and I invite others to contact me to discuss the solutions I have seen effectively put in place to address it.
Johnny’s article is excellent and well presented. Ryan’s response is on the money as is Tony’s. Nothing more to be said.
In my 22+ years as an optical dispensary business owner, I was dependent in a big way on having great relationships and communication with my frame vendors. But at the start, I told them exactly what I needed from them and didn’t need from them. I gave them a second chance to listen so we could be effective partners, but if they were intent on being in charge, I said goodbye.
Vendors can be pushy and try and run your business. If you are not clear about what you need from them and they are able to pay attention and over deliver for you, it’s absolutely a win-win. They may not have liked me, but they respected me. They knew when we sat down for an appointment, they’d be walking out with an order. I always let them know how much I appreciated their care of my account and that I did care about them as a person.
A strong relationship with your vendors based on mutual respect and clarity is paramount to a smooth F.L.O.W.
The greatest issue between retailers and vendors is the lack of a win-win approach to growing the business. Both sides are heavily focused on short-term gains, whether or not those gains are at the expense of the other party. Vendors seek to gain shelf space, even if expansion of their products would not grow profit for the retailer. The retailer can be focused heavily on extracting every spare cent from the vendor, even into programs that do not work.
Neither side, aside from some best-in-class examples, focus on the CUSTOMER—whose relationship and commitment pay the bills for both parties.
As I look at these “issues” the one that stands out is the Hustle. The first rep viewed the relationship as a partnership. (Not in the legal sense, but in the relationship.) The more we promote and sell, the better we all can do.
Partnership should be a goal. The “partner” always has a tighter relationship than the “vendor.”
When our customers problems become our problems we are in a form of “partnership.” When we work to find solutions that mutually benefit both parties, you have a form of partnership. Partnership is loyalty on steroids.
Vendors do not win if retailers do not win and vice versa, but they both do not win if the shoppers lose. Hence it is very critical to understand what the shopper needs at that particular store. Both retailers and vendors are grappling with this issue, and they cannot figure it out unless they work together.
Collaboration starts when they both align to a common goal of serving shopper needs; all the other things will then beautifully fall into place.
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Retailers and vendors, otherwise known as brands, have a couple of conflicting mindsets. For one, brands are always thinking long-term building for the future, while retailers live and act only in the present moment. But if both parties are willing to agree that both parties need to make a profit from the relationship, and if both parties are willing to openly define what that means, then a good partnership will start to evolve. Meaningful communication is the key.
Here is how I see it. You need to establish the relationship with the retailer first, and prove that you can be trusted to do the right thing. I don’t need the vendor physically at my store every month pushing every SKU that they sell. The internet, cell phones, and digital information available to us is awesome. If the vendor treats us right, there is no need to drive 200 miles to push their new product.
More work can get done digitally than ever before, and I’ll buy tons of deals from those ESTABLISHED vendors, no problem.
It is all about the relationship I have with them, and it saves all of us time. A lot of vendors are doing No-Show Food Shows, which I love. Just fill in the quantities you want, and they get sent to you with outstanding savings. A win-win situation, and I pass the savings to my customers. You gain my trust, and I’ll let you sell to me from California or whatever golf course you sent the e-mail from. Just back up what you sell, and I am fine with it.
Some excellent advice, particularly the communications comments. In my research on the relationship between manufacturer and retailer there still is considerable lack of trust between the parties. In analyzing the causation of this situation this emanates from a lack of understanding which is further caused by a lack of engagement and transparency.
The key is to develop collaborative relationships. Collaboration comes from the Latin word “collaborate” which means “to labor with.” Win-Win requires real engagement and transparency to enhance mutual understanding and ultimately, trust.
What Johnny stated about meeting with people is so valuable. No, you can’t meet with every person that calls on you, there’s not enough hours in the day. But allowing a vetted meeting to explore possible solutions is what keeps the industry honest and competitive. If your vendors know you’re regularly taking meetings, not to necessarily replace them, but just keeping your finger on the pulse of the industry, they’re more likely to become a value-added partner, bringing solutions along with issues, raising their hands before it’s too late, and keeping lines of communication open and honest, which takes care of the other two points simultaneously as well.
All three suggestions are spot on. These same insights are equally relevant when dealing with enabling technologies. Having worked both sides of the aisle (so to speak) keeping informed and aware of all options from the retailer’s point of view resonated with me. All too often I’ve seen retailers become complacent and ‘comfortable’ with the status quo. Your shoppers and customers want to be surprised and delighted. If (and when) they come to your store and and it becomes too comfortable—as in stale and boring—they’ll find, or be attracted to the new place in town.
As a consultant with a ‘steamer trunk’ full of varied real world experiences and perspectives of many brands and retailers, the good, the bad and the ugly, I am confounded when I hear that “I have a good working relationship with my current supplier” line. More often than not, it’s more about being comfortable and easier as opposed to exploring the best path for the company.
Non-obtrusive persistence, patience, true sincerity and time-establishing trust are glues that hold retailers and vendors together. When retailers and vendors work together in that earned mode, win-win situations can be developed.
Win-win situations aren’t easy to come by. In recent decades we have seen retailers and vendors come and go or merger into other companies. Fiscal pressures and the rules for win-win relationships can get modified with each contraction and that’s where non-obtrusive persistence comes in … and that’s when Johnny Harris’ three issues can productive interplay.
They are three faces of the same issue—effective, transparent, honest communication. If you don’t have that, you don’t have anything.
As Ryan has indicated, communication is the key. Each side of the relationship understands that their agendas may not exactly match, but as long as both are working towards their mutual goals, it can be a win-win.
I love Johnny’s taste in music, first of all.
All of the above… are some reasons for lack of collaboration. Old problems still exists, and they are not all resolved with technology. Humans are still dealing with humans. It’s a two-way street, and both parties, as well as all the other ecosystem partners (wholesalers, etc.) need to find the right ways to make this business win-win-win….
Communicating with the relevant people, communicating in person, and continuing to communicate. Are there really three issues? Showing up, meeting with the category manager and VP, and talking about how to improve business for the retailer and manufacturer are critical for success.
I think Johnny has highlighted a great issue for focus. I have worked with some progressive companies on how to improve; trust, relationship building, collaboration, business planning, etc. We (as an industry) have LOST that edge—even though we have far more sophisticated tools in place. What is missing is the ability to connect with each other. I think the crux of the issue is contained in Johnny’s article—and I invite others to contact me to discuss the solutions I have seen effectively put in place to address it.
Johnny’s article is excellent and well presented. Ryan’s response is on the money as is Tony’s. Nothing more to be said.
In my 22+ years as an optical dispensary business owner, I was dependent in a big way on having great relationships and communication with my frame vendors. But at the start, I told them exactly what I needed from them and didn’t need from them. I gave them a second chance to listen so we could be effective partners, but if they were intent on being in charge, I said goodbye.
Vendors can be pushy and try and run your business. If you are not clear about what you need from them and they are able to pay attention and over deliver for you, it’s absolutely a win-win. They may not have liked me, but they respected me. They knew when we sat down for an appointment, they’d be walking out with an order. I always let them know how much I appreciated their care of my account and that I did care about them as a person.
A strong relationship with your vendors based on mutual respect and clarity is paramount to a smooth F.L.O.W.
The greatest issue between retailers and vendors is the lack of a win-win approach to growing the business. Both sides are heavily focused on short-term gains, whether or not those gains are at the expense of the other party. Vendors seek to gain shelf space, even if expansion of their products would not grow profit for the retailer. The retailer can be focused heavily on extracting every spare cent from the vendor, even into programs that do not work.
Neither side, aside from some best-in-class examples, focus on the CUSTOMER—whose relationship and commitment pay the bills for both parties.
As I look at these “issues” the one that stands out is the Hustle. The first rep viewed the relationship as a partnership. (Not in the legal sense, but in the relationship.) The more we promote and sell, the better we all can do.
Partnership should be a goal. The “partner” always has a tighter relationship than the “vendor.”
When our customers problems become our problems we are in a form of “partnership.” When we work to find solutions that mutually benefit both parties, you have a form of partnership. Partnership is loyalty on steroids.
Vendors do not win if retailers do not win and vice versa, but they both do not win if the shoppers lose. Hence it is very critical to understand what the shopper needs at that particular store. Both retailers and vendors are grappling with this issue, and they cannot figure it out unless they work together.
Collaboration starts when they both align to a common goal of serving shopper needs; all the other things will then beautifully fall into place.