Room for Improvement
It’s true—your vendors are certainly helping you out as is, using their basic fee structure. If you pay the fee, they’ll perform their duties. But your vendors won’t dedicate maximum effort or gain the best possible results if that’s the route you go. They’ll give you as much effort as they think your account is worth; not less, but not more, either.
When you think about it, it’s understandable. You’re only one of many clients, and their time and effort is divided between all those various accounts in a way that maximizes their own revenue. Many vendors see no reason to dedicate too much toward any one client, because clients often leave for other vendors or cause them various hassles. You’re not special. Secondly, vendors, like most of us, believe their time and full effort is worth more than their fees. After all, the service they’re providing makes you a lot of money, so they always believe they’re worth more than they’re currently getting.
These factors combine to result in less-than-maximum effort. Some vendors will give more effort than others, and some will give less, but you still won’t be getting 100 percent productivity. You’ll get as much effort as you’re paying for, so when you get a bargain fee, you’ll also be getting bargain effort.
Getting More from Vendors
To get more from your vendors, you need to get past the traditional fee structure. Offer to pay your vendors variably, proportionate to the results they get you. To get them to take the offer, though, you’ll need to make it lucrative. You want your vendors to know that if they give you their best efforts and bring you a lot of business, that you’ll return the favor with large financial rewards for them, too.
You’ll end up paying a lot more for vendor services than you were in the past, but you’ll also get a lot more. You don’t have the same level of expertise in their field that your vendors do; they have contacts, sources of information, and years of experience. They can use those to their fullest and reap you huge rewards. For you to get those same results on your own would cost you far more than even the high variable costs you set up with your vendors, so it’s a worthwhile expense.
Why Doesn’t Everybody Do It?
As profitable as this is, many businesses never take this step. Most people just assume that what they’re getting for the simple fee is the best there is, and paying extra on a variable basis is just a waste of money. Your accountants might be particularly puzzled!
Always remember that you’re looking for superior results, not the cheapest possible option. You’re paying more to get more—and getting more than you’re paying. Present an attitude that shows that you care about results above all, and are willing to pay for them. If your vendors see that attitude, they’ll be more likely to take a chance on you than if they get the impression that you’re looking for a way to pay less.