06June

Clients have somehow forgotten that vendors are equal partners

My first exposure to a vendor (they were not called so derogatorily those days) was Ogilvy & Mather when I led the marketing function for American Express Consumer Financial Services for India (circa 1989). The Kolkata branch head of the storied agency was a moody celebrity in the advertising community who did not even condescend to meet me during my numerous trips to the O & M office as he was assured of the AmEx business thanks to the global tie up that we had with them. It almost felt like he was doing me a favor having chosen to dedicate some of his people to the AmEx account. Fast forward to today. At 58, I am made to wait interminably in the frigid lobbies by 20 something recruiters when I visit my clients' offices. I will hasten to add here that the CXOs of my client companies are far more reverential and courteous than their junior colleagues who sit on horses that are even higher than the genre you would find in Arabia.

The pendulum has clearly swung the full distance from a seller's to buyer's market and along with that, the basic respect that one would earlier confer on a service partner seems to have vaporized. The "vendor" tag probably has something to do with the dilution in the status of service providers. In my younger days, a vendor limited himself to serving tea or coffee or maybe the telex roll. One did not associate vendors with high end professional services straddling advertising, market research, executive search or even software development. Those who peddled these knowledge based services were deferentially referred to us partners. 

Semantics apart, the very fact that a professionally managed company seeks out a service provider is an admission of some kind of expertise that is perhaps not resident within the firm or an activity that is not considered core. Very often, clients (especially their junior employees) mistake a non-core activity to be a trivial function and that is where the cavalier attitude towards vendors develops. Finance may not be core for an IT company but it is at the heart of the banking industry. The reverse is also as true. But these 20 somethings who have been seemingly empowered by their managers to be at the front end of engaging with vendors have obviously not been groomed to manage external relationships that is fast leading to a resentful retreat by quality service providers from companies that they perceive to be bullies.

Arrogant companies tend to forget that business is after all a cycle. Enron is still fresh in almost everyone's memory. During bad times, companies usually depend on vendors to pull the chestnuts out of the fire. Satisfied vendors are known to extend longer credit to clients (who are hobbled by an industry downturn, for example) with whom they have developed a sense of bonding over time. Bullies can’t count on such benefaction. If you dent tell the bullies among your clients what they are, you will soon find your people jumping ship to competitors who have a stronger spine than yours.

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