Are you getting ‘nickel-and-dimed’ by your vendors? This is a great phrase that you’ll hear concerning charges for extra services within a larger service or purchase. According to Grammarist.com, the phrase ‘nickel-and-dimed’ has been around since the 19th century. Originally, it meant small amounts of money. It wasn’t until the 20th century that this phrase became a verb and an adjective for descriptive purposes. It’s a relevant phrase when it comes to the SMB-vendor relationship. Being ‘nickel-and-dimed’ means you’re spending more on extra services than you agreed to. The phrase makes you consider the impact unknown costs can have on a business and its profit margin.
As a business owner, you need to decide what level of IT support is right for you. Small businesses frequently operate under the “break-fix” model. Break-fix is exactly what it sounds like: you run your business normally until something breaks, then you pay someone to fix it. Managed Service Providers, like us, offer a monthly service agreement to handle all of your IT support. But remember, not all managed services are created equally – don’t get nickel-and-dimed!
While the break-fix model appears the simplest out of the gate, it ends up costing more than you think. The ‘breaks’ cost you more because you’re stuck with unexpected hardware and software costs, and the ‘fixes’ cost you a lot more due to downtime, outages, and lost potential revenue. At some point, you’ll get tired of your CFO running into your office with a stack of bills from all of last month’s fixes.
Working with Vendors
Finding a vendor that works well for your business is essential. SMBs often seek out vendors that offer full solutions. These deals are usually better for the client as well as their revenue and profitability.
Choosing a vendor that offers a complete solution means you won’t get ‘nickel-and-dimed.’ When a vendor gives you the option to pick your solutions it often sounds too good to be true. However, this way often makes things more complicated for both you and your client. It also makes it hard to predict revenue and costs going forward.
SMBs need efficiency
Efficiency is paramount for SMBs and this translates to your customers too. When vendors offer features individually, the SMB purchases separate parts as individual products. With a turnkey solution, they have one single comprehensive package. Otherwise, you’re spending money on features that you thought were included. Unbundling your service might also mean ending up working with multiple vendors. What you need is a single vendor; a one-stop-shop for all of the features you need. Bear in mind that this vendor also needs to be able to adapt to you in the future too.
What SMBs need their Vendors to know
SMBs need a vendor that recognizes their role in supporting your business. We buy, employ and use their technology to run our businesses. SMBs should expect their vendors to listen to them and help them build their business. If you suspect you’re being nickel-and-dimed, then this isn’t a partnership worth pursuing. Don’t stick with it because it might seem like an easy option or because it’s hard to find a vendor that checks all of the boxes. You can maximize profitability and ROI with a vendor that works for you and works with you.
When new features become available, they should not be a separate offer or a stand-alone service. SMBs need to ensure the vendor they work with can future-proof their plan to add any new features onto their existing offering.
With a complete, fixed-price solution, vendors will earn your business each month and will then continue to improve their solutions without having to ask for extra money. A good vendor will focus on lowering the costs and not try to upsell new opportunities as they arise.
Final thoughts – don’t be nickel-and-dimed
You need a solution that will meet your needs straight out of the box. It should be a ready-to-go turnkey solution that will make you satisfied in the knowledge that you have all you need to be able to solve any business problem – all while paying a reasonable sum. You also need your vendor to incorporate new additions into your product as they arrive without it costing you more. It’s vital not to settle when you’re looking for a vendor. If the vendor doesn’t look out for your and your customers’ interests, can you call them a partner?
If you are having issues with your vendors, please contact us at any time. We want to be sure you’re getting what you’re paying for.
When a Business relationship with vendors is good, it can form a strong and strategic partnership that strengthens and develops your business.
Many businesses don’t have the capability or skills that are needed to build marketing and sales in their business plans. Vendors can support businesses in this area. Vendors have the resources to tap into their expertise and provide guidance on how your business can promote your services. A vendor can give advice on which marketing goals should be a priority.
Establishing solid relationships with your vendors is crucial to staying competitive. This is true in both customer service and business growth. Take care of them and they will take care of you.
The relationship isn’t a one-sided one. Both you and the Vendor need to engage with one another to establish in-depth growth and development plans. Hold one another accountable. Vendors can also help businesses execute strategic plans by providing services that may be out of reach. These could be marketing resources or technical recommendations. Vendor partnerships with strong foundations also lead to efficiency in operations. Having a good vendor allows you to reduce the number of resources required with simpler, automated processes. As you can tell, this is good for your bottom line.
A positive vendor lifts you up
Vendors have lots of expertise and valuable advice to share with you. Whether they’re forthcoming or not depends on the relationship you have with them. Just like any working relationship, a relationship between a business and a vendor is not just transactional. The traditional format of the vendor-buyer relationship is no longer enough to stay competitive. You both need to go much deeper than that. To have a vendor that lifts you up requires you to establish a two-way relationship and dialogue. Strive to help each other.
Both parties have key responsibilities. Vendors should listen to their clients to discover what services, support, and products they truly want. You, on the other hand, should engage proactively with the Vendor to gain access to price promotions, bundles, and Marketing tools. This will help you provide better services to your clients and stand above your competition.
How can you get more out of your Vendor?
Often, small businesses don’t have enough budget or time to plan and carry out marketing programs on a big scale. Vendors can plug this gap. You can ask vendors how they invest in making their client network a success. Another question to ask is, do they create activities for lead generation? To help support the vendors become actively involved in their promotions.
You need to work to make the most out of your vendor partnership. When dealing with a Vendor, articulate your needs clearly. In turn, your Vendor has to make it easy for you to have access to the materials and resources you need to sell your services. There is no place for being timid here. Ask the Vendor how they can help you and what the available support is. Examples of this might include payment plans with added flexibility or discounts to help with your cash flow.
Build your relationship
Often, business owners are quick to criticize a vendor for not providing or offering the support that was expected. We must remember that this is a reciprocal partnership and a two-way street. The relationship needs to work for both parties. Sometimes, owners find that their Vendor isn’t creating the positive effect on their business that they would like. For this to happen, you must engage fully with the Vendor to set achievable, common goals. Spending time to establish the right partner is an investment SMBs often can’t afford to miss. Having a trusted partnership with a vendor impacts your company’s success.
Collaborate with technology
Simply listing each other’s company on your website is not a collaboration. For the relationship to go deeper, it should involve the integration of technology. An intertwined technological relationship will open up ways to create more innovative services. Your vendors have a larger budget for research and development than you do. Being collaborative as a technology partner is an important consideration that many businesses can benefit from.
What if your Vendor is negative to your day-to-day operations?
Strive to build and maintain good relationships with vendors. Remember, vendors also have to play a positive role in the relationship. Some vendors aren’t good for your business and it’s important to work with the ones that are. As MSPinsights.com describes, sometimes vendors alienate themselves by offering “channel” products that mean they have direct contact with your clients. You might even find vendors that offer competing products to the end clients or require them to sign contracts. This kind of ‘offer’ often suggests that these vendors are not interested in treating your business as a legitimate partner.
For best results, you need to become your Vendor’s favorite partner. Essentially, you’ve got to find someone who wants to build a partnership that works two ways. If you need a little help managing your vendors, remember that we can do that for you. Contact us and we’d be happy to get the ball rolling.