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Choosing a vendor usually goes like this: you talk to two or three companies and they explain how they work. They may seem like a good fit, but those conversations often leave you wondering if you're making the right decision.
You may feel like you need more information, but haven't these companies told you enough?
Finding a vendor, especially in an unfamiliar location and as a self-service business, can be difficult. Those few conversations don't give the full picture and can lead to wasted time and money.
After my video editing company decided to scalewe realized we needed more help and additional vendors to keep up with demand. This is why we developed a structured system to guide the selection of our vendors.
This approach has been very useful, allowing us to choose the right partners and build long-term relationships. Two vendors we have selected through this system have worked with us for years.
Let me walk you through the process step by step.
1. Find 50 companies that can provide the service you need
The first step in our process is to identify 50 companies that can meet our requirements. For example, if we're looking for social media management or content creation services, we specifically look for 50 agencies in that field. We call it the “Rule of 50”. Then, we approach them with our specific task to see if they can handle it.
While not every company specializes in our exact needs, the answers we get help us better understand the market. They allow us to assess what is realistic, correct our assignment, and learn what the industry typically offers. This method also clarifies our needs and shows whether our request is practical.
Although selecting and analyzing 50 companies takes time, we have found that this number is ideal for evaluating the market and achieving the best results. After collecting the responses, we move forward with those candidates who can perform the task and move to the interview stage.
2. During the interview, remember that you are the buyer
This is especially important if your business is also a service provider. It's easy to fall into the habit of showing initiative and providing the best experience, as we do for our customers. However, in this case, it is important to change your mindset. You are the one who evaluates and makes the decision, so leave room for the sellers to show what they are capable of.
Pay attention to visible green flags. Do they go the extra mile? Do they follow you up or send thoughtful recap messages after the interview? One of the good signs is that they focus on your needs instead of endlessly talking about how great they are. The ideal salesperson will be attentive to you and show they can accommodate.
Another major green flag is their ability to clearly explain their services, especially if you are unfamiliar with the niche. The best salespeople can break down what they do in simple, understandable terms, not jargon. This shows not only their expertise, but also their own the ability to communicate well. If they can simplify complex concepts for you, it's a good sign that they know their field well and can meet your needs without complicating things.
3. Don't be afraid to approach vendors who seem out of your budget
When you are looking for vendors, you may come across a team or a business owner who you immediately connect with, knowing they are the perfect match for your company. You might want to pay them all the money in the world, but sometimes, it's just not in your budget.
However, don't dismiss them too quickly and definitely don't hesitate to continue the conversation. These vendors are often leaders in their field and can provide valuable expertise. They can share their knowledge and high standards with you, which will help you understand the market and its key players. Even if you can't afford their full-time services right now, there are still ways around this.
For example, you may be able to negotiate different terms that are beneficial to both parties. They can work with you part-time, maybe 80 hours a month instead of 160, or even as a consultant for just a few hours a week. Think creatively and be open to new opportunities when it comes to building a relationship with these vendors.
Related: 3 steps you can't miss when growing your business
To summarize
While you're the one paying for the service, it's important to remember that working with vendors is still a two-way street. If you want your vendors to stay with you for the long term and for the partnership to be productive, focus on building a strategic relationship rather than a vertical, transactional one.
For example, you can recommend them to other customers or refer them to your network. This will naturally make them more appreciative and, in many cases, more motivated to deliver their best work. Treating vendors as valued partners rather than just service providers leads to a long and mutually beneficial relationship.