Ask an organization’s procurement team about the biggest factors considered during vendor selection, and you’ll likely hear the same things over and over.

Competitive pricing, a proper mix of capabilities, and a solid track record are usually at the top of the list, and with good reason – but they shouldn’t be the only things considered.

There are other hallmarks of a good vendor that often go unquestioned, to the detriment of their customers. We’ve included a few of them below: gaining an understanding of a potential supplier in these ways will put you in a better position to evaluate them as a partner.



Look Towards Your Future – and Theirs
Organizations often plan for the “now” when examining vendors rather than where they will be in the future. 

  • Growth plans. A good vendor today may be outgrown by tomorrow – even if a vendor has the ability to meet your current needs, could they still do so as demand increases? A particularly strong period of growth or a marquee acquisitions may be too much for a supplier to handle.
  • Flexibility. How flexible is your potential vendor? Organizations grow and change, and pivot business models to remain competitive. Many vendors understand this and work to keep agreements flexible in terms of change. Others penalize any changes in requirements or usage, or make implementing changes a bureaucratic nightmare.
  • Supplier business strategy changes. Just as your organization could grow apart from a key supplier, so too could that supplier grow away from you. What new areas of business does your vendor see growing into? Such growth might require sacrificing a business segment you rely on – do they have plans to do away with any that are critical to your needs? What are their plans for improving the products and services they currently offer? These are all key questions to ask your current suppliers as well.

Right Idea, Wrong Execution
There are other key elements that organizations look into, but may get a little wrong.

  • The other side of pricing. Is that incredibly low price a bargain or a pipe dream? Competitive prices are a must, no doubt about that. However, also consider price in terms of what a supplier can realistically afford to offer. We’ve seen it happen: suppliers cut costs to the bone during a competitive RFP, but are unable to support the business they win at such low margins once they come face to face with delivering on promises.
  • A long history is critical, except when… There are times where having a deep history serving customers is important. However, organizations can be too focused on age as a measure of value. Cutting edge software development and marketing agencies rely less on age and more on innovation and creative problem solving as two examples. Think about the qualities you are interested in, and ask yourself if a supplier needs to have been in the game for a decade or more to possess them.
  • Product and service mix. When looking to replace a product or service offered by a lagging incumbent, it is natural to seek new vendors who offer those same products or services. This is of course critical, but don’t take such a narrow approach to viewing your needs – beyond those products and services you’re seeking to replace, what other complementary services are out there that you never thought to incorporate into your strategy?
  • Customer support. A supplier with a great product and competitive prices but lousy customer service, an inability to meet SLAs, and who can’t be bothered with deadlines is never a good deal. If pricing is proposed that looks a little too good, ask yourself “what are they cutting out to be so competitive?”

Seeing Potential Vendors with New Eyes
As you begin the process of evaluating new suppliers, look below the surface to find out if the supplier, itself, is a good fit beyond the products offered. Time spent gaining clarity into suppliers in these ways is time invested in identifying a business partner rather than just a vendor.

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