3 tips for better vendor relationships

“I won’t work in that co-op again,” a contractor recently told us after a bad experience with the community.

ROC members understand the importance of relationship building in strengthening the business of their co-ops. That’s never more important than when cultivating relationships with vendors and suppliers.

Great vendors help co-ops achieve the goal of keeping lot rents affordable by controlling expenses, while managing the work necessary for a well-maintained community. The tasks are many: clearing snow from roads, complying with legal agreements, keeping common areas attractive, maintaining infrastructure, removing trash, and filling vacant lots with new homes. The must-do list is too long for a co-op to manage without help from outside vendors.

nb_ROC-vendor

Good vendor relationships are created on a foundation of mutual respect, honesty, trust, and fairness. When cracks appear in that foundation, scenarios like these happen:

A property management employee is berated repeatedly by a couple of co-op members. The company decides to not renew its agreement for services with the co-op. A new vendor will cost significantly more, resulting in increased lot rent for all members.
A snowplowing contractor is repeatedly approached with complaints by non-board members while trying to plow. The board was unresponsive to the plow driver’s report of the interference. Frustrated, the contractor quits. The co-op is left with snowy, slippery, unsafe roads.
The co-op hires a plumber to complete a job at a set price. Upon completion, the co-op tries to pay less than the agreed-upon terms. After several plumbers experience the same treatment, word spreads and the co-op is unable to secure a plumber (or electrician) at any price.

Nothing sours a vendor relationship quicker than one party trying to take advantage of the other. Most relationships can withstand some misunderstanding and conflict. However, poor communication and unresolved issues are a recipe for disaster. Both the co-op and its vendors need to benefit from the relationship. Otherwise the vendor will walk.

Tips for better vendor relationships

If an issue or complaint needs to be addressed with the vendor, focus on how to solve the problem, rather than placing the blame. Avoid verbal attacks and instead begin a conversation with “Help me understand the situation with _________,” or “What do you think the solution is to resolve ________?” Remember, vendors want their customers to be satisfied (it’s how they stay in business) and are typically eager to make things right.

Adopt a Non-Interference with Contractor Policy and distribute it to your members. The policy should clearly communicate that co-op vendor business relationships is managed solely by the board of directors. Ideally, one liaison from the board will be the vendor’s primary contact. It’s difficult to have five or more bosses.
Using advice from your Procurement Policy, plan to look at bids regularly and invite estimates for the work you need done. This helps the board ensure they are getting a good price, and it allows vendors to renegotiate if their costs increase year to year and they need to pass that along. Once a contract price is agreed upon, both parties should stick to it.
Creating a Scope of Work that puts in writing your co-op’s expectation of the work that will be included in a vendor’s quote can help avoid miscommunication later. For example, a scope of work could include details such as which days of the week the dumpster will be emptied, who puts the reflector sticks in the ground to direct the snowplow, whether the board will inspect the finished electrical job before the last payment is made, and what hours are included with the day-rate for the tree-removal company? Clear communication of small details can help avoid the escalation of conflict later. Here’s a sample Scope of Work for snow plowing.

Don’t forget to use the ROC-NH Facebook Group page to get input from other ROCs about good vendors to use and other resources for co-ops. Many ROCs across the state have long-standing, great relationships with many vendors.

Kelli Cicirelli is a ROC-NH™ Senior Organizational Trainer.

ROC-NH™ is a program of the New Hampshire Community Loan Fund, Inc. and a ROC USA® Certified Technical Assistance Provider.
ROC-NH is a registered service mark of ROC USA, LLC.

“I won’t work in that co-op again,” a contractor recently told us after a bad experience with the community.

nb_ROC-vendor

Good vendor relationships are created on a foundation of mutual respect, honesty, trust, and fairness. When cracks appear in that foundation, scenarios like these happen:

A property management employee is berated repeatedly by a couple of co-op members. The company decides to not renew its agreement for services with the co-op. A new vendor will cost significantly more, resulting in increased lot rent for all members.
A snowplowing contractor is repeatedly approached with complaints by non-board members while trying to plow. The board was unresponsive to the plow driver’s report of the interference. Frustrated, the contractor quits. The co-op is left with snowy, slippery, unsafe roads.
The co-op hires a plumber to complete a job at a set price. Upon completion, the co-op tries to pay less than the agreed-upon terms. After several plumbers experience the same treatment, word spreads and the co-op is unable to secure a plumber (or electrician) at any price.

Tips for better vendor relationships

Adopt a Non-Interference with Contractor Policy and distribute it to your members. The policy should clearly communicate that co-op vendor business relationships is managed solely by the board of directors. Ideally, one liaison from the board will be the vendor’s primary contact. It’s difficult to have five or more bosses.
Using advice from your Procurement Policy, plan to look at bids regularly and invite estimates for the work you need done. This helps the board ensure they are getting a good price, and it allows vendors to renegotiate if their costs increase year to year and they need to pass that along. Once a contract price is agreed upon, both parties should stick to it.
Creating a Scope of Work that puts in writing your co-op’s expectation of the work that will be included in a vendor’s quote can help avoid miscommunication later. For example, a scope of work could include details such as which days of the week the dumpster will be emptied, who puts the reflector sticks in the ground to direct the snowplow, whether the board will inspect the finished electrical job before the last payment is made, and what hours are included with the day-rate for the tree-removal company? Clear communication of small details can help avoid the escalation of conflict later. Here’s a sample Scope of Work for snow plowing.

3 tips for better vendor relationships

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