Successful businesses are built on good relationships with clients and vendors. For diverse-owned businesses, building and maintaining relationships with corporate partners should be a top priority. Firms committed to supplier diversity and inclusive supply chains are a boon for diverse suppliers that are up against systemic barriers and outright discrimination.
Winning a corporate contract can be a significant victory for a diverse business, but that’s just the beginning—the company still must deliver on its promise of goods or services, and it appears that some suppliers are faltering. In our annual survey of CVM corporate customers, just 42 percent of respondents said that at least three-quarters of diverse suppliers were meeting expectations—a drop from 48 percent last year.
In an increasingly competitive market, diverse suppliers have the power to and must improve the outcomes they are delivering to their corporate partners through rigorous self-assessment, soliciting customer feedback, and utilizing development and mentoring resources that supplier diversity managers offer..
Know Your (Current) Limits
Diverse suppliers, regardless of size, generally experience more challenges in access to capital and other resources. This can, at times, limit their scalability and growth.
When a company committed to working with diverse suppliers posts an opportunity to bid through an inclusive procurement process, the temptation to overcommit or over promise is strong. The urge to show that you can compete with the big guys can be difficult to resist.
But should you?
There’s a saying in business: “Underpromise, Overdeliver.” Sometimes we get too excited about an opportunity to assess our ability to complete it successfully. We overpromise and underdeliver. If such an opportunity arises for your business, and after careful consideration you determine that your current operations are not capable of meeting its full requirements, then you’ll still have options.
Reach out to the supplier diversity team and ask if the company is open to breaking the RFP into smaller components. For example, perhaps you can’t supply the full order but you can supply a portion and another company can supply the remaining components. If this is not an option then, you’ve not only shown creative thinking as a supplier, you’ve also planted the idea of breaking large RFPs into smaller contracts, which could benefit you down the road.
Another option is to become a Tier 2 supplier. Fifty-nine percent of respondents to our survey measure Tier 2 spend as part of their supplier diversity program. Talk to your contacts in supplier diversity and procurement about making connections with their Tier 1 suppliers to pursue partnership opportunities. Often, they’ll be happy to introduce you to the right person at that company, and can even give advice about doing business with their Tier 1 suppliers.
One of the biggest mistakes business owners (of any size) can make is delivering low-quality products or services. An honest assessment of your capabilities and a willingness to find alternative avenues for working with corporations can only improve your relationship with them.
Take Advantage of Supplier Development
What if neither of the above options is viable for your company right now? Then you have some goals to work toward and it’s time to create a plan for reaching those goals. More than 50 years after supplier diversity began in the United States, we’re seeing a wealth of resources for diverse suppliers to grow and succeed.
Your first step is to partner with your local diverse supplier council. Visit the websites for the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, NGLCC: National LGBT Chamber of Commerce, Disability:IN, and/or the National Veteran Business Development Council to find the appropriate local council for your business. These organizations provide a variety of development opportunities, from starting a business, to pitching your products or services to corporate buyers, to sponsoring members for graduate-level business education opportunities.
A second, and often overlooked option is to leverage the supplier development resources many corporations offer through their supplier diversity programs. In our survey, 29 percent of respondents indicated that they have a formal supplier development program, while another 29 percent said they have an informal supplier development program. Another 22 percent said they were in the early stages of a supplier development program. These responses indicate that corporations see the advantages of working with diverse suppliers to help them scale in order to provide the goods and services a larger organization requires.
Talk to your supplier diversity contact about what supplier development resources are available. This could range from summits where diverse suppliers learn how to work with corporations and meet buyers, to mentoring opportunities, to access to in-house training. All of these resources can help grow your business and your relationship with the corporation. When supplier diversity professionals see a diverse supplier actively seeking ways to improve how they do business, they take note.
We’ve talked about the importance of communication between diverse suppliers and corporate contacts before. And you probably noticed in the two sections above that we recommend talking to supplier diversity professionals about RFPs and supplier development resources. This is because communication is your mightiest, most strategic tool when it comes to improving relationships with corporate partners.
It can take years for a diverse supplier to win business with a corporate client, but building a relationship through communication improves your chances considerably.
(If you’re a supplier diversity professional reading this, we know that managing internal and external communication is a BIG job. The expert staff at CVM can assist you with crafting and executing a thorough communication plan specific to your goals and objectives.)
Optimize your time with supplier diversity professionals at conferences and other networking events, such as those held by your local diversity council. Research the company ahead of time to familiarize yourself with what they offer, trends in their industry, and potential needs that you can satisfy. After connecting at the conference, reach out to set up a meeting to discuss how your two companies can work together, including any Tier 2 opportunities.
Stay in contact with the supplier diversity professionals at current and potential corporate partners, but don’t overdo it. Let them know about new products or services you’re offering, awards and accolades you’ve earned, milestones, etc. Anything that shows your business growth and development is worth a quick note to your supplier diversity contacts.
In the event that you bid on a contract and lose, which, let’s be honest, is a very real part of doing business, follow up with your supplier diversity contact and ask for feedback on your bid. Supplier diversity professionals want diverse businesses to succeed, so they are happy to help you identify weaknesses and provide suggestions for improvement. This is also a good time to ask about the company’s supplier development resources.
If and when you are awarded a corporate contract, maintain good communication throughout the process. Keep buyers and other stakeholders apprised of progress, deliverables, and any changes—positive or negative—that could affect them. Should problems arise, having an established history of clear communication can be a real asset to finding solutions that benefit both parties.
Building a strong relationship with a corporate customer is important for any business but especially for diverse-owned companies. If you want to improve your status with Fortune 500 or Fortune 100 clients, you need to prioritize relationship building. Start by creating a free profile in CVM’s Supplier Portal. Be ready to carefully assess your company’s ability to meet a client’s demand, take advantage of supplier development opportunities, and optimize communication. Over time, you can become one of the most impressive suppliers in a supply chain.