When you are evaluating vendors to perform a task for you, you often look first to see how much their services cost. As we have covered in past blog posts, cost isn’t the most important factor when choosing vendor. Often times, customers want to see what other perks they can get from working with their selected vendor. Is it world-class service? Or can you build a relationship with them? Regardless, you want to go where you can stretch your soft dollars the furthest.
In this post, we will discuss how you can get the most out of your soft dollars when choosing a vendor.
Hard v. Soft Dollars
Many of you have probably heard the terms “hard” and “soft” dollars. But what do each of those really mean? In business, hard dollars are your costs, currency, assets, wealth, etc. It’s anything that is physical when it comes to money. Examples include how much a service costs or how you are going to pay for said service. While this is important to clients — and often top of mind — it won’t have as much impact as soft dollars.
For most, soft dollars are the reputation, value, and impact that a vendor can have on your business should you choose to go with them. Considerations like associating yourself with a company that is well-known in town for the service you are seeking out is oftentimes better than a no-name company. Additionally, you need to think about how much ROI your chosen vendor will guarantee you. Will it be an increase in profit? An increase in customers? Either way, the impact the vendor will have on your positive business outcomes is something crucial that you need to consider.
Showcase ROI Potential
Now that we have an idea of what hard and soft dollars are, let’s apply them and share how as a business, you can create soft dollar experiences for your potential clients. Let’s take our ROI example from above. If you want to showcase that your company can give clients an amazing ROI, you need to showcase it. See if some of your past customers are willing to share a testimonial with you and give you quantitative results. These can metrics such as “increased customer spending by x amount” or “decreased time to market from x months to y months”. Sharing examples like this as part of the selling process or just having them available on the website is a great way to show potential customers that they care as much about the success of your business as you do.
Another great way to create soft dollar experiences is to accumulate and share reviews of your services and employees. When we search for a vendor, a natural start is the internet. Once we search the name of the business or the employees, one of the first results their Google My Business listing, including the number of stars the business receives based on Google reviews. Click further and you’ll be able to read these reviews. Chances are in these reviews, past and current customers talk about their interactions with the business, the staff, and the quality of the product. Encourage your clients who have had success using your services to leave a Google or Yelp review for others to find. You never know how impactful it can be.
Choosing a vendor is no easy task; you want to choose one where you can get the most bang for your buck. Ultimately, you want a vendor that gives you the most value for the amount that you’re paying. Not only do you want a vendor that is economically feasible, but one where they are transparent in communication can deliver your product on time, where employees go above and beyond for their clients, and where employees can foster a true client relationship. These characteristics go beyond just the traditional client-vendor relationship; it builds the foundation for personal connection to take place. Ask yourself — do you want a vendor who treats every project the same, or one that takes the time to know you and what your needs are? How you answer these questions is key in determining how much value you want to receive from the vendor you choose.
The Final Evaluation
Now that you have everything to take into consideration — ROI impact, reputation, and value — how do you choose which vendor to go with? As mentioned above, many go with which is the least expensive but find they don’t get great ROI or value from their choice. If you want to maximize your soft dollar spending, go with one that is the best of both worlds — both economically feasible and will give you the value your company and your project deserve. There’s no easy answer to choosing a vendor, but choosing wisely will benefit you and your business.