Tips on Measuring Vendor Performance

If you are like most landscape contractors, you purchase a variety of lawn care products and equipment from a variety of vendors. While it makes good business sense to procure from a limited set of vendors, it’s not always possible. Even small lawn maintenance-only companies often have to buy equipment and parts from at least a couple of dealerships.

What is possible is making sure that each of your vendors is doing a good job for you. That does not mean you’ve played softball with the owner for 20 years. Nor does it mean the sales rep slashes prices to “steal” your business from other dealerships; think about how disgusted you get when your competitors do that to you.

What it means is that a given vendor works with you as your partner. Prices are fair for the value you receive. Service is reliable. Empathy is genuine and consistent. In a nutshell: You are working together so both of your businesses can prosper.

Here are some things to think about and measure in order to ensure that you are maximizing the business potential of your vendor relationships.

Define and evaluate what matters most

If you want to buy a new riding mower, for example, you have an idea of the horsepower, cut width and engine type/brand you’re looking for. You should also have an idea as to what you’re looking for in a vendor. Characteristics might include:

• Size of company and/or number of locations
• Years in business
• Number of servicing technicians
• Service technician training, certifications, etc.
• Service turnaround
• Breadth of product lines and availability
• Parts inventory and availability
• Ability to order online
• Access to key representatives when you have questions or concerns

The point is that you identify those traits which make a vendor partner valuable to you. Put them in a list and evaluate each of your vendors on a continual basis, perhaps quarterly but at least yearly.

You can evaluate vendors via several different methods. A simple way to do it is to merely assign “poor, adequate or good” ratings to each of the key traits you outlined. Sounds crude, but it’s effective. It forces you to remain focused on the key areas of vendor performance.

Some of the performance traits can actually have a precise piece of data assigned to them. For instance, if a vendor normally delivers same-day service on your equipment, you could assign a “1” to that trait. If the dealership’s service department is EETC-certified and STIHL Gold-certified, you can note that.

Some performance characteristics will require “yes” or “no” notations. Others, such as parts inventory and availability, might require the “poor, adequate or good” ratings. You’ll rely on your own personal experiences and instincts here to form a judgment. Also remember that you can invite input from other members of your staff if they might have some insight to share.

Recognize that not all vendors are created equal—and that your requirements of them are not all equal, either. In other words, you have different needs when it comes to your fertilizer supplier as compared to your mower dealer, for instance. Then, you might even have different needs when it comes to your mower dealer as compared to your skid-steer loader dealer.

It’s not a bad idea to separate your vendors into groupings; lawn maintenance equipment, construction equipment, lawn care consumables (i.e. fertilizer, seed, herbicide) plant materials, hardscape materials, etc. After all, each type of vendor will likely have a different set of performance characteristics you’re looking for.

Look for the things that "add value"

Each vendor will likely bring their own version of "value added" to the table, as well. By value added we mean those "little extras" that go beyond the standard but don't really add cost to the product or service.

At the same time, it could also be the case that a dealer does offer something extra, but you have to pay for it—but it is so valuable to you that you have no problem paying for it. Regardless, it's important to recognize what your vendors are and are not doing to help you run your business.