The quality of a vendor, business partner, or even customer often comes down to the simple question of whether or not they are transaction oriented or they are relationship oriented.
A simple example is that of ordering a meal at McDonald’s. When you go there, you’re going to get a heavily standardized product, produced at high volumes with razor thin profit margins, by minimum wage employees with zero equity in the firm. With the motto of “Over a Billion Served”, don’t expect much more than a flimsy meat patty that was thawed out that morning and plastered with mayo, ketchup, and special sauce to mask the total lack of flavor. The company doesn’t need to build relationships and cultivate clients because it has an entrenched brand name and spends millions a year in advertising to reinforce mind share among the masses.
Compare that with your neighborhood mom and pop burger and shake shop. It’s both a family business and pillar of the community. On the walls you see pictures of a T-ball team they sponsored from 1987 when they won the pennant. The old man works the grill, just as he has since he opened the store in 1975, mom works the register and some neighborhood kids serve the food. Everyone knows your favorite meal and that you’re allergic to sesame seeds and hate pickles. They cost more than McDonalds but the meat is freshly ground and the tomatoes are from a local farm. Their customers are the people in the community and they rely on word of mouth as well as the occasional feature in the paper about having the best onion rings.
How important is your business to your vendor? Are you just one of a billion served? How important is that service that your vendor is providing? If you lost that service for a few hours, a few days, a week, what would it mean to your company? Finally, as in the examples above, are you willing to pay for better service? That is an area where many businesses are a penny wise but a pound foolish.
The prolific English writer John Ruskin once said, “It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money - that's all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot - it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
Let’s up the stakes a little bit from hamburgers to a matter of life or death. I recently met a representative of Pinkerton, which is a security firm that has been around for so long that they actually guarded trains from robbers. If your line of work took you to hot spots around the world which are notorious for kidnappings, assassinations, and terrorism, would your focus be on bidding out to the lowest cost provider or finding the best firm that money could buy? I would hope that you value your life more so than your money, because you can’t take it with you.
In the field of merchant services, it can be life or death for a business if you pick the wrong provider, or at the very least a litany of hassles. There is a bit more to the job than simply cutting the client the lowest transaction fees and putting a credit card machine on their desk. Price is an important part of the equation, but what you really want is value in terms of payment system up time, customer responsiveness, and most of all a representative that sees himself as a partner in your growth.
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