So you don’t want to be a “vendor?”

“We don’t like when our customers refer to us as a ‘vendor.’ We want to be thought of as a ‘partner.'”

Just about every company who sells to other businesses says this. So, what does it take not to be considered a vendor?

It’s simple. Do more than vend.

Think for a moment what a ‘vending’ machine does. It displays options. It offers clear, logical choices. It is convenient. And every vending machine is essentially like every other vending machine. Sure, one may offer a better selection of pretzels today, but, if this vending machine enjoys any sort of temporary success, the next vending machine can easily offer the same pretzels tomorrow. As I said, every vending machine is essentially the same.

Is your company, essentially, a vending machine? You have a very logical, well-constructed website. Your printed brochure, which is still available for those clients who prefer to read paper, is also well-organized and easy to read. You deliver your goods and services on time and with efficiency. Your bills of lading and invoices are easy to follow, and your products have only rare defects. Yet your business is not as robust as you believe it should be. Customers display lukewarm loyalty and are easily swayed by a competitor’s promotional pricing, challenging you to match the price or lose the business.

Yes, every vending machine is, essentially, the same. We live in a land of plenty, where every customer believes he or she can buy products similar to yours from someone else. If your product and service offerings are really just ‘offerings,’ you can believe that a competitor is offering products and services that your customers see as reasonable substitute for yours.

Vendors provide things. They often provide them very well. Vendors deliver things, and they often deliver them very well.

Partners also provide and deliver things. But they do more than provide and deliver. They are less focused on the products and services they send to the customer and more focused on what it feels like to receive those products, from the customer’s perspective. They also focus on how their interaction with each customer depends on who that customer is, and what is going on, right now, in that customer’s life or business.

To a vending machine, every customer is the same. A vending machine cannot, and does not wish to, distinguish between the rough hand of a construction worker and the tiny hand of a child. As each pulls a handle, the only discernment relevant to the vending machine is the amount of coins that have been inserted and which product to dispense.

What about your company? If another person and I each order the same product or service on the same day, do your systems and processes recognize what makes each of us different? Or, are you just vending the same product to each of us, with our addresses and credit card numbers the only things that differentiate our orders?

Sometimes it makes sense to be a vendor; after all, partnership has its costs. If you can’t afford to distinguish between the other customer and me and still make yourself a good profit, then don’t. But please make this decision deliberately, and consider, in your cost-benefit analysis, that you’re not really giving me a good reason to buy from you next time I’m in need of a product like yours. I may be able to find another vending machine that, in my mind, is just as good as yours.

There is a small grocery store not far from my apartment in Jerusalem, which I often pass by on the way home from morning walks with my friend Ezra. The owner often stands guard by the checkout aisle, stern faced, stoic and seemingly disinterested in anything but the products on his shelves and the efficiency of his cashiers.

One evening I was in a local restaurant, and I saw the man. My first reaction was, “Hey, I recognize that guy. Where from?” As we made eye contact, I immediately realized who he was, and he immediately looked away. The next day I stopped in his store to buy a bottle of juice, and he didn’t even blink to acknowledge me. Why should he? After all, he provided a good bottle of orange juice at a fair price, and it was properly displayed on his shelves, alongside a reasonable array of choices. And, if I wanted to buy a loaf of bread, or some deodorant, or a small box of pens, he was able to provide those also. It’s a fair trade, the store owner assumes. He stocks his shelves, and I give him shekels in return for the wares on those shelves. What else could I want from him?

This store, despite its high-quality fresh produce and other useful products, is nothing more than a vending machine. And because it is such an impersonal place, my neighbors and I use this local store as nothing more than a vending machine. If we need something quickly, we run over there, “pull the handle,” and buy only what we need.

Now, back to your business. Ask yourself whether your company is a vending machine or if you are something more. Here are a few simple ways to tell:

  • Do your company’s systems and processes recognize the unique needs, features and interests of different customers, or have you made the decision to compromise personalization for operational efficiency? (This may be a reasonable decision, if you think it is more profitable, but have you made this decision deliberately, or by default?)
  • Imagine you are a “fly on the wall” as one of your salespeople is meeting with a prospective customer. Is he delivering a sales pitch or creating a vibrant conversation with the customer?
  • Look at your marketing communications, including your brochures, websites, ads, etc. How much of your communication is focused on talking at your customers, and how much is focused on creating dialogue with your customers?
  • Consider your ongoing communication with customers, beyond marketing communications. Do you have ongoing, continuous conversations with customers, or is this communication better characterized as a punctuated series of disconnected missives and monologues?
  • What about your metrics and key performance indicators? Are they focused solely on the products and services you produce, how quickly you deliver them and how much money you take in? Or do your metrics also include rich information about who your customers are, how they behave and what they care about? Do you have easy access to unique information about specific customers? Do you measure the quality of your relationships with individual customers?

Your operational processes, efficient delivery mechanisms and marketing communications are very important, but they are merely the underlying foundation of your business. What truly makes a difference to your customers is how you engage them, recognize them and differentiate them from other customers.

A vendor is like a vending machine. The customer puts in an order, and products are reliably dispensed. A partner can deliver products, services and messages as effectively as a vendor, but a partner’s true focus is on the relationship he builds with his customers.

So, if you don’t want to be considered a vendor, don’t act like a vending machine.


  • Andy Thorp
    Apr 06, 2010 - 08:57 am

    Hi Steve
    It sounds to me like you’re emphasizing the ‘human’ element of doing business. Part of this is understanding things from the perspective of the buyer. But it’s also about building up a unique relationship between you and the client. We live in an age where markets are transparent and information is everywhere. It’s really easy to copy products and systems. So I like the idea of focusing on something that’s tough to copy – that’s YOU and those special relationships you cultivate with your customers. It’s that WE thing again – you just can’t get away from it!

    Great post, as always!

  • Dan O'Brien
    Apr 06, 2010 - 13:00 pm

    Steve, thanks for a great reminder about being deliberate in our customer facing behaviors. I’ll use this article as a great discussion starter with my team. Dan

  • Steve Yastrow
    Apr 09, 2010 - 08:14 am

    Andy and Dan,

    Thanks for your comments. Dan, let us know how the discussion with your team goes.


  • Randy Bosch
    Apr 23, 2010 - 11:45 am

    Reminded me of a favorite experience: When leaving the executive offices after my first visit to the new customer’s appropriate VP, I asked secretary to validate my parking stub since on my way into the meeting, I had seen that the previous visitor had received a validation. The VP intervened and stated “we don’t validate for vendors”. The CEO, overhearing, came out of her office, said “that is correct”, then validated my parking herself and walked away. The VP advanced and became one of my best professional services clients, and a great humanitarian in world relief efforts. Grace abounds!

Leave A Reply