Developing good relationships with suppliers, without compromising objectivity, requires setting ground rules.

Developing good relationships with suppliers, without compromising objectivity, requires setting ground rules.

Increasingly, successful fleet management is dependent on outsourced programs. From leasing to maintenance management to fuel, fleet managers need the resources and expertise of their suppliers.

It is hardly possible to use such programs successfully without a good and close relationship with those suppliers. Indeed, what they do, and how well they do it, will directly impact how successful the fleet manager is and can directly impact careers. However, developing these relationships requires a fleet manager to walk a fine line between being professional and friendly and being unduly influenced or even unethical.

Establishing Common Ground

It’s an old saw in the sales profession that “customers buy the salesperson as much as the product.” There is truth to this concept, and understanding it is the first step in avoiding conflicts of interest.

Sales people are trained to try and establish common ground with their customers; common interests and activities can help break down barriers to the sale. There is certainly nothing wrong with this, and when these common interests are found they can help both parties communicate more openly and honestly with each other. Similarly, client service and account executives who take over the account, after the sale is made, look to continue building these common interests.

Setting the Ground Rules

Fleet managers can avoid awkward situations where their objectivity is being tested by setting ground rules at the beginning of the professional relationship. Certainly, this doesn’t mean fleet managers should purposefully hold suppliers at arm’s length. Ethically, there is no reason to tell them “this is business only, not personal, and we need to avoid any kind of personal relationship.”

One of the great things about the fleet industry is the friendships that one develops over the years; friendships with fellow fleet managers as well as suppliers. However, developing relationships (and even friendships) doesn’t necessarily have to intrude on the objectivity needed to make business decisions.

How, then, does a fleet manager set limits that govern supplier relationships? What are the dos and don’ts of maintaining objectivity?
The first step can be taken when negotiating the original agreement.

Fleet agreements, whether for leasing, management, or administrative services, should contain not only what the customer must do (payment terms, pricing, etc.), but also contain clear performance requirements for the supplier. These standards should be discussed carefully from the beginning with the fleet manager, making it clear to the supplier that he or she expects to review performance on some regular schedule, and that failure to meet performance benchmarks could result in reconsidering the business relationship. This should send a clear message that, regardless of personal considerations, it is the supplier’s performance that will determine how the business relationship will develop.

It’s Just Lunch

Most fleet managers know how supplier representatives conduct the relationship. Most of them are very good at what they do, and are serious about providing the highest level of service and quality. This involves a variety of communication tools, including telephone, e-mail, and, most important, in-person visits.

These visits may occur several times each year, whether part of the agreed account review process or just “stopping in.” Such meetings often include lunch, or another meal, and there is little wrong with it. One way of tacitly making the objectivity point is for the fleet manager to occasionally pick up the tab for the meal. Some companies go so far as to prohibit employees from accepting any gratuities, such as meals, from suppliers. However, the occasional lunch or other meal is rarely, if ever, considered by a supplier to be a quid-pro-quo. The idea that buying lunch a few times each year will obligate the fleet manager to remain a customer is almost laughable.

Beyond lunch there are a number of situations considered the normal course of doing business (by suppliers) that can indeed lead to the breaking down of a fleet manager’s objectivity. Some of them stem from industry gatherings, such as conferences and seminars. Suppliers will often host dinners or other events, inviting their current and prospective customers. These type of activities are generally harmless; the fleet manager is one of a group (sometimes a large group), and it can hardly be a threat to objectivity, especially since many suppliers host such gatherings.

It is when normal supplier-customer contact is more intimate, that is, more of a one-on-one situation, that a fleet manager might need to lay down the law.

The simplest way to avoid conflict is to politely decline an invitation to something beyond a simple lunch meeting. Tickets to a show or a ball game, for instance, might create an awkward situation if the supplier, for example, is not performing well and the fleet manager is considering seeking an alternative.

One fleet manager relates the story of a meeting he attended in Las Vegas. He agreed to meet a supplier (along with a small handful of other customers) after a function and hit the hotel casino. The supplier offered each of the attendees money so they could gamble. The fleet manager, as well as some of the others, declined. A good decision: not only might this be a threat to objectivity, but it may have been a serious ethical violation.

Making Personal Contact

The bottom line? Beyond the normally accepted practice of a lunch meeting, fleet managers would be smart to avoid any situations in which their strict business decisions vis-a-vis a supplier might be compromised.

As mentioned previously, the fleet industry can be an intimate place, where friendships flourish. It is not at all unusual for suppliers to extend the relationship beyond the office, or any business setting.
Inviting a fleet manager customer and his or her spouse to a supplier account executive’s home for dinner for example, or to a night out with spouses is out of the ordinary.

There is nothing wrong with entering into a true friendship with a supplier, and this includes getting to know respective families. But, it can be a fine line to walk, particularly if the fleet manager knows he or she will run into the supplier’s spouse at other times. Imagine how difficult it would be for a fleet manager to have a friendly dinner at a supplier’s home, only to have to notify them shortly thereafter that a bid is going out.

And, at the top of the list of situations that are dangerous to the fleet manager’s sense of objectivity is any romantic involvement with a supplier representative. No need to expand upon this; it should be strictly avoided, no matter what the circumstances.

Originally posted on Automotive Fleet