The Vendor and Lender Relationship


There is a thin line between a simple solicitation for business and being a pain in the rear to a potential client. While there is no better way for a vendor or repossession agency to get their foot in the door than a cold call and persistence, there is a tipping point where the vendor is being annoying.

Having worn both hats as an Agency Manager and a Collections Department  Head, I can sympathize with the difficulty of drumming up business for an agency as well as the time restraints and inundation of so many attempts to get my business from so many vendors. Many of you reading this have attempted to contact me over the years hoping to develop some business for your companies. Some of you I call back, most of you not. For those of you who I didn’t, it’s nothing personal, it’s usually just a matter of priorities.

What I hope you all will remember is that you are in constant competition with each other who are all trying to get the same things. On the Lenders end, there is only so much work to go around. It’s kind of like three large men trying to get through a narrow doorway at the same time. There is only so much work and time on our hands.

With constantly increasing regulatory burdens of reporting on top of the already laborious reports necessary for the computation of loan loss reserves as well as the simple day to day matters every collections manager deals with, the time remaining for vendor appointments is very thin. This is why many of us don’t have time to “do lunch”, or have a couple of drinks after work. It’s not like we wouldn’t honestly enjoy the pleasure of your company, it’s just too hard to schedule on top of our day to day lives.

With all of that said, there are some definite do’s and don’ts of developing the vendor client relationship.

Don’t be Annoying – While persistence is an admirable trait under most circumstances, you could be doing yourself more harm than good through appearing needy and desperate. There is no bigger turn off in the world than desperation. A salesman or woman who calls everyday or sends letters every week is kind of like a stalking suitor saying “You have to love me!” or “I need you or I won’t survive!” These words are like relationship repellant to the average person and gestures and acts equivalent to them from a potential vendor as equally repulsive.

I once had a salesman from a collection agency I spoke to once and was in no need of services to which I was honest but friendly about. Undaunted, he persisted to call me every two weeks for months until one day he showed up at my office without an appointment. As luck would have it, I was going into a meeting and had to tell the receptionist I was unable to meet him today. So, I get out of my meeting and found several messages on my voicemail, two from the receptionist and one from the vendor. The receptionist told me he was still there and asked to see me again. On his message he told me he had all day and wouldn’t leave the lobby until I came out. His manners were as though I owed him something.

Faced with the insolence and arrogance of this man, my patience was tested and I gave him what he was asking for. I went out into the lobby and gave him what he basically asked for and excused myself politely, while he remained oblivious to his professional faux pas and may have even thought his foot was in the door. To this day, I will never give that company the time of day.

Free Meals – Like I’ve got the time? Well, actually from time to time I do have lunch with vendors, more often those I do business with than those trying to get mine. There’s more to talk about and no obligations, real or perceived, but I’ll get to that issue shortly.

When I first came to the Credit Union I’m with many years ago, there as a lot of work to do and a lot of vendor changes needed to get thing more like the Bank I came from. I had a lot of lunches with a lot of people, most never got business. One however was an old acquaintance from my repo company days when I was a vendor and would run into her at Credit Union collector meetings.

Lisa and I hit it off and while I was willing to give them a shot, our then COO wanted final approval on all liquidation companies. For reasons unknown to this day, she would never approve them despite their patronage by the largest Lenders. So, Lisa and I would have lunch together once or twice a year and she would always bring up the topic of our signing them up, to which I would have to tell her the truth that I just couldn’t get them approved. This went on for 9 years! I felt so guilty we started going Dutch.

Eventually, our COO left for another position and by then, Lisa and I went to lunch maybe once a year mostly talking about work and kids. By coincidence, the day after our COO’s departure, she called to cancel a lunch appointment we’d made a month earlier. I told her don’t bother, send me the contract.

Today, we use them and are very pleased with them. Lisa’s patience and professionalism are biblical in my eyes and I still consider her a friend as much as a vendor. When it develops right, your vendors are like family and friends you can be honest with and visa versa.

On the flipside, as a vendor, don’t expect that everyone has time to go out, some of the best meals are those shared with the staff, Everyone is looking for ways to improve morale and something as simple as pizza for my staff is always better than a steak dinner or a four star lunch for me alone. I would imagine most managers and executives in collections feel the same.

Gifts – Pens, calendars and post it notes. Everyone collections department gets them. It’s a great way to get known, remembered and provide people useful office tools, that is with the exception of calendars, really, who uses wall hung calendars anymore?

I’ll be nice about this. There are Collection Managers out there that like to milk vendors for everything from nights on the town for themselves and or their staffs to trips to Hawaii. Amongst the worst of these can be those from some of the Collector Associations who connive vendors into thinking that they’ll somehow get exclusive access. I have vendor friends and signed vendors who have told me as much that they won’t get any business unless they pay for such extravagant gifts. Nowhere is this more prevalent than at some of the association conventions.

Conventions – I’ve been to collector association conventions where on vendor night the vendors both man their company booths and the bar trying to liquor up the potential clients. For a mere business card in a box at the booth or, for an association controlled price per ticket raffle, the end of the evening looks like a drunken game show with collectors walking away with TV’s, DVD players and vacation packages. I’d love the Federal Examiners to come to one of these shows. Heads would roll.

Let me clear the air before it appears as though I’m slamming them all. There are some great associations out there, the New England Adjustment Mangers Association (NEAMA), the Michigan Credit Union Collectors Round Table and the Maryland Credit Union Collectors Round Table just to name a few, are organizations I’ve never heard any complaint of except that they rarely meet vendors as a group. I’m sure that most of the others are pretty straight up and honest but don’t be a mouse and bite the cheese, it’s a trap.

The truth is, such activity I mentioned are violations of NCUA and FDIC regulations as well as any regulated financial organizations policies. If you ever get this quid quo pro approach from anyone, contact their compliance officer or worse yet, their regulating body if you can provide evidence. It’s low and people like that have no business in collections or anywhere where credibility and character have any value as far as I’m concerned. Don’t be a fool, you don’t want to business with people like that.

Nothing is Free – With all of the assumptions of the word free, there is no such thing as “no strings attached.” Beyond the legally binding strings of contracts or simple agreements are the invisible strings of assumption and emotion. Each causes an unspoken debt.

From Shakespeare’s Hamlet, 1602:

LORD POLONIUS: “Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.”

Meals and gifts while they may appear free, create debt in such that the provider is the lender and the recipient the borrower. And as Shakespeare points out, this change in relationship diminishes both.

Relationships – Professional relationships should be forged on trust and honest and fair competition. Performance, price and attributes should rule all decisions. Business relationships based on other selfish interest will only cause hurt, mistrust and poor business practices.

Rule #1 – If you wouldn’t want it to appear on the front page of “The Wall Street Journal”, don’t do it.


Kevin Armstrong


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