Industry Insights: Instead of Single Vendor vs. Multiple Vendor Strategy, Think Primary and Secondary Vendors

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While there are many upsides to contracting with a single provider for a critical service, including simplified vendor management, streamlined operations, advantageous pricing and increased data security, exclusivity can be tough to justify in today’s business world.

With ransomware attacks that lock up systems, natural disasters, bankruptcies and other events disrupting or shutting down vendors, few companies can afford to wait out an interruption, especially if it means suspending their own essential operations, such as sending out bills and collecting payments.

To avoid business disruptions, more companies are signing up multiple vendors for vital operations. But they are shortchanging themselves if they focus only on averting disaster.

When working with multiple vendors for the same service, a more strategic approach can deliver significant benefits above and beyond business continuity. It requires a mindset and operational shift that centers on establishing primary and secondary vendors.

At first glance, it seems to make good business sense to diversify risk by splitting work evenly between two vendors. But this arrangement provides little incentive for either provider to move beyond a transactional relationship.

By giving one vendor 75% of the business, however, the client can create a partnership that leverages the best of that provider. In fact, a primary vendor often offers many of the same advantages as having a single vendor with 100% of the work, including favorable pricing based on guaranteed volume and simplified operations and vendor management.

How does a company select a primary transactional communications vendor? By evaluating the vendor’s strengths in eight key areas:

A primary customer communications management vendor should enable a strategic transactional communications program while digitally transforming and automating processes for greater efficiency and effectiveness. It requires a powerful yet flexible CCM engine with both self-service and full-service capabilities to suit each client’s needs. 

The primary vendor needs to provide an omnichannel CCM platform for composing digital and paper communications that drive better customer experience, compliance, and engagement. The platform should enable companies to better manage and update individual preferences across print/mail, email and text messaging while providing personalized experiences with consistent branding across channels.

Another way to create seamless and efficient interactions: Automating a progressive delivery communications program. If an emailed statement or text message bounces or remains unopened for a pre-determined number of days, the system will print and mail the same bill, payment reminder, or other communication.

Regardless of the model for dividing up work between vendors, simply adding a second vendor is not enough protection for a client’s vital services. Companies need to scrutinize and verify each vendor’s business continuity and disaster recovery preparations, including that they undergo regular third-party audits.

At Nordis Technologies, we invest in back-up vendors, redundant operations and a secure cloud operating model. Our cloud solutions mean companies don’t have to worry about their on-premise hardware or installed software failing or being infected. For our CCM platform Expresso®, we have primary vendors for texting and email as well as agreements with other providers that allow us to switch volume if needed. We also work with two financial technology firms with expertise in consumer payments to support our ExpressoPay ® electronic bill presentment and payments system.

We have deliberately placed our print and mail facilities in different regions of the United States, namely Florida and Nevada. The plants have comparable equipment and capabilities. And we can switch jobs between the two plants with a single keyboard click. We also work with several paper and ink manufacturers to keep supplies flowing.

Please contact us for more information about maximizing a primary and secondary vendor strategy.