As we inch closer towards the holiday shopping season, many consumers are trying to set budgets and keep their impulse buying habits in check. After all, the average U.S. consumer spends $5,400 each year on impulse buys, according to a survey reported by CNBC. When it comes to your role as a credit union executive, answering to a board with a set annual budget, there is no room to bring your impulse buying habits to work with you. Choosing a vendor is no small task for any organization, in just about any facet of operations. Whether you are looking for a new paper supplier or contemplating a credit union core conversion, before you sign that new contract, you will find it beneficial and cost effective to step back for a moment to give your options some thought. The extra time you spend at the beginning can make a huge difference in the long run. Before you just renew, evaluate how happy you are in your relationship with your vendor and their service. Think long-term in order to ensure you’re making the smartest and most informed decision for your credit union’s needs.
If you have the ability to be flexible and are open to negotiating, you might want to consider interviewing multiple vendors. Smart decision-making can save money. Some credit unions even consider enlisting the help of a third-party consultant to assist in reaching the best results. A recent article in CUInsight outlined a few things to consider when making the decision on which vendor is right for your credit union.
- Is the vendor innovative and constantly evolving? Many credit union core system providers have fallen by the way side or been acquired because they didn’t invest in technology and make an effort to stay relevant. You want a vendor who is in touch with the latest and greatest technology and works with you to implement the most cutting edge technology.
- Is this vendor the best partner for my credit union? You want to not only consider how good their technology is, but do they have your best interests in mind. Do you feel like you would work well together? Are they prepared to provide solutions for you now and also after you sign the contract? Do they have your best interest in heart? One of the best ways to vet this interest is by consulting with existing customers of the core provider.
- Is the pricing structure of the contract appropriate? This is where it might pay off to do a little research and know what pricing is like for similar services in the industry. A third-party contract negotiator could also work with you to let you know if you’re overpaying for certain services compared to other financial institutions. There may also be a better way to structure your contract to get better pricing and fit your needs more closely.
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- Will I be taken care of after I sign a long-term contract? Many worry that if you lock into a long term contract, that’s the end of routine contact with your vendor. Make sure you have a system in place to check-in, that they are responsive to any questions and concerns and that they proactively reach out to you with the industry’s latest.
- Will I be ready to renegotiate when the time comes? It’s tempting to just auto renew – but mark your calendar and be prepared to renegotiate. Have the vendor show you new technology and what there’re working on. Make them work to keep your business and prove their worth. Remember to stay on top of your renewal date and if negotiations don’t go as planned or you don’t like what you hear or you want more - leave enough time to find that perfect new vendor.
Bottom line, don’t be complacent when it comes to your vendor and your contract structure. Don’t be afraid to dive in and renegotiate. Demand to see the latest and greatest technology from your vendor and make sure the relationship is providing what you and your credit union want and need. Whether you are looking to change out the vending machines in your breakroom or are embarking on a core system review, partnering with the right vendor will keep your credit union relevant and competitive in the financial marketplace.