“Know your customer” and “know your supplier” are critical components of B2B partnerships and expanding supply chains. Technology has made it easier than ever for businesses to connect to corporate partners and clients regardless of location, but exposes these firms to risks from an array of sources, like late invoice payments, lackluster service or non-compliance issues.
According to Mike Cassity, CEO of B2B matchmaking platform Flockgen, performing due diligence on new customers and partners is a key component of ensuring that the right businesses connect.
“We look at everything,” Cassity recently told PYMNTS of how Flockgen assesses businesses looking to join the Flockgen community in search of partners and clients. “How long they’ve been in business, types of experiences they’ve had.”
Analyzing data is, of course, important, with information sources coming from financial records, payment history and more. But Cassity emphasized there is a human element to the risk mitigation strategy.
“One question we like to ask a potential partner we’re screening is, ‘Would it be okay if we speak with some of your customers?’” he said. “If we get any hesitation, we move on.”
The firsthand experience of existing partners is a telling sign of how a company will perform in the future. Indeed, a critical component to any B2B relationship, including Flockgen’s strategy of connecting businesses, is transparency.
“We encourage that communication,” he continued. “You can build software to automate everything, but businesses cannot run only on technology. To make relationships work, to develop trust levels, there has to be an analog element, which means you know the people and you develop a relationship with them.”
With more middle-market companies outsourcing critical functions like finance, the ability to connect with the right service providers – or the ability for those providers to connect to the right clients – is essential. Assuring business partners can be trusted and live up to set expectations is a critical component of B2B partnership success.