Photo by Karl Steinbrenner

Supplier Strategy

Moving Vendorsfrom Level 1

ToLevels 2 or 3

Valerie J Smith, CPCP

NASACT 2008 Charge Card Administration 2

Supplier Strategy

-Acquiring Bank/Merchant Service Providers Enables suppliers to accept and process charge cards. Provides training, set up, software and support for transaction

processing.

-Cardholders Cardholders, Buyers and Procurement representatives that purchase

products, goods or services from the merchant.

-Card Provider Issuing Bank for the Purchasing Card used by cardholders. Supplier Strategy:

NASACT 2008 Charge Card Administration 3

Supplier Strategy

- Level I provides basic credit card purchase information including but not limited to; Supplier name, Merchant Category Code, Date and Total purchase amount.

- Level II adds additional information to level 1 elements including but not limited to; Customer Code, Sales Tax amount, Vendor Tax ID, Outlet zip code and Minority & Women Owned Business status (MWOB).

- Level III adds line item detail to level I and level II elements including but not limited to; Customer Code, Sales Tax, Item Description, Item Quantity, Item Unit of Measure, Product Code, Freight amount and Extended Item amount.

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Supplier Strategy

- Level I Basic Data – Standard Interchange Cost, only transaction data passed to client, supports e-commerce initiatives

- Level II Improved Data – Lower Interchange Costs, ability to send client limited line item information, supports e-commerce initiatives.

- Level III Superior Data – Lowest Interchange Costs, ability to send client invoice level details, supports e-commerce initiatives, and ability to qualify for Large Ticket Discounts

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Supplier Strategy

- Analysis of Data

- Work with Card Provider to facilitate

- Have it matched with Platform vendors

- Return data with:- Matched – accepting- Un-Matched – not accepting- Level set up as – 1, 2 or 3- Any additional data – Socio Economic

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Supplier Strategy

- Ways to Match

- Federal ID

- Vendor ID

- Name

- Address

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Supplier Strategy

- Analyze Vendor Volumes

- Volume

- Transaction Count

- Average transaction cost

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Supplier Strategy

- Design Target Audience – Phase #1

- Vendors with

- High transaction counts

- Low transaction costs

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Supplier Strategy

- Design Target Audience – Phase #2

- Vendors with

- Low transaction counts

- High transaction costs

- If that level of volume can be on a card

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Supplier Strategy

- Design Target Audience – Phase #3

- Vendors with

- State Contracts

- Recurring Charges

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Supplier Strategy

- Determine Target Group Size

- Critical to be a success

- Can do a blast letter mailing – very low response

- Limiting Size to enable personalization

- Get a buyer to participate

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Supplier Strategy

- Targeted Letter, Call or Face-to-Face

- Decide based on your phases

- Should we do a letter followed by a call- The letter gives a Heads up so it does not seem as a cold

call

- Should we just do a letter- Normally low response rate

- Should we do a vendor fair- Invite a small group of vendors- Have provider assist

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Supplier Strategy

- Follow Up

- You must have follow up to be a success

- Always follow up with vendors- They are busy people too

- Remind them of the financial benefits