Customers don't make much of a distinction between our vendors and our company--if there is a problem with the service provided by a vendor, it reflects badly on us," says Cynthia Cattern, vice president of training and development for Merit Property Management, based in Mission Viejo, Calif. This $10 million company, which provides property management services for homeowner associations, also found that expressing appreciation for vendors' efforts goes a long way toward ensuring good customer service.

Cattern writes handwritten thank-you letters to vendors, and she nominates those that go above and beyond for the company's "killer cake" award: a decadent chocolate cake sent to one winner every month.

Current vendors are also invited to an annual appreciation night. Merit thanks vendors for their efforts and lets them know that their service to customers is instrumental in the company's success. "The response from vendors has been fantastic," says Cattern. "Vendors like meeting the people they've worked with only over the phone, and they feel like part of a team." She suggests planning an evening during which all vendors will feel comfortable. A fancy banquet didn't appeal to all of Merit's vendors, but a "Beers of the World" theme was a hit with everyone, from landscapers in T-shirts to lawyers in suits.