Practically every business operates multiple vendor relationships. For the most part, they work out well. Everyone gets what they want: you pay the third-party various fees, and they give the services you need in return.
But there’s still a lot of risks involved in handing over responsibility for various aspects of your operations to an external company. If they make a mistake, it could damage your brand and, in extreme cases, put you out of business.
Before beginning any relationship with a vendor, be sure to ask the following questions:
What Percentage Of Your Clients Refer You?
If you want to find out more about the quality of a vendor, just ask them about the percentage of their clients who come via referrals. Usually, they’ll be able to give you some statistics. The number will vary from industry to industry, but the higher the better.
How Long Do You Spend Training Your Employees?
Sometimes you can go to a company believing that it is a team of experts, ready to do your bidding. But that’s rarely how it works out in practice. People with relevant skills are actually surprisingly rare. Many startups will grab whoever they can and hope for the best. For clients, it’s not ideal.
Always find out how long vendors spend training their employees as part of your vendor risk assessment process. You want to make sure that people in these organizations have a genuine understanding of what clients want and need.
How Many People Will Work On My Account?
A lot of top firms will assign a single account manager per customer, ensuring continuity of experience, but not necessarily. Organizations often attempt to cut costs by allowing anyone in the firm to service accounts when required. And that can lead to trouble at your end. If multiple people look after your account, you may find yourself having to repeat yourself. Worse still, reps could make mistakes or get confused.
Personal account managers are usually better because the person gets to know the specific needs of your firm. They know what you want, and what you don’t.
What Happens If My Needs Change?
As your company evolves over time, so too will your vendor relationships. And that can create problems if the vendor themselves isn’t set up to meet your needs.
Let’s say that you use an IT company to manage your network. Everything works perfectly when you only employ a couple of dozen people. The MSP can handle it – no problem at all. But when you expand to, say, a couple of hundred employees, things start to go wrong. The IT service can’t keep up with the workload and you start experiencing issues.
It’s best to find out whether scaling issues are going to become a problem ahead of time. The last thing you want is to find yourself in a situation, where you’re unable to grow your business because the vendor can’t keep pace with your changing requirements.
Asking vendors questions is all part of the buying process. If one particular company can’t meet your needs, another certainly can.