Vendor relationships are like a battery – mostly forgotten until your device dies. Have you been ignoring yours?
Two recent encounters with a large company snapped my last nerve due to the company’s habit of ignoring its vendors’ performance. Thus, the inspiration for this post.
The following shares three deadly mistakes to managing vendor relationships and offers tips for keeping your relationships thriving.
You can also download a free template for selecting and managing vendor relationships.
Vendor Relationships for the Small Fry
We all have vendor relationships. Whether you are a consumer, a corporation, or a business of one, at some point you will interact with vendors.
For purposes of this post, let’s use this Master Class definition.
The mistakes and tips can apply to any size business. However, my goal as a sole proprietor is to provide practical tips for small businesses. The big guys have their own ideas on managing vendors (not necessarily good management, from my experience).
Mistake #1 – Skipping the homework.
Does anyone really like homework? Wasn’t that the incentive of becoming an adult? No more homework. But if we’re honest with ourselves, homework is how we learned things.
Especially if you’re afflicted with Shiny Object Syndrome, good marketing can push you toward disappointing selections. So, put on those big girl or boy pants, and do your homework.
Homework Tips
Check sites for reviews of the vendor products you’re considering. Do a search for the specific product type (e.g., reviews of animation software). Hubspot created a list of 32 Customer Review Sites for Collecting Business & Product Reviews
Read feedback/reviews from verified purchasers. I would rather hear from someone who has tried the product. Amazon has a huge database of reviews. However, beware of the potential for fake reviews. Fakespot created an app to identify them (love visionaries). I have not tried the app. Does anyone have any experience with it? If so, share your thoughts in Comments.
Read the support questions. Particularly with technology products, you can find a support area or user forum. You learn a lot about the issues users are having (think Fitbit or other trackers). While every product has its occasional bump in the road, a pattern of complaints is a red flag, especially for unresolved issues.
Accept trial offers. If the business offers a free trial period, take it. That way you can take it for a spin before committing to the purchase.
Mistake #2 – Snubbing the details.
Hated almost as much as homework are product terms and conditions. Who reads that? At a minimum, scan terms to know what you’re getting for your hard-earned money.
What to Look for
The following are a few areas you may want to pay attention to.
Terms of Service
Products with subscriptions offer different plans with different fees. Understand what’s included in your selection. For example, if data analysis is important to you, confirm your selection provides that feature.
How you can use the product is important to avoid legal issues. For example, if you are purchasing stock photos or audio clips, does the vendor prohibit use for selling? Can you reuse purchases more than once?
Return policies may include time restrictions (e.g., must be returned within 60 days) or exclude returns entirely. Does the business have a money-back guarantee?
Hidden fees are an unpleasant surprise. Look for limits on services (e.g., downloads, images), and other fees, such as late payment or restocking fees on returns.
What Type of Service
An often-missing element is what happens if you have a problem or need support? You may need to do extra homework to discover the answer.
The pandemic has been a handy excuse for lousy service. Check out those reviews to see what others are saying.
- What kind of support can you expect? Do-it-yourself forums? Or can you submit technical support tickets?
- Which communication channels are available? Phone? Online chat? Email? Social media?
- How long does it take for a response? Check to see if the business posts this information (e.g., within 24-48 hours).
Know what’s important to you and read the fine print to ensure you get what you need.
Mistake #3 – Signing up and forgetting.
How many times have you added a vendor’s software and forgotten about it? Until the annual fee comes along. Even if the service is free, it’s a good idea to monitor how it’s working.
Maintenance Tips
I get it. You have a lot on your plate. But taking the no news is good news approach to vendors could be disastrous.
While small businesses are less likely to be attacked, we suffer the fallout from compromised vendors we do business with. And our clients or customers may take a direct hit.
So, regular check-ins help avoid bigger problems. Below is an example of tips for the multiple software vendors you use.
Keep software current
Be diligent about installing updates. If you are one who likes to wait until the kinks are worked out, make sure you don’t forget to update.
WPBeginner recommends waiting one full week before updating WordPress plugins – except if it says it’s a security update. Those you want to install immediately.
Do a search about updates. Techie types often share reviews and recommendations on the latest updates.
Don’t ignore alerts
I cannot tell you how many times I’ve received notification of a data breach. I’ve also had my banking accounts hacked. So, I am careful to monitor accounts.
You may think because you are a small business, hackers are not interested. But do you send emails or use a newsletter marketing vendor? An internal tool at Mailchimp resulted in the breaching of hundreds of accounts.
It happens. When it does, pay attention to how the vendor is fixing the problem.
Invest in protection
If you have a business blog or website, you know about spam. But a lot worse consequences come from an unprotected site.
- The shutting down of your site
- Potential theft of your data and your followers’ information
- Stolen credit information
Periodically, my WordPress security plugin, Wordfence, sends me a report on increased attacks on this site.
If anything dispels the myth that a small fry like me does not get attacked, this report does it. Hundreds (sometimes thousands) of attacks in a 10-minute span. Mind blown.
Hold vendors accountable
Are you someone who likes to support other small businesses? Specifically, during the pandemic, I enjoyed supporting my fellow small business owners.
Protect yourself
But like any sized vendor, you want to protect yourself. Do your vendors have the following protections?
- Security protection of personal information from outside attacks (look for trust seals)
- Limit access to employees whose responsibilities require using specific data (check policies)
- Protection of payments (evidence of PCI – Payment Card Industry Data Security Standard)
- Compliance with financial and privacy guidelines and regulations
Okay, so that sounds good. But how do you know if a site is safe for you to do business with? The graphic below offers a few basics.
Skip a vendor skips that skips basic security.
The buck stops here
How often have you heard the excuse that another vendor caused the problem? Just because a business contracts with another entity does not mean the business has no accountability.
Drives me nuts when customer service essentially says – hey, it’s not our problem. Really? I’m your customer – not theirs – so whose problem is it?
If you contract with a vendor on behalf of your customer, take responsibility. Manage the problem. If the vendor continues to mess up, consider finding a new partner.
So, whether you sign on with a vendor for yourself or to run a business, avoid the three deadly mistakes. Work on those vendor relationships.
- Do your homework.
- Pay attention to the details.
- Protect your business for the long haul.
Tip: Download your free checklist template. The template is a guide. Make it your own and use it as a handy reminder to hold vendors accountable.
What tips or vendor horror stories do you have? Share yours in Comments.
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