Monday Mornings with Madison

WHEN A VENDOR PERFORMS POORLY

Most companies typically deliver a product or service to people or other companies. At the same time, most companies hire vendors to provide them with products and services. For example, a doctor provides medical advice and assistance to people concerning their health. That doctor is delivering a service. Likewise, that doctor probably also employs vendors, such as a lab to process bloodwork or an accountant to handle their tax issues. In those instances, the doctor is the client and the lab and accountants are vendors providing a service. In those contexts, ‘service’ is used as a noun meaning the work performed by the company. Most of us are, at once, both vendors and clients.

However, as either a vendor or client, we are also servicing and being serviced by others. In that context, service is used as a verb, meaning to be helpful or useful. Companies constantly tout their ‘excellent service’, whether it is in the delivery of a product or service. Yet, service is often the most overused, abused and elusive part of business. Even in tough times, businesses continually over-promise and under-deliver quality products and services.

What is the appropriate course of action to take when a vendor delivers a poor product or service? What do you say when a printer delivers a brochure in which the colors are muddy, even though the proof was fine? What do you do when a package that positively absolutely had to be there on time is late or, worse yet, lost forever? We’re not talking about a vendor who has an employee with a bad attitude. What recourse do you have when the actual product or service is so poor, it affects business? It all depends on what type of product or service it is, how much it impacts your business and what that vendor’s track record is. Here are some steps to take when addressing a vendor who is missing the mark.

Step 1: Identify your goal

1. Problem with a Product
If the issue is with a new product that is replaceable, then that should be the goal. However, if the product is not brand new or it is an item that cannot be replaced, then the goal should be to get a partial refund, have it repaired free of charge or have them provide an adequate substitute. For example, if the item purchased is a copy machine and the machine was purchased a week ago and has broken five times in five days, the goal should be to have it replaced. If the copier, however, was purchased three months ago and has needed repair repeatedly since purchased, the goal should be to have the vendor repair it at no cost and provide the company with a partial credit to compensate for lost productivity.

2. Problem with a Service
If the issue is with a service, then it will depend on whether the service was provided as part of a contract and, if so, what that contract specified. For example, if the service was for a Realtor to sell a property, then listing agreement should have specified what steps the Realtor would take to market the property and earn the commission. If the contract was not honored, then the goal should be to have the agreement terminated. If the service is for cable television and the cable service was down for six days due to problems with cable company’s lines, then the goal is to get a credit for those days without service.

Regardless of whether it is a product or service, it is important to have a goal in mind that will satisfactorily resolve the issue.

Step 2: Discuss the problem and request a solution

It is essential to get results from every vendor. In order to get a resolution to a product or service problem, the next step is to have a concise discussion that explains the problem you had with the service or product. A business cannot be aware of your concerns unless you share them. Start at the point of contact. Ask to speak to a manager. It is not necessary to try to reach a resolution with an employee.

The purpose of the dialogue with the manager is to get adequate remediation for the problem and get better service in the future. State the problem including whatever inconvenience it may have caused. It is important, however, not to get angry or be hostile during this conversation. Being the ‘angry customer’ seldom produces the most favorable outcome. Fully express your concerns to management and find out what actions will be taken to rectify the situation. It is, however, okay to be reasonably unreasonable. What does that mean? If your goal is get a discount, realize that there are ranges of acceptable discounts so there is reasonably unreasonable and then just plain unreasonable. You might want a discount greater than 50 percent whereas a company might be willing to provide a discount lesser than 30 percent. The goal is to achieve the maximum discount, even after you are offered lower ones, but without asking for too much.

How? First, establish yourself as a high value customer. For service-based industries, high value customers are repeat customers, customer connected to other customers and customers who give referrals. Then, when offered a lesser resolution to the problem than what you requested, refuse to accept it. Be persistent. Without raising your voice, show that you aren’t going to back off. Indicate calmly that you have a legitimate claim and insist that you are going to be heard. This usually will produce the best resolution to the problem. Keep in mind that most companies deal with hundreds of complaints have established guidelines for what can be offered to solve customer issues.

If you are thoroughly satisfied with the manner in which management handled the situation, leave it at that. If you are skeptical about the resolution, disappointed by the treatment received from management, or feel the problem was treated insignificantly, write or email the corporate office or owner. Outline what happened to cause the problem, what actions management took or promised to take, and reasons for continuing concern. Businesses commonly have managers or associates who interact with customers to present them with opportunities to express and resolve their concerns. Make use of these resources.

Step 3: Determine a future course of action

When a vendor performs poorly, the question of whether to change vendors may arise. If it us affecting your business, it is only natural to ask “is it time to shop around for a new ______?” Don’t make that decision in haste or in the heat of the moment. That decision should rest on how often the problem occurs and how significantly it is affecting your business and how easy it will be to find a vendor who will provide that product or service better.

The first issue is frequency. How often does this vendor mess up your work? One mistake, even if it is a big one, may not be sufficient cause to let go of an otherwise good vendor. For example, a vendor who consistently does good work can occasionally make a mistake, especially if they do a lot of work for you. However, if a vendor is frequently delivering an inferior product or service, then it may be time to find another vendor. 

The next question to ask is “how much are the mistakes this vendor is making affecting my business?” If the answer is “a lot”, then you may need another vendor even if it is a one-time mistake. For example, if an ad agency submits the wrong advertising commercial to play during half-time on Super Bowl Sunday and the 30 second spot cost $1.4 million, that is not a mistake that can be simply overlooked. Costly mistakes cannot be overlooked. It is that simple.

The final question to ask is whether it will be easy or even possible to find a vendor who can provide a better product or service? If the answer is a definite no (think of manufacturers of unique items such as jet planes or mega-cranes), then you will need to work with management to try to get them to improve the quality of the product or service. If the answer is a simple yes (which is true of most vendors), then shop around first and try out the new vendor before making the switch. Sometimes the grass may seem greener until you cross over to the other vendor’s yard.

Ultimately, no vendor is perfect…. no one is perfect when delivering a product or service day-in and day-out. The reason is simple: humans are imperfect, which is why they put erasers on pencils. Companies should strive for quality and put measures in place to minimize mistakes. However, when a vendor falls short (it will happen), clients should let the vendor know. Good vendors will step up, take ownership of the problem, do their best to rectify the situation and strive to do better in the future. Poor vendors won’t and that’s when it may be time to take your business elsewhere.

QUOTE OF THE WEEK
“We are all manufacturers. Making good, making trouble, or making excuses.” H. V. Adolt

© 2010 – 2012, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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