4 Questions To Ask Vendors' References
PurchTips edition #215
By Charles Dominick, SPSM, SPSM2, SPSM3
What Can You Learn From Vendor References?
When you select a vendor, a best practice is to check their references. Let's be honest, a vendor will never give you a poor reference - they will only use customers that they know will be positive references. However, there are a few questions that you can ask which will help give you a balanced, objective assessment of the vendor and let you get the most from the reference call.
#1: "What's your relationship with the vendor?" You want to know if the vendor is a mission critical vendor and how this matches to your requirements. If a vendor is critical to your business but not to the reference's, the information you get is not necessarily relevant for you. Your service levels and other requirements may be worlds apart from theirs. You need to know that the input you get matters to your business.
#2: "How do you interact with the vendor?" Frequently, vendors will ask Purchasing to be a reference. The problem is that Purchasing does the contracts and issues POs, but often isn't involved day-to-day with the vendor and doesn't have visibility to quality and service delivery. You should ask to talk with someone in vendor management or, better yet, talk with the business owner of the relationship with the vendor.
#3: "Describe a situation where the vendor disappointed you, and how they responded." Every vendor disappoints clients at times. The real key is how they react to and recover from the issues. A vendor's response to problems is more important than how they act when things are rosy.
#4 "What are some things you wish the vendor would do differently?" If the answer is to improve quality, service, or product delivery, it should be a real warning flag to you. You should then dig deeper to understand the specifics concerns they are having and decide if it is relevant to your business.
The bottom line is that no vendor will have you talk to a poor reference but you can probe and get objective insights if you ask the right questions. It's up to you to get the most out of the reference check. And a final tip: Ask the vendor to let you talk to a former client, and ask why they stopped doing business with the vendor.
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