Don’t burn your bridges
Don’t follow through on your knee jerk reaction no matter how frustrated you are. Keep a cool head and a professional demeanor. Often the situation can be resolved as a one off and the relationship salvaged. Even if not, though, you’ll never know when you might need them again so suppress your urge to shout.
Ask for compensation
Recently, one of our suppliers had a problem with its delivery system, which meant 50 of our customers were affected. We pride ourselves on our excellent customer service so this was a devastating blow. We faced losing good customers for a situation beyond our control. So we asked for compensation.
If you find yourself in the same situation, firstly ensure the supplier admits fault. Then look into how much it has cost your business and request they credit your account to the equivalent amount. In nine out of ten cases they will be happy to pay to keep your business.
Explore service level agreements
It’s worth considering service level agreements with suppliers to enable you to activate ‘fine’ clauses if jobs aren’t delivered. That said we don’t have any contracts with suppliers. Primarily because we’ve never needed one; instances of being let down are few and far between. Additionally though we’ve always felt that contracts protect the supplier more than you. Therefore if you end up going down this route ensure you draft a document with the help of a solicitor you know and trust.
Test new suppliers
Before making a big commitment with a new provider, trial them with a smaller order.
Escalate a complaint
For most of our clients, we are a big account. As a result we have good account managers who understand how the business has a knock-on effect with ours, meaning any problems can be managed by our department heads. However if the issue is significant enough I will call the supplier’s sales director. Not just to fast track our complaint but also, as a business owner, I know they’ll want to know.
Dealing with regular offenders
We put in penalties for suppliers with a history of poor service. For example we have a supplier who regularly invoices incorrectly meaning our accounts team spend days chasing the right information. Due to this we have added an extra 10 per cent onto their retail prices to offset the extra admin incurred. We let the supplier’s account manager know, clearly explaining that once their accounts system has improved, we can reduce our levy.
Severing a relationship
You need to trust a supplier and if it’s become a case of problem-after-problem, you need to call time on the relationship. Always call to explain, backing up the verbal conversation with an email so you have something in writing, and always be professional. Treat people as you would like to be treated. The loss of your business could have massive implications on their company so no matter how frustrating the situation is, approach with compassion.
That said, don’t fall for guilt trips. The decision you’ve taken is for a commercial reason, not a personal one. Base your decision on the facts and respond to any attempts to change your mind with resolve.
Create a network of back-ups
We have a system of back-up suppliers we can turn to. This is why it pays to never burn your bridges. You never know when you might need them again. Most suppliers are grateful for a chance to have another shot at your business so don’t be afraid to call on them in the eleventh hour.
When you can’t negotiate
There are some suppliers with whom it’s impossible to negotiate. They effectively have a monopoly which means they can call the shots. Both BT and Royal Mail are cases in point: you need them, which means it’s impossible to go elsewhere. Bite your tongue and suck it up!
Further reading on dealing with suppliers
