how to manage a poor vendor relationship

Yikes! How To Manage Poor Vendor Relationships

Anyone who has their own business will end up working with vendors from time to time. While most of these relationships are fantastic and mutually beneficial, from time to time someone isn't going to live up to what has been promised. Over the years I have worked with plenty of vendors who ran the gamut from amazing to awful and I have learned a few things about dealing with someone who isn't performing as expected.

Whether you work exclusively with freelancers and vendors or just occasionally use someone to supplement an area of your business, you need to be prepared.

I have some tips I want to share to hopefully prevent a little pain from your vendor relationships.

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Today, I’m going to talk about a somewhat awkward, difficult conversation or situation you might find yourself in if you’re an entrepreneur or somebody who works a lot with vendors or partners for your business.

This is about what to do when a vendor or partner isn’t performing at the level you need them to.

The reason I decided to do this video was when I was starting I went to an event; it was awesome, and I met a bunch of really cool people. One of them was starting a business to support content creators like myself. His pitch was basically, “You create the content, and I will get it out on LeadPages, I’ll get it out on the interwebs, and you’ll be famous in three months. It’ll be awesome. We’ll run your Facebook ads. We’ll do everything.”

The price was right. It seemed really reasonable. It wasn’t cheap, but it was definitely reasonable. There was a pay-for-performance profit-share at the end after we’d gone through a little trial. That resonates with me because I like people who are comfortable working on a pay-for-performance schedule.

Anyway, we get started, and the first three weeks are great. I’m not sure if his business grew rapidly or if he had just completely over-promised and was now rapidly under-delivering – and pissing me off, for lack of a better term – but it was very clear that he was not going to be delivering any of the stuff he said.

About six weeks into the relationship, I started a performance improvement plan. At the time, I was working on my Reframing Firing and my How to Fire Someone video series, so as I’m creating this I’m thinking, “Do you not see that this is exactly what I’m doing to you? I’m walking you step-by-step through this system. I’m addressing ‘This is what you said you’d do. This is what you’ve done.’ There is a huge gap between what you said you would do and what you have actually done, and we need to see a rectification of this. Can you please tell me your plan for fixing this?”

Systematically, we did it, and ultimately I fired him. It was a pain. It was very frustrating and disappointing, and it sucked.

But I had tons of documentation and it was ready, and at the end of the day, it was far less painful than several of my other friends who were at that conference and who went through the same experience with him.

Really, I got out fairly scot-free compared to the rest of them, mostly because of my background in HR and the fact that I’m a pretty direct communicator. If I’m paying you to do something, I expect you to do it. That is business. I don’t pay you to talk a great game. I can talk a good game myself. I don’t need to pay anyone else for that.

Today, I want to walk through some steps that you should take if you have a vendor, or maybe it’s a virtual assistant or a partner of some sort, who’s really not living up to their end of the bargain. They’re really simple to say, but they’re a little bit trickier to actually do. They require you to screw up your courage. I’m going to do another video on getting yourself psyched up for these difficult conversations, but in this one, I’m just going to talk about the steps to take if you have an under-performing vendor, partner, virtual assistant, or employee.

Step 1. Review your contract

Review your contract and see what they said they would do and see what you said. Make sure that you’re not holding them to expectations or things that you thought they agreed to that they didn’t actually put in writing.

If you did everything verbally and everything handshaky here and there, it’s going to be really hard to call them on it. If you did do that, my tip is to say, “Hey. I’ve been working with a coach,” or blame your accountant or blame your attorney – blame somebody – and “We really need to get this defined. We need to be clear about what you’re expected to do and what I’m expected to do, and make sure that this is something we’re both comfortable with going forward.”

That’s your get around if you haven’t done it.

Hopefully, you have an agreement of sorts that you can go back to and review because you might be having expectations that are unreasonable. That happens to us sometimes as entrepreneurs. We think we’re the center of the universe, and then it’s like – Oh, wait. I guess they are doing everything. It sounded like way more in my mind when I read it three months ago.

Step 2. Tell them your concerns

If they are not meeting those expectations, simply copy and paste that part of the agreement and put together an e-mail. The subject line can be “Just wanted to address some concerns.” The body can be, “Hey, I just wanted to bring this to your attention. We’ve had some concerns about the fact that we’re not seeing the work product that we had expected when we signed this agreement. I went back and reviewed the agreement, and this is what we agreed to. Right now, as of today, this is what’s been delivered. You can see that we’re a little bit short, and I’m sure that wasn’t your intention, so if you could tell me your plan to get us back up to speed so we’re performing at this level, I would be grateful. Thanks so much.”

I want you to send it in an e-mail because e-mail is very helpful if you have to go the route to get an attorney to get out of it.

Make sure you don’t take too much blame in the e-mail: “I assume you didn’t intend to do this and you’re going to rectify it immediately,” is okay, but don’t be like, “I’ve made some mistakes too, and I’ve changed my mind a lot.” Don’t do that. That’s not the point of this. The point is that this is their agreement, this is what they’ve actually delivered, and there is a vast difference between the two things. You’re addressing it and they need to take corrective action for you to move forward with this relationship.

Once that’s done, they’re going to respond in one of two ways. The first way is, “We’re totally going to fix that now. That’ll be great,” and then they actually do fix it, and that would be great. That doesn’t always happen. If it does happen, feel grateful and happy and lucky.

The other one is they say, “Yeah, I’m going to fix it right now,” and they don’t fix it. Then a week later, you have the same e-mail exchange and say, “You know, we talked about this last week. At this point, I really need to have a systematic plan, and we need to see the results by this date.” Maybe it’s two weeks out, maybe it’s one week out, whatever it is that’s appropriate for the relationship. You need to make sure they know that you mean business about this.

The third possible thing is when you call them on it, they say, “You know what? Here’s the deal, we don’t feel like this is a good fit. Maybe we should take this as an opportunity to part.” And you’re done! That’s great.

Them actually admitting it, owning it, and fixing it quickly, and them saying – We’re not a good fit – and parting, is the least likely to happen. Nine times out of ten they’re going to tell you they’re going to fix it, and then they’re not going to fix it. It’s going to irritate you, but that’s just the nature of the beast.

It’s part of the process.

Step 3. Prepare To Extract

At this time, I usually start to figure out how I’m going to replace them. What am I going to do if they don’t work for me anymore? How am I going to fill this hole? I start to back fill and get ready. I start having conversations with people because generally, I can’t have a two-month gap in my vendors.

Let’s say they don’t perform, they don’t change, you send that second e-mail, and they still don’t improve. That’s when you’re going to say, “At this point, we’re close to a month in to me expressing concern and frustration with how this partnership has gone. Right now, we need to see a rapid turnaround in results within a week or we need to recognize that this isn’t a fit and we would like to cease this relationship effective immediately.”

That is what I would consider the “line in the sand” communication. You get one of two responses to that usually, too. One is “Okay, we’re going to game on!” About 50% of the time, they do game on at that point, and the other times they’ll say, “We just don’t have the bandwidth, and we’re sorry that you’re frustrated, but we don’t see that we can feasibly do this.” That is how the options go.

The other response they can have to your “line in the sand” message is, “Bring it. We think you broke our agreement, and let’s get our attorneys involved.”

That’s okay because part of this is that you’re not really starting this dialogue and you’re not drawing a line in the sand unless you know you have really solid ground to stand on.

As an example of this, I had hired a person to help me with my marketing automation. They talked a great game. Sadly, this is a different person from the first person I talked about. I don’t know what happened, but they completely MIA-ed on me. They hardly responded to e-mails. Finally, I said, “This is supposed to be a two-month contract. We’re two months in and I don’t have any of the stuff.”

I had paid through my credit card, so I submitted to my bank and requested my money back. I won. I believe she disputed it, and I seriously have no idea what she was thinking in doing that. But I won and got my money back.

Just make sure you’re protecting yourself. If possible, I like to pay with a way that I have some sort of recourse. I’m don’t know that PayPal does anything for services, so you might be better off paying with your credit card through your bank. Those are just things to think about.

But, address it. Take action.

If you are paying someone for a service and they’re not delivering what they said they would, you need to call them on it, you need to expect that, and you need to hold them accountable.

That’s part of being a business owner.

It is a difficult conversation. You have to screw up your courage, but it’s worth it, I promise.

I hope this helps!


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About Rikka

Rikka’s the go-to girl for growth-minded multiple six, seven, and eight figure entrepreneurs and leaders who understand the power of recruiting and retaining the right people to achieve their business (+lifestyle) goals.