Vendors Giving Bad Customer References!?
Many purchasing organizations use customer references as a part of their scoring criteria when rating competitive bid responses. Unfortunately (and obviously), customer references from vendors represent only the happiest and most pleased of the vendor’s customers. What this means is that the customer references provided by vendors rarely give you any insightful information—diluting the value of the references and wasting your time.
Calling customer references is more like just checking off a box. We don't know why we call customer references, we just do it because it sounds like a good thing to do...
Scenario 1
Your boss: Did you call the customer references? You: Oh yeah, I finally got hold of the last one—we had been playing phone tag for a week. I spent hours trying to get in touch with them. They thought the vendor was great. Your boss: OK, let's get this deal wrapped up...
Scenario 2
Your boss: Did you call the customer references? You: Heck no! It's a waste of the company's time because all of the references are going to say the vendor is wonderful. There's no value in that information. Your boss: I've been meaning to talk with you about your performance...
So, what do you do? You check off that customer reference box even though there's zero value in talking to the references. Were you aware that, in some cases, those customer references receive a benefit from the vendor in return for the reference? By the way, if you're routinely serving as a reference for your vendor, and you're not getting something out of it, you're missing the boat...
So back to those glowing references... You don't want to hear all of the stories about how wonderful the vendor is, right? I mean, your customer already knows how wonderful the vendor is (that's meant tongue-in-cheek). As a purchasing professional, what you're really interested in is information that you can use to help compare and contrast the vendors in your competitive bid project.
So here’s a simple tactic to get customer references from a vendor that can provide you (and your customer) with a dose of reality: just ask your vendors for "bad" customer references. Laughable, huh? Like a vendor is really going to do that... Well, they will if you couch it in a certain context. Meaning that I recommend you add language to your RFx master template requesting at least two references from past (don't say "bad," just "past" or "prior") customers, and indicate in the RFx that not providing that type of references will impact the rating of the vendor’s proposal or potentially disqualify a non-compliant vendor.
If the vendor balks, first ask why they have a problem with it (do they have something to hide?) and let them stutter their way through a response. Then explain that you're not looking to get dirt on the vendor, and that what you really want to find out is what the vendor did (or worse, didn’t do) to try and retain the business. And, that if the vendor doesn't provide the past customer references, they'll be disqualified. You'll be amazed at how fast most vendors can come up with the references.
Scenario 3
Your boss: Did you call the customer references? You: Yes, and ahead of schedule. I also spoke with some prior customers of the vendors and got some very valuable information on which vendors worked really hard to try and retain the customer. I think we have a couple of real winners. Your boss: I've been meaning to talk with you about a promotion I think you really deserve...
I've used this tactic for some time now, and very successfully. I've disqualified vendors for adamantly refusing to provide the references, I've disqualified vendors based on the horror stories I've heard from the references, and I've awarded business to vendors based on "bad" references where I discerned that the vendor really did try to salvage the business. Try it for yourself and let me know how it works for you.
Calling customer references is more like just checking off a box. We don't know why we call customer references, we just do it because it sounds like a good thing to do...
Scenario 1
Your boss: Did you call the customer references? You: Oh yeah, I finally got hold of the last one—we had been playing phone tag for a week. I spent hours trying to get in touch with them. They thought the vendor was great. Your boss: OK, let's get this deal wrapped up...
Scenario 2
Your boss: Did you call the customer references? You: Heck no! It's a waste of the company's time because all of the references are going to say the vendor is wonderful. There's no value in that information. Your boss: I've been meaning to talk with you about your performance...
So, what do you do? You check off that customer reference box even though there's zero value in talking to the references. Were you aware that, in some cases, those customer references receive a benefit from the vendor in return for the reference? By the way, if you're routinely serving as a reference for your vendor, and you're not getting something out of it, you're missing the boat...
So back to those glowing references... You don't want to hear all of the stories about how wonderful the vendor is, right? I mean, your customer already knows how wonderful the vendor is (that's meant tongue-in-cheek). As a purchasing professional, what you're really interested in is information that you can use to help compare and contrast the vendors in your competitive bid project.
So here’s a simple tactic to get customer references from a vendor that can provide you (and your customer) with a dose of reality: just ask your vendors for "bad" customer references. Laughable, huh? Like a vendor is really going to do that... Well, they will if you couch it in a certain context. Meaning that I recommend you add language to your RFx master template requesting at least two references from past (don't say "bad," just "past" or "prior") customers, and indicate in the RFx that not providing that type of references will impact the rating of the vendor’s proposal or potentially disqualify a non-compliant vendor.
If the vendor balks, first ask why they have a problem with it (do they have something to hide?) and let them stutter their way through a response. Then explain that you're not looking to get dirt on the vendor, and that what you really want to find out is what the vendor did (or worse, didn’t do) to try and retain the business. And, that if the vendor doesn't provide the past customer references, they'll be disqualified. You'll be amazed at how fast most vendors can come up with the references.
Scenario 3
Your boss: Did you call the customer references? You: Yes, and ahead of schedule. I also spoke with some prior customers of the vendors and got some very valuable information on which vendors worked really hard to try and retain the customer. I think we have a couple of real winners. Your boss: I've been meaning to talk with you about a promotion I think you really deserve...
I've used this tactic for some time now, and very successfully. I've disqualified vendors for adamantly refusing to provide the references, I've disqualified vendors based on the horror stories I've heard from the references, and I've awarded business to vendors based on "bad" references where I discerned that the vendor really did try to salvage the business. Try it for yourself and let me know how it works for you.
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