Time to Find a New Vendor: 2 Steps to Take

Companies aren’t nearly done tightening their belts as the economy slows down. Many are cutting back on vendor services or considering switching to other vendors.

The obvious upsides to this approach is cost-savings and better goods and services. The downside: Fielding offers and meeting with vendors can take up a lot of time. It’s no wonder why many companies let evergreen contracts with the vendors they rate as OK to renew automatically — the devil you know may be better than the one you don’t.

Here are two strategies for getting the info you really need from from a prospective vendor — quickly — and securing a strong deal:

1. Get the Details that Matter

A typical sales pitch can sound like this: “We provide a wide variety of asset management strategies for companies on the cutting edge.” Great. Now what exactly do they sell or do?!

Busy CFOs and controllers don’t have time for generalities. The three things financial decision makers need to know are:

• what are the vendor’s services (in plain English)
• their rates, and
• what they do better than the other guys, backed up by numbers.

You can create an email template that asks all three of these questions and send it to a vendor if it piques your interest in some way. Beware of a vendor that can’t answer your question succinctly.

A vendor that can quickly explain why it’s the right fit deserves strong consideration and follow-up. One that doesn’t isn’t worth a second call or visit.

2. Waiting Can Help Secure a Better Deal

Let’s say you like and need the vendor’s services. Their references and track record check out. And their rates are reasonable.

Don’t make the deal right away. There’s always some wiggle room. Give it at least a couple of days for the vendor to get back in touch with you.

Hungry vendors that want to close a deal will come back to gauge your interest. And by waiting, you’re more likely to spur them to adjust rates or contract terms, or maybe extend a service deal.