May 05, 2016

Time To Address Your Vendors (#OhBoy)

Here we go. Let's see how many unsubs this generates.

When I spoke at VT/NH, an attendee mentioned that "Kevin is not a fan of vendors". 

Not true. 

I am not a fan of unaccountable vendors who voraciously consume your money without sufficient return on investment ... all for their own personal benefit

Vendors know fully well if they fall into this category or not.

We've all dealt with this issue.

I once took over a marketing department. The database vendor rep immediately flew to my office. The conversation went something like this (with obvious embellishments for comedic effect).

Rep: So nice to meet you! How is your family?

Kevin: We've never met, and you honestly want to know about my family?

Rep: You have a family, right?

Kevin: Of course.

Rep: So how is your family?

Kevin: Fine.

Rep: Good. Good! Kids?

Kevin: No.

Rep: Really?

Kevin: No kids.

Rep: Interesting.

Kevin: Why is that interesting?

Rep: I ... don't know.

Kevin: What did you want to discuss today?

Rep: Our relationship.

Kevin: We don't have a relationship.

Rep: Between our companies. We've been your loyal service provider for six years.

Kevin: My team wanted to implement a statistical model, and you told them that they couldn't easily implement a model without paying more money to create a new table. We've paid you millions upon millions of dollars over six years, and you wanted to nickle-and-dime my team for $1,900 to build a table. Is that correct?

Rep: Have you heard of Big Data? Because Big Data is really going to be a game changer. Our three year roadmap includes Big Data solutions that will enable you to do pretty much whatever you want. And your investment in supplemental tables funds Big Data research.

Kevin: Will I be able to build a model that suppresses email campaigns from customers who return more than seventy percent of their merchandise?

Rep: We don't have any clients doing anything like that. Doesn't sound like a best practice to me. We really like to focus client energy into best practices.

Kevin: But will I be able to do that in the future, or do I have to implement a skunkworks solution like I do today?

Rep: Are you using another vendor? Because we have an exclusive contract. Your predecessor wanted to make sure that our unique relationship did not spill over into the competitive environment.

Kevin: Are you saying that my predecessor was an idiot who signed a dumb contract?

Rep: He understood the value of an exclusive relationship.

Kevin: Speaking of our exclusive relationship, our contract ends next summer.

Rep: I have paperwork with me, if you want to re-up right now and get the best possible pricing.

Kevin: We will not be able to continue our relationship unless there are significant changes.

Rep: Oh, we can't lower our prices any lower than they are today. We're giving you the best deal in the industry. Trust me.

Kevin: I'm not talking about price.

Rep: Good!

Kevin: I'm talking about service.

Rep: Oh.

Kevin: You promised us real-time updates. It's in the contract. And yet, we waltz into the office on Monday morning, and the database is down thirty percent of the time.

Rep: That's not true.

Kevin: You are right, it's actually 32% of the time.

Rep: I'll have to verify this "fact" with my team. We have contingencies in our contract that give us some wiggle room.

Kevin: Why do all of the contractual contingencies benefit you?

Rep: I've got a really interesting deck I can send you. It features all of the benefits that Big Data is going to deliver to the industry. Let's focus on the future.

Kevin: Why is our database always down?

Rep: It's not always down. You said it is up about 68% of the time. That's better than two-thirds of the time.

Kevin: You know what I am talking about. Why is it always down? And why is your householding logic so bad?

Rep: It's not bad. It's proprietary!

Kevin: My wife and I are householded separately.

Rep: Are you having marital difficulties?

Kevin: What are you talking about?

Rep: Because our algorithms are really sensitive to social media overlays. We use fuzzy logic.

Kevin: Sure do.

Rep: Did you have a disagreement? Did you air your dirty laundry on Twitter? You should have seen what happened last week. A couple outside of Provo got into a real rhubarb about ...

Kevin: It's not my fault that your algorithm thinks that my wife and I, living in the same house for nearly thirty years, are in separate households. It means I'm paying you to implement a database filled with errors.

Rep: Our Big Data initiative will address this issue.

Kevin: In three years.

Rep: Correct. Though we have a contingency for a five-year implementation if the business environment changes.

Kevin: The business environment always changes!

Rep: Well then you have a clear idea when our Big Data initiative will roll out.

Kevin: So are you going to do anything to make sure we have real time updates to our database that we can trust? And are you going to address your householding logic?

Rep: Where do you want to go out to dinner tonight? I'm in the mood for seafood, how about you?

Kevin: You didn't answer my questions.

Rep: Is it Copper River Salmon season yet?

Kevin: This meeting is over.

Rep: I'll take you to Anthony's. Pick you up at six? I rented us a Lincoln MKZ.

Kevin: I pay you, and then you use my money to rent a Lincoln MKZ?

Rep: We thank you for your loyal patronage.

It is at this point, in your rebuilding process, that you have to put the vendor on notice. The highly embellished example (but directionally accurate example) resulted in the vendor being put on notice. Four months later, I visited the vendor in question, informing the vendor that if their performance did not improve, our contract would not be renewed.

It was around that time that the vendor rep stopped visiting with me, and instead visited with one of my staff members. I'd see the vendor rep walking through the building with my Manager. I'd ask both of them what they were doing? The vendor rep would say "we're working on strategic initiatives". The Manager would give you a smirk that suggested that the Manager was prepping for his next job at his next company. Or that he liked salmon. Or both.


The contract was not renewed. The staff member did not last long, either.

The steady diet of $34.95 seafood dinners ended.

Look, I understand what you are up against. Your merchandising team spends half the week chewing you out over perceived incompetence. Why would you want to spend one more minute with the Visigoths when you could enjoy halibut and three bottles of wine with your vendor rep? Be honest, which scenario is more enjoyable?

The more embedded your vendors are with your dining habits, the more critical it is to put the vendor on notice. Food is not a substitute for failing to adhere to contractual performance.

I know, you fully disagree with me. Over the past ten years, you repeatedly chose your vendor partners over your co-workers. Co-workers don't take you out for Copper River Salmon.

I attended NEMOA two years ago. I walked into a room for a session, and a vendor rep (NEMOA Sponsor, no less) had this to say.

Rep: Kevin, nice to see you. We're spending a lot of time with "Brand E" this week.

Brand E Employee: Hi Kevin!

Kevin: Hi Brand E.

Rep: We took Brand E Employee to a Boston Bruins game last night. Great seats! Great time! What exactly do you do to make your client base feel special, Kevin? Anything?

Kevin: I generate profit for my client base.

Yes, that conversation actually happened. As outlined.

You have vendors who work above-and-beyond to make sure your business is successful. It is patently unfair to treat them the same as you treat vendors who want to nullify poor performance by feeding you halibut or shoving a chardonnay-flavored hockey puck down your gullet.

Again, I get it. You aren't going to follow my advice. Your vendor partners are your friends.

Do you want to be excellent?

Do you want your team to perform at the highest level?

Do you want your company to perform at the highest level?

Do you want to rebuild your team, your department?

Your vendors are part of your team - they are essentially your co-workers. You fire co-workers all the time. Why won't you fire your vendor base, when they perform poorly? And for crying out loud, you pay your employees $70,000 a year ... you'll gladly pay a vendor a million dollars a year ... with numerous vendors into six-figure territory. Why do you hold your employees to a higher standard than you hold vendors to?

Flushing poorly performing vendors out of your ecosystem is a critical part of the rebuilding process. 

Rewarding highly performing vendors is a critical part of the rebuilding process. Do you reward highly performing vendors, or do you just pay them what the contract says you should pay them? And to think that some in the vendor community think I'm against them.

If you aren't willing to do this, then you aren't serious about rebuilding your marketing practices.