Thursday, March 12, 2009

Using References for Vendor Selection

Whenever you need to select a new vendor for a product or service, it is important to feel confident in your final selection. For every service or product you require, chances are good that there are many vendors to choose from. So how do you select the bes t vendor for your needs? You can start by checking references.

Using references should be a critical piece of picking a vendor. If a simple review of a vendor’s catalog or services can provide you with information about a vendor’s products or services, a reference check can provide you with information about how well those products or services are provided…and how well they hold up. References can give you an idea of how well a vendor meets a deadline, responds to queries, and provides support.

But how can you be sure that the reference you are getting is accurate and useful? In many cases, references avoid saying anything negative about a vendor for two reasons:

  1. There is a legal liability associated with giving references. Giving a bad reference may constitute slander or libel, which can result in legal action taken against the reference on part of the vendor.

  2. Many references are coached by a vendor in terms of what information they can and should share with a new business.

How to Perform a Reliable Reference Check

While obtaining an unbiased reference may be difficult, it is not impossible. One way to find unbiased referenced is to find companies that have use the vendor’s services – but that are not specifically listed as references by the vendor. How can you find such companies? Here are a few ideas:

  • Take a look at the vendor’s press releases for information about business partnerships and relationships.

  • Perform a simple search engine search

  • Browse a vendor’s LinkedIn profile.

  • Go to industry trade events to meet companies that work with a business (this is especially useful if a business is large or well-known).

Also, ask the references to rate the vendor on dimensions that are most relevant to business services such as timeliness, reputation, expertise, reliability, communication,and availability.

Finally, keep in mind that not all business relationships are the same. The relationship that a vendor has with a business in one industry may differ greatly from the relationship that a vendor has with a business in another industry. Therefore, find references that seem similar to your business in terms of type, size and/or location.

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