As a small business, there are many things you can manage on your own, like email marketing. However, you may decide to outsource other tasks that you don’t know how to do, or don’t have the time or resources for. This is the point when you would call in a vendor.

Managing vendor relationships is harder than many business owners realize. It’s not as simple as just paying them and sitting back and waiting for deliverables.

Rather, it’s important to be proactive, yet considerate, about communicating with them. There’s a fine line between being detailed and descriptive about what you expect from your vendors and micromanaging them.

It can be especially challenging to manage a vendor relationship when it starts to go south and the vendor isn’t living up to your expectations. It happens all the time. One 2017 survey of IT professionals found that the biggest challenges they encountered working with vendors was they were unresponsive to requests for help, had constant employee turnover, and slow product improvements.

So, what’s the best way to communicate to a vendor that you’re dissatisfied with their work? Here are the key steps to first trying to avoid, and then communicating, problems with your vendor.

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Set the stage for feedback upfront

It’s important to jointly recognize early in your vendor relationship that not everything is likely to be rosy all the time — and you need to establish a system for expressing concerns or dissatisfaction. A good way to do this is by breaking projects and processes into increments in which you have ongoing stages or points at which you can review a vendor’s work and provide feedback.

This process should be established in a written vendor agreement so it’s clear when and how feedback will be provided. How you structure and time feedback will likely depend on the type of service or product the vendor is providing and what makes sense for that particular relationship.

For example, if a web design firm is redesigning your company’s website over a six-month period, you might have a few meetings before the redesign process begins to provide feedback on their design and development recommendations, and then twice-monthly meetings to discuss how the redesign is progressing. This gives you natural times at which to express satisfaction or dissatisfaction with the process, and if you have any concerns or complaints, you can air them at that time. If you have a long-term relationship with a vendor — such as a marketing firm — you should also create regular times to meet and align on expectations. Perhaps you have a monthly call or in-person meeting that includes reviewing the services and assets the marketing firm is providing your company. However you decide to structure your relationship and “check-in” points, you need to set the groundwork for open and honest feedback from the get-go.

Share your expectations and priorities with your vendors

Your vendors can’t meet your expectations and priorities unless they know what those expectations and priorities are. You can dodge a lot of problems by clearly communicating them in advance.

Before you start working with a vendor, consider what your goals are for both the service or product the vendor is providing as well as the relationship itself. Then create benchmarks that will help you measure the vendor’s performance.

Those benchmarks will vary, of course, depending on the type of vendor. But they could be tied to the vendor’s timeliness and efficiency, accuracy of work, responsiveness to your requests, or specific metrics related to the work they perform. Once you’ve created your key benchmarks for the relationship, share them at the beginning of the relationship with the vendor. Be courteous about how you present them and be open to changing the benchmarks if the vendor has concerns or information that support revising them. For example, you might think a vendor’s project should be completed by a particular date, but the vendor may have a valid reason for not being able to finish by your preferred deadline.

Once you create these benchmarks, make sure to review them — and discuss whether the vendor is achieving them — at your regular check-in meetings.

Put your feedback in writing

Face-to-face meetings, video calls and phone calls can all be invaluable in terms of building a strong and trusting relationship with your vendors. After all, studies have shown that facial and verbal communications are incredibly valuable in terms of likability and building positive business relationships.

That said, however you decide to communicate concerns and problems with a vendor, make sure to also put it in writing — whether that’s in a follow-up email or writing a business letter. This gives the vendor an easy way to review the feedback you’ve provided and allows you to document the problem so there’s no debate later on over whether and what feedback was provided.

Be considerate, but also clear and constructive

How well you express your dissatisfaction with a vendor can go a long way in preserving your relationship with them. Before describing the problem, it can help to briefly mention something positive about the relationship — something they have done well — or thank them for something in particular. But then get to the point quickly.

The goal should not be to criticize them, but rather to offer constructive feedback that helps solve the problem and gets the relationship back on track. Here are a few pointers for constructive feedback:

  • Describe the problem rather than pass judgment.
    Refrain from using adjectives like “good” and “bad” and instead provide detail: “The report was due to us on January 20th, but we did not receive it until February 15th.”
  • Don’t try to interpret why it happened.
    Extrapolating the reason for a problem may only lead to worse relations. For example, even if you believe a vendor missed their deadline because they weren’t prioritizing your relationship, you should probably leave the explaining to them. (And you may have jumped to the wrong conclusion, anyway.)
  • Avoid making it personal.
    When you start naming names, it can get prickly — and those people are likely to get defensive. It’s usually better to keep your feedback focused on behaviors and actions than singling out particular individuals.

Offer a concrete solution

Rather than just lay out the problem, also suggest a way — or ways — it can be solved. For example, if a vendor missed a key deadline, you might request a discount for the work or ask that they speed up the turnaround time for the next phase so the overall project doesn’t fall behind. If a vendor doesn’t meet a particular performance metric that you established early in the relationship, you might request a meeting specifically to re-evaluate the work they’re doing and brainstorm how to get that performance metric back on track.

Keep in mind, as well, that having insurance coverage such as general liability coverage, can protect your business in case a vendor relationship goes very badly and causes a legal claim against your business.

Know when to let go

At the end of the day, it’s important to recognize that not all vendor relationships that go bad can be salvaged — and sometimes it makes sense to change vendors if you discover your current one is unresponsive or doesn’t seem to care about fixing problems.

But how you establish the relationship and create a mutually agreeable way to share information and feedback — as well as how you communicate your dissatisfaction — can make a big difference in maintaining positive and successful vendor relationships.

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