10 supplier selection pitfalls to avoid

10 supplier selection pitfalls to avoid

Selecting the right supplier is hard – here’s how not to make it harder. It’s a fact that clients change spouses more often than they change their suppliers.

OK – that’s not actually a fact.

But choosing the right supplier is an important decision that needs careful consideration. Having worked both supplier and client sides, we thought it might be helpful to note the top places where the wheels can come off.

With apologies to Guy Kawasaki.

  1. We don’t need to put this out to pitch, I know a guy”

If it’s a low-risk commodity job, then you don’t need a selection process – make your stakeholder happy, go ahead with their guy, and save yourself a lot of time.

But if you thought you needed a pitch, it’s probably because the task has a significant degree of variability and risk, and one provider is not much the same as another.

If you end up selecting their preferred guy, great – maybe you could have saved some time, but now you can stand behind your choice with more than just word-of-mouth, gut-feel and crossed fingers.

And you’ll almost certainly learn something from the process and meet some interesting people.

  1. “Only two people spoke – I’m not sure I’ve met or heard from the team I’d work with.”

You probably haven’t – because one of those people was New Business, and the other an Account guy you’ll only see at quarterly reviews, the first of which will likely be you reminding them that agencies get fired for being flaky.

So take some steps to get a better view:

  • Host chemistry meetings and structure them in such a way that everyone from the supplier has a role and a need to engage in the meeting. You need to manage that meeting, not just say “over to you” at the start.
  • Insist that the team who’ll work on the business be present throughout the process.
  • Check references and your network. If they have a reputation for “bait and switch” it’s probably because they deserve it.
  1. “I didn’t get a sense of who they are or what they’ve done.”

Which is understandable, since you’ve only met them briefly once or twice.

It’s your party, so say what you want to know and who you want to see.

Tell them you want to see three examples of analogous engagements from the last 18 months; with the detailed business case behind them, five references from both current and previous engagements, and perhaps even references on the individual team members you’ll be working with.

If you can, trial them for a month – they’ll be on their best behaviour, but you can throw a few curveballs to test their comfort zone, flexibility and responsiveness.

Or pay them to do a small task. An obvious start. Too many pitches lead straight into the biggest and most important project. You may need a warm-up before the big event, so plan ahead.

Need help clarifying your strategy? Learn more about Trigenit  

  1. “They told us what we already knew.”

They’re trying to show that they understand your business, which is commendable.

Fact is, they’re in the supplier business, not in your business, and they will be coming from a standing start on the ins and outs of what you do – a lot of what they’ll learn seems new to them, even if it’s trite to you.

You’ve had years being you, with all of you think about nothing else all day long, and you deal with the subtleties that they won’t yet see.

Make sure you tell them what you already know, so they don’t spend a lot of time trying to show you how much desk research they’ve done, then expecting to bask in your adulation for taking such a lively interest.

  1. “They didn’t really answer the brief”.

Suppliers sometimes hear the question they would like to answer, or think you should’ve asked, and set about answering that instead of the one you wrote down.

It’s OK for them to challenge a brief, but actively and progressively – anything else and they’re asking to be excluded.

If you really mean “They didn’t really answer the brief I think we should’ve asked them”, well, that’s your bad.

We’ve seen senior clients who haven’t read, agreed, or even seen the brief sent out to the supplier, open a meeting with “forget what you read in the brief, let me tell you what this project is really about” – thinking they bring some executive insight, but really just wasting everyone’s time.

A successful selection process has a clear, agreed and well understood brief.

If you’re overseeing the selection, make sure that all the stakeholders have read and agreed the brief and process, intermediaries don’t dilute this, and suppliers have a chance to interrogate it with you.

If there are key points, emphasise them; if you are looking for particular insight, say so; if there are no-go areas, point them out.

If you want to take a less structured approach or think a brief limits thinking, that’s cool, but don’t pretend otherwise. Be shameless about it. Meet some suppliers, throw out some questions and discuss the thinking. Perhaps just write one question or a statement to anchor things.

The clearer you are about what you’re doing up front, the easier everything is later on.

  1. “They just presented PowerPoint* at us for two hours.”

(*Yes, it’s often Keynote these days – please try and focus on the substance!)

We all know that PowerPoint can be a trap – its form determining a meeting’s function. And *everyone* can be prey to its faux-structured allure.

But it is your process – you get to decide length, format and structure.

You don’t have to be hyper-prescriptive, but there’s nothing wrong with keeping things short, or suggesting that the supplier time-box parts of the presentation, or running it as a workshop, or scheduling a meeting room without a screen, or insisting on a lengthy Q&A session.

Or just make it clear that you will explode if there are more than 30 PowerPoint slides.

Whatever you like – just tell them what you want.

  1. “There is an obvious provider – this is an easy decision.”

One vocal stakeholder can skew a selection process – “we should just use these guys, because they’re great / I’ve used them before / I’ve had a strong recommend”.

Beware.

If you’re running the pitch, it’ll be because you’re going to manage the chosen supplier. It doesn’t matter how nice this supplier was to your stakeholder, you have to deal with them and their output. And what Company X was 3 years ago is not what Company X will be when you hire them.

So agree a decision process beforehand. Set criteria, create a scorecard, weight the answers, assess immediately after the meetings – i.e. create as independent a set of benchmarks as you can, so that vocal stakeholder will be managed within the context of all the others.

  1. “The costs were all over the place.”

Which should be a worry, whether you are buying a specific deliverable, licensing a technology, or putting a programme in place.

Because while rate cards can vary (you should ask to see them), the same job should take a similar amount of time, effort and materials, and have different suppliers come in reasonably close together on price.

It may be the case that a technology overmatches the competition meriting a premium, or a creative solution requires additional production – and the providers should highlight these to you.

Or that a supplier sees significant risks and complexities in working with you. Incumbents often price more because they subconsciously know the animal they are engaging with. Newbies can price below simply because they don’t understand the complexity of you, and not because they are actively low bidding.

But if you can rule all this out, chances are the brief wasn’t that clear and that lack of clarity has left too many blanks for the provider to fill in, with variable, and disconcerting, results.

Learn more about Matthew Treagus, author of this article. 

  1. “I don’t know if my team understands enough about digital / innovation / technology to make the right choice”

Absolutely – particularly when you’re looking to make a step change in what you’re doing as a result of a changing technology landscape. These will be hard new problems to solve, and even the smartest folks with the best will are still doing their day job.

Reach out to colleagues who might have been in similar situations to get some pointers about what to do. And / or consider an intermediary, especially if it’s a marketing service gig – they’ll have done this before and can guide you through the process.

If it’s a more general business / technology engagement bring in a ringer – there are consultants of all stripes who’ve done this sort of thing on more than one occasion, and your engagement models can align risk and reward. People like this can be found at www.trigenit.com.

  1. “I’m not sure I’ve seen a credible provider.”

Then you need a re-think.

If a lot of people are telling you that you need to sell digitally, when all you wanted was an ad campaign, you’re probably not solving the right problem.

Take a step back and ask yourself, “what exactly is the critical question here?” If you can set that question with clarity and confidence, you can write the brief for a supplier to solve, and list out the best suppliers to solve that problem.

Wrong answers to the wrong question might be the right answers to the right question.

Or maybe you just chose some rubbish candidates, in which case, work your network and/or bring in a consultant/intermediary and try again, this time with feeling! See also www.trigenit.com.

  1. “Our favourite guys said they didn’t want to participate in the process”.

Businesses that run pitches poorly get a reputation. And that affects your brand in the supplier marketplace.

Of course someone will work on your business – you are a client with money. But do you get the best suppliers? And the best team? And the best deal on the best team in the best supplier?

Be nice. And straight-forward. Communicate to both the winners and the losers. Offer honest, constructive feedback. Running a tight ship in a direct, open manner will have good people hammering on your door to do good work.

  1. “I just didn’t like them.”

That’s OK. It’s human nature. Don’t work with them.

But let them down gently.

Chemistry trumps everything. If you can’t imagine working with them then that’s that. Trust your instinct with matters of taste.

Do everyone a favour and find this out early. Run those chemistry sessions. Keep them light, open and informal. Take the time to meet lots of people, then pick the ones you like and take it from there.

OK – it was 12 – we got a bit carried away.

Browse

Article by channel:

Read more articles tagged: Featured, Strategy

Strategy & Innovation