There’s a wrong and a right way to check your prospective vendor’s references. Whether you’re procuring a new shipping vendor or seeking a new product supplier, these five tips will help you maximize your time and minimize blind spots when checking vendor references.
Five Tips for Checking Vendor’s References
- Leave plenty of time: Don’t rush your calls with references when checking on potential vendors. Allow at least a half-hour of time, and keep your schedule clear for a half-hour after the call in case your meeting runs over. Take your time and allow for periods of silence on the telephone, which may simply mean the other person is thinking of the answer. Rushing people is a sure way to get a mediocre response and a lukewarm vendor check.
- Talk to an expert: Only speak with someone who had direct knowledge of the vendor’s performance. You need to speak with the individual who had direct contact with the vendor. Politely, but firmly, insist on speaking with that person. Don’t let your call be handed off to a junior manager with little direct knowledge of the vendor relationship.
- Ask open ended questions to start the conversation: It’s always wise to begin the conversation with an open-ended question such as, “Tell me about your experiences with ABC Payroll Administration.” Then wait for the response. This allows the referring person to bring up any good or bad points quickly.
- Prepare a list of questions with a graded scale for a response: Come to your meeting prepared with a list of questions that can be answered with a graded response, such as a scale of 1 to 5, with 5 being superb and 1 being unacceptable. This helps you compare “apples to apples” when speaking with several references. If any answers strike you as excessively good or bad, wait until you’ve asked all of your questions, then return to the outlier and ask clarifying questions to understand the response.
- Ask the magic question: The magic question is one that many references answer honestly. That question is simply, “Would you work with this vendor again?” Even if the overall review wasn’t stellar, if they answer “yes,” you can be fairly certain the vendor was acceptable to the references.
Are References Always Positive?
A glowing, positive review often sets off red flags for business owners just as much as a very bad review. Keep in mind that vendors only supply you with references from businesses they believe approved of their work. You’re more likely to get 5-star ratings from your vendor check than anything else. That’s why asking questions on the graded scale, and asking the “Magic Question” can pinpoint more opportunities for clarifying questions and details than simple questions.
Include Reference Checks as a Normal Part of Doing Business
Don’t skip checking references when it comes to selecting a vendor for your business. Many businesses could avoid problems simply by requesting references and following up on that request. A reference check today can save you time and energy later.
We welcome the opportunity to put our accounting expertise to work for you. To learn more about how our firm can help advance your success, don’t hesitate to contact Kathy Corcoran at (302) 254-8240.
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