How to Fire Underperforming Vendors

You’re only good as the company you keep – or so the saying goes. The same is true for vendors you hire to execute key initiatives for your company. Whether it’s a digital agency for development, SEO company to drive traffic, or third-party software solution to increase sales, there is nothing worse than signing on the dotted line only to find out you’ve gotten into bed with a snake oil salesman. With services costing tens of thousands of dollars, it’s imperative to hold companies accountable that oversold and under delivered what they promised. To hire slowly and fire quickly can mean the success or failure of your e-commerce business.

Conduct a Vendor Audit

When people hear the phrase “audit”, tax season and the IRS often come to mind. Most companies don’t think to audit their existing vendors to review the relationship and performance. Auditing Audits help identify underperforming ecommerce vendorscan also be used as a tool to improve the relationship with your vendor (if possible) and recognize their accomplishments.

Routine audits send the message that you are monitoring the vendor to ensure business standards, ethics and contractual agreements are being met. If you don’t have the resources internally to conduct an audit, hire an independent consultant to help. The Information Systems Audit and Control Association (ISACA) conducted an excellent presentation to their Houston chapter on best practices for auditing technology providers. By starting with an audit, you set the precedent on what your expectations and goals are to continue the engagement by re-enforcing critical KPIs. You’re also giving them fair warning to shape up – or ship out.

Document Discrepancies

So you’ve voiced your concerns to your vendor regarding shortcomings you’re experiencing with their services and still no results. If you haven’t already, it’s key to document every phone conversation and organize all your written correspondence. If there are other staff members working with the vendor, direct them to outline discrepancies they have seen with the service. Utilize analytics, reports or any other data to help expose the problems you are finding.

Pull the Plug

Ending a relationship with a poorly performing vendor is sometimes easier said than done. Companies fear contractual obligations or sometimes don’t have a well thought-out termination strategy. Here are some tips to help you through the process:

  • Know when to fire underperforming ecommerce vendorsBy conducting an audit and documenting discrepancies, you are already in a powerful position legally to terminate your contract. For most vendors, it is better to release you from the contractual terms than face a lawsuit down the road. Remember, you are in the power seat at all times.
  • Research and vet new vendors 2-3 months prior to ending your relationship with your current one. This will give you ample time to check their references, negotiate terms and implement a transition strategy.
  • Ensure you have access to all passwords, servers and pertinent information prior to the transition. If your vendor is not cooperative for some reason, leverage your IT department or hire an independent technical consultant to work around their roadblocks. We have seen some e-commerce retailers go so far as shutting off server access, or mirroring their website to replicate their source code to bypass vendor obstacles.

 

Hindsight is 20/20 – many of your vendor woes could have been avoided by hiring an e-commerce consultant prior.  Researching, vetting and negotiating the best in class solutions are part of their job. They bring a wealth of experience to the table, with a deep understanding and pulse of who’s hot (and not) in the industry. Hiring a strategic consultant to help you through the process is a small investment compared to the price you may pay by signing with a deadbeat vendor.

Moxxii is a commerce strategy, conversion optimization and advanced analytics firm for innovative digital, retail, fashion and luxury brands. With offices in Florida and New York, Moxxii strives to support its clients with strategic advisement that is authentic.