Your company’s vendor relationships are vital to the health of your business. So if a vendor’s own financial health is subpar, it could have real consequences for you. If a vendor goes out of business, you may not be able to get service, updates or replacement parts that you need. Plus, you’ll have to spend extra time and resources finding and establishing ties with a new company. It’s a good practice to pay attention to possible warning signs that a tech vendor won’t be around in the near future. Here are some to watch for:
Slow service: If service has slowed way down from previous levels, look into why. Sometimes, it’s due to temporary (positive) factors like when a company is rapidly growing and still integrating new employees or products. But if there is evidence of other causes like layoffs and financial difficulties, it may be an indication of a bigger problem.
High staff turnover: Has your account manager changed three times in a just a few months? Something bigger might be going on. It could be that the company is having a hard time keeping good people, or that they are not able to attract strong employees in the first place. Competitors may be easily poaching the best talent. It is true that in many industries, employees stay in the same roles for shorter lengths of time than in the past. Some turnover is inevitable, but if it’s especially rapid or widespread in the company, it is a sign of potential mismanagement that could lead to more serious issues down the road.
Cost-cutting: Evidence of cost-cutting measures shouldn’t be too obvious or painful to customers. It’s one thing when vendors are downsizing, removing marketing or perks that are rarely appreciated. It’s another thing when vital services or resources you’ve counted on are suddenly cut from the budget.
Failure to keep up with industry changes: Maybe you think the product you’re using is working well enough, and then you happen to see a demo of the competitor’s version and are floored by how much more advanced it is. Similarly, you’ve noticed that service models once considered innovative are now commonplace . . . except with your main vendor. If it seems like your partners aren’t keeping up with the pace of change in the market, sooner or later, they may drop out of it altogether.
Businesses are imperfect. Sometimes, slow service, turnover, cost-cutting, or a need to catch up with the industry are temporary waves that you just need to ride out with your vendors. However, if a pattern emerges, if you see clusters of multiple signs at once, or you have a bad feeling about the future of your vendor, it might be time to look at your alternatives.