Generally speaking, whenever a vendor owns up to a service problem, they offer a concession in order to make up for it. Here’s the question – is what they offer you truly an appropriate fix, and does it really make things better for you? In the short-term? In the long-term? What may seem like a conciliatory gesture by your vendor may actually serve their needs more than it does yours. They are relying on the notion that you will identify a short-term fix as sufficient. They know that a customer won’t have the time to evaluate the long-term impact of a short-term fix. We see this problem all the time in bad service design. We have one simple message – don’t take the permanent detour.
Now, we’re not saying it’s always permanent. We just want you to know when it’s likely to be permanent. Sometimes, a credit from the vendor is enough – maybe it was just a small mistake. However, sometimes the credit is an indicator. Sometimes, the problem isn’t the problem. We’ve found that many credits are generated by virtue of larger service design issues that have negative long-term consequences. For example, have you ever had an entire invoice credited? Have you ever had an entire month’s worth of service charges waived? When abnormal credits like this occur, it generally indicates that a normal pattern of incorrect charges has occurred.
DOES THE VENDOR OFFER A PERMANENT DETOUR?
When you do identify an issue and your vendor offers a fix, be sure it’s a fix that has long-term benefit. More importantly, be sure it actually addresses the thing you want fixed – don’t fall for a head fake. If you want a price increase reverted because it was out of compliance, don’t let a month of credits be the fix. Don’t let three months of credits be the fix. The thing that is broken is the price increase, so insist that the provider address the primary issue. Seems simple, right? Obvious, right? Our research indicates that vendor’s do this quite often with great results – for the vendor.
Maybe you’ll get reduced billing for a few weeks due to an invoice error. You might do quick math in your head and compare it to the headache of trying to fix the root issue. Often, the quick math and the quick fix feel like a reasonable solution, especially when there is existing friction with the vendor. Unfortunately, the long-term effect is frequently bad for the customer and good for the vendor. The real problem here is one of visibility. What does the data indicate? Do you even have access to the data that would give you the best decision? What is your vendor showing you? What are they NOT showing you?
DOES THE BEST DECISION FOR YOU CAUSE FRICTION WITH YOUR VENDOR?
A red flag should appear when you have to harp on your vendor to fix unresolved problems. If you hear things like, “Sorry, but my boss hasn’t approved the credit yet,” or “Our policy doesn’t allow us to change a price increase,” don’t think that it’s bad management. Don’t think that it’s people being bad at their job. Don’t think that your vendor just doesn’t have their act together. Instead, consider that it may actually be by design. All those things preventing you from getting what you want – those are in place by design to achieve a goal. So ask yourself, what goal is being achieved?
Certainly errors happen, and vendors make honest mistakes. Sometimes, technology fails and products and services don’t get delivered. Yup. All true. Look at the bigger picture, though. Is there a pattern of mistakes? Is there a pattern of you asking for X and mostly getting Y or Z? Does your service provider always have a reason for a shortfall and give you a response that doesn’t attack the issue? What if they’re not mistakes? What if those responses are intentionally designed to achieve a thing that benefits the vendor? Every aspect of your services are designed. Even some of the “mistakes.”
DOES THE VENDOR MAKE DECISIONS ON YOUR BEHALF?
The whole idea with using a managed service provider is to offload most of the work, decisions and problems to a vendor that deals with it. It works very often. It also does not work very often. What tools do you have in place to differentiate between the two? Are we getting nit-picky again? Maybe. But if the difference meant knocking 30% off your purchasing, then would it matter?
Vendors design services that benefit you and them. We’re interested in ensuring that most of the benefit goes to you – the customer. We want your vendor to achieve their objectives as well, but we see the tables tilted too much in the vendor’s direction. Most customers make good decisions when paying invoices. We want to help them make the best decisions.