Breaking up with a vendor is hard to do

Marriage counselling - how and when to break up

Managing a vendor break-up is nuanced. Can you remain ‘friends’? How do you message the change to your customers? What about certifications? Here are ideas that borrow from human relationships:

1. Don’t argue in front of the kids (Telling your customers)

While it’s tempting to vent your spleen to customers, Coppa says don’t make
a ‘knee-jerk’ reaction. 

And Moses advises taking the customer’s perspective. “Be open with the customer and say, ‘We now have a relationship with the vendor that we don’t think will support you. And now we have better technologies and we’d like to talk about migration.’ ”

Stay ethical and dispassionate, says Canalys channel analyst Jordan De Leon. “A pitfall is letting the customer know there’s trouble with a vendor. You don’t want to get them involved … don’t let them think you’re unstable or there’s a problem,” De Leon says. “You don’t want to badmouth the vendor no matter how sour the relationship is. Just say we’re moving on.”

Tech Research Asia analyst Mark Iles asks resellers to be honest with themselves about why they’re heading away from a vendor: “Are you doing it for yourself or for your customers?” He says that if the reseller “can’t make any more money” from an existing vendor relationship, it’s better to tell customers they have instead found a “better fit” elsewhere, rather than rake over the details of the split.

2. It’s not me, it’s you (What’s wrong with the vendor relationship?)

Is your portfolio of solutions still competitive? Just ask yourself, were you to initiate a relationship with this vendor today, would you still pick their offerings?

“Look at win ratios; is the solution best of breed? Are there new vendors? If you’re not winning deals, that’s a considerable consideration,” says Iles, who was also former A/NZ vice president of US networks vendor Juniper. He says this is especially true for resellers under transformation: “If you’re selling managed services to SMEs you can hide the technology”.

Resellers shouldn’t stay with difficult vendors, says  De Leon. Vendor account managers that are hard to contact and confusing partner programs commonly leave resellers looking elsewhere. “The lack of ease in doing business is a huge inhibitor,” De Leon says. “For channel players like HP, Microsoft and Cisco, partnering
is in their DNA. It’s very easy to earn
a dollar, get certified and trained.”

3. Staying faithful (How many partners?)

Most resellers can only manage a top-tier and a second-tier vendor, says Iles. “You rarely find someone handling Cisco and Juniper but you’ll see someone with Huawei and Pure Storage. They’ll have premium and cost-budget streams”, especially at the value end for their own managed services offerings. He says that tier-1 vendors are most vulnerable to upstarts like Huawei, especially as reseller business models shift to commodity services.

4. Going to couple’s counselling (The review process)

Iles says many resellers don’t have a formal approach to weaning vendors but the customer review is a time to slip the cord. “They should have an annual review” of their vendors and “communicating that to the customer should be part of the justification process”, he says.

The review with the vendor is also a good place to air grievances, says Moses. He advises cool heads: confirm where issues lie, set clear rules of engagement and consequences for breaches. Vendor account managers or direct sales managers might be asked to justify their actions and acknowledge mistakes. “An apology makes us feel good in the short term but if you lose that $700,000 deal there’s a big gap; you want action.” 

And at each annual review, the reseller should ask themselves, “Do they want to do business with the vendor?” asks De Leon.

Next page: The partial break-up