by Bill Garvey
December 12, 2011 – Maybe it’s the season, but I do believe it benefits an insurer when they take the time to personally explain to software vendors why they had been eliminated during the search process. Vendors spend months, sometimes years, wooing an insurer. They don’t expect to make every sale, but the better ones would like to know why they lost despite how painful the conversation. Advising a vendor by email may save time and the awkward conversation, but it doesn’t help in the long run.
When you take the time to explain you educate them for the future. Why is that important to you? Despite what you might think at the time you send your Dear Vendor email, you just may need them down the road. Software projects, while better run than say a decade ago, still fail with regularity. Vendors who win your hearts the first time around, may not live up to expectations once you’re a paying client, and they’re courting the next account. Larger vendors with whom you’d cringe at the thought of doing business frequently buy out the nimble wonder kids who’ve smitten you. Sometimes that vendor who didn’t get past second base starts to look pretty good.
I’m not suggesting you can’t reacquaint yourself despite how cold you cut them out. No self-respecting vendor refuses the opportunity to win your business again. But if he or she understood why they lost your account the first time around, they may better themselves for round two. They should have fixed the problem, built the missing function or prioritized their enhancement schedule around what you felt was lacking. If the issue was one of sales style, presentation or you just didn’t like whom they brought to demonstrations, a good salesperson takes note and makes changes.
I’ve had many difficult conversations with vendors. I honestly hate them, but out of courtesy and an attempt at mutual education I always make the call. Dialogue produces knowledge. Vendors are more likely to let their hair down when they have to hear why they’re out. They also appreciate knowing why. If they’re smart they will listen.
The next time I see a vanquished vendor in a software search I pay close attention to what has or hasn’t changed. I recently watched a vendor do the same dumb thing that lost a prior search I conducted, despite my advice. They lost again for the same reason. On the other hand, a vendor I spoke at length with about sticking to the script of a scripted demo because, after all, the insurer spent a lot of time preparing it, stuck closely to script the next time I saw them. Guess who won that contract?
About the author: Based in Halifax, Nova Scotia, Bill is principal of Eastern Shore Consulting, Inc. He assists insurers in building the business case for legacy system replacement, selecting the right software, and enabling a successful implementation. He can be reached at (902) 818-8269 or visit www.easternshoreconsulting.ca.