Ideally, service providers and their customers are connected for a long time. However, if the following signs increase, you should analyze the situation in more detail. […]
It happens in the best relationships: one of the two partners simply loses interest. Service providers are actually interested in long contracts with their customers, because only then will they make a good profit. But if this profit is far away, it becomes critical – for the customer. After all, large IT providers sometimes introduce programs to part with the ten percent of the least profitable customers.
But the separation is usually difficult, because the contracts are designed for a long time, a unilateral termination is therefore expensive. So the provider only has to subtly get the customer to cancel or improve his margins – or both.
How do you know if you are one of the problem customers? The author Stephanie Overby from our US sister publication CIO.com has identified ten signs that indicate an early end to the relationship.
If a customer falls into the dregs of the least profitable customers, a provider is rarely so shy not to let him feel it. Rather, the provider will begin to raise their concerns and envisage changes through standard governance processes, rather than immediately developing subtle termination plans. Your counterpart could also try to renegotiate the contract or work through a lot of critical points in meetings at the decision-making level.
Be vigilant with a provider who is always extremely vigilant on a technical level about what is included in the scope of the order and constantly discusses it. In the United States, this is called the “Death by change order”. It is a sure sign that your provider is no longer inclined to you.
A listless seller could also refuse to respond to new technological requests or expansion requests until another part of the existing business is fixed anew.
Today, all leading service providers focus on a growing business with existing customers. From a sales point of view, it is cheaper and more efficient to create a close relationship. This often results in opportunities for strategic work. So if your outsourcer only makes a few attempts to sell additional services or develop a long-term roadmap, there is a high probability that he wants to get out.
Even the best business relationship may require consulting a lawyer. But if you are suddenly omnipresent with the smallest problems, you know that there is a problem.
If the fluctuation in the account team increases sharply and the provider withdraws especially the more experienced members, these are also bad signs. Especially if he only announces changes at short notice.
If the contract allows, a dissatisfied outsourcing provider can replace its onshore resources with more cost-effective offshore personnel. Sometimes it is not even necessary to notify the client.
If the team members stop looking for operational solutions to problems and blame each other for failures, this is a sure sign that something is wrong. The problem is that such behavior is difficult to reverse – even if the management of both companies ultimately decides to continue working together. If the project managers on both sides can no longer work with each other and the provider does not appoint a new leader, they have probably reached the bottom.
Did you see the managers of your provider the last time you signed the contract? Then the relationship is on the rocks. Good leaders spend a lot of time with the most highly prioritized customers. If you don’t see any executives for a long time, this could be a sign that your company is much less important to the provider.
Repeated delays, especially in development projects or rollouts of new technologies, indicate fundamental difficulties. Long delays are a popular way to “fulfill the contract” – with half the required resources. The provider can always claim that there have been unforeseen technical difficulties. In fact, he has been desperately trying to keep his return target with heavily compressed resources.
Most providers have a classification system for their major customers. Where do you stand? For silver, gold or platinum? Some criteria are contract amount, brand status or a key figure for future growth and investment. If you are not listed in the ranking, this could be a sign of problems or at least a lower perceived value in the relationship.