3 Reasons to Create Vendor Performance Standards

Vendor Performance Standards

Vendor Performance Standards

It’s common for businesses to engage vendors to provide services to their customers, and it is crucial to set vendor performance standards. These vendors may interact with your customers by providing product delivery, performing tasks at your customers’ sites,or acting as a communications point. Their role is critical to your company’s success. Here are three reasons to create vendor performance standards.

Your vendors represent your company

When your customer interacts with vendors who are providing services on your behalf, that vendor represents your company. This is why you want to make sure you have the vendor performance standards in place. Just as your employees are required to adhere to certain criteria when interacting with customers (your employees do have interaction criteria, right?), the same should be the case for your vendors.

You are entrusting your company’s reputation to someone outside of the organization. It’s important to make sure your vendors thoroughly understand both your and your customers’ expectations. Establish vendor performance criteria just as you would for employees and periodically check for adherence to the standard.

Your vendors actions impact your internal operations

More often than not, someone within your company is tasked with interacting with vendors. This communication might include providing task/project requests, receiving task/project updates, and responding to customer communications regarding vendors.

Developing vendor performance standards will certainly assist in creating a positive relationship between your internal personnel and vendors. Both parties will know and understand the expectations, which should translate into fluid communications.

Vendor performance standards prevent the need for internal personnel to “chase” the vendor for updates or other information required for internal task completion. “Chasing” vendors will most certainly lead to internal delays in task completion and quite possibly create the need to perform rework which more often than not will lead to a subpar experience for your paying customer.

Vendor performance standards establish measurements for performance reviews

Just as you periodically conduct employee performance reviews (you are conducting periodic employee performance reviews, right?) it’s a good idea to sit down with your vendors to talk about the relationship.

Your vendor performance standards will allow you to objectively discuss how your vendors rate in accordance with the set performance criteria. Some companies often have several vendors who provide the same services to their customers.

Vendor performance standards assist in the ability to be consistent when rating multiple vendors and comparing the results. Companies should always track the level of customer service their vendors are providing. Should role responsibility change within your company, standards can assist in ensuring that vendor performance continues to be measured both objectively and with consistency.

Just as you have employee performance expectations, make sure that you establish vendor performance criteria as well. Remember, when your vendors interact with your customers, it is just as if a company employee is in that role. Make sure your vendors understand both your and your customers’ expectations.


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