5 Signs a Vendor's Negative News Is Hurting Your Business

By Wayne Landt

In recent years, the telecommunications world has evolved at a very rapid pace. The introduction of new technologies, new entrants into the market and changing customer demands have put a lot of stress on some old-line companies. In fact, there have been more than a few household names that have either gone out of business, retired their products or have been forced to reevaluate their organizational and financial structure in an effort to remain viable.

For those of us who have been in the business for a while, these changes and fluctuations are not always much of a surprise. Even so, when your business (and livelihood) depends on partnering with vendors and selling their solutions to your customers, even the most loyal reseller must sometimes question the relationship.  

As a reseller dealing with all these changes, it is sometimes tough to know if you’re still in good hands. When should you worry that a vendor’s troubles might bleed over into your business — and that of your customers?

Here are some signs that the road ahead may be a bumpy one.

You lose deals you should have won.

The demo went great. The product that you’re selling hits all the checkmarks for the customer’s requirements. You put together a proposal that you know is in budget, and you think you’ve got the deal won.

Then you get the word that you weren’t selected. They loved you, your company and the product, but they had concerns about your vendor. The risks, they tell you, are far too great with that company. They’ve seen the headlines, and they need to know the supplier is on solid ground before investing in its services and products.

Been there? If not, you could be, because customers these days are savvy. They fully research every product and vendor that they are considering for purchase. For mission-critical applications like voice, they scrutinize every detail to ensure their investment is a good one. In the age of Google, you can’t hide bad press.

Product investment stops.

New products and technologies are the lifeblood of every business. They increase productivity, reduce costs and let employees provide a better customer experience. This is true with communications products as well; customers have come to expect that a good communications vendor will continuously update their product line with new offerings and feature capabilities that benefit customers. So when R&D comes to a halt or is significantly scaled back, it’s crucial to question why investments have dried up and what impact that could have on the strategy of the company and its products.

Even if product investments ramp back up in the future, it’s likely that competitors have taken advantage of downtime to close the gap or surpass the vendor’s product capabilities, which puts you at risk of selling and maintaining a laggard technology solution.

Support is not so supportive.

There is nothing more frustrating to both you and your customer than not getting the support that you need, when you need it most. Now imagine that inferior support is the norm and not the exception — you have long hold times, poor follow-up and you start wondering if anyone is even paying attention to your problems.

Support is an expensive proposition for a vendor. It costs a lot of money to ensure that a help desk is properly staffed with adequately trained people who are able to rapidly respond to customer issues.

Additionally, support typically doesn’t generate revenue; it’s purely a cost center. That means when a vendor is trying to remain a viable, ongoing concern, support is one of the first places the bean counters go to reduce costs. What you will find is that it gets harder and harder to find someone who can get to the root of your problems and get them resolved, putting both you and your customers at risk of suffering from more downtime and less productivity.

Good customers refuse to reinvest.

When the pain of poor support and a lack of new product features starts to take its toll, customers question whether they want to reinvest in their current vendor’s product or services. In short, they have had enough and wonder why they continually invest in a company that doesn’t offer them what they can get somewhere else.

This frustration prompts them to start considering other options. Some customers won’t even wait to feel the long-term pain, but instead make the assumption (right or wrong) that the vendor will eventually go out of business or end products in order to cut costs. Perhaps they’ve even seen these scenarios played out before with other vendors and don’t want to go through it again.

When those customers are presented with license renewals, purchases for new locations or any other reinvestment, at minimum, they will likely withhold their purchases and, if you’re lucky, take a wait-and-see approach. Worst case, they jump ship right away, reevaluating their situation entirely, and will invite outside vendors in to discuss their options.

Your vendor uses you to help pay their way.

A “survive at all costs” mentality causes some vendors to forget who their friends are. They forget who brought them customers and who made those customers and that vendor successful. This forgetfulness causes them to look for revenue opportunities — not by selling more to new customers, but by taking more from their channel.

Reducing margins, taking renewal opportunities direct or charging exorbitant amounts for training and certifications are all signs that a vendor is looking at you, its channel partner, to help get them out of the mess that they created — and that’s not good for your business.

What’s the Answer?

As a reseller, you can’t fully predict how changes within a vendor’s business or strategy are going to impact your customers and, ultimately, your revenue stream. However, there are signs, like the ones discussed above, that your business might start suffering due to your vendor’s missteps. If you are sensing trouble with your current vendor, or are simply looking for a backup plan, consider introducing alternative product lines to help keep both you and your customers’ businesses secure. Vendor loyalty is important, but it’s also critical to be a good steward of your own business, and help protect the investments of your customers.

Wayne Landt is the director of worldwide channel sales for Digium, and manages Digium’s channel sales team and channel partner program. He has over 10 years of voice experience at both the manufacturer and channel levels, having sold cloud, virtualized, and on-premises UC solutions to customers across the globe. Connect with Wayne on LinkedIn.