Making Vendor Relationships Work Effectively

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Dear Bev,

We hired an outside contractor to do some marketing work for us. It has been a nightmare. She is difficult to deal with and criticizes every idea we have. I expected her to offer “client service” to us along with her technical expertise. Is there something we can do differently to avoid this situation in the future? I can’t afford a full-time hire, so I am dependent on outside help. What happened to professionalism and the-client-is-always-right attitudes?

Mike S., Boston

Dear Mike:

I can answer some of your other questions and give you some guidance to increase the probability of success next time. However, I cannot answer the question of what happened to professionalism. Unfortunately, I ask this same question often dealing with outside resources in my own firm!

  1. When hiring outside resources – for marketing or anything else – it is critical to have a written agreement about the expected deliverables, timeframe for deliverables, costs and contingencies. I see too many situations where the understanding is not defined in writing and confusion arises. Even if you have worked with a vendor in the past, put any new agreement in writing and be as clear and specific as possible.
  2. Be aware of behavioral style. Some of what you are talking about sounds like a “high C” – high compliance, rules-oriented style. These folks will often come across as critical or difficult. Their strength is to identify what’s wrong and what needs to be fixed, but their weakness is that they can be too harsh in their response. First, get an understanding of your own style, and then find someone who matches you in communication and approach. Or conversely, find someone else in your firm with a similar style and team them up with the vendor. Much of what is going wrong here sounds style-related (and therefore communication-related). I speak more about style in a video on our website.
  3. Have an agreement, preferably in writing, about communication. Given the lack of “assumed” professionalism and the “client is always right” attitude you talk about, you might want to write out some expectations. For example: a 24-hour or one-business-day turnaround, a monthly conference call to discuss progress, a number of rounds of edits (when marketing related) or rules about cancellation of calls or meetings. Leave nothing to chance. Identify those things that matter to you and be sure the vendor agrees with them in advance of starting the project.
  4. Think about finding someone through referral next time. Custodians, fund managers and other large institutions have “vetted” a number of vendors for their programs, and they are invested in success for their advisor clients. You might want to turn to one of these larger firms next time to help you find the right resource. This way, you have someone else who can intervene and provide assistance if necessary.

Dear Bev,

My advisors want to spend upwards of $10,000 on a “Client Appreciation Event.” I don’t see the value. Our clients know we appreciate them. What’s the point?

Mel C., NY

Dear Mel:

The issue of events keeps coming up in our business too. I have had this discussion with at least 4 people this week, and we just helped to organize a successful event for an advisor client of ours. It’s an important topic because it can be so expensive, but if done well, it can yield great results.

First off, $10,000? That sounds very pricey to me. Unless you are a large firm with very deep pockets, I would first suggest you review what costs are included in this number. Spending more money does not necessarily mean ensuring higher return. I agree with you that there are other, less expensive ways to show your clients you appreciate them.

That said, events do make sense in a number of areas:

  1. Marketing to, and deepening relationships with, centers of influence
  2. Enhancing relationships with prospects
  3. Introducing your firm to referred prospects
  4. Reminding clients of what you do well and why they should be happy to work with your firm

Here are some ways you can increase effectiveness when you put on events:

  • Set a budget.
  • Be sure to have a desired outcome for the event – what will success look like?
  • Include a hook, something educational or informative that offers value to attendees.
  • Don’t rely on a mailed or emailed invite – call the clients or centers of influence you want to attend.
  • Create a follow-up mechanism so you can increase your return on investment by finding new prospects or having evidence of a deeper relationship after the event.
  • Make it fun!

In your case, I would take another look at the event process – be sure you know why your advisors want to do this and what they hope to gain from it. Then, review that budget to see how you can offer class at a discounted price!

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal,, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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