7 ways your CRA inadvertently sabotages vendor relationships (and why price negotiations hurt you the most)!

Frequent readers and CRA’s who engage my consultancy know I rarely think putting the screws to vendors or making huge technological investments are the best ways to build a pre-employment screening empire. 

Today’s article focuses on how your vendor relationships can hamstring your growth, and actionable solutions that fix it.

1.     You drive the price so low you get 99’d

That’s an internal code identifying the clients to back-burner during an unexpected volume surge. No one keeps spare capacity lying around, so providers make choices. Do they first serve the client with healthy margins, or the one that drove such a hard bargain it’s hard to make a buck on? I know which complaint call I’d rather take. 

Key takeaway:You never want to be the CRA getting the best price. How you handle volume spikes shapes your client’s perception of whether you can handle their work. And you going to need your vendor's help doing it. 

2.     Your payment terms are awesome for you, awful for them.

This one’s simple. At best, you’re frustrating them. At worst, you’re probably paying more or not getting as much of a discount. It's an elegant cash management solution that really hurts on the back end. I don't know of a single company, be it a CRA or a vendor, that doesn't feel it affects their client's level of service and support. They're going to sprint for you at the same speed it takes you to pay.

Key takeaway: Seek out opportunities for everyone to win. If you wouldn’t extend those terms to a client, don’t ask for it from a vendor.  

3. You look for vendor unicorns

Vendors come in all shapes and sizes. And there are awesome ones out there. But solutions are pretty similar. Beware those whose offering seems too out of line. Something’s different. Do you want to find out on the inside?

Key takeaway: The game isn’t won here, but it can be lost. Steady is a solid, if unspectacular choice.

4. The low price forces you to spend more money inside your organization

I’ve always felt paying a little more than you want is preferable to paying less and using your staff to fix. If you’re getting everything you want and the price is a tad high, don’t worry about it. That premium pays for itself in business certainty and problem prevention.

Key takeaway: If you can find a vendor who can provide the same solution, it’s typically better and cheaper even if you pay more. Use your team in house to make something you do well even better. Don’t use your resources making something subpar average.

5. "Nobody ever got fired picking IBM."

Can’t tell you how often I hear that. And I think it’s dead wrong. 

Key takeaway: I always worry about being a small client to a large company. Pick the best vendor for your business, period. And sometimes the best is the biggest! Then you're all set. But make sure you pick them because you did a solid vet and they meet YOUR needs.

6. You beat up their people

Client service is a stressful role. They’re naturally friendly and enthusiastic, but they feel intrinsic pain when they can’t solve a problem. Know they’re on your side, even if you just got laid into by your client. If you commit to work together, outcomes are likely to be better and faster. And it ensures you have a partner just as dedicated to solving your next problem.

Key takeaway: Inability isn’t the same as indifference. In an FCRA world, some problems can’t be fixed as fast as we want it. Trust your partner if it can’t be done, and you'll come up with good talking points for your client call.

7. Your team sends mixed messages

What is our goal? Are we trying to move faster? Or get it quicker? Cheaper may mean you do more work inside your shop, so how does that affect compliance? Your vendor needs to know what problems trump others. A clearly defined scope of engagement combined with open, consistent lines of communication prevent problems from escalating. 

Key takeaway: Lack of alignment and competing directives confuses the vendor, causes delays and ultimately costs you more. Single points of contact and clear decision making authority dramatically reduce confusion.

Summing it all up...

It’s a great time to be an employment screener. There’s a LOT of business out there. Building a strong business requires well thought out strategic goals and aligned tactics to support them. Every facet of the business must come together. This is an overlooked part that when done well, dramatically increases profits.

Therefore, your vendors are your partners who are instrumental in helping you reach your goals, not a line item to drive into the ground. You’ll run through a wall for your clients. Make sure they’ll want to do the same for you!

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Kevin Bachman is The CRA Doctor, a background check executive providing financial, strategic and operational counsel to owners and senior management. He also helps employers create optimal screening programs and find the right CRA to fit their needs and budget. He is also available for speaking engagements and onsite training sessions. Kevin can be reached at [email protected] or 216-509-2108.