How would you address a situation where a vendor promises more than they can deliver during negotiations?

1 Assess Claims

When you suspect a vendor is promising more than they can deliver, your first step is to assess their claims critically. Ask for detailed explanations and examples of how they've met similar commitments in the past. It's crucial to differentiate between genuine confidence and over-optimism. Your goal here is not to accuse but to understand the basis of their assurances. If their explanations seem vague or they struggle to provide concrete evidence, consider this a red flag. Use this information to gauge the risk involved and to prepare for further discussions.

2 Set Expectations

Clear communication is key in vendor negotiations. Once you've assessed the vendor's claims, articulate your expectations plainly. Emphasize the importance of realistic promises and the potential impact on your operations if those promises are not met. This conversation can serve as a reality check for the vendor and can help align both parties' understandings of the project scope and deliverables. Be firm yet open to dialogue, and document all agreements for future reference.

3 Verify Capabilities

After setting clear expectations, take steps to verify the vendor's capabilities. This might involve asking for references, reviewing their portfolio, or requesting a demonstration of their services. By doing so, you gain firsthand insight into whether they can truly deliver on their promises. This step not only protects your interests but also gives the vendor an opportunity to prove their competence, which can be a foundation for trust moving forward.

4 Negotiate Terms

With a better understanding of the vendor's capabilities, proceed to negotiate terms that protect your interests. Consider including clauses in your contract that address non-performance or under-delivery, such as penalties or the option to terminate the agreement. These terms should be reasonable and proportional to the potential impact on your business. Negotiating such terms can incentivize the vendor to assess their capabilities honestly and commit to what they can feasibly deliver.

5 Build Flexibility

In negotiations, it's wise to build in flexibility to accommodate unforeseen challenges. This might involve setting phased deliverables, allowing for revisions, or agreeing on contingency plans. Flexibility ensures that both you and the vendor can adapt to changes without the need for drastic measures. It also creates a buffer against overpromising, as it acknowledges that some aspects of service delivery can be unpredictable.

6 Monitor Performance

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?