10 Signs That a Third Party Relationship Is Going Sour

There are times when even the best of relationships fall apart. But, there's also usually plenty of early warning signs. So, let's look at a few of them related to your vendors – these are just a few quick hints based on plenty of experience with questions to ask yourself and appropriate actions that may result. 

The 10 Signs

Maybe it's too late or not even worth saving certain vendor relationships, but here's what to think about:

1. Difficulty in getting a return call or email

a. They were great in responding earlier, now they can't be reached
b. Sign of larger problem?
c. What happens if you need them in a crisis?

2. Lack of responsiveness to routine requests

a. Every day communication is a good leading indicator of how they will respond when really needed
b. Do they return phone calls with an email instead?

3. Inability to provide assurances on service levels

a. They are contractually committed via SLA, but they fail to report
b. When their service level slips, they aren't able to explain why

4. Failure to provide agreed-upon due diligence or reporting

a. Due diligence is always a good indicator of how the relationship will go
b. If they push back unreasonably now, how will they respond when needed?
c. Do they have a reasonable basis for not providing something or just "we never provide that"
d. Are they open to discussion or considering alternatives?

5. Deteriorating financial condition

a. What has changed?
b. Are they willing to discuss and forthcoming with explanations?
c. Is this unexpected and short term or an indication of bigger problems?

6. Falling performance levels

a. Short term hiccup or major problem?
b. Are they able to explain and offer a reasonable solution?
c. Do they have documented plans?

7. Rising complaint volume

a. Do they have a complaint management program?
b. What's driving the complaints?
c. Is it tied to a product or a practice? Can it be easily changed?

8. Bad news headlines

a. Who knew what and when?
b. How was it discovered and communicated?
c. Are they open for discussion of the issue or defensive and unwilling?

9. Departure of key executives

a. Who is leaving and why?
b. Fundamental change in product or strategy?
c. What is the quality of the management team in replacement?

10. Enforcement actions or monetary fines

a. Learn as much as you possibly can
b. Read the enforcement action and the underlying causes
c. What steps are they taking to address it?
d. Document and inform your senior management