How Client References Guide a Negotiation

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March 16, 2022

It's rare that there's only one potential supplier for your business. In most cases, you'll need to compare vendors to determine which one is right for you. Even when there is an obvious front runner, you'll still want to verify that working with them will meet your expectations.

This is where client references come in. Asking the vendor for a reference is standard practice in many industries and talking to their current and past partners gives you important information about their process and pricing. You can choose how to approach the negotiation or whether to negotiate with them at all based on this information. There are, however, two things you should keep in mind. 

Curate the Information Carefully

The list you are given by the vendor will likely only include their most satisfied partners. References are unlikely to lie, and you should definitely consider the great things they have to say about working with your counterparty. Just understand that there may be others who have less favorable experiences. If you have time and access, consider looking into other businesses they may have worked with and what that experience was like. 

While talking with references, you'll want to ask a range of questions to get the best possible information. Make sure you're aware of pricing. Ask the client why they chose to partner with this particular vendor and how reliable they have been. If they mention a problem with deadlines or budget, try to determine whether the issue was the client or your vendor. Find out how your vendor resolves problems with their product. There will inevitably be some complications in a long-term business relationship, and knowing how your vendor is likely to react can be valuable. 

Consider Your Own Performance

A vendor may request references from you in exchange. This is especially true if your vendor is particularly well-established or in demand. Make sure that you are reliable and conscientious in your other partnerships. A bad negotiation or unprofessional behavior can damage your ability to make future deals. 

You should especially consider contract presentation. Your vendor may forgive or take reports of small missteps with a grain of salt. But references can always show a vendor what your contracts looks like, and poor presentation and unprofessional language make a strong negative impression. Take the extra time to clarify language so your contract is as strong and binding as possible.

Convert JPG to PDF online, and make multiple edits over time. Every detail is important. The spacing, word choice, margins, headings, and terms should be complete and arranged in a way that minimizes confusion and looks great to your potential vendor.

Client References Build Confidence

It may seem awkward to ask a vendor for references, but this is actually an important aspect of building trust. Suppliers should be proud of their past work and talking to people who've worked with your vendor gives you a much clearer idea of what to expect from a negotiation. It's equally important that you maintain strong references to share with them. 

One way to build strong business relationships is to join your local chamber of commerce.