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October 28, 2004 - How to Tell Vendors That They Didn't Win the Contract

Many training officers loathe the responsibility of telling vendors that they were not chosen to conduct training for their organization. Why do they hate doing this? Well, very few people like delivering bad news, so we usually avoid it whenever possible. However, we all know it is part of the job, so doing it well is the best way to do it.

Vendors Want to Know
It's important to remember that your vendors want to know whether they got the contract as soon as you know. Shortly after you or your internal client has made a choice, let all of the non-winning bidders know the results. If not chosen, vendors want to find out why not, what they could have done better, and how they can improve their chances the next time an opportunity arises. No news is worse for them than bad news. They can take the loss, learn from it, and move on.

Giving the Bad News
The longer you hold off telling the losing parties, the more irritated they'll become. Don't wait to call them back until after they've left you three follow-up voicemails. Get it done quickly; it should be like tearing off a band-aid. You always think it's going to be worse than it turns out to be.

Other than doing it quickly, how should you deliver the message?

1) Always tell them in person or by telephone. This is imperative. It shows your vendors that you value your relationship with them and respect them as individuals (and as companies). By delivering the message in a personal way, you will also elevate yourself in their eyes.

In the last ten years, email has made ducking face-to-face or telephone conversations easier than ever before. Don't use email as a substitute for the telephone or a face-to-face meeting. This is not professional and does not allow for a two-way conversation to occur. It is a one-way form of communication, and no matter how long you pore over every detail, your message is surely to be misunderstood. It's a major flaw of email (or snail mail, for that matter), so remember to use only those communication methods that engage the other party in dialogue.

2) Explain to them why you have chosen a different contractor. The "why" part can often be difficult. In giving the whys, focus on the positives of the vendor you chose instead of pointing out the negatives of the losing bidder. If the vendor asks you specific questions that beg for honestly negative answers, give them the straight skinny (but in a nice way!). The accurate information and perspective that you offer them are the only criteria they have to improve their future proposals. If you don't give them the facts and your viewpoint, they might make bad decisions based on what you've told them. Now, you wouldn't want that to happen, would you?

3) Don't use price as an excuse unless it's the ONLY reason. Contractors (and all people involved in sales) hear the price excuse so many times, that it's amazing they don't give their services away for free. Sometimes it seems no price is low enough. But more often than not, training officers use price as a minor factor in their decisions to award contracts. So, unless your evaluation of the winning contractor and the losing contractor is equal except for price, don't use price as your reason for going with the other guy. It's an easy out for you, and it puts the vendor in a funny position to ask follow-up questions because you've basically told them that if only they would have submitted a lower bid, life would be peachy. On the flip side, if after telling the vendor the substantive reasons for going with another contractor you think the price issue should be raised, raise it. Maybe the vendor isn't aware that their prices are not competitive in the marketplace. In this case, telling them what the others bid might make them reevaluate their business plan. You could really help their business by demonstrating this reality to them.

As you can see, delivering bad news to your vendors can be a positive experience for you and for them. You can use the opportunities to sharpen your communication skills, become a better answerer of tough questions, and learn to face uncomfortable confrontations. The vendor is positively impacted by your professionalism in many ways, the most important being that your alertness and sensitivity will strengthen your relationship with them and help them build better businesses to serve you and others like you in the future.

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