Cost-of-working crisis: SMEs say suppliers are still blaming the pandemic for poor customer service

Two in three firms say their supplier is blaming poor customer service on COVID-19 - six months after restrictions ended. How can SMEs demand better service?

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Today’s small businesses are heavily impacted by the cost-of-living crisis, which has sent costs spiralling throughout the supply chain.

But despite the rising rate of inflation meaning that suppliers are being paid an average of 9% more, a new survey has found that buyers are experiencing the same poor standards of customer service exhibited during the pandemic.

The research by connectivity provider TalkTalk Business shows that UK SMEs are spending an average of 16 hours a month on the phone to supplier customer service teams. This is diverting attention away from their core business.

It comes as 8 in 10 small businesses worry they are facing a ‘cost-of-working crisis’, where the cost of doing business threatens the viability of the business itself.

Below, we look at how your business can work with suppliers to improve your current customer experience.

The customer is always in plight

Of the 510 small business owners surveyed by TalkTalk Business, just four in 10 said that the customer service they receive has improved since the pandemic.

Buyers trying to contact customer support teams reported being put on hold, passed between customer service agents, and not having their issues resolved in one call.

TalkTalk Business customer Yifat Castle, Owner of Artisan Gelato and Sorbet Company, Mooka in East Hampshire, said: “As a business that sells a luxury product, we’re apprehensive of what’s to come in the next few months. Our factory is energy intensive, so we know that unfortunately we’re going to be paying higher bills.”

“Speaking to a human to resolve issues quickly is the absolute priority, as it allows me to focus on the things that matter for my customers.”

How can you demand better service from your suppliers?

Supplier relationships aren’t just about buying physical materials or software. They’re also an important part of your business strategy that, when done well, give you a market advantage over your rivals.

Conversely, a bad supplier relationship can impact on your bottom line and drive your customers over to other businesses.

If you’re starting to lose trust in your existing supplier base, below is our step-by-step guide for improving relationships with partners.

1. Voice your concerns

It sounds counter-intuitive, but often small businesses simply keep their complaints to themselves – particularly if your supplier is proving hard to reach over the phone.

Like any relationship, communication is key. If you are losing trust in your suppliers, your first step should be to voice your concerns via a direct channel. Some, like the best small business energy and network operators, are legally obligated to have a clear complaints process for this reason.

In any case, starting a dialogue with your supplier might also help you to identify the root causes that can help solve a problem.

If your supplier is struggling with shipping delays, for example, you could request a discount in exchange for extended delivery dates.

2. Set up a meeting

Addressing poor supplier performance can be done remotely. But actioning a performance improvement plan should be a more formal process and is therefore best done in person (or if your supplier is based internationally, using video conferencing software).

Set up a meeting with your problem supplier to share and integrate an action plan. If the problem is poor communication then you might request a designated account manager, for example, who can act as a point of contact for your team.

Remember, the solutions to the supplier’s poor performance could be quick, simple and cheap to achieve, or the opposite in one or more respects. They may entail changes to obligations, processes, costs, service levels and so on.

Any agreed changes during this meeting need to be added into your contract as an amendment.

All interested parties in the organisation should be notified about the changes, with details published via the methods normally used in order to prevent any obscurity later down the line.

Generally, both parties exit these meetings feeling more positive and promising about the future. Be wary about increasing order levels on the basis of this step, however.

3. Implement a review period

Once your supplier is aware of the issues, give them a few months to demonstrate sustained improvement. If the supplier considers you to be a priority customer, it’s likely they’ll take the threat seriously and take steps to improve your experience.

If performance doesn’t improve, but the supplier seems willing to address problems, you might seek an alternative primary supplier and use the problem one as a back-up only. This gives the supplier an incentive to get back into your business’s good books.

4. Switch providers

Perhaps you’ve tried all of the above and there’s just no likelihood of dealing with a supplier’s problems. Or, perhaps the supplier has exhibited persistent indifference or reluctance towards improving its service delivery.

In this case, it might just be best to terminate the contract and look elsewhere for a company that places higher value on customer support. We’ve picked out five free competitor analysis templates you can use to evaluate rival suppliers.

Of course, this might only be possible on a contract’s commencement date or after a minimum term. It may also attract a significant fee.

In this situation, you should weigh up the impact of contract termination versus the damage caused by continuing the relationship to take a view on which is greater.

Depending on your business contract (so assuming you have no requirements for supplier exclusivity) you may be able to simply stop using your supplier until the end date is reached.

Conclusion

The research from TalkTalk Business shows that, despite COVID-19 restrictions being lifted nearly six months ago, small businesses are still grappling with poor customer service from suppliers.

The causes can sometimes be controllable, sometimes not. Regardless, you shouldn’t have to put up with an unprofessional or subpar service from vendors – particularly if it is having an impact on your bottom line.

SMEs can take the reins by designing an action plan that will address the current problems.

Doing so will not only incentivise your providers to improve – it will also set higher standards for new partners and lead to more effective relationships in the long run.

Helena Young
Helena Young Senior Writer

Helena "Len" Young is from Yorkshire and joined Startups in 2021 from a background in B2B communications. She has also previously written for a popular fintech startup.

Included in her topics of interest and expertise are tax legislation, the levelling up agenda, and organisational software including CRM and project management systems. As well as this, she is a big fan of the films of Peter Jackson.

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