THIRD PARTY RELATIONSHIP MANAGEMENT

In-Ear Insights: Third Party Relationship Management

In this week’s In-Ear Insights, Katie and Chris talk vendor and partner management, aka third party relationship management. What is it? How do you choose vendors and partners who fit your requirements best? How do you position yourself as the vendor of choice? Tune in to find out!

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In-Ear Insights: Third Party Relationship Management

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Machine-Generated Transcript

What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for listening to the episode.

Christopher Penn 0:00

In this week’s In-Ear Insights, let’s talk about third party relationship management.

Now, Trust Insights is very often a third party vendor or a partner to other companies.

And we in turn also have partners and vendors.

And in the current economic environment, particularly in B2B, and in tech, there’s tons of layoffs and things a lot of people starting up their own things, a lot of people trying to figure out what to do next.

A lot of companies are in a position of, hey, we just laid off everybody.

And now look, there’s still a lot of work to be done.

No one’s here to do it.

Well, I guess we better bring in some partners to do the workforce.

So Katie, for people who are particularly who are on the brand side, who suddenly find themselves with all the work, but none of the people, what should they be doing what should be thinking about when they bring vendors in, because I know the the instinct is crap, just bring some companies get the work done now.

And obviously, it’s like anything, you don’t want to bring in the first thing that comes along, like, you know, you’re the adoption agency for the for your dog, just grab the first dog, you see, you test out the different personalities, take it for a little walk and stuff and see if they gel with you.

When you have a when you’re evaluating a third party vendor of some kind, how do you take them for a little walk?

Katie Robbert 1:16

Well, let me backtrack a little bit and clarify that this is why I’m not allowed to go to the shelters and adoption agencies because I would just take the first one, and then the second one, and then the third one, and then all of them.

But, you know, when you’re bringing on a vendor, or an agency, or a contract, or any third party, that you have to do relationship management with you, really, it’s an interview, you know, and so, you know, Chris, you and I come from the agency world where those interviews were often, you know, a lot of glitz and glamour and sparkle, but not a whole lot of substance.

And that’s not to say that substantive work wasn’t going to get done.

But it wasn’t the flip that we led with.

It was the let me just dazzle you with the bright lights and the pretty, pretty pictures.

And to me, as someone who’s now in the decision making position, I don’t want to see any of that, that does nothing for me.

And so you first need to decide what your interview process is going to consist of, do you want people to just give you big, flashy pitch decks? Or do you actually want to drill down into the weeds with them and understand what it is that they’re doing.

And for some, for some companies, the the flash and the glitz and the glitter is what they want, and that’s fine.

But you have to make that decision, you have to have that internal expectation going in.

And then you need to really have a strong understanding of what exactly this third party is going to be doing for you.

Whether it’s a piece of software, whether it’s a contractor, whether it’s a whole agency, you know, if they’re going to act on your behalf, if they’re going to, you know, if you’re going to white, label them, it doesn’t matter, you still need to set those expectations.

And I think that that’s first and foremost, where these relationships absolutely go wrong.

It’s a lack of expectation setting, both internally and externally.

And so Chris, if we were to bring out a contractor, if I just said, Hey, you know, here’s Julie our contract, you’d be like, great what she got to do, like I don’t know how you wanted a contractor whose contractor just go have her do stuff for Julie’s gonna sit there and go.

But what do you want me to do? How do I know if I’m doing the thing? How do I know I’m not going to let get let get let go? Because I didn’t do the thing.

And so expectations first and foremost is number one.

Unknown Speaker 3:47

Are we getting so named really? No word? Not today? Maybe not today.

So when when it comes to choosing these partners though,

Christopher Penn 3:59

I remember when at the old shop the the dog and pony show was a lot of glitz and glamour.

But in some ways that was appropriate because it was public relations for him.

You want to see some some glitz and glamour when you bring on st analytics partner, you probably expect some level of polish and professionalism, of course, but you probably also don’t expect you know, dancing clouds and people dressing up and all sorts of interesting stunts.

So how if you’re trying to evaluate a partner for a particular role, what are the steps you need to take to make sure that you you choose the right partner because one of the things I’ve seen happen an awful lot is companies make choices.

And this is a human thing based on relationships and some companies and in some industries that is very much still the old boys club and knows Oh, my, my frat brother from 20 years ago, you know, he’s he’s got his agency.

We’re just gonna go with him and he’s like, but is that the best fit? How do you how do you to figure out that, yes, well, that person, that relationship may be important.

That company may or may not be the best suited to do the job that you need them to do.

Katie Robbert 5:11

Well, and again, it goes back to expectation setting.

So really starting with, you know, what is the problem you’re trying to solve.

And so if the problem you’re trying to solve is, you know, quantum mechanics, and your body’s agency does, you know, Canva images, it’s probably not a good fit.

You know, it’s sort of the old, you know, don’t work with your friends don’t work with your family, there is a reason for that, because the lines get blurred.

You know, and that’s not to say that it’s not an acceptable choice, but you really need to be objective when picking.

And that’s the other piece that sort of, to your point, Chris, about the human piece of it, you know, oh, let me do my buddy a favor, he’s got this agency, and they need some business, let me just throw him a bow.

And he could do the work for me.

That’s not a great way to go about picking agencies for your company, because that may or may not work out.

And then a few set of involve that personal relationship, the friends, you know, if you have to say, Hey, you’re not doing your job, I have to let your agency go, it’s going to be a harder conversation because you’re more emotionally invested.

So in terms of, you know, if you work at a company that your decision maker keeps hiring, you know, their friends, their buddies, there may be nothing that you can do about that.

What you can do about that is wrangle the relationship in a way that you can demonstrate it’s either working or not working.

And that goes back to the expectation setting.

Christopher Penn 6:45

How do you define those KPIs? Because in some cases, you’ll have, you know, maybe bringing on a social media marketing vendor, partner of some kind.

And maybe the person who’s in charge is like, Oh, this is gonna go tweet, I have to go tweet.

What do you what do you see as the most effective ways to set those KPIs for that vendor?

Katie Robbert 7:07

I mean, it’s probably easiest to start with a user story.

And so as a social media marketer, I want to, you know, tweet more so that I can increase engagement, I can increase followers, I can increase awareness.

And so by stating that user story that helps you start to narrow down, like, what is the purpose of bringing on this agency, this vendor, this contract, or this piece of software, that’s going to automatically do the thing for me.

And the so that is what becomes the start of your KPI.

And so if I say, Chris, we need a social media person.

Your first question is going to be probably what for? Why, why? Why do we need and I will say something, you know, like, we’re not getting enough awareness.

We’re not getting enough.

You know, our account isn’t big enough.

We don’t have enough followers.

People don’t know who we are.

So we need to be on social media even more.

And so Okay, so I’m giving you these big grandiose, you know, goals.

You as the one who’s setting the expectations can start to drill down to say what I heard, my out of touch CEOs say is that they want a bigger online presence, they want their digital footprint to increase so that people know who we are and what we do.

Okay, I can work with that.

And then you can start to break it down into more granular KPIs.

Christopher Penn 8:40

Gotcha.

So in that case, you know, you have said, awareness is a goal.

Yep.

If we were looking for a partner to increase our awareness, how would we go about? What are the things you think you would look for in a partner to build awareness? Because there’s public relations, there’s advertising, there’s influencer marketing, there’s and we have friends and colleagues in all these spaces? Where do I start?

Katie Robbert 9:04

Um, you know, I would start to look at our deficits in terms of what we as a company, currently can’t do it, whether it be from a skill set or resource side.

You know, what are we sort of missing out on? And what are the things that bring in a lot of awareness for us? So we know that organic search brings in good awareness.

We know that social media brings a good awareness, but neither one of those things are a focus for you and I at the moment, just because resources not that we can’t is that we don’t have time.

And so I would start to look at okay, who can we bring in to supplement our existing content plan? Who can we bring in to not only supplement the content plan, but also share that content on social media once it’s published once it’s live? And having those two things go together? To me would be like, Okay, that’s the way that we Trust Insights can start to drive more awareness.

This, but then I would also take a look at well, what skills do we have that we’re just not using effectively enough.

And so that is the public speaking, that is the webinars that is the, you know, guest blogging, the, you know, guest, podcasting, all of those things that brings us outside of our own network into other people’s networks.

And so working backwards from there to say, Okay, why aren’t these things getting done, we have the skills to do them, maybe we don’t have time to pitch ourselves onto other podcasts, maybe we don’t have time to clean up our content and put something together as a guest post, maybe we don’t have time to pitch that guest posts.

So that’s where I would start to look for resources to help fill those gaps.

Christopher Penn 10:45

Gotcha.

So it sounds like that’s almost the middle core of the five P’s right, we have the platform, we got the stuff, right? We don’t have the time to execute the processes, because we actually know the processes, right? Don’t have the time to do them.

So really, for us is the is literally a people problem.

What if though, if someone is in a different situation where perhaps they don’t even have the stuff? How do you? How do you help someone prioritize which partners to bring in? Because, yeah, you know, your CEO, say, Okay, you have 10k a month to go get some help go get some help? How do you figure out okay, well, which, which is the thing that’s going to make the biggest bank so that I can get more budget, knowing that I’ve got to show some results are early in the past.

Katie Robbert 11:35

If you don’t have any of the stuff, or you don’t know, if you have any stuff, you have to start with the five key audit to really understand what you’re working with.

And so the purpose, that would be, you know, I want to drive awareness, the people, okay, if we don’t have anyone to do the thing.

And if we don’t have anyone to do the thing, the likelihood of us having a process probably doesn’t exist, either.

The platform is to be determined.

And then the performance would be we have more awareness, and so more people coming to our website.

And so that’s where you might have to spend a little bit of time interviewing these agencies.

No, well, first of all, you have to under you, yourself, have to decide whether what are the things that I uncomfortable with our agent, our company doing? That would drive awareness.

And so let’s just say it’s social media and organic search.

So it’d be you know, content and posting, I would probably try to find a couple of different agencies who do those things and say, help me understand how you have helped your clients drive awareness before, what have you done? How quickly does it work? What are the methods? What are the tactics? And then what are the results, and so really challenging these agencies that I’m interviewing to demonstrate to me, I want to see real examples of where the work that you have done has made an impact? How do you

Christopher Penn 12:57

deal with a mismatch of, of expectations? Example? You have a out of touch CEO, who says Go get me some more awareness, right? And then a month later comes back says, So what was the ROI of that awareness? And you’re like, but that wasn’t what you asked for.

But yeah, we know, we’ve heard that story a dozen times.

But you know, back at the PR agency, every time the you know, the economy turns slightly sideways, the first thing the CMO at the client would say is, what’s the ROI of your PR? And we’re like, Well, you didn’t ask us to measure that.

So we have no idea.

Katie Robbert 13:41

If you know, the first thing that struck me about that question was, you know, they said, you the example you gave was the CEO, the CIO, the CEO, sorry.

The CEO says, I need more awareness.

And then a month later asked the question, that’s the first problem right there, you have waited a whole month for the CEO to come back to you versus you proactively giving regular updates that would allow you to pivot if the CEO said, You know what, that’s not what I was talking about, or great.

I want to know how much this is costing me, or what’s the ROI of this, it’s easier to get those things set up at the beginning, that it is once your one month, two month, three months in, waiting for the CEO to remember that they asked you for this thing.

If they asked you for this thing on day one, on day two, provide an update on day three, provide an update on day four, provide an update, even if they’re small little bytes of information.

Make sure that this stays on their radar so that on day six when they go what what is this What am I looking at? You can say well, on day one, you said to me, I need you to drive more awareness.

Here are the steps that I am taking to make that happen.

Oh yeah, weirdness doesn’t matter anymore.

We need to drive sales leads.

Yeah, whatever.

And so it’s like, okay, I’m only six days in versus 30 days in and that’s a big You know, cost savings, time savings.

And so in terms of the mismatch of expectations, make sure that you are putting those expectations, front and center.

This is what I understand you asking me to do, this is what I’m hearing you say, this is what I’m doing based on the statement that you gave to me to drive awareness, and just keep being as transparent as possible, until the end.

So and, and I will say 10 times out of 10, you’re giving these daily updates, these weekly updates, and the person who you’re giving them to, is ignoring them.

They’re not looking at them.

But it is documented.

So then when they say on day 23, what are you doing? Why are you spending this money? You can say, Oh, well, if you look at the 22 previous days that I have shared with you the information, you know, I’m surprised that it took you this long to tell me this is not what you want.

Because I have 22 documented days of what I’ve been doing.

And you didn’t tell me to stop before that.

Christopher Penn 16:03

When you think about in your role as our CEO, you think about the vendors and the partners we work with how do you measure their performance? Like do you do you look at the you know, the ledgers and say, Well, you know, the ROI of this company is x, or the ROI of this company is that of x because when again, when the economy turns sideways, people go from a growth mindset to an ROI mindset instead of how can I get the biggest bang for my buck? How is it becomes you know, how do I get to be the most efficient with my dollars? Because my budget got cut 25% or something like that.

So how do you measure our vendors?

Katie Robbert 16:38

Well, I mean, it really comes, it really depends on what they’ve been engaged to do for us.

And so there is no one magic number.

And I think that that’s sort of the first place I would start if someone says to you, what’s the ROI? Like? That’s the wrong question to be asking.

You know, and so, you know, let’s say, for example, we were just playing with some software this morning, Chris, that makes connections between data sources, it gives you notifications.

What’s the ROI of that? Well, the ROI of that is that we got notified about the thing that happened so that we can adjust one way or the other.

It’s not a monetary piece.

It’s not a it’s not a, you know, numeric figure to say it saved us, you know, $10,000 by doing this thing, like, and I think so I think ROI is the wrong question.

I guess I would ask you, because you’re asking me all the questions.

I want to turn this interview around on you, Chris.

What would you say? If you were asked that question?

Christopher Penn 17:41

It depends, and you hit it on and Exactly.

If the outcome is monetary, then ROI is one of a selection of potentially appropriate metrics, right? Obviously, you want things like top line revenue, like did this, did this earn any money? And then if he if the answer is like, No, we didn’t earn any money at all for this, like, Okay, well, there is no, there’s no point asking the ROI question because there was no r and y.

And if it’s a non monetary outcome, then the question is, is it a benefit? And then what is the importance of that benefit? So for example, if you hired me, say, a Ukrainian virtual assistant, that person saved me 11 hours a week of time, right? What is that time worth? Well, in one hand, you could say if if, if you were made, we’re talking to the CFO, and the CFO is like I need everything is dollars and cents, and there’s no other language I speak, then you can say, Okay, well, that 11 hours saved at my billing rate is x 1000s.

of dollars, and therefore, I have X 1000s of dollars more time, that we could then book and Bill to clients to customers.

And so if we’re spending $1,000, to earn back $11,000 of time, then there’s a financial measurement that the CFO can at least look at, okay, well, at least I know that you’re a you’re speaking my language, and be that you’re actually keeping an eye on things and not just spending money and not having any idea what you’re getting for it for things that where there just is no monetary outcome.

It depends on the benefit, the big picture benefit, and that is, you know, for example, if you’re investing a lot of time, say learning how to use the causal impact library in it, that is part of our, which is something I’m looking at right now.

What’s the value of that time expenditure right now with zero, right? Because we’re still learning what the heck this thing does and why it might be important.

But then, once it comes out of r&d, then it goes into production.

And then they say, Okay, this is now a billable service that we can offer to the client.

So you would track your time that you spent learning in the r&d phase, and then say, Okay, well, can we is there a likelihood this is going to become a saleable thing that can earn revenue down the road? You’ve had this experience in pharma, right? We have a pharma companies will spend $5 billion lawyers on a drug to research knowing that they can make $50 billion later if it succeeds.

And so they’ll invest kind of like a venture capital fund 50 or 100, or 200, different research candidates knowing all but one is going to be a waste of money, right? Because you’ll find the 99 drugs don’t work on the problem.

But if you find that one, then you can charge you know, $1.3 million per dose of this thing to people.

And all the fun that comes with with Healthcare Billing.

But that’s the process that they take is they say, Okay, here’s a bunch of investments, we’re going to, we’re going to place bets, we know, most of these bets are not going to pan out, but the one that does, is really going to pan out.

So some of the risk calculation we have to take into account is, when we look at the things that we do with our time, are those things going to pan out, if you take, you know, three hours to have lunch with somebody one day, you’re placing a bet on that person, right? In a business context.

Forget, if it’s an actual friend, that’s, that’s separate.

But if it’s if it’s a business meeting, I’m placing a bet, maybe this personal turn workout, maybe this person won’t, but I’m going to place that bet and expecting 95% of them just to not be a good use of your time.

But the 5% that are, are really worth it, or the can be really worth it.

So that I guess that’s the calculus that kind of goes on in my head, when I’m thinking about, how do I weigh the value of things that don’t have immediate monetary value? The challenge for a lot of organizations is that if you’re particularly publicly traded companies, you have very short time horizons to be able to show value, before somebody says, Nope, we’re not gonna invest any more this and some of the things that may be of greatest benefit may take longer than a quarter, you know, when business quarter to show some results.

And so you have to have a culture that is willing to assume a certain amount of risk over a long time horizon.

Katie Robbert 21:54

Well, and I was gonna say, you know, you’re talking about it as if you are dealing with rational people who understand the research upfront for the longer term benefit.

But when you’re evaluating third parties to get work done, it’s the immediate, like, I just need something done.

Now.

It’s the reactive reactive reactive, it’s not the thinking through, I wonder how this is going to look in the long run.

And I think we see this with some of our larger enterprise sized clients, where they just don’t have the staff to execute, you know, the things and what ends up happening is, they’ll bring on, you know, a third party, you know, agency, you know, vendor contractor to get worked on, but then they’ll just keep piling on to this vendor, without really thinking through, is this the right use of their time, because they’ve already got them in the system, they’ve already got them working.

And the vendor is probably like, okay, great, I can increase my retainer, I get more money out of this.

I’ll just figure it out.

And so the flip side of the conversation of that third party relationship management, is you as the third party, really being honest with yourself and with your clients of can I even do this work? And, you know, I mean, we’ve been there, when we first started Trust Insights, we kind of said yes to everything, just to get our feet under us.

And as you know, the company matures, and we’re gonna hit, you know, we’re actually past the five mark, but our public five year anniversary is this March, you know, we know the things to say no to, and sometimes it stings a little bit.

So you’re like, well, technically, I could do that.

But do I need to be spending my time doing that? And I think that that’s sort of the flip side of the conversation of that relationship management is really having that honest conversation between the third party than the person who’s bringing them on of just because you can does it doesn’t mean you should.

And so, you know, if we position ourselves as, you know, a data analytics company, and someone goes, Oh, but I know that you in the past have done Google ads, right? Can you do that? Our first inclination inclination is probably to say, yeah, we can do that.

But then when we’ve really take a step back, say, does that make sense for us to be doing and that goes, again, back to expectation setting of like, here’s our boundaries, here’s the things we can and can’t do.

And for the things we can’t do, we will help you find another relationship for that.

Christopher Penn 24:24

And you bring up a really important point of view there.

There’s a difference between hiring for competence in hiring for excellence.

If you just want warm bodies and seats, right, then you’re hiring essentially, for minimum competence and you don’t really care about the quality of the work.

You just want people off your back.

If you are hiring for excellence then you are hiring for okay, what is this company good at that they specialize in that they can that they will be provable results for? In your case? The example Yeah, we can run Google ads.

Should we be running Google ads? Probably not.

Can Do we have a good track record of using Google ads to generate results? Yes, because we focus on data and it’s a data driven system.

But is it our center of excellence? No, it is not.

It is not our center of excellence.

And while we can certainly pinch it when we need to.

A company shouldn’t hire us for Google ads, right? So if you’re focused on excellence, if you want excellent performance out of Google ads, we’re not it.

If you want excellent performance, our Google Analytics, we are it.

Right? So it is the vendor, like you said, being forthright, here’s our centers of excellence, here’s what we’re really good at, hire us for these things.

And it is then on the company to decide, do I want to hire for minimum competence just to put butts in seats? Or do I want to hire for excellence? Knowing that it will be a more complex set of arrangements because there is an appeal to the One Stop Shop? Right? We have one vendor for everything, and that one vendors is good at nothing, but mediocre at everything.

That’s a company culture thing, right? You can’t really change that, as certainly not as a third party, you certainly can’t tell the company.

Yeah, you kind of hired a bunch of dummies.

But your internal culture is also a bunch of dummies, so it kind of works out?

Katie Robbert 26:22

Well.

And you know, to be clear, both are fine.

It’s just a matter of what your company really needs.

And so if you’re hiring, you know, just to, you know, fill in the gaps for now, just to stop, you know, the overflow of things happening, that’s fine.

But that’s not a long term solution.

So having those short term and long term solutions are totally acceptable.

So if you’re hiring that one stop shop, who can just keep the trains running, while you keep the customers happy? That’s great, but not a long term solution.

So you need to have figured out, okay, great, we’re gonna hire you for three months.

But my expectation of myself and my team is during that three month period, while you are just filling in the gaps, and stopping the overflow, I need to also figure out a longer term solution, and maybe you vendor, show me that you can step up to the plate and be that long term solution.

Or I’m also then interviewing other agencies to be that long term solution, knowing that that interview process was just going to take longer.

And I need to make sure that for right now, today, things don’t, you know, go sideways.

And so it again, goes back to, you know, what is the problem you’re trying to solve.

And if the problem is, I just need warm bodies, push buttons, great, you can fix that problem, you can hire a third party, who’s going to do that for you, but set that expectation with them.

So that you can say, I’m not looking for a long term relationship with you, I just need you to fix things.

For right now.

Our contract is three months, and we will evaluate at the end of three months and see where things stand.

But I’m setting the expectation letting you know that this is exactly what’s happening with this relationship right now.

Christopher Penn 28:14

Yep.

The one thing and this is I guess the last point I’ll make is that because of the nature of change in, in the digital marketing industry, especially but in all industries, a partner that is minimally competent, is generally not adaptable, right? They generally cannot keep up with with rapid change.

A partner has a center of excellence, they are focused on that center of excellence.

And when things change in that industry, like we’re seeing some massive shifts right now happening in SEO, SEO is in six months is going to look totally different than the way it does right now.

If that’s not an area of excellence for your vendors, and you need to you, it’s a core part of your business.

That’s an area where you have to spend some time looking at your five P’s looking at your users, we’re always saying okay, this is something where we cannot compromise on an agency that’s merely competent, we needed a nhcs specifically excellent at this one thing, because the landscape is changing.

So if you’ve got some stories about the way you select vendors that might be helpful to folks, why not pop on over to our free slack group go to trust insights.ai/analytics for marketers, where you have over 3000 other marketers are asking and answering each other’s questions every single day.

And wherever it is, you watch or listen to the show.

If there’s a challenge you’d rather have it on go to trust insights.ai/t AI podcast, you can find us on pretty much every channel and while you’re there.

If you don’t mind, please leave us a rating and review it really helps to share the show.

Thanks for tuning in, and we’ll talk to you soon


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