CWS 3.0: April 19, 2011 - Vol. 3.10

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Column Corner: Three's Company

While managed service providers help contingent workforce managers greatly, having one doesn't mean contingent workforce managers should not be involved in the communications process with vendors participating in their programs. Indeed, there are certain steps program owners can take to ensure stakeholders and participants are happy with the relationships and the program.

To start, do you know how satisfied your staffing providers or your stakeholders are with your MSP? Chances are, they aren't very. Staffing Industry Analysts (the publisher of this newsletter) regularly surveys companies and staffing suppliers about their relationships with each other and with other vendors in the process, such as managed service providers or vendor management systems. One such survey showed there is a stark contrast in how MSP and VMS relationships are perceived, with contingent workforce managers being more satisfied than are the staffing providers -- though the overall satisfaction level from each is pretty low.

In determining satisfaction levels, SIA uses the Net Promoter Score* methodology in its research, and has long advised its CWS Council members to do likewise. CW managers' overall Net Promoter Score for MSPs, for example, was 27, while MSP's score from staffing providers was a dismal -43 percent.

Knowing your own program's or MSP's net promoter score can be a valuable first step in improving your vendor relationships, as it provides an objective measure of how a current or prospective MSP works with supply chains of service and solutions providers. What you do with the information is what counts, though.

For instance, you can use net promoter scores to recognize the value of the MSP/supply chain relationship. And, you can use it as a key metric to evaluate the MSP's overall value proposition to their program. Maybe, just maybe, you can use it as part of the performance payment program of your financial relationship.

One technique you can borrow from the marketing world is to take the top and bottom 20 percent of NPS scores and diagnostically evaluate them to determine why some relationships are strong and why some aren't. All parties will benefit from that homework -- and it's a beneficial data point for your annual reviews with individual suppliers as well as your overall supply chain.

All of which are key steps, because good supplier relations require active involvement by the customer stewards and managers of the entire program, especially including suppliers. To that end, there are a number of steps program owners can take to provide more constructive feedback to enhance the value of their MSP program.

Communicate more often. Formal programs such as supplier forums and quarterly business reviews are just the start of a good program of interactions with your supply chain. Beyond these table stakes are communications such as success stories and program update letters you can share in your portals or via email. In this case, the more communication, the better.

Communicate more clearly. Even for organizations that connect often with their supply chain, a common complaint is that the communications are murky or filled with corporate-speak. I'll never forget a supplier forum I once attended in which the owners of the program stood on stage for nearly an hour and droned on about minutiae that no one in the audience cared for. Aside from sounding like the adults in Peanuts cartoons, the content was so weak the audience spent more time checking email than listening to their ultimate customer.

Keep the MSP in the loop. Open door policies are great in boss/worker relationships. But not in owner/supplier programs. It's critical that you allow your MSP to be in the middle of all discussions -- formal and informal -- with suppliers. The first time you allow a supplier to go around your MSP's back, you not only degrade the value of the MSP, but you create a bad precedent for all other suppliers to follow. That's a slippery slope you don't want to build.

Allow for feedback from your feedback. Your exchange with suppliers needs to go beyond one-way communication in individual reviews and formal group sessions and forums. Actively solicit comments from your supply chain, whether it's allowing for a microphone at a large group session or a Q&A or review period at the end of a quarterly meeting. Undoubtedly, you may not want to hear some of the commentary or criticism, but you will learn from your suppliers and your program will likely benefit from the critical thinking they provide. Most importantly, don't shut down a session just because the conversation or feedback becomes uncomfortable. Two-way and open lines of communication add significant value in the long run -- and cutting short a conversation just because it's uncomfortable sends the wrong message to all involved.

Jim Lanzalotto runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. He can be reached at jim@scanlonlouis.com can also follow him at twitter.com/jimlanzalotto.

*Developed by Satmetrix, Bain & Co., and Fred Reichheld, the Net Promoter Score concept was first introduced through Reichheld's book The Ultimate Question.

Put simply, NPS is a single value representing how good a customer's experience is. It is derived from survey results to a single question, "How likely would you be to recommend "X" to a friend or colleague? (rated on a scale of 0-10)" Those awarding scores of 9 or 10 are considered "Promoters." Those scoring 6 or less are considered "Detractors." NPS is calculated as:

%Promoters - %Detractors = NPS%

The conservative definition of Detractor typically yields low NPS values (e.g. 5-10). Even leading brands with strong reputations would consider an NPS of 70 percent to be very high. You can find more information on Net Promoter Scores at: www.netpromoter.com

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