Apr 18, 2023
Procurement

Doing your due diligence: Referenceability

If you want to make sure that your vendor is reputable and trustworthy, it's essential that you speak with their customers.

Doing your due diligence: Referenceability

Due diligence is the process of investigating a company or product before making a decision. It's an important part of any business transaction, but especially so when you're choosing vendors for your business.


If you want to make sure that your vendor is reputable and trustworthy, it's essential that you speak with their customers. Here are some reasons why:

  • You can learn about their customer service standards by asking about their experiences working with the company in question.
  • You'll get insight into how well this vendor meets deadlines, delivers on promises made during negotiations and performs under pressure (e.g., if there was ever a time when they needed something done quickly).
The Benefits of Speaking with Their Customers

One of the most important benefits of doing due diligence is that it helps you gather valuable information.


When you speak with references, they will give an unbiased opinion on your vendor's performance and quality of work. They'll also give insight into how well they worked with other companies that have used the same vendor in the past. This can help give you a better idea of whether or not this particular vendor is right for your company and if there are any issues that may arise down the line if they were chosen as well!

The Process of Doing Due Diligence

The first step in the process of doing due diligence is to gather customer references. You should contact each reference and ask questions about their experience with your potential vendor, including:

  • How long have they been working with this company?
  • What was the quality of their work?
  • Was there anything about their service that stood out as exceptional or subpar?
Questions to Ask Customer References

When speaking with customer references, you should ask the following questions:

  • How long have you been using the vendor?
  • What services do you use and how satisfied are you with them?
  • What are the vendor's strengths and weaknesses?
  • Have there been any issues or problems with their service delivery that may be relevant to my organization's needs (such as system downtime, slow response times, etc.)?
What to Look for in Responses

When you speak with customer references, you want to look for:

  • Detailed answers. If someone is giving a vague answer or simply saying "yes" to everything, it's likely that they don't have much of an opinion on the vendor in question. If the person has been using the vendor for years and has had positive experiences, they should be able to provide specific examples of how they've benefitted from this relationship.
  • Consistency in responses. When speaking with multiple references from different companies (or even within one company), check whether there are any discrepancies between their responses--this could indicate that something was not quite right with the vendor or its offerings in general. Be sure not only that each reference gives positive feedback about their experience working with your potential partner; also make sure there aren't any major differences between them!
  • Level of detail provided by each reference when describing why he/she chose this particular service provider over others available at that time.

You want to work with a vendor that is highly transparent and agreeable to provide multiple customer references to ensure you're able to perform a well-rounded view of their performance and capabilities as a potential partner for your business.

Jacqui Gigliotti
Written By

Jacqui Gigliotti