If you work in an office environment, there is a chance you’ll interact with an external vendor at some point. On Atomic’s marketing team alone, we work closely with vendors specializing in SEO, website development and management, and copyediting. As with many relationships, we may need to end a vendor relationship at some point.
Maybe they aren’t meeting your expectations. Or maybe you’ve found another vendor that can better meet your needs. You may even find you no longer need their services as you’ve outgrown the product they help you maintain. Regardless of your rationale, take these three important steps when professionally ending a relationship with your vendor. These ensure minimal relational damage and to best set your team up for success.
Review your MSA/SLA.
Oh, yeah, we’re breaking out the acronyms. It’s serious now.
When you agreed to embark on the service-based relationship with your vendor, they should have had you sign a Service Level Agreement (SLA) or Master Service Agreement (MSA). An MSA outlines the terms and conditions that govern the long-term relationship between you and your vendor. An SLA, on the other hand, outlines the specifics of a project. It is common for a business to have one, overarching MSA and multiple SLAs with one vendor.
A well-written MSA/SLA should detail how the professional relationship should end, including timelines, communication patterns, and the responsibilities of each party involved. Thoroughly review agreements before speaking to your vendor about termination. This is because you want to ensure that you:
- Will maintain all of your intellectual property post-split.
- Are within your rights to terminate the vendor relationship.
- Are giving adequate notice of termination.
This step is pivotal, as you want to ensure you have proper documentation of why and when you are terminating the relationship. If you are ending the relationship because the vendor breached the contract, you should have clear, documented examples ready to avoid paying a costly termination fee. If the vendor did not breach the contract and you’re choosing to leave for convenience, be prepared to pay the termination fee in full.
Contact the vendor.
For peacekeepers like myself, this is the hardest part of the process. Rather than jumping on a phone call, I recommend crafting an email. “Future you” will be thankful for the opportunity to control the communication and have a well-documented notice of termination. You can jump into the nitty gritty with the vendor later on. Here’s what you should include:
- What: Explain to the vendor that you are terminating the relationship
- Why: A brief explanation of why you are choosing to end the relationship. You can also provide a “shit sandwich” here by saying a few nice things about your time together and sandwiching in the negative feedback between your positive notes.
- When: Clearly state that you are giving them X days’ notice (ideally the notice required in your MSA). If you’re already established with a new, replacement vendor, you can outline when the new vendor will take over.
- How: This is your opportunity to set up a Zoom call to discuss the particulars of the transition/termination further.
Remember to be kind and professional. This correspondence could be used against you if the vendor feels you’ve breached their contract illegally. Depending on how the relationship transpired, be prepared for your vendor to probe further into why you are ending the relationship.
Have your final meeting.
Once you’ve sent the termination email and your vendor has had a chance to share their piece, you should have an hour-long meeting with your team and theirs to discuss the next steps for terminating your relationship. If this vendor manages your website, for example, you’ll want to clearly understand where all of your code is stored, if the vendor is pass-through-paying for any plugins, how you’ll transfer the ownership of the site to your new vendor, and more.
This is a great opportunity to further manage your relationship with your soon-to-be ex-vendor. You don’t need to burn this bridge because things didn’t work out. You can use this as a teaching and learning opportunity, offering feedback to your vendor and asking for any feedback from them on how it was working with you.
Last Word of Advice
There is so much more I could explore here, but if I have one piece of advice to share it is to sloooooooow down. Don’t rush through the MSA review. Don’t forget to include any important notes in your termination email. And, take the time to treat your vendor with respect by having a thorough, open conversation with them about why you’re ending the relationship. This process can be painful, but you can set yourself up for success by being organized and thoughtful from the start.
Have you or your team ended a vendor relationship before? What were your “a-ha” moments during the termination process?