Three findings to help get the most out of your next service provider relationship.
If you’re a small business owner preparing to hire a service provider for the first time, you likely have a few specific needs and business goals in mind but aren’t sure how to achieve them. You’ll want to know what to expect from the search process and have a clear vision for how the relationship will go.
Service engagements are generally relatively short, but they take a comparatively long time to set up. Measure twice and cut once when it comes to these relationships, making sure you understand how long a given project will take. Doing your due diligence during the vetting process will ensure you get the most out of your service relationship.
The good news? We’re here to guide you with insights from Capterra’s 2022 Services Users Survey* to help you understand what it takes to find the right provider and avoid potential pitfalls along the way.
Before we dive into the findings, let’s first cover a helpful definition:
/ What is service onboarding?
Service onboarding is the process of bringing a service provider up to speed after you’ve hired one. Onboarding (in this context) refers to connecting internal stakeholders with appropriate team members from the service provider, granting access to tools and technology, and acquainting them with the goals and priorities you have in mind for your business.
What can I expect from an effective service provider?
Having an objective third party helping work toward your business goals can be a huge boon to a growing business. Here are some of the main benefits of a service provider relationship:
Time and money savings: Hiring a service provider will save your business time and money in the long run by helping you avoid mistakes, optimize processes, and strengthen your long-term strategy.
Access to outside expertise: As the saying goes, you don’t know what you don’t know. Service providers offer support in areas you may not have covered with knowledge and expertise from internal employees.
Help with daily tasks: Reporting, brainstorming, planning, and campaign management take time and energy. Having a service provider bear that workload will save you both during your day to day.
Objective input on your business’ trajectory: The value of having objective input on your business’ strategic decisions cannot be overstated. Service providers and agencies offer a fresh perspective on your decision-making process, which allows you to scale your business more confidently (and effectively).
For more info on common types of service providers, visit the Capterra glossary:
What are the phases of hiring a service provider?
There are four distinct phases to the service provider hiring process. Here they are with a brief overview of what each phase includes:
Finding #1: It takes 4 months on average to make a decision on a service provider
Our finding indicates that, on average, it takes four months for a purchase decision to be made for a new service provider. This applies to all types of service providers with a third (33%) of respondents naming Google search as their most important resource across the purchase journey (followed by social media and personal recommendations).
What does this mean for my business?
Hiring a new service provider is an important decision, so you should take all the time you need to research, explore options, and choose the right one for your business. This includes holding internal discussions around the scope of upcoming projects as well as the budget and resources you have to devote to the relationship. These discussions can include anyone from the business owner and leaders to individual contributors who will work with the provider on a daily basis.
This is also a great opportunity to do your due diligence before you engage in the contracting phase of the process. Getting these ducks in a row early will make the onboarding process much easier once you’ve selected a service provider.
Finding #2: Nearly two-thirds of service engagements are contracted for a year or less
It’s important to be as specific as possible in determining the length of your project when hiring a service provider, but you should also leave room for changes that could impact the overall scope.
Nearly two-thirds (63%) of service engagements are contracted for a year or less, with 40% being six months or less*. Knowing this can help you manage your expectations around the length of time it takes to complete a project or service as well as narrow down to an appropriate budget.
What does this mean for my business?
Be mindful of the fact that changes in scope can go either way, and this varies by the type of service you’re seeking as well. While a good amount of contracts last for six months or less, developments during the process can quickly extend that time to a year or more.
According to our survey data, tech implementations such as cloud services, for instance, tend to complete their work in the allotted amount of time, whereas marketing and finance services are prone to extension due to more frequent changes in scope*.
Finding #3: The pace of the exploration phase varies by the type of service provider
The final finding we’ll discuss pertains to the pace with which you’ll move through each phase of the process. Our data indicates that the experience you’ll have will largely depend on the kinds of services you’re looking for.
For instance, those searching for software development services move relatively quickly through the first three phases of the process but slow down significantly during contracting. Conversely, those searching for marketing services spend more time in the exploration, evaluation, and selection phase before moving briskly through contracting.
What does this mean for my business?
When searching for your own service provider, be mindful of these ebbs and flows in the process and plan accordingly. After a few weeks of searching for a marketing services provider, you may be surprised when you’re ready to onboard them sooner than you think.
With this philosophy, you can strategically accelerate or decelerate specific phases of the process during your planning. What this looks like is either building in time for longer stages during planning or preparing onboarding procedures early based on the type of service you’re hiring.
Need help finding the right fit? Here are 4 Key Considerations to Help You Choose a Digital Marketing Agency. While this article is about digital marketing specifically, these principles apply to all verticals.
Capterra tools and tips: Getting the most out of your service provider relationship
Hiring a service provider is only one piece of the puzzle. While it’s a big one, you’ll also want to ensure you’re setting your new partner up for success as they integrate with your business.
That means acquainting them with the processes, tools, and technology you use on a daily basis. How in-depth you go with sharing information and tools depends highly on the type of provider, the length and nature of the relationship, and what types of tasks they’ll be helping with.
Some of the more common technology you may grant a service provider access to include tools such as:
With access to relevant tools, service providers will not only be able to help with tasks, they’ll also have the potential to further optimize your use of these tools. Collaborating here will have positive short- and long-term effects for your operation, including increased efficiency and productivity as well as utilization of features you may not have explored previously.
For more information on the process of choosing and hiring a service provider, make sure to visit the Capterra blog where we host a wealth of resources, including pieces such as: