Posts filed under 'Selling'
An interesting insight came out of our interviews with Procurement professionals (Procurement Talks: An Interview with Microsoft and Expedia’s interview to be published next week).
There’s not one style of procurement, but many. From traditional to progressive (my term for high-tech). And infinite hybrids in between. Procurement’s style leads them to operate differently.
And that matters if you’re trying to sell contract services to them.
Procurement’s style seems to be driven by the type of business their company is in. So, let’s look at the two end styles (you’re on your own for everything in between).
TRADITIONAL STYLE PROCUREMENT
A traditional procurement style buys products and services primarily for in-house operations. This style held the informational reins on the purchase, from specifications to sourcing/vetting vendors to bid/negotiation, even through to vendor performance and compliance.
The traditional style buying was done by people who really knew a great deal about what they were buying. This is the world of deep analysis and cost-basis pricing. And the recipients of their buys (business owners) lived and died by procurement’s acumen.
Today, this style lives in manufacturing and industrial businesses - with big spend, complex buys, long lead times, and often limited number of suppliers.
What This Means to Vendors (Contractors)
Contractors would do well to recognize this style of procurement and explore the following:
OPEN KIMONO
Consider presenting full disclosure pricing. Even if the bid doesn’t call for it. Why? Because this is how traditional procurement works. They seek to understand vendors’ cost basis and then back into a vendor’s pricing to see if it’s reasonable.
QUANTIFIED VALUE PROPOSITIONS
In proposals, send only well-defined, quantified value propositions. Tie the value of service into measurable business outcomes, showing clearly where and how it impacts their businesses’ bottom line.
LONG-TERM RELATIONSHIPS
Invest in long-term relationships for developing credibility and personal connections. Churn in procurement in these businesses tends to be more stable, so you’re likely to work with the same individuals for years.
PROGRESSIVE STYLE PROCUREMENT
Again, the term “progressive” is mine. This style is seen in high-tech businesses, particularly software and online services.
The progressive style outsources non-core services as well as buying products for in-house consumption. But here, unlike the traditional style, procurement isn’t the deep knowledge base for what they’re buying.
Progressive procurement doesn’t have time to gain the expertise of all their buys. They’re focusing on their core business buys. For everything else they’re spread thin. Often they rely on their business owners to identify preferred vendors to include on bid lists.
What This Means to Vendors (Contractors)
By understanding the progressive style, contractors can more successfully engage procurement. Consider:
HOMEWORK UP FRONT
Do a great deal of homework up front to know what’s important to them. Don’t waste their time being unprepared.
HYPER-SUCCINCT
Send only hyper-succinct snapshots presenting the vendor’s value proposition. Cut all smoke and mirrors. Include similar clients as references they can contact, and include specific dollar savings or improvements your reference will allow.
DEVELOP CREDIBILITY
Develop credibility with business owners around vendor’s expertise. In both interviews, procurement said their business owners found vendors who were speaking at trade shows and seminars, or publishing articles and blogs. These weren’t self-serving vendor promotions, but education for their clients’ (business owners) industry.
QUANTIFIED VALUE PROPOSITIONS
In proposals, send only well-defined, quantified value propositions (same as the traditional style)
EDUCATE WITHOUT PREACHING
Don’t assume procurement understands the vendor’s business. Procurement wants to know more, so they can buy a better deal. It’s in the vendor’s interests to be the one that helps them do that. But avoid preaching that wraps a vendor pitch in with the goods.
What style of procurement to you deal with?
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Chris Arlen
President, Service Performance
Technorati: procurement, service contracts, value proposition
June 27th, 2008
Buyers want to succeed - sellers want the same. What’s in the way?
Understanding each other.
Sharing perspectives is a first step along the way to success. To that end I recently interviewed a Procurement Manager at Microsoft. And there’s another interview coming the end of this month with the Senior Director of Procurement at Expedia.
Having worked with contractors for many years, it was interesting to hear some of their commonly-held beliefs confirmed. However, a number of their beliefs were off the mark too.
From procurement’s side, both interviewees understood contractors pain in the process. But confirmed procurement’s role as helping their companies succeed - by buying the best value, at lowest cost.
Simple, Not Easy
These interviews provide great insight into the buyer’s mind from the procurement perspective. If contractors want to sell more, they’ll need to understand buyers very well.
Conversely, if buyers want more value from their spend, they’ll have to better understand what they’re buying. And how it helps their company succeed.
A few insights popped out during these interviews. Here are a few:
Procurement doesn’t buy low price only
Sellers (contractors) have heard this before but may believe it’s not true. Many believe buyers are lying to trick contractors out of profits.
I heard clearly in both interviews that price is rarely the only factor. And not always the most important. Despite contractors believing low price is the only consideration.
Procurement is more interested in how the purchase (contract service) can help their company. That was always the first consideration.
Contractors’ sour grapes may be more an indication of not knowing what’s important to procurement or the business owner.
Buyers want to understand what’s being purchased
This may seem obvious, but if sellers take it for granted they’ve missed the boat.
Procurement (and business owners who’ll manage the contracted service) don’t always know how their purchase will help their business succeed.
Or, they’re unable to articulate it. When that happens, buyers can only fall back on the lowest cost to their company as success defined.
Contractors can help buyers better understand the business impact of their services. Not more sales and marketing smoke self-congratulating the contractor.
Procurement does not manage vendors
Procurement does their bit up front. When the contract is finished it’s handed over to the business owner to manage the vendor. Procurement doesn’t have the expertise, or time, to oversee the service.
When the contract date comes up, procurement will follow it’s bid evaluation process, which may or may not include an RFP process or renegotiation. But it’s only the business owner’s feedback on whether the contractor delivered what was promised.
How well do you see the other side of buying and managing contract?
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Chris Arlen
President, Service Performance
Technorati: procurement, facility services, vendor management
June 17th, 2008
The expression, “can’t save your way to success”, can help service contractors better understand how they fit into their customers’ world.
I first heard this saying yesterday from a senior manager of corporate support services at a Fortune 100 company. She uses in-house employees and outsourced services to deliver support.
“Can’t save your way to success” says bluntly no matter how good or cost effective support is, if the revenue generating parts of a company fail, the company goes down the drain.
Note: I’m including all cost of goods sold in the revenue generating part. And for support services, I’m thinking facility services, i.e. janitorial, physical security, O&M (operations & maintenance), etc.
It made me think how contractors must deal with the reality that their customers are only expenses within their own companies.
Then it’s no surprise that support services impact a company’s profitability but not it’s viability. Logically companies look to provide support as cost-effectively (lowest cost) as possible.
Voila! Procurement has it’s marching orders. Highest value at the lowest cost, but mainly the latter. Why? Because purchase savings are easier to show than value. And service value can be hard to determine.
How can this help service contractors avoid procurement’s low-price hunting?
In two ways:
#1 Discovering how business success is defined
#2 Telling a compelling value story
#1 Discovering how business success is defined
Contractors must fully understand what success means to that particular company. Asking procurement or the business owner “What does success for you look like?” is key.
And success is never defined in monetary terms alone. There are other criteria, such as legal and regulatory compliance (just ask the former Enron CFO about that one).
Procurement is going to drill all contractors on cost savings and low pricing anyway. But what other areas help/hinder the company in increasing revenue and profits, compliance, or public image?
Contractors must understand this specifically per customer. Before making their pitch for partnership.
Otherwise they’ll sound like a used car salesperson spouting meaningless hyperbole at customers.
#2 Telling a compelling value story
This is non-fiction, not fairy tales. Contractors must articulate how they can meaningfully help a customer’s business succeed.
With a specific understanding of success, it comes down to the contractor’s ability to tell a compelling story.
Doing so is the difference between persuasively winning and doing an informational data dump.
How do your customers define success?
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Chris Arlen
President, Service Performance
Technorati: contract services, facility services, procurement
June 13th, 2008
Is our economy in recession? Have we been, or will we? What’s a recession? Are these too many questions?
Even if you may not be seeing recession’s effects locally, customers are hearing the pronouncements in newspapers, radio and TV. We are, or will be, in recession.
How does recession affect customers and contractors?
Recession Makes Customers Reluctant
First, on a business level, customers worry if their customers will keep buying at expected rates and quantity. Second, on a personal level, they worry if their plants or offices will be closed and if they’ll lose their jobs.
The fear of the unknown may manifest itself as a CEO’s “freeze everything” memo, or individual decisions at departmental levels. However it shows up, the anxiety is present.
While these worries alone won’t stop customers buying contract services, it may alter when and how they buy.
Customers’ Altered Buying Behavior
Recession reluctance may cause customers to:
AGGRESSIVELY REDUCE COSTS
Some customers may go out to bid specifically to lower contract pricing. Even before their current contracts expire.
Do customers need a pretext to put a contract out to bid in the middle of its term? Nope.
With more price sensitive customers, value may not be as valuable as value once was. It may cause a 6 to 12 month downward spiral where lowest-cost, low-value contractors gain lots of new business. Only to lose it again when customers get fed up and fire them for poor service. And/or the economy looks rosy enough to rehire their preferred contractors.
Customers low price hunting may increase the number of contracts out to bid. However, contractors had better have a sharp pricing pencil to participate.
HAND OVER DECISIONS TO PURCHASING
Recessionary fears may drive executives to mandate cost savings immediately. These initiatives typically fall on the Purchasing (Procurement) department.
Even though Purchasing is involved in bidding service contracts, their role and authority in contractor selection has increased noticeably.
And the knowledgeable end-users (facility and property managers) aren’t as influential as they once were.
As a result of Purchasing’s greater impact, bids may start to skew more towards “lowest cost” rather than the more intelligent “lowest qualified cost”.
DECIDE NOT TO DECIDE
For customers with bids already in progress, they may choose not to pull the trigger to change contractors. The fear of a worsening economy may cause them to prefer the known situation. Again, it’s the Lucifer they’re familiar with.
This behavior frustrates contractors who have already invested in those bid processes - but causes incumbents to breathe easier.
STAY PUT
For customers who aren’t required to go out to bid, they may choose not to. Better the devil (or contractor) they know, rather than stirring up an already uncertain future. Incumbent contractors love this.
DELAY
For customers with upcoming contract expirations, they may choose to delay scheduled bids if possible.
Caution may drive them to see which way the wind blows with their own business first. They want their focus on the health of their core business before distractions from bidding out contracts.
Again, incumbent contractors love this.
The Secret to Overcoming Recession Reluctance
By the way, this secret works for “normal” economic times as well as recessions.
Here it is:
Show customers how their service issues directly impact their business.
Another way of saying it is: Connect the dots between customers’ service pains and poor business performance.
This shows customers that letting a janitorial or security issue continue can hurt their (fill in the blank):
- Revenue
- Profitability
- Brand Reputation
- Customer Retention and/or Acquisition
- Safety
- Regulatory Compliance
- Etc. the list goes on
An Example
Customers may mention the service issue of “poor training” with contract employees (that’d be your competitors’ employees, right?). Recession reluctance may keep customers from doing something about this, like going to bid.
The secret is to let them know that:
1) Poor training may lead to –>
2) Contract employees interacting with customers inappropriately (did someone say obnoxiously?) that may lead to –>
3) Representing your customer to their customers in a poor light that leads to –>
4) Tearing down your customer’s brand reputation that leads to –>
5) Lower customer revenues and profits. End of story.
In this conversation, customers can no longer pretend poor training is acceptable. Not when it takes money off the bottom line, devalues their company’s worth, and generally stinks.
This “connect the dots between service issues and business impacts” is the real deal. It’s a great motivator for customer action.
Avoid the Appearance of Blame
There’s a caveat of course. No one likes having their “problems” jammed in their face. However, if the troubles aren’t discussed, nothing happens. So, contractors must exercise sensitivity. They must not blame customers for their failures, or discuss them in terms of failures. Because aren’t all failures really learning opportunities. Some larger than others.
True Differentiation
And here’s the best part. Other contractors aren’t making these connections. They’re busy explaining how they’ll reduce turnover or missed trashcans, or non-scheduled guard overtime. But they’re not making the connection between service issues and how it impacts customers’ business.
How do you overcome customers’ reluctance to act?
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Chris Arlen
President, Service Performance
Technorati: buying, selling
February 14th, 2008
Green is definitely the flavor of the moment for marketing janitorial, engineering, and of course, landscaping services.
But everyone’s doing it. They’re Me-Too Green.
Contractors seeking to get an edge and stand out from the competition are seeking that next advantage.
So what’s next?
The Triple Bottom Line (3BL).
3BL is a concept where business success is measured in profits -and- environmental stewardship -and- social responsibility. The key is “and”.
3BL (also called People, Planet, Profit) takes into account the interdependence among all three. Not profits at the expense of the environment, or the community at the expense of profits.
3BL is different from green because it recognizes the need for businesses to be profitable. And adds social responsibility into the mix.
Multiple Names - Overlapping Concepts
There are two other concepts that are similar to 3BL; sustainability and corporate social responsibility.
Confusingly, 3BL is also known as an approach for public sector full cost accounting. It was adopted in early 2007 by the UN’s International Council for Local Environmental Initiatives (ICLEI)
These concepts overlap, interconnect, and are sometimes used interchangeably.
Mind boggling.
A Clearly Understood Name
However, for marketing purposes, one name must be commonly used to avoid further confusion.
Sustainability can sound as if it’s only about the environment. And corporate social responsibility may be too much of a mouthful.
That leaves 3BL, which seems to fit the bill for ease of use and memorability. Specifically since contractors’ focus has been on the bottom line, profits. Using 3BL as a new name for a new concept seems an easy choice.
Does 3BL Give An Edge?
The short answer is yes, if the green movement is any indication. Already more customers are looking to do business with green contractors or buy green products. This trend will only speed up as public awareness and peer pressure continue to rise.
Besides the poster children of Levi Strauss , Ben & Jerry’s , and The Body Shop there are many other successful, large 3BL businesses.
Getting to Scale
by Jill Bamburg, explores how front running 3BL businesses grew up without selling out.
How will 3BL help Contractors Prosper?
1) A True Win-Win-Win
When 3BL contractors achieve their goals (People, Planet, Profit), everyone’s smiling, worthy warm fuzzies for all.
2) More New Business & Faster
This is the point of this post. Contractors who can tell customers their 3BL story will have the advantage over competitors.
3BL contractors will capture that wave of business from customers that green contractors are now receiving.
But here’s the surprise, and it’s a good one.
3BL contractors will get more business more quickly than green contractors.
That’s because customers will be more aware of the ethics of business. The green movement will have prepped them. And they’ll be ready to move their business quickly to 3BL contractors.
3BL is the Trifecta of cause marketing under one roof
Think of the number of customers who are now going green, and the multitudes who will shortly.
Add corporate customers who require representation by small and disadvantaged businesses (Proctor & Gamble, Bank of America, etc.).
Toss in public agency customers who require prevailing wages and benefits (airports, counties, municipalities, etc.).
Lastly, include customers who have been harassed by unions about wage and benefit issues (property management firms, hotels, etc.).
That’s one enormous salad of opportunity for 3BL contractors.
Those contractors will have designed, or re-engineered their business to serve People, Planet, and Profit. And are now aligned to reap the market advantages of 3BL.
There Really Will Be A First-Mover Advantage
Unlike the slow take up of green services, 3BL contractors will reap first-mover advantages over latecomers.
With compelling messaging and marketing, 3BL contractors can launch further, farther and faster than green contractors have done.
Several of those benefits are:
- Greater customer awareness
- High customer preference & loyalty
- Greater efficiencies from the earlier learning curve
How to Get Started
Learn the concepts and then take them into action.
Read The Business Guide to Sustainability. It provides a self-assessment and rating system for the services industry, and by individual functions within an organization. Throughout the book additional resources are listed.
For facility service contractors I’m guessing the most challenging of the three bottom lines will be the People part. At least regarding higher wages and customers’ price sensitivity. Did someone say recession?
3BL is a challenge. But it’s the future of services industries, specifically janitorial, security, engineering, and landscaping.
Are you up for the challenge?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: green cleaning, marketing, change
February 6th, 2008
1/15/08: Here’s a concept “The more people you reach the more likely it is that you’re reaching the wrong people” (yup, S. Godin again). It’s the unspoken, but absolute keystone to the following business sermon, which started with All Business is Personal. The overall premise goes like this.
All business is personal
-> Everything personal is a relationship
-> -> All relationships are an exchange
-> -> -> All exchanges can become more valuable
Business requires “blocking and tackling” (pardon the sports analogy). And successful business requires better “play calling”. You have to do both. And do them well. This post is about better “play calling”.
So everything personal is a relationship. No blinding insights there. But what about…
Relationships to People We Don’t Know?
Yes, we’re in relationships with people we don’t know. Those would be our suspects. They may, or may not need our services.
So, what’s the problem? We don’t know them, and they don’t know us.
Or do they? Word travels. Gossip’s cheap. People talk. Promotions occur. Jobs are changed. And there’s Google.
Many people may know us (and our business) who we don’t know.
Later on, we may know them. And if they fit our target profile, they’re no longer suspects. They’re prospects.
The key is they’re out there first, before we know who they are.
These unknown people will hear about us from potentially many different angles.
We’d like to think they’ll be knocked out by our clever print ads, Flash/video web sites, or glossy brochures. And a small percentage will - if we’re very lucky. But don’t count on surviving this way. The numbers don’t add up.
The best and strongest first mention of us to a suspect will be personal; a referral from a customer evangelist during an RFP, or word of mouth buzz at a trade association luncheon.
It’s the metamorphosis of suspect-to-prospect-to-customer that begins with relationships to people we don’t know.
And all this business is personal.
Making it Easy to get to People We Don’t Know
Help make it easy for the people you know (customers) to spread your word. Here’s a simplified list.
1. Give ‘Em Something to Talk About
Overperform in delivery and value for your customers. You want more than extremely satisfied customers, you want ravers. Those customers are hungry to spread the good word about you. (I’m sure you’re already working on this)
2. More Than a Tagline
Provide an easily shared message. Create 1-2 short sentences that customers can remember, and then repeat in their own words. You can’t force your customers to use this message. But they’ll pick it up if you use it consistently in person, in emails, in almost every communication. And if it accurately reflects your value, your strengths and your uniqueness. Learn more about messaging here in the Leaning Tower - Part I & II.
3. Bake It In
With both the above in place, incentivize sharing. Create a simple referral program that rewards customers and your employees.
Rewards can be business related (discounts, additional services or free products) or personal (lunch, gift certificate, mention in a newsletter). Is it necessary to say be careful when giving cash rewards? Remember, appearances can be misconstrued.
Rewards are earned from referrals that call in, and/or lead to promoting the good word about your business.
Obviously the large rewards go to referrals that lead to contracts. But these can take time, and because of that don’t happened as often. The reward can be too far away from the effort.
Look for rewards you can give more often. Consider rewards for every referral that contacts you, especially those you didn’t know about.
This works for suspects that call in, even if they won’t be prospects because they don’t match your target profile. Here’s an opportunity to give a minor reward to your customers and educate them about the prospects you’re looking for.
Whatever program you come up with, make it:
- Simple to understand
- Easy to run
- Rewarding frequently & appropriately
4. Create a Target Profile
It’s essential you define what your prospects look like. How else will you know them when you come across them? Learn more about creating a target profile in Sales Plan-o-rama.
It’s also worthwhile to put some effort to find out the size of your market. This would be the number and size of target prospects. This will help you decide where and how much of your resources to spend.
How are you developing relationships with people you don’t know?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: marketing, prospecting, sales planning
January 7th, 2008
Most contractors believe their services are remarkably different from competitors. Their (fill in the blank) technology, operations, quality, etc. are noticeably better than the next guy’s.
However, customers only see shades of gray. They don’t see a remarkable difference. Contractors look pretty much the same.
I’m not saying great technology, operations, or quality aren’t important. They are. But they’re no longer differentiators. They’re the ante just to get into the game. You couldn’t play if you didn’t have them. Harsh but true.
Where is competitive advantage?
Does the contractor with the most offices or largest annual revenues have the advantage? Nope. Otherwise the largest contractor would win every time. And you know they don’t.
Does the cheapest or highest price have the advantage? No again, because low ball or high price doesn’t win any more bids than middle market pricing.
Competitive advantage lives here
I believe it’s in the most compelling customer solution. That’s what customers’ buy - solutions to their problems, or fulfillment of their wants.
Competitive advantage is with the contractor who best understands a particular customer’s specific problems and wants. And then creatively solves and presents that unique solution.
Everything else, fancy offices, web this-and-that, are all necessary, but not the tipping point.
It comes down to contractors’ abilities in sales analysis, solution design, and then presentation. And this often is a lot more work than most sales people want. But that’s the edge between average and exceptional.
~~~~~~
Chris Arlen
President, Service Performance
Technorati: competitive advantage, buying, selling
October 9th, 2007
There are only three strategies to develop new business: Rainmakers, Acquisitions, and Organic Growth.
None are mutually exclusive of the others. Contractors can use some degree of all three at the same time.
Though each strategy can contribute growth, each has some baggage. Here’s a brief look at them.
Rainmakers
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Rainmakers were defined in last week’s post as hiring someone for the business they’ll bring. The rainmakers’ upside is new business comes on fast, and the ROI is clear.
New business should be almost instantaneous, at least something significant in three months. That’s what you expect. You hire a rainmaker to make rain now. Not a year down the road.
Contractors can gauge the cost of the rainmakers expenses (salary, taxes, benefits, bonus, & commissions) against the value of the expected new business. Should be an easy ROI calculation. Helpful before bringing on a rainmaker. And when they’re on board, it’ll be easy to see if its not panning out.
The downside of rainmakers is if they can bring business with them, they can also take it away when they leave.
And they will leave. Their primary worth to contractors is leveraging their relationships, past positions and notoriety. Once they’ve gotten what they can, they’ll be looking for greener pastures. Just expect it and you won’t be hurt when they leave you.
My preference is to use monies targeted for rainmakers towards building contractors’ capabilities for organic growth. But there will be the rainmakers with exceptional ROI that’ll convince any contractor to take the plunge.
Acquisitions
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Upsides can include big jumps in scale, instantly. Buy a firm as big as yours and you’ve grown 100% when it closes. Takes a lot longer to sell that much.
Overnight acquisitions give instant credibility in new geographic areas and vertical markets. Acquisitions can also bring high-caliber management, expertise, and offices.
The downside is retention of customers and that high-caliber management. Depending how or if the acquired firm is integrated into the buyer’s firm.
If nothing is changed (original contractors’ company name and customer service contacts stay the same) then retention can be high. Some Mergers & Acquisition people believe as high as 90%, which means only 10% is lost in the first year.
However, if the acquisition is integrated into the buyer’s company, retention rates plummet. Sometimes as low as 50% after only three years. That means looking back, only half the acquired customers stayed. Yikes!
Several factors affecting retention rates of acquisitions include:
Change in Brand
Is the acquired company’s name changing to the new buyer’s, or does it remain the same? Branding can spook some customers, even though operationally everything remains the same.
Customer-touchpoint Personnel
How many of the personnel who serve customers stay with the acquired company ? Owners may leave immediately, or stay during an earn-out period. However long an owner sticks around, customers care more about the people they deal with on a daily basis. It’s really the service reps who determine whether customers stay or leave.
Limited Options in Local Market
Customers in local markets typically want three to four viable contractors to feel they have options. Sometimes they’ll want more.
If an acquisition occurs in a market where the contractor-buyer is already strong, customers may seek other contractors because they don’t like the buyer’s firm. Or don’t like the idea of a monopoly or oligopoly.
Sometimes customers will help bring in a new contractor into the market just to ensure there’s enough competition and free choice.
The bottom line is when customers’ choices are few, they leave and contractor-buyers’ revenue seriously drops.
Organic Growth
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This means a contractor has the capabilities to bring on new customers and contracts. It’s the most valuable and effective strategy. If a contractor can bring on new business by itself, it’s protected against the downsides of acquisitions and rainmakers.
However, organic growth is also the most management intensive strategy as well. Contractors need to have a number of components in place for the entire system to work. There must be:
* Competent sales people & on-going sales training
* Proposals & presentations that win contracts
* Sales management, reporting & accountability
* Marketing to bring in leads & raise awareness
For these reasons, organic growth (healthy, successful organic growth) is the slowest to get in place compared to acquisitions and rainmakers.
From the Menu
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All three strategies have their place. Rainmakers and acquisitions, if used cautiously, are steroids for any contractors growth curve. But like steroids, the constant use of them can produce deadly results. Organic growth is worth the investments, whether or not the other strategies are used.
What’s your mix of strategies?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: buying, contracts, retention
August 2nd, 2007
At BOMA’s Office Building Show this week I saw lots of contractors courting customers. It made me think about contractors who hire customers to bring on new business.
It’s the rainmaker model. Hire someone for the business they’ll bring. Only in this case, it’s someone from the other side of the fence.
Contractors do get business from the customer/rainmaker’s friends. It does happen, but rarely. When it does happen, the amount of business isn’t as much as expected.
So, after six months there sits contractor and customer/rainmaker, in a desert of unfulfilled expectations. Eventually the contractor lets the customer/rainmaker go. What’s the point of such a short-term employee?
I know why customers take the plunge and become contractor employees. It’s for the:
- Money
- Career Advancement
- Excitement
- All of the above
However, I believe the customer/rainmaker model is flawed from the start. It’s a risky move for both parties, unless of course the Tiger Woods of customers shows up. But if you’re even slightly risk-averse, I’d stay away from it.
Here’s a look at the positives(+) and negatives(-) of the model.
POSITIVES
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These are over simplifications, but worth considering when contractors hire customers to bring business with them. Customer/rainmakers should:
(+) Be very knowledgeable about their specific market (owners, trends, decision-makers)
(+) Know how the contractor is viewed in their marketplace (helpful for tweaking marketing/sales messages)
(+) Understand how the contracted service can help/hurt customers (where hidden benefits can be found)
(+) Provide specific knowledge for improvement areas (guide contract operations to make changes)
(+) Have other positives that I’m not aware of
NEGATIVES
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Again, these are over simplifications, but from a contractors perspective I’ve seen all of them play out. Customer/rainmakers:
(-) Are more passive than contractors, expecting work to come to them, they’ve not had to aggressively solicit business in the way they now have to
(-) Require more sales skills and experience
(-) May look down on the sales profession as a result of past experiences with “bad” sales people
(-) Over estimate the number of their peers who will give them business
(-) Must learn more about the contracted service than they knew before
(-) Under estimate the amount of work it takes being a contractor
(-) Must work differently than when they were customers, less time and more requirements
(-) Have a shorter life span with a contractor if they don’t deliver than as an employee with their customer company
Who would you rather hire for new business development? A zebra or a tiger?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: hiring sales people, sales, selling
July 28th, 2007
Everything has a different meaning depending on where you’re standing. Think about it!
Alice couldn’t read the poem Jabberwocky until she went through the looking glass (and then it’s anyone’s guess what the poem means).
Consider these perspectives from the other side of the mirror:
- 4th of July to the British (tea tax anyone?)
- Caviar to sturgeon (goodbye momma)
- A pearl to an oyster (ouch!)
- 5-over par to Tiger Woods (ouch!)
Contractors have a mirror of their own. It’s how they look at “selling customers”. However, there is another side. The “customers’ buying” side.
Perspective is everything. If you’re on the “selling” side of the mirror, you’re working very hard, inefficiently, and with frustrating results.
However, a slight change from “selling customers” to “customers buying” makes all the difference. Swap perspective, and changing your actions are simple, not easy - but produce greater results .
When contractors help “customers buy”, contractors become subject-matter experts (SMEs), facilitators, and informational resources.
Now customer conversations are different. Customers want to talk to contractors who have answers. They’ll take those calls, will meet with those contractors. But only those who can legitimately help them.
What contractor doesn’t want to be known as the “go-to-person” by their customers?
What side of the mirror are you thinking from?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: buying, marketing, selling
July 3rd, 2007
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