Selling someone else’s products

Have you ever thought about selling someone else’s products? When you sell someone else’s products,  parts of that vendor’s business obviously become a part of yours: their products and services. However, the reality is a good bit more complicated.

Be sure what business you’re in

When you consider selling someone else’s products, it’s critical to assess whether the product is germane to what you do.

For example, it isn’t hard to find stores selling fidget spinners. They’re an impulse buy that could add a small bump to daily sales, so grocery stores, convenience stores and the like could justify selling them back when they were hot.

However, it makes little sense to see these gadgets advertised on outdoor signage at pawn shops and musical instrument stores – which I’ve seen lately. The logic behind advertising out-of-context impulse items on a specialty retail store’s limited outdoor signage escapes me – particularly on high traffic streets.

Will it confuse their market? Will they lose their focus by selling a few $2.99 items? Doubtful. While they’re trying something to increase revenue, the emphasis on an out-of-context, low-priced impulse buy product is the reason I bring it up. It makes no sense for a specialty retailer.

When you start selling someone else’s product, there are questions you don’t want your clients and prospects asking. They include “Have their lost their focus?” and “What business is my vendor really in?”  These questions can make your clientele wonder if another vendor would serve them better.

Should you sell out of market?

I had this “Is it in context?” discussion with some software business owners this week.

One of the owners (not the tool vendor) is asking the group to sell the development tools they use to their customers & other markets. Ordinarily, this would be a head scratcher, since most software development tools generate their own momentum, and/or are marketed and sold with a reasonable amount of expertise. That isn’t the case with this tool vendor.

However, the discussion really isn’t about that tool vendor, even though they’re at the center of the discussion being had by these business owners. The important thing for you is the “Should we sell this product?” analysis.

Start the conversation by bluntly asking yourself if makes sense for your business to sell this product.

Adjacent space or different planet?

If your company sells to businesses that develop software internally or for sale to others, then you might consider selling a vendor’s software development tools to your customers. It might make sense if you sell into enterprise IT.

However, if you sell software to family-owned, local businesses like auto parts stores and bakeries, it makes no sense at all. You’re going to appear to be from another planet going to these customers to sell software development tools.

If you try to sell these tools in an unfamiliar market, then you’re starting fresh in a market your team probably isn’t used to selling and marketing into. The chance of losing focus is significant unless you’re leading your current market by a sizable margin and have plenty of extra resources.

Ideally, a new product line feels congruent to your team, clients and prospects. Even when it’s a good match, the work’s barely started as selling and supporting a ready-to-sell product requires a pile of prep work.

Your sales team needs training to sell the product and know how/when to integrate it into multi-product solutions. You need to include the product in your marketing and training mix. Your support team needs training to provide the level of support that your customers expect. Your infrastructure team needs to incorporate it into your CRM, accounting, website, and service management systems. Your deployment team may need training as well.

What if the new product’s vendor has problems?

Reputation damage is one of the biggest risks when selling someone else’s products, particularly if you have to depend on the other company to service and interact with your customers.

Does the product vendor provide support as good as yours? Do they communicate in a timely & appropriate manner? Do they service things promptly? Are they a good citizen in the developer community? These things are important in the software tools market. In your market, they may not matter.

The actions of the product’s creator reflect on you, since YOU sold the product to YOUR client. Carefully consider the risk/reward. Your entire clientele will be watching.

Being ready for a new customer

In a sport, when a player isn’t ready when the play starts, bad things tend to happen. In some sports, a penalty. In others, the opposing team gains an advantage, sometimes big, sometimes a few points. In business, being ready when “the play starts” means you might get the business. Not being ready may mean you don’t get the sale. Sometimes this means a lot, sometimes a little. Worse yet, not being ready may mean you don’t get the customer. Not getting the customer is a critical failure. Few of us have a business where we can afford to miss out on customers. Some of us have businesses where if we miss out on that chance, we may never get another chance to sell that customer.

Being ready times lifetime customer value

Never having a chance to sell to the customer you missed can be costly. Any car dealer worth their salt can tell you how often (on average) they see a repeat customer. Do the math, and you’ll know how many cars they can sell that person’s family over a lifetime – assuming they don’t mess up the relationship. Factor in the relationship habit that often creates in children, referrals to friends and referrals to other family members and before long, you can see that the value of establishing that first relationship can be sizable. The same can be said for real estate, legal and financial assistance, among others. A relationship created by being ready when a new customer steps into your world as a real estate agent, attorney, lawyer or similar can result in a lifetime of steady, lucrative business, despite having the possibility of having years pass between transactions. Again, the family and friends referrals can mount up in value.. if you’re ready.

However, this type of substantial lifetime customer value creation isn’t limited to big ticket businesses. Retail, restaurants and many other businesses benefit from long-term relationships created by that first transaction or event… if you’re ready.

What does not being ready look like?

Not being ready comes in many shapes, colors & sizes. Are your people trained for the job you sent them to perform? Do they have the tools they need? Do they have the training to do that work? Do they have the materials needed? This includes brochures, business cards, safety gear, proper clothing, etc. These may seem like obvious questions, until if you ask your customers whether or not the people they work with seem prepared. I suspect you will find that they encounter ill-prepared staffers more often than you would like. Ask them if they encounter unprepared people at other businesses – without naming the business. This eliminates their desire to avoid embarrassing someone on your team, but provides examples you can use to check on your own team’s state of readiness.

Training your team is part of being ready

Making sure your team is trained is critical to making sure they’re ready for the opportunities they encounter. One of the areas I often see untrained team members is in front line positions that senior team members don’t want to staff. A good example is a real estate open house on a weekend. The listing agent can’t be in more than one place at a time when they have multiple houses open simultaneously, so the team members they book to staff the other homes is critical. If you’re the listing agent sending untrained or barely-trained people “into harm’s way”, consider the possible cost. If you send an ill-prepared team member to staff an open house, their lack of preparedness and/or tendency to act more like a house sitter and less like you can be costly. Will they collect leads? Will they follow visitors around the house like a new puppy? Will they have the home info learned well enough to answer questions without having to read the spec sheet for visitors? Make sure they have a process to follow.

A similar situation arises when a restaurant’s wait staff comes to the table not having tasted the food, wine, and other things their restaurant serves. While this might seem surprising, it happens frequently. Part of training your team is tasting the things you want them to sell. Recommendations from your staff matter.

Think about your encounters over the last week. Were they ready to serve you? How did their level of preparation make you feel about that business?

Photo by Leo Hidalgo (@yompyz)

Bounce rate too high? Set the stage

What are you doing to keep your website’s bounce rate down? Bounce rate is the percentage of visitors that visit your site and leave without looking at another page, or taking any action (opt-ins, etc). A high bounce rate would be a bad thing in most cases. There are sites where higher than normal bounce rates aren’t unusual, but for most business-oriented sites that have sales, service and related functionality – it isn’t usually a good thing. A business site may have some pages that have a higher bounce rate than the rest of the site, but those tend to have specific purposes and are self-contained (ie: everything the customer/prospect needs is on that page – like a phone number or the answer to a specific question).

High bounce rates can be caused by pages that are: boring, objectionable, uninformative, unclear, misleading, or didn’t match the expectation (reason) that the view believes that the page exists. For a home page, a high bounce rate might tell you that the page doesn’t do a good job of communicating what the company does and why you should be there. Think about the reasons why you leave a site after visiting only one page. You didn’t find what you wanted. The site isn’t what you thought it was. The site is too technical or is filled with jargon. The site isn’t technical enough and targets people far less experienced in the subject than you.

Some of those reasons are legitimate, depending on the person coming to the site and their expectation. It’s the reason audience-specific landing pages exist – the home page can’t be everything to everyone. Even so, your site (like a retail store) needs to set the stage.

Set the stage

When you walk into most retail stores, someone either says Hello (or welcome). In many cases, the store’s next action is for a staff member to ask if they can help you. Sometimes the ask is inquisitive, sometimes it’s asked in a tone that clearly hopes you say no, sometimes it’s perky. No matter how the question is asked, the most common answer is “Just looking”, of course. The possible translations of “just looking” include: “I got this”, “Leave me alone”, “I don’t need help, thanks”, and others. Sometimes, “just looking” is OK. Sometimes, they’re showrooming – but they’re in your store, so reducing their bounce is what you do next.

In far too many cases, “Can I help you?” is a conversation that tends to feel like this: “How was school today?” “Fine.”

Many stores handle in-store visitors in a more effective way. Some explain how the store works, particularly if it has an unusual process or there’s something non-obvious about it. A good example: “If you see an item you like, and you want it in a different color – please let us know. We have every color of every item in stock and ready to take home.” Is there a similar comment your website could make to set the stage for the visitor to accomplish what they came for? Take that same “we have every color…” angle and look at your website.

Compare it to face time

I looked at a computer bag / luggage site recently. Their site made it clear which laptops fit which bags. It showed how to measure the dimensions of your laptop (vs. trusting “15 inch laptop”) so that you’d be sure your gear fit. My guess is that poor fit is a common reason why people return computer bags. Their site makes sure I buy the right thing and don’t bounce due to uncertain fit. What makes your visitors bounce?

What would you say if a web site prospect was sitting with you at a local coffee shop or cafe? If they walk in and sit down with you, how would speak for your website in a way that encouraged them to look further, or help them find the answer they’re looking for? What would they say as they were seated?

What’s the first thing you would say to them to help them feel comfortable, welcome and knowledgeable about what your site is all about? What would you say to enable them to take the next logical step, assuming they are the type of person (or business) that you want to visit your site? Is that what your site says now?

Photo by jacopast

Which little things do you let slide?

We often let little things go because we have “bigger fish to fry”. We prioritize tasks, clients, products and services over others of the same sort because we have to. Prioritization of what’s important today over what might be important tomorrow, or even later today is perfectly normal. We have to do it.

The challenge with little things is that they add up, particularly when they’re repeatedly set aside. They have a way of ganging up and creating momentum, as if they were a colony of ants. Together, a colony can move things much larger than any single ant.

We cannot allow any error in judgment to delude us into thinking that ‘letting the little thing slide’ would not make a major difference.” – Jim Rohn

What little things?

What sort of little things come to mind for you as important for your business?

For me, the little things that matter are those things that tell me what the business thinks is important. Every business says the customer is important, but how do they prove it? Do their words match their actions? Little things are a great place to sort this out.

Little things explicitly communicate what’s important to the owners of the business. They tell me about the culture of the business and paint a picture of what’s important to the business’ management team. These things indicate how hard the ownership and management has thought about what their customers need, want and expect.

Their consideration of and emphasis placed on these things is reflected in the staff’s behavior. Their behavior is an indicator of the quality of management. It signals management’s emphasis during staff training, as well as the quality and frequency of that training. All of this points at the importance placed on serving their clients’ needs, wants and expectations.

Think about the curb appeal of a house. Consider your impression when stopping in front of a home with a weedy, un-mowed yard. Now think about the impression you have when viewing a nicely manicured one. What does that tell you about the upkeep, maintenance and care taken for the rest of each home? Your impression might be wrong – but changing that impression is tough. A business with poor “curb appeal” may never get a chance to improve the impression they’ve left.

That’s exactly what little things can do. They have a knack for sending a big message to your clients.

Prioritization by impact

Big things matter. If you think back over your career, I’m sure you can think of a number of big issues that started out as little things that were left to fester. But which ones? It’s critical to separate the little unimportant things from the little things that can fester into big ones. And how exactly do you do that? One of the most important prioritization skills you can develop is the ability to determine which of these little things are unimportant and which need to be dealt with before they create big problems.

I tend to look at the impact, rather than the size.

If something small is likely to impact a number of people, it won’t be small for long. That’s the kind of little thing that requires short term attention. Little things to you, your team and your business might be big things to your clientele, which speaks to your awareness of client needs, wants and expectations.

If something small isn’t communicated, it can become something big simply by not letting your clients know about it – and know that you’re aware of it. Even if you believe it’s a little thing, communicate anyway. This gives the client a chance to say “Thanks, no problem” or “Hey, it’s not a big deal in and of itself, but it’s going to create another problem that causes a big impact.” The incremental cost of that brief advisory to the client is tiny. The return on investment on that communication can be sizable if it helps keep a small issue from morphing into something ugly.

If you only identify one of these situations per year and it results in keeping a client you might have lost, the return on investment is obvious. If you retain one sale a month by categorizing these little things and taking action on the important ones, the return on investment is obvious.

Assumptions are dangerous

For the last month or so, I’ve been working on an all-consuming project. Yesterday, during a conversation with the recipient of this work, it became obvious that both of us had made some assumptions about the work that overcomplicated the project in the short term. In the long term, no time was wasted on this large, multi-phase project but in the short term – the assumptions were stunning.

Despite hours of phone conversations and emails, detailed technical specifications (geeks: think WSDL but newer), we still managed to have a rather large gap in the workflow of this project. Fortunately, there wasn’t any damage done and the situation merely juggles the position of a few tasks on the timeline, but we didn’t have to be that lucky.

“Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won’t come in.” – Isaac Asimov

The root of assumptions

The root of assumptions, at least in this case, was both groups of people thinking they had properly and completely described the project. Bear in mind that there are mindmaps and API calls and a bunch of other technobabble. Still, this happened.

But why?

Not enough questions?
Not enough diagrams?
Not enough workflow description?
Not enough conversation?

Perhaps all of those, but there have been plenty. What ultimately caused this was quite simple: there was a fundamental asset involved in this project that I was unaware of. They knew it would be used. I didn’t know it existed, so I was planning to use a similar asset under my control.

I speak vaguely about these things because the details really don’t matter and I don’t want the technical jargon to distract from the meat of the discussion: assumptions are dangerous.

The project will come in on time and it’ll be good for both parties, but it might not have worked out as well had this discovery happened a week later. It wouldn’t have broken anything, but it would have wasted some time, or at least caused work to be done that won’t be needed for a month or more and that would delay work needed soon.

There are many ways that assumptions can endanger your projects. The key is to have a process that does as much as possible to eliminate them.

Eliminating assumptions with a third party

The most dangerous assumption I made was that the technical documentation and the mindmaps would effectively communicate the project’s details to a technical audience. At a granular level that was true. Where this assumption got me was at the 10,000 foot level – the level where you break down a ton of technical workflow to 10 sentences (step 1, step 2, step 3…) in plain old English that anyone would understand.

Didn’t happen. Six weeks went by without this critical message climbing out of the technical documentation – and even then, it didn’t. It came out when those 10 sentences were written to clarify something that suddenly became confusing.

Many years ago, I was involved in an exercise along these lines where two people with experience in a field had to explain something to each other. Once they reached agreement, they had to explain it to a third person who had no background in the subject.

A fascinating thing happened.

The two people who thought they were describing the same thing were still far apart. When each of them described the project to the third party, they were stunned at the assumptions each of them had made – not big ones, not project killing ones, but differences that could create drama, friction, additional cost and so on.

Watching these two people realize they were not talking about the same thing was illuminating and stunning at the same time because the audience was made up of people with similar experience to the two ‘explainers’.

Of course, the exercise was designed to set them up to some extent and the whole idea was communicate to all involved that communication is real work and that it is breathtakingly easy to make a few small assumptions that can take two parties on substantially different paths even though they think they are talking about the same thing.

Getting two people (or two groups) to understand each other and agree that they are talking about the same thing requires great care.

Next time you have a project to deliver, involve a third party with much different skills. Describe the project to them and see where the conversation goes. Maybe you can avoid dangerous and potentially costly assumptions.

Hat tip to @ClayForsberg for the Asimov quote.

Strategic Notepad: Customer Service

Last week, I noted that how you should recover from a client’s poor experience with you is dependent upon the context.

For example, a four hour flight delay is meaningless if you have a six hour layover. It becomes serious if you have a three hour layover before an international flight late in the day, or if the delay causes you to miss an important meeting, a wedding, or a funeral. If the delay causes you to get bumped to a connecting flight later in the day, it might not be a big deal. If it causes you to get bumped to next Saturday…

Context matters a lot.

Serious context is a serious opportunity

When your client is under pressure, deadline, stress or similar, you have an opportunity to create a memory that can last a lifetime. Will that memory be good or bad? Whichever way it goes is likely to be how your relationship with that customer… unless you treat them like a client.

What’s the difference? A customer is a transactional thing. Customers buy and consume “stuff”. Clients are like patients – under your constant (or at least regular) observation and care. Which are you more likely to take better care of, based on that definition? My guess is the client. Despite the definition, it’s all about perception. If you perceive them as an asset to be cared for (and to extract revenue from for a lifetime), you’re likely to treat them differently than you would if you think you might never see them again. Thing is, if you treat them like you’ll never see them again, you might experience that.

The opportunity to save the day / be a hero in your client’s most stressful, pressured, awful moment is a gift – but only if you open it. Sure, you might push COGS a little higher for their transaction. You might take a little heat from your manager if you take the initiative to solve a client’s problem in a slightly unorthodox way – but not if they truly get it because they’ll know you’re protecting the business.

Are you encouraging initiative?

One of the things that seems to be getting being “beaten” out of employees these days is initiative. Evidence? The fact that people are so impressed when someone takes initiative to help them as if they read the Business is Personal playbook. Businesses have produced a generation of workers who fear helping clients in an appropriate manner (when context calls for it) because not adhering to policy and procedure is often considered as a firing offense, even if you acted in the client’s best interest.

Even if you can’t stretch, provide options

Last month, I reserved a car rental with a pickup at 3:00pm. The rental location address provided by the vendor was wrong – fortunately it was wrong by a few blocks (and across the street). However, the rental location closed at 3:00pm and the nearest open branch was about 50 miles away. After waiting on hold for 54 minutes, customer service basically said the whole thing was my fault because I arrived a few minutes after the pickup time. By the time my call came off hold, I was more than an hour’s drive from their only open location and due to my appointment schedule, I was unable to visit that location. I made it clear that I was more or less stranded but my comments were ignored.

How could this have been handled – even if the customer service person couldn’t spend a dime? They could have offered to send someone to pick me up – but at 5pm on a Saturday (which tells you how long I was on the phone), there was no extra staff at the airport to shuttle a car to me. Had they said they checked and couldn’t do that due to a lack of extra staff on duty, I would have appreciated it. They could have asked which hotel I was at and (because they are a travel agency), offered to rebook me at a hotel close to me and have the car delivered the next morning.

Instead, they chose to blame me for the entire situation. They were focused on shifting blame, rather than helping a client juggling business and family travel on a very important family day. I will not forget and neither will your (former?) clients.

Protect your business by protecting your clients.

Where’s the Maitre’ D?

When a new client arrives at your store and/or on your website, do they know exactly where everything is? Probably not.

If not, are there clear introductions to where things are, what the rules of the road are, how (and where) to get help, what the buying process looks like, where to find service help and so on?

Guidance needed

In a retail store, these things are somewhat common – at least the basics. You’ll probably see signs that say things like Parts, Service, Lawnmowers, Chainsaws, and whatever the other departments of your store are. Even so, is there guidance in any form that helps people figure out where they can get warranty, financing or delivery information?

Think of it like a website that you’ve never visited before. When you first get on a retailer’s web site, you often have to dig around a little to find policies and procedures, or how they handle refunds, delivery/shipping, etc.

You have two choices when onboarding a new visitor who will presumably become a client:

1) Guide them step by step in a logical manner and provide them with the tools they need to have exactly the experience you want them to have, and position them to be the ideal buyer.

2) Let them figure it out for themselves and explain where they went wrong when they find themselves painted into a corner, or stuck trying to figure out how to get service, delivery, refunds, exchanges, on-site help, upgrades / updates / improvements, financing and repairs.

Think of it like a restaurant

At some restaurants, you are greeted at the door, guided to your seat, provided with a menu, and introduced to your wait staff (or advised of their name). You might then have your expectations set regarding the arrival of someone to take your drink order, explain the menu, share the night’s special entrees and desserts, as well as any other information you might need. Later, you might be asked additional details about how you want your order, whether or not you want dessert, coffee, etc.

Obviously, this varies a bit depending on the type of restaurant, but I suspect you’ve experienced this level of guidance – all to do something you do every day: Eat.

The alternative, even in the same restaurant, might be to provided none of that guidance, have menus on the table, be expected to place your order at the counter, pick up your food at the counter and pay on your way out the door.

Neither of these is wrong, but both types of guidance are designed to fit the type of restaurant you’re in. Generally, you probably know what to expect when you enter the first restaurant vs. the second. If the experience is not in sync with the type of restaurant you’re in, the “system” seems out of place or the experience feels broken. When I experienced things like this with my dad, he would say “This would be a great place for a restaurant” – noting of course that we were in a restaurant at the time.

Restaurantize your business?

Now overlay those restaurant experiences onto your business. Think about each step of the dining experience (in both types of restaurants). Which one of these experiences is a better fit for a new visitor to your business (or your website)? Which is a better fit to a long-time client?

Before you decide which experience is best for an experienced client vs a new one, let’s back up a step… even when you go to a restaurant with a highly guided experience, does the maitre’d recognize that you’ve eaten there before? If so, do they hand you a menu and point at the dining room and leave you to figure out the rest, or are you guided through the process in a similar manner to every other visit?

Which of those experiences makes sense for visits to your store? Which experience makes sense for visitors to your site? Which experience creates a new client who is more prepared to purchase what they really need vs. what they think they need? Which experience produces the client retention you want? Is there a difference? How do you know? Testing helps.

Fine tune the experience for each stage of your client lifecycle in a way that creates an optimum client experience for them while producing the ideal client for you.

Project Management: Is it done yet?

When I was young and a bit green at project management, I somehow managed to have responsibility for a number of big projects. Some came in OK, some never seemed to get rolling properly, some were late, and some seemed to take on a life of their own. A latter group tended to include projects whose scope was a moving target or had many unknowns.

The worst of these have a way of being the unknowns you never see coming, often gestated from a family tree of assumptions and incorrect or changed information.

Secretary of Defense Rumsfeld famously said that decisions are made while dealing with “known unknowns and unknown unknowns“. Anyone with large project experience knows exactly what he meant. Interestingly, Rumsfeld credits a NASA manager with the terminology.

Project management requires discovery

The software business has a sketchy reputation for delivering projects on time, despite a lot of internally-driven improvement over the last two decades. This reputation is sustained by the memory of failures of very large software projects.

Agile project management and related methodologies have helped a great deal. Many of these methodologies can trace their roots back to Lean manufacturing / management methods taught by Deming in Japan after World War II.

Success with these management strategies depends on early discovery of issues, challenges and changes in the information driving your decisions. This, along with our human tendencies, is why the MVP (minimum viable product) construct works. The earlier the customer sees your work, the earlier you’ll find out if you’re on track.

Usually, you get to decide how this discovery occurs: organically as the project work occurs, or in advance, thanks to discussions of expectations, requirements and manufacturing options during the design phase.

Poorly managed projects are often started without sufficient discovery and discussion. Even today, many projects are started and finished with very little advanced thought. No one would build an airliner as it rolls down the runway. While that sounds a bit ridiculous, this is exactly what happens.

The context of the design is critical as well. Work done in a vacuum, even with the best of intentions, often produces incorrect assumptions thanks to the aforementioned unknown unknowns.  The project’s scope is an known unknown and the unknown unknowns are often a simple matter of lack of experience with the environment where the completed project will be used. The gap between expectations and results matters whether you’re building a crescent wrench, a software program or a Mars rover.

When will it be done?

While you may not have an accurate answer to that question, better design will improve your ability to give an estimate that someone can actually trust.

Better design? How?

The most common problem I see is not breaking things down into small enough pieces of work. Granularity is critical to the design and estimation of highly detailed / technical work. The volume of dependencies and unknowns in this type of work compounds the miscalculations and omissions resulting from a lack of detailed analysis, resulting in inaccurate estimates and missed expectations.

An estimate of days, weeks or months without a detailed breakdown of subtasks is symptomatic of the problem. I find that estimates require subtasks no larger than two to four hours to create a design that’s thought out well-enough to meet expectations, discover obstacles in advance, while producing a reasonable estimate.

But it’s not perfect!

Human nature also creeps into the equation: We like completing tasks.

It’s such a part of our us that people tend to focus on less important tasks simply because we can complete them before the end of the work day. We feel accomplished despite leaving big projects untouched.

If you’ve ever written things on a checklist that you’ve already done so that you could check them off, then you know what I mean.

Rather than fight the fixation on small projects that we can “download” and complete in a work period, feed it with subtasks of your big, important projects that conform to the need to complete something the same day.

Life has a way of being incredibly creative when it comes to finding ways to delay a project’s completion. Build these project management tactics into your design, estimate and build workflow so that you can get better work done faster – even on big projects.

Your referrals leave an impression

Recently, I received an email from someone who described a rather unpleasant home improvement job, which involved the purchase of materials and a subsequent installation of them. We like these things to be boring – meaning everything went smoothly with no drama.

This one doesn’t appear to be turning out that way.

When I say rather unpleasant, the job describing to me included the theft of building materials by a contractor who was referred by the company where the materials were purchased. They also described bill padding on two occasions by the contractor, once for materials, and once for the labor. I’m told the referring supplier reimbursed the customer for the stolen materials, and that the contractor first offered to reimburse for the padded bills and then disappeared.

A few things about this merit discussion: First, there’s probably more to the story. Second, these situations almost always leave clues before bad things happen. Finally, this is really about how much care are you (the business owner) take when you refer someone to help your clients.

Do no legal ties mean no responsibility?

Referrals made in these situations are typically made to businesses with no legal ties to the referring business. You can understand why a referring business would make a point of distancing themselves legally from the folks they refer, but *does the lack of a legal connection matter to the consumer*?

Only legally, if that. And only until you establish a pattern of referring people to your clients regardless of how the referred vendor performs. The corporate line will almost certainly be one of maintaining that legal separation and that the consumer must be responsible for selecting a contractor.

The thing is, if you are going to go to the trouble of referring someone, why do it poorly and without conviction?

Taking the wimpy, “no legal connection” angle is not how you make business personal. I understand that there’s a desire to avoid burdening the corporate parent with the possibly sketchy behavior of a local contractor. What I don’t get is why you would recruit and refer contractors with so little care that it’s simply a matter of time before you run into trouble.

Even if there’s no business relationship and no legal responsibility accepted by the referring company, only a fool would believe that a referral doesn’t reflect on the one who makes it. So why do it poorly?

Why not refer well?

The smart business who makes these referrals will recruit, select and refer contractors that are so good that they leave the kind of impression that you can’t wait to refer them to your clients. Help your customers choose by giving them the tools they need to choose the best contractor from your vetted list of referrals.

The smart business who makes these referrals won’t stop there. They’ll follow up with every referral after the job, perhaps during each job until they’ve developed a level of confidence in the contractors they refer. It isn’t enough to recruit and select well – you have to keep it up. These people represent you whether you like it or not. Make sure they do it well and make sure they understand the importance of the work you’re sending to them.

The consumer bears the burden too

Part of the story that I left out up to now is that the referred contractor asked the customer if they could pay in cash because of some irrelevant reason.

If you (the consumer) don’t immediately disqualify a contractor who asks this question, you shouldn’t be surprised if (when) you have problems with them. In this case, that’s what happened. I told the consumer that this should have been a red flag to expect trouble.

When I get this question, I ask myself what else they want to skip.

Will they skip work that would result in dangerous construction? Will they skip town with my money? Will they skip town with materials? What else might they do while having access to my home or business? Did they skip buying insurance? What else did they shortcut?

The smart business will remind their clients that while working this might save you a few bucks, it might also cost them a lot.

The quality of your referrals matters. Make sure they’re worth giving.

Experience management matters

Delivery of a product or service is about far more than the act of your client opening the box or getting the service they paid for. The total experience matters, so you’d better manage it. An example should give my assertion the context it needs to clarify why experience management is so important.

A need to know basis

I recently flew a major airline from Chicago to Kansas City. In the middle of the boarding process, one of the gate agents came out of the jetway, halted all boarding halfway through zone three’s entry to the plane, got on the phone and then disappeared back down the jetway.

About 10 minutes passed without a word from anyone at the airline, including the agent minding the boarding pass scanner. Finally, the agent who halted the boarding process came back out and gave the boarding agent the all clear to resume boarding. All of this happened without a word to passengers. Clearly, we were on a need to know basis and we didn’t need to know.

I tweeted a comment about the situation. After my flight, a subtle dig from the airline’s Twitter account reinforced the culture that leadership has established, and is perhaps indicative of the kind of mindset the recently departed CEO put in place.

Why experience management matters

Did our lack of awareness of the boarding situation affect the final outcome of the flight – a safe on-time arrival? Of course not.

Did our lack of awareness of the situation positively influence our confidence in the provider’s ability to consistently and safely deliver the service we purchased? Not really. Instead, it gave the impression that delivery is all that matters – an assertion that doesn’t hold water.

It isn’t as if the passengers on the flight needed to know why we our boarding was temporarily delayed. The nitty-gritty details may negatively affect your confidence in the business delivering the service – and could roll downhill to your thoughts about the safety of that delivery. Even so, knowing that the delay is not unusual, will be cleared up in 10 or 15 minutes and will not affect an on-time departure is enough information to calm a nervous group of passengers who might be concerned about safety, about making a connection, or the likelihood their flight will actually happen.

Simply stating these three details (situation normal, expected time till resolution and lack of impact on delivery) will do the trick. Taking these few issues off the table improves the experience, communicates that you have your clients’ back and understand the importance of delivering the service as well as the issues that define its importance to your clients.

An opportunity to build

When you can build the client’s confidence in your ability to deliver and improve the credibility you have to trust that you can handle whatever comes your way, use the opportunity humbly.

It reminds me a good bit of the refrigerator sheet story that I use to demonstrate how a real estate agent provides a confidence building framework of “things that frequently happen during a real estate transaction that I routinely handle for you so don’t sweat them“.

The same airline missed an opportunity to show their understanding of the nature of their clients’ use only a week earlier. I was flying out of a small rural airport on a very small regional jet. It was the first flight of the day in this tiny little plane leaving an airport that is not a hub. This means that the first flight of the day is always going to be boarded by clients who need to make a connection in a hub city so they can reach their intended destination.

On a plane that only seats 50, this produces a group of people who are not inclined to give up their seats, unlikely to miss a flight due to a connection and unlikely to have an opportunity to easily book the next flight out without repercussions. The logic that this sort of rural flight would be overbooked by 20% ignores all of these qualities / needs of the passengers involved, yet the 20% overbooking is exactly what happened.

At a hub airport, we may not like overbooking, but it’s easy to understand the justification. The combination of first flight out, rural airport and small plane make it an anti-customer decision that sets the company up for a bad experience for their entire service delivery experience – a situation you don’t want to create.