Business

Piece Of The Pie: Do You Share Or Hold On?

I want to continue where I left off last month related to the issue (yes, it is an issue) of industry professionals who, to put it bluntly, sell services they cannot provide, for a profit. We complain that we are not treated as professionals; perhaps, if we started acting like other industry professionals people are familiar with, we would get the same respect that they do. I am talking about giving referrals to other industry professionals without taking a cut of their fees.

One of the reasons I was successful in prior businesses is that I had many referrals, not because of “payoffs,” but because those individuals wanted something good for their clients. I designed and installed many nightclub systems; small, medium and large, maybe even extra-large! The DJs and even other club owners passed my name around. This garnered most of my business, not my advertising. There were a lot of folks doing shoddy installs, and it was common for a system to fail just when it was needed the most: Friday night, 2:30am, dancefloor packed. As the DJ tried to get the most out of the system, BOOM, no more sound!

The DJs were always blamed for blowing up the system, and were despised by many on the dancefloor who were not ready to go home. Catastrophe is too small a word for the strife DJs suffered operating these substandard systems.

The systems I designed and installed never suffered such a fate. I used some “advanced for the time” engineering principles to make sure the systems would not fail when they were needed the most. It did not take long for owners to want my systems in their clubs.

DJs did not try to broker themselves and say they could do the system and mark up my price with their cut. So why are so many IT companies and IT consultants, MEP consultants, selling AV services that they cannot provide?

It’s for money. They do not really know and understand what we do, yet they still sell the service. Sure, there is one point of accountability (most of the time), but a lot is often sacrificed when it comes to clients getting what they need, for the right price.

Instead of listing on their website that they do IT, security and AV, these companies could state, “We specialize in IT or MEP only,” and can offer referrals for security, AV, etc., services for direct work. They could offer the option that, if the client prefers to have a single point of contact, for a 25% fee (or whatever each firm charges) they would manage the additional service for the client and those companies would work as a sub.

Choice…Ever hear of it? One of the things prompting this missive is that I have worked as a sub to IT companies several times and, in every instance, the project and our relationship went south, in my opinion, due to the fact that I was not direct to the client. Middle-manning of the project caused quite a lot of grief due to incorrect information, promises that could not be delivered, incorrect pricing…and the list goes on. In fact, I can say with absolute certainty that, had they not been in the middle of the project and just referred me, the project would have turned out much better for all.

It’s also about control, I think, and fear…fear that you will steal their client (and they won’t get more cuts of your profit), and they just want to control every aspect they can. More often than I care to remember, when I worked as a sub for a particular contractor, the client always asked me if I would do additional work. The answer was always the same: no. I would tell them that they would have to ask “so and so” if it’s OK with him. I am sure that, for every time I said no, 10 others would have said “yes.” Trust is something that’s earned, they say.

Let’s go back to the issue of respect. I have mentioned before that we are a young industry, and I know I have discussed the medical field because I think it is a good example.

Think about two areas of trust you give to your doctors. First, you trust their skills. If there is something they do not know about, they will refer you to a specialist. You will usually be given a few names so you can decide who you want to contact. Doctors are your trusted advisors and you respect their referrals. Do they get a cut of the fees the specialists charge? No, they don’t!

Second: Let’s say you need a complicated procedure. It typically is scheduled, with a specific specialist doing the procedure. If a conflict arises, does the doctor tell you that someone else will be taking care of your surgery?

Now let’s look at our industry: How many times has a scheduled install with the “A team” changed at the last minute to a lesser team? Is the client told? That’s a big “no” again.

And on the issue of referrals, many out there advertise services that they can’t actually provide, do not disclose this in advance and then bring in subcontractors to do the work they aren’t able to. It usually looks like a good deal at first, but time and a lot of experience dealing with the issues that come up in these situations has led me to believe that consultants and integrators who do not refer their clients to industry experts are not really doing what is best for their client but what’s best for themselves, so they can maintain control and make more money.

Until we can be trusted to do the right thing, many potential clients will doubt our intentions and say the now famous, “I can get that at Best Buy for $$?!!”

This all comes down to something I read in the hallway of an elementary school my kids go to: “Character is what you do when no one is looking.” How is your character? Do you do the “right thing” or go for the money?

Just to be fair, I know that sometimes subs have stolen clients and/or damaged relationships. Sure, it can happen. But I believe it is the exception, not the rule, and does not justify trying to control what you can’t. What would you do? Please send any comments, examples or stories you would like to share to dkleeger@testa.com.

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