After Contracts Are Signed
“There is no danger that Titanic will sink. The boat is unsinkable and nothing but inconvenience will be suffered by the passengers.” – Phillip Franklin, vice president of the White Star Line
(After the accident, a penitent Franklin walked back his remarks. “I thought her unsinkable, and I based my opinion on the best expert advice.”)
Delighting Vendors
My definition of a customer differs to that of most entrepreneurs. To me a customer is anyone who receives your attention and communication. Yes, it can be someone purchasing your service or product, it is also your vendors and consultants (and life your partner, children, animals, and friends.) The goal is to delight them all whether you communicate by email, on the phone, or in person.
Of course, you are also their customer and they should delight you, but such delight is rare. The onus is on you to set the bar.
As a startup, it is up to you to ensure you create effective communication. By delighting your vendors you get far more attention and their staff tend to go the extra mile on your behalf. If they are performing essential services, like telesales or online promotions, you want them to do so with a high degree of motivation. That only happens if they like you.
Delighted customers become your invisible, unpaid, sales-force.
When people have a winning idea and do nothing about it, the idea soon fades until it is forgotten.
Even small vendors can have large staffs, and many workers feel like they are just another employee number or just another cog in the machine.
It is not often that an employee feels that he or she is making a positive difference in the world. They appreciate it when you show them gratitude and offer feedback and testimonials from end-users.
With vendors it is essential to develop open, respectful, two-way communication, which allows you to share feedback from the end user. The aim is to create a network of vendors that is so good at what they do that they render your involvement almost unnecessary. That only happens if they are enthusiastic about you and your company.
At each vendor I put a lot of effort into the initial education, training, and direction of the people who are responsible for my product or service, especially those who will be talking to end-users on behalf of my business. I give them as full of an understanding of my company and its business model as if they were employees. Then they receive comprehensive training in all aspects of the product or service they are handling. This usually requires an on-site training session, or what we would call an “in-service” training meeting.
Once or twice a year I hold refresher training via video in which everyone can air concerns, get questions answered, and learn the latest feedback from the market. Typically, the people interacting with my end-users are junior level in the vendor. They are always delighted when the client CEO speaks directly with them. In traditional structures the communication would take place between equal ranks, so to speak with a real, live CEO is unusual. It delights them, especially when the client CEO thanks them and copies their boss on the message.
For customer-service personnel, I provide binders with frequently asked questions and best answer scripts as well as phone scripts. Everyone has my direct mobile phone number (dedicated only to work) and knows to call me with any question, no matter how small. They know that I will appreciate the prompt attention to any customer complaint or question. I follow up any such call with a grateful email copied to their boss. (boss and employee delighted) I also include everyone in the distribution of any feedback that comes to the company from customers and other vendors.
Staff Turnover
With one vendor, I discovered too late that they had some staff turnover issues. The customer service people I had trained were moved to another project. New people were assigned, and they received only a cursory handover from the vendor client manager.
By chance, I came across an Internet forum in which a customer was openly criticizing my company for its awful customer service. I was shocked to read the negative rhetoric. Products had been shipped to wrong places, and the customer had been charged incorrect amounts. Fortunately, this had only been going on for a short time when I discovered it and I was able to fix things right away.
The experience served to remind me that ongoing training with staff is essential to be sure everything continues to run smoothly. I set up a new procedure that caused the vendor to alert me whenever people moved from the call center, then permitted me to train or instruct the new person online or over the phone that same day.
After a few months, most teething troubles are worked out, and then that function runs smoothly. I found most vendors were so proficient at what they did that there were only rare issues. One of the hardest things to get used to is stepping out of their way and letting the vendor do its job. At one vendor, my company was its one hundredth account. After an annual review of our operating procedures I received the following e-mail:
‘We appreciate as much the trust you have in us to do our job. Many of our other clients have issues with letting go and contact us on a daily basis. We spend so much time placating egos when we could be doing more constructive things. It is not lost on us that the more involvement a company has with the day to day running of their business through us, the more issues there seem to be…’
When I took vacation for a week and the business kept running so smoothly that no one noticed my absence, even for me that took a bit of getting used to. My regular career had instilled in me the belief that everything is complicated, everyone has to work at full pace, and that there are not enough hours in the day. With a virtual business, I found the opposite to be true. I had so much spare time on my hands I actually felt a bit guilty about it. To paraphrase Lao Tse, the best Virtual CEO is the one whose contractors say, “We did it all ourselves.”
Another aspect that takes a bit of getting used to is the geographic dispersion of the vendors. It is the opposite of working in a regular environment where all the functions are under the same roof. For my first company, the LLC was legally registered in Delaware because that particular industry used the state as its legal standard, but the company address was a town near Seattle. A firm in Dallas provided accounting services, but their systems allowed me real-time access to every detail from anywhere and on any mobile device. Warehousing was in Kentucky, also with real-time access to an online inventory management system. I visited the warehouse once a year to give the team an update on progress at the company and to thank them for all their hard work. There was little else for me to do. Regulatory service was handled from Chicago. Sales and marketing were managed from New Jersey. Legal services took place in Georgia. Research & development were performed in laboratories located in California and Taiwan.
It was, however, all coordinated from my home office or on my mobile devices as I traveled. A few mouse-clicks and regular video conference calls over the Internet kept me on top of the business.
In reality the hard work is in finding and selecting the right partner companies, negotiating contracts that make sense for cash-flow management and educating their customer-service staff about your products or service. After that the model pretty much runs itself. Other than regular conference calls to update progress and experiences, it frees you up to concentrate on growing the business through marketing efforts and acquisitions.
Eighteen months after setting up my first virtual company, I overheard an investor comment to a colleague that it was the best-run company of all the small businesses they were involved with. He was not complimenting me, but commenting on the efficiency and transparency of the business. With this model all data are accessible to everyone in real time and that gives everyone a sense of security and ownership.
