Business

To keep any business running, there is constant pressure to chase the next project and the next invoice. If we’re not careful, this can cause quality and creativity to take a nosedive as making the money becomes the over-riding priority.

I’ve been running my own web design business for a couple of years now. I think the tough reality is that you’ve got to work hard to keep the money flowing. This is how one survives. The times I’ve gotten behind on invoicing are the months I’ve nearly folded. It’s no different for larger agencies. They may or may not have healthier cash-flows, but the pressure to keep solvent and keep chasing the next job is just as great, if not greater.

On the other hand I don’t think that needing to churn over lots of work and get paid promptly means agencies need to throw quality, creativity and promises out of the window. Where that happens, I think they have a dodgy business model. Poor quality work is going to cost somebody sooner or later. It’ll hit their client first, but ultimately it’s going to damage the agency too.

I’ve been finding that many of my clients want very similar core things. So my business model is evolving to be two-fold:

1. Develop some “packaged” products and my own frameworks where the quality is already established. Use these for the bulk of clients who want common systems.
2. Accept entirely bespoke projects, but ensure I get a good price for them and adopt excellent project management processes to ensure all the promises can be met and exceeded.

I’m not yet an expert in this way of working. My frameworks aren’t yet as flexible as they could be, and I don’t always budget high enough for the very bespoke stuff (I tend to pay for this mistake by working longer hours rather than ditching quality, but it’s still not a great situation). But as I get closer to the ideal, it feels like it’s got to be the right approach.

This sounds really encouraging. I imagine the looming recession could provide strong motivation for corporations to try out such crazy new ways of working.

But, while I’m trying really hard not to be cynical, I think this video doesn’t address the way patents seem entirely damaging to collaboration. If patents started to get used for the purpose they were intended—which was to encourage sharing of private ideas—then all could be well. But right now, patents are the strongest form of protectionism and are used to block innovation.

Also, I think that corporations will have to fundamentally change for this to work. Until the current collapse of the western economic model, most corporations were led by shareholders with frenzied greed. This is antithetical to the open, collaborative exchange of ideas. Nike can’t have their cake and eat it. Most of the smart people do work for other organisations, but you can’t tap into their talent unless you care as much for them as you do for yourself. And I mean care for them. Not simply care about their wallet.

I went to a Business Link Yorkshire seminar on sales today, to learn how to make sales and keep existing clients. It was a very good event. Business Link are a great bunch of people.

However, one of the last slides provoked a strong reaction in me. These were the two final tactics under a list of tips for keeping customers:

Do you have a technology which you can embed in your customers’ systems?

Can you lock your customer into a long term contract with penalties for termination?

I thought that these were both very dangerous tactics which raise issues of business ethics.

Embedding proprietary software in clients’ systems could be akin to spyware or malware. Is there a practical need for it? Does the client fully appreciate what her software is doing, and how her future choices may be limited by the closed nature of a software system?

And on the second point, is there a justification for locking people into long contracts, and for applying penalties if they wish to end the relationship? In the case of phone companies offering “free” hardware with long-term contracts, I think this is fair enough—the company is clearly only able to “give” you a phone because you agree to pay for it over a period of time through your monthly contract payments. Likewise, I can imagine large-scale website development projects where the cost of development is actually part of a long-term relationship between developer and client.

But citing these strategies as techniques for keeping customers really does seem deeply unethical to me. They may be practical solutions which help manage software systems or help finance a long-term project. But as sales techniques I submit that they could to lead to the vendor deliberately manipulating their product or their client to force ongoing sales.

In any case, I think such strategies are counter-productive. Of all the relationships I’ve had with suppliers, those where the supplier had tried to lock me in or limit my choices have resulted in a souring of the relationship—often to a point where I would not willingly do business with them again. Companies which allow me to leave easily and freely are much more likely to get me back if I decide they provide a product or service I need in the future.

At the beginning of the seminar, the leader told us that sales very much isn’t about forcing people to buy things they don’t want, but rather about helping them get the things they need. With these two strategies for lock-in, I think he contradicted himself.