You are encouraged to hire an outside PR agency to satisfy your employees’ or investors’ desire for a “big splash” but when you gather for the first meeting you observe:
Close to zero energy or enthusiasm in the room
They default to publicity ideas, not “market positioning”.
Both of you don’t leave with maximal clarity on the right audience to be targeted, it is not defined or is opaque at best.
You are being asked to join existing conversations, not strategic, category-defining or future-focused one’s with clear and unambiguous value creation.
There is no obvious revenue leverage from the proposed PR (marketing expense).
There is no obvious “fame” or perceived strategic importance, driven by the scarcity and value of the news.
Conversations are dominated by tactical inputs and rarely results-focused outcomes
An elongated needs analysis or fact-finding effort is recommended (you want fast results and success, the PR experts want “perfection”)
The clarity, creativity and simplicity proposed by your quick “AI-sense check” and intelligent prompts is more valuable than the PR experts in-person contribution.
The PR experts are trying to address and encouraging you to invest in too many moderate and low importance matters.
They start talking about deliverables not results.
They don’t clearly attempt to frame or re-frame the exciting news, in ways you hadn’t considered before that clearly create a “siren call” to your organisation’s value.
The concept of “reverse benchmarking” is greatly overlooked by a lot of entrepreneurs, executives and investors. When everyone turns up to a business meeting in a suit with an open neck white shirt, they look like extras in a film. A sea of dullness, and a lack of originality.
Rather than fret about what the competition are doing better than you, why not focus on what you excel at that they don’t, and do it consistently better than they ever do. People will remember and remark on that if they recall nothing further from their interaction.
I have only had two clients in 35 years of business, who have threatened to or failed to pay me for my advice. Most trusted advisers will rarely tell you their war stories (personal embarrassment or vulnerability). I am a contrarian. We learn from our own and others’ misfortune and build an “institutional warning system” and risk mitigation with experience.
Situation No.1: The first a Dubai royal family-backed hotel luxury management company, Tiara Hotels and Resorts, fired my buyer and the entire executive management team in the midst of the 2008 financial crisis. The remaining employee a UAE Financial Controller sought to renege on our agreement, and outstanding invoices.
My response: a robust chronological provision of all correspondence and a face-to-face meeting in his office, which led to acceptance that all project objectives have been realistically met led to release of the £60,000 equivalent monies owed.
Lesson Learned: doing business in seemingly cash-rich, hard charging and “first world” economies, backed by sovereign wealth, and led by world-renown executives, is not “risk-free”. Where local legal systems are tilted in favour of local businesses, the best form of protection in corporate advisory is (1) demanding 100% payment upfront or front-loaded increments that exceed the value delivered, (2) be highly judicious about where and with whom you do business, and (3) high growth markets are invariably more fragile than you ever imagine and you need to be factoring in a “risk premium” as an advisor.
Situation No.2: A mid 50s seasoned Florida tech entrepreneur with two successful exits was introduced to me by a childhood friend of his and business acquaintance, seeking counsel about the profitable growth and expansion of his latest venture. His appearance, convivial demeanor, and the setting over Zoom in the midst of Covid reflected his past success, and enviable country club lifestyle. Against my first principles of “no upfront payment, no advice”, we agreed a 6-month retainer with two staged payments from his personal holding company, not the new venture, at 3 months, and 6 months. Fees due, as invoiced. Our weekly calls would touch on his progress attracting capital, product approvals/feedback, and developments within his team and strategy. As the months went by, he asked in good faith for the first payment ($18,000) to be aggregated with the second on the understanding our relationship would extend substantially beyond 6 months. With growing trust in our weekly engagement, I agreed against my better judgement. As could be foreseen, his capital raise and regulatory approvals overran our immediate 6-month advisory term. Conversations about an extension were met with stalling emails. Invoices went unpaid for 1, 3, 6, 12 months and beyond. Text and email apologies and guarantees of payment then hit a wall of silence. I was being “ghosted”.
My response: Offers to mediate our growing dispute by voicemail, email and text and through the intervention of our referral source, merely led to “acknowledgement of the debt and I’ll honour it!”. Yet his actions conveyed the polar opposite. As the quarters clicked past, I’d send reminders including fresh invoices with the compounding interest he had proposed at the outset of our engagement for deferment to a mid-term payment. I weighed up legal action or debt recovery services to recoup the $40,000 debt but the probable time and expense outweighed investing good money after bad money. I was soon to learn that I was not alone when major US lenders pushed a foreclosure action on his home, and to cap it off, he pulled the same deceit several years later on his childhood friend.
Lesson Learned: in the world of trusted advisory world don’t confuse the reassurance a trusted referral source might give you, a well-to-do client’s accouterments of wealth or a prospect’s past success with an upfront financial commitment before you start working together. Fraudulent and unethical clients come in all clothing, sex and sizes, including sitting behind mahogany desks, wearing crisp white Ralph Lauren shirts, and gently lifting their horn-rimmed Dior spectacles to tell you about their kids exploits in the weekend’s country club tennis tournament. None of us can predict the future but we can expand our control over the entrepreneurial risks that we are taking today.
Life isn’t fair, and nor is business as solo or small boutique advisory business owner. Get wise and stick to your principles!
Is your positioning to your ideal commercial partners, ideal client buyers and ideal investors largely a re-stating verbatim of your methodology (features or benefits) or prefaced, in powerful language that demonstrably portrays your “fame”, driven by the scarcity and dramatic value that you are putting on the table now, giving you maximum control of the immediate discussion?
A great many highly seasoned entrepreneurs, executives and managers rush into, and “project out” a self-centred, dull and mechanical story in their own context expecting others to go “wow”. They don’t want to listen to solicited advice (ego) or see a need to invest in the requisite preparatory work.
When the reality is nine times out of ten they receive a polite “that is nice to hear, I’ll have my subordinates meet you”, “let us think about it” or “we’ll get back to you”.
What’s in it for the other party (compelling real and immediate business with minimal personal risk), and the scarcity (clearly cannot wait for other alternatives), is simply not evident.
Nor does the other party have the time, energy or money to investigate if it indeed exists.
95% of such meetings in my experience lead after the first or if you are lucky, a second meeting, to a “no need” or “no urgency” decision.
You and your story-telling (“positioning”) are the problem. If you think you are good at it but see a growing pattern of such responses, look yourself in the mirror, park the ego, and take qualified expert advice. You just might see the error of your ways.
If your ego or blind belief in your proposition won’t allow you to do so or you don’t see fault in your own language, the uncomfortable truth is no amount of wishful thinking, is going to generate your desired outcome.
There is a cadre of idiots, who happily take to LinkedIn to offer profound comments, often under posts from people with a bigger personal brand than their own. “Rent-a-joke” as I term them.
One idiot this morning wrote alongside a post from Mark Fitzpatrick, CEO of UK wealth manager, St James’s Place, “if asking for Advise, remember one thing, you are supposed to be getting the experience and thoughts of others to help you reach a decision to allow you to take an action. It is NOT supposed to be used for you to confirm the decision you have already made, that’s called affirmation or validation.”
I’d estimate 75% of a wealth manager’s clients at in-person or virtual meetings are not seeking investment advice, but reassurance. 60% of my strategic advisory clients similarly know the answer and are delighted to pay for the reassurance (the avoidance of stepping on “landmines” while growing their own or their investee’s business). It is similar to the answer “Why do people go to the doctor?”
Behavioural scientist, Rory Sutherland, points out adroitly that there are many spheres of human action in which reason plays a very small part. Understanding the unconscious obstacle to a new behaviour and then removing or creating a new context for a decision, will generally work much more effectively.
The bane of entrepreneurial advisory businesses is
(1) characters that we implicitly trust, and who exude shared values but prove to be untrustworthy and/or unethical customers.
(2) a change of circumstances in the business (delays, terminations, restructurings) where the relationship changes from a peer-level trusting one to an individual, who willfully ignores the trust and respect earned.
It is most often manifest in bad or non-payers.
My observation is that we make informed judgments and if less than 2% of our customer revenues fall into this category we are doing well.
Yet there are “red flags” in the pre-deal negotiation that trip up even the most seasoned of professionals. Clients who won’t accept payment upfront, who seek to defer payments or even voluntarily offer to make deferred payments with interest. Their resistance pre-deal (particularly common in start up and other cash-strapped businesses) is one of four forms: “no trust” (a belief you must prove to them you will deliver success before being paid), “no hurry” (a belief you’ll voluntarily cut them some slack), “no need” (a belief you’ll happily play banker for their entrepreneurial risk taking) or “no money” (a belief you’ll voluntarily start work without accepting any commitment from them or contingent on other events arising e.g. fundraising in startup).
Where do those beliefs start from? My experience is 90% of the time they start from the language you use, yes, you use, which controls the pre-deal discussion and the relationship that ensues. Notwithstanding the 2% who are simply unethical but you don’t spot it.
You have a choice. Accept or turn down the business. Please don’t come whining about lousy payers. Lousy payers are invariably a function of how desperate you are for the business, and the weak verbal and written language you use pre-deal or simply not raised manifest in your relationship, not the commercial and legal terms.
Why are you doing the client’s “heavy lifting” (routine tasks, capital and labour intensive work)? Is it what they actually value about your expertise and need today or you think they value (past feedback) because of a past need? A great many businesses, who remain unwilling to ask themselves these uncomfortable truths, think they are “safe” in the same old activities when the exact opposite is true.
frame your objectives clearly (raising money, selling/buying the business, refinancing, merger or joint venture)
present alternatives that demonstrably are the simplest and easiest (fastest) route back from your goal to today
articulate powerfully the pro’s and con’s of each
swiftly help you select the the best alternative.
That may sound simple but it rarely is when mutually-exploring a relationship.
Is it you (entrepreneur/executive), who is unclear about your desired outcomes or the adviser, who insists on taking you through a convoluted tour of his or her methodology, to arrive at point where you conceptually agree it makes sense to work together or end the conversation? In 87% of conversations, where I have brought together two parties, it is the latter. The reasons are largely about the adviser’s (lack of) expertise, knowledge (absence of a recent track record of success) and their own self-worth (need to justify their fees vs. value delivered i.e endless “needs” assessment).
If you are the best-in-class art dealer, racehorse trainer, or headmistress, they possess an “eye” for their ideal prospect, move at a comfortable pace and don’t fear turning away unsuitable candidates. Why would a corporate adviser not possess the same skills, behaviours and expertise? Perhaps they are revealing their unsuitability and poor “fit” with your needs.
There are commodity businesses (discount airlines, railways, minicabs), whose whole business model is about price extraction commensurate with the utility of the product or service in the customer’s mind. “Corporate dentists” (Ryanair’s CEO Michael O’Leary). Someone with few friends, and those who do befriend them strike a “compromise of convenience” (utility of the product vs. minimal time, money and energy).
Building and leveraging “market power” is the currency of their business.
I have always thought it stupid complaining about their service, rather like whining about an errant boyfriend, who has led a life of non-commitment. What did you really expect?
When financial services and professional services firms (banks, wealth managers, insurance brokers, travel agents etc.) try the same pricing tactic (ancillary admin fees), and sell us on their relevance, premium brand and perceived value, it is “price extortion”. It is comical.
These are businesses run by fools, treating us as fools, nothing more.
