Venture Capitalism. Vulture Capitalism. When I hear those words, I immediately envision business owners whose top priorities are their investors exit plans, and subsequently are serving their investors rather than their customers. I’ve been a business owner long enough to see the effects of vulture capitalism within my industry. The landscape is littered with our competitors’ corpses and lingering bad business practices. And what’s left to show for it? Customers picking up the broken pieces of a defunct service agreement. It’s sad and very recognizable to see customer service go by the wayside… and even more disheartening to see how the customer becomes the ultimate victim of it all.
What’s the Real Cost of Doing Business?
I won’t deny that making money is a good thing… actually it’s a great thing. However, with the acquisition of new customers comes a reality beyond the money. The company and consumer should fully understand the benefits of partnering and look forward to a long relationship. You both have, in a sense, invested your time, money and energy into each other so making the most of your partnership should be the goal. There’s a responsibility to onboard customers truthfully, realistically and with respect. Desired client acquisitions should be viewed as relationships that are forged for the long haul, not a one and done that satisfies the immediate need to look profitable for your investors’ exit plans.
All this said, there are times when investment money can be a savior to your business. Necessary and ongoing software development, sales and marketing, and operations can be what is desperately needed to help your business not only survive, but also endure. In these situations, investigate your options thoroughly and don’t leap before you know the extent of your potential partners’ involvement and understanding of your industry, competition, business and long-term goals. The more aligned you are with the investors, the more likely you’ll find a harmonious and successful working relationship.
Don’t Judge a Book by Its Cover
Research tools are available for consumers to investigate a product or service prior to purchasing, but many people fail to use these to their advantage. It’s important to dig deep to uncover any hype or misrepresentation. As human nature goes, people will be dazzled by the shiny object. The perception being that what appears to be a duck and presumably quacks like a duck must be a duck, even if we’re not totally sure what it is. This mentality can easily happen in the minds of consumers, because they believe what is large, expensive looking, flashy, and presumably the next best thing, must be what they should have.
Peeling back the layers and looking deeper into our perceptions often reveals the truth and accuracy of what we believe to be real, and with that a clearer picture of what is actually in front of us, is revealed. Consumers don’t want to be misled and certainly don’t want to spend their hard-earned money on a bill of goods, but when companies invest large amounts of money on marketing that causes misdirection, consumers can be made to believe in brands that will not or cannot deliver on their claims.
It’s important to vet out all brands and fully investigate their worth. Look beyond the pretty pictures. Ask tough questions. Dig for the truth and do not settle for being misdirected. It’s easy to settle, but ultimately when you do that, you have conceded control of your money and fate, along with opening yourself up to the disappointment of poor service, payment for an over-rated product and years of frustration trying to divest yourself of the albatross around your neck.
Reputation Management
In today’s world where nothing and no one can hide, apathetic interests are quickly identified and exposed. Companies that continue to practice a narcissistic philosophy, are myopic at best. To live today without worry of tomorrow is tantamount to extinction. This form of self-centered thinking holds customers in low regard with businesses believing buyers are not the reason the doors stay open and lights remain on… after all, they have millions from their investors for that purpose.
Areas that should never be overlooked or neglected are customer referrals and authenticated product reviews. Both of these speak fathoms about your business’s reputation and matter to any organization that is consumer-oriented. Further, they’re likely a critical part of the customer pipeline. When consumers review sites such as Angie’s List, Home Advisor, TrustRadius and Capterra they should be looking for feedback from other people’s experience to guide their decision making.
And most importantly, take time to think about the type of pipeline you’re developing. Attempting to bring on new clients by whatever means necessary, especially when done to satisfy investors, is a house of cards that will eventually collapse with calamitous results for the customer. If you’re paying your customers to refer business to you or to write unsubstantiated reviews, you’re building a pipeline of business under false pretenses; this is a dishonest practice and a conflict of interest, and it will backfire with negative results. Having brand ambassadors who have a vested interest in the success of your organization because they realize the mutual benefit of using your product or service is more valuable to you, in the long run, than false reviews or paid referrals for new customers.
Take a Lesson
There are a lot of great business leaders in this country. Some of which conduct business with the highest of moral standards. They see the value in a win-win situation and recognize the long-term benefits of ensuring everyone with a seat at the table is well served.
Ben and Jerry’s is a fine example of this. The core mission of their business aims to create linked prosperity for everyone that’s connected to their business: suppliers, employees, farmers, franchisees, customers, and neighbors alike. They know that when these stakeholders win, they win too. This philosophy creates enduring and satisfying results for everyone involved. Partnerships that are structured in this manner make doing business with each other a joy, and less likely to dissolve due to unfair or deceitful business practices.
When it comes time to consider your potential partners’ business philosophies, consider their history of doing business with other companies. Do they have a reputation to churn and burn? Yes, this partnership may infuse money into your business, but keep this in mind, their exit plan is the end goal and always top of mind in a churn and burn situation.
At the End of the Day
I like to believe that “good guys” can finish first in business. Good business people are those who are not self-serving, but are people who understand who it is that they serve, and they serve them well. This understanding is important because it puts motivation into context and gets priorities straight. Everybody wins in this situation. Companies make money. Customers get what they want and hopefully, return to buy more. Companies that conduct business with their customers in mind, will in turn, be top-of-mind to their customers.
I don’t profess to tell other companies how to conduct business, however for my company inviting in capital investors has never been an option. I choose to work with people who believe in the mission, vision and values we’ve set forth as a company. Capital investors are more concerned with how their exit plan will manifest and are not focused on the endurance and critical needs of the organization as a customer satisfaction machine. This should not be where your attention is focused. Your customer is the true partner.
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