Contracting out your reputation – 5 questions you must ask

We’ve seen a sobering example this month that should send a shudder down the spines of any company executive that contracts out customer sales or service to a contracting supplier.

Energy company AGL was ordered to pay $1.55 million in fines thanks to just one dodgy salesman working for a contractor in South Australia.

We are not talking here about a series of events – the case that’s spun out into major reputational damage and negative publicity involved just one encounter with a householder about switching his retail energy contract. 

Beyond the financial pain, just consider the damage to the company’s brand and reputation. 

Don’t even get me started on the whole idea of pushy salesmen doing the old door-to-door routine. (Yes, I know some sales pointy heads will tell me they do it because it works – but at what cost?)

Incidents like this one highlight the need to ensure any contracted out service includes significant control measures that guarantee the people acting on your company’s behalf live up to your brand promise. 

I strongly advise my clients to look closely at any arrangement they have in place that involves the contracting out of services to third party suppliers and ask these questions:

  1. Does the legally enforceable contract include a requirement that people employed by the contractor understand and will comply with your customer service standards, values and expected brand behaviours?
  2. Does it require that any new employee working for the contractor undergo an overt training program to ensure they understand what is expected of them?
  3. Are you regularly auditing the performance of contractors in relation to employee compliance with your customer service standards in both the letter and spirit of the law?
  4. Are there financial penalties in place where employees contracted by your service supplier fail to meet the standard?
  5. Are you prepared to terminate the contract for repeated contraventions of your service standards?

If you can’t answer “yes” to every one of these five questions, I’d say you are carrying a significant risk that needs to be addressed post haste.

For all full details on the ACCC case click here.

The danger of distance

Wars are fought at a distance; battles between families are often fought at a distance.  In fact, in my experience distance is always a factor when relationships breakdown between individuals and organisations.

Of course, there is a time for respecting someone’s space and nothing can be gained by aggressive confrontation.  However, while our nature is to separate ourselves, for companies and corporate entities that often just makes things worse.

Distance isn’t just about physical separation.  It can be the perception of mental distance, a sense that you simply are not prepared to come into my mental space and see or feel things from my perspective.

The mining company executive who sits down in the dirt with a group of tribal elders is far more likely to succeed than one who stays in his city office tower and sends out letters via his legal team.

Bridging distance, reaching out, shows respect.  You may never agree, you may never be able to reconcile your views of an issue or the world in general.  But reaching out shows respect and is likely to significantly lower the risk of your separation turning into a damaging conflict

How often have you based your opinions on someone from hearsay?  You build up this image of a cold, disinterested, hard-hearted individual.  Then you meet. The warmth of the handshake, the look in the eye, the nervous first meeting, realising you both have hopes and fears.  There aren’t always fairy-tale endings, but stepping towards rather than away means far less chance of a nightmare conclusion.