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.

First impressions

Imagine you have 60 seconds to advise a business on how to improve its brand and reputation.  What would you say?

It is never that simple of course. There is no magic bullet solution but there is one piece of advice that I think could make a world of difference to many companies: Think about first impressions.

Number one on my list would be to make sure that the person who answers the phone or greets your clients or customers for the first time is right for the job.

I phoned a large advertising agency recently on behalf of a client with a reasonable budget to spend.  I asked to speak to the Managing Director.  The manner and tone of the young woman who answered the phone was deplorable.  This wasn’t a conversation, it was an interrogation!  Why did I want to speak to him? She sounded impatient, especially when I asked to leave not only my office number but also my mobile number!  I got off the phone feeling angry, resentful and quite frankly p****d off. 

Did this young woman’s employer have any idea how much damage she was doing to their brand and reputation – let alone their sales and retention of existing clients? 

First impressions often become lasting impressions.  Just read Malcolm Gladwell’s book Blink: The fact is, people form opinions of you in the first 10 seconds.  How you look, how you speak, your manner and tone of voice.  If you run a business, have you listened in to the way your receptionist answers the phone lately? Forget analysing the monthly account - this could be the first step to solving your number one business problem.

The brand "flash-card" test

I want you to imagine I’ve got a set of flash cards – photographs of people. I’m flipping them over and asking your first impression. Julia Gillard, Tony Abbott, Barrack Obama, Britney Spears, a famous sportsman, a super-model. I’m prepared to bet that you have an opinion about every single one of them. Good, bad, sneaky, conceited, untrustworthy, wasteful and so on. Have you met them? Of course not! Well, I saw Julia Gillard from a distance once when visited our local shopping centre.

Here’s my point – pretty much all of us – apart from that rare breed of non-judgemental folk – have opinions on people – usually based on what we have read, seen or heard via the media or impressions based on the opinions of others.