Audio version 7 mins some (justifiable) swearing. Or listen on Spotify.
(Note 30/5/20 I wrote this two weeks ago, obviously not expecting the nightmare events currently unfolding in the US. I’ll leave the looting analogy in the spirit it was originally meant, please don’t think this is some clickbait piece taking advantage of this terrible situation.)
Ring That Sales Bell!
Our industry is still 100% illegal, so the prospect of any revenue is quite intoxicating right now.
When a sales enquiry comes in from a big financial institution, we light up like a dog sighting a juicy tennis ball:
“We really like those chat shows you’ve been doing with all the guest speakers, just wondering if you’d be interested in doing something similar for us.”
Woo hoo! We’ve set up pop-up studios full of very expensive gear to do virtual events in most of our offices. Compared to our regular revenue, it’s beer money at best. But every dollar is pretty significant right now, and it keeps our people occupied and motivated.
We’ve been using the studios to do interviews with a range of experts, as a joint initiative with our friends at Saxton Speakers. These are presenters who normally cost thousands. The shows are free, to help our community through the lockdown grimness. And if that leads to some actual paying gigs, great.
This sales call felt like it had some solid potential. They have staff in the thousands. Then they casually drop this:
“Oh, we don’t have a budget. You know, things are tight with the COVID stuff, is it possible you could do it for free, to help us through till we get more funding?”
What the actual fuck.
Someone on a salary, who works for an organisation with a multi-billion dollar balance sheet, is asking a modest family-owned company in an industry they know to be on its knees, to work for free. They would like their internal budget cuts to be our problem. Because, you know, nobody’s paying for much at the moment.
This is not the same as picking up a sweet bargain at the Half-Yearly Sale. This is essentially looting.
It’s walking past stores that have been torn apart by the virus shutdown hurricane, noticing that their front door is swinging open, and helping yourself to a free television from their front window. Because you can.
Meanwhile in next-level dog acts: last weekend, the first days when the lockdown was loosened to let restaurants sit an unprofitable ten people at a time, food journo Anthony Huckstepp reported multiple restaurants getting no-shows from booked customers.
Honestly, how much of an unfeeling sociopath would you have to be? At a time when most people are discovering new reserves of niceness and public spirit, supporting their local businesses and generally doing the right thing.
Looting Your Own Staff
COVID Looter Syndrome isn’t just a supplier thing.
Right now another huge financial institution, whose revenues haven’t dropped much at all, is asking the majority of its staff to accept a 20% pay cut. Why? Because virus-affected industries are doing it, so they saw the opportunity. They’re quite open about how that 20% pay cut will ensure this year’s dividend payout goes ahead. Of course, the CEO gets a cut of that.
Everyone that works there knows what they’re up to. Is it even legal? They think they have a workaround for that, but even it’s not illegal, it’s deeply immoral. It’s a smash’n’grab raid on your own staff.
Their competitors aren’t doing it. What does Looter Corp think is going to happen over the next five years? Do they think those staff are going to forget? Or will they bail at the first opportunity?
The Long-Term Cost Of Looting
I can’t believe I even have to write this, but it is not OK to take advantage of suppliers and staff under these conditions. Sure, ask for a deal, but not extortion. Whatever small, dirty wins you stand to clock up, you will lose many times over from the evil smell emanating from your reputation.
During the peak business inferno after Black Friday in March, I wrote:
The actions you take through these few weeks will be remembered for decades.
We, and others in our field, kept the majority of our staff, you can read about that experience here. Plenty in our industry threw all their staff overboard that same week, like some hideous 18th century slave ship. A week or so later, the government subsidies arrived and most of those businesses brought those staff back.
Too late. We all saw what you did. It’s seared into the memories of your staff, and they will never trust you again. Ask them to ‘go the extra mile’ or whatever in 2021 and they’ll say ‘sure’. They will not go an extra inch for you until the end of time.
If you’re a buyer in any field, it’s important to think further ahead than this quarter. Suppliers you took for granted will not be there in a year. Yes, there will be surviving suppliers. The question to ask is: will there be good ones? It costs more to be good in any field. Let the good ones die and you’re left with the bare-bones, zero-response, pay-for-every-extra companies, and your entire business life will be a series of risky, untrustworthy transactions.
There Is No Leg Up From Looters
If you’re a desperate supplier, thinking doing free work will give you a leg up for future paid work, let me give you my personal research findings from decades of testing it for you.
There is no leg up.
Think about the rat-like mindset of clients who ask you to do free work. In the future, will they choose you, or will they keep trying to sniff out others who’ll take their bait? They certainly don’t care about the quality of the work they get, or they wouldn’t be asking you to do it for free.
I’ve literally never seen up-front free work turn into a legit paying client. Not. Fucking. Once.
Our industry has plenty of those jackals, and one of the few pleasures of COVID-19 has been watching some of them get torched. Most clients have behaved with above-and-beyond honour through all this. I’ve been speaking to our competitors pretty regularly through the virus times, and we’re looking out for each other. Do we all know who’s been naughty and who’s been nice?
Oh yes indeed. Santa’s CRM is nothing compared to our list. Business karma is real, and it’s a long game. Be good and you’ll get nice things.
Speaking of the interview shows, check out the program for the next few weeks. There are some really good guests coming up. Startup people: next Tuesday 26th I’m talking to Jodie Fox, who started Shoes Of Prey. I wrote about them last year, after they published a brutally honest account of their VC-fuelled expansion and subsequent collapse. Should be an interesting chat.
If you’re new here I write a story like this each Tuesday, drop your email here to get it sent direct.
Great article-as always!
There’ll always be people asking for and others offering freebies; I know from both sides.
Max I now offer is a free consultation, which tells us both if we want to work with each other.
You didn’t say but I guess you didn’t do a freebie show…
Thanks David, good approach. There was no free show!
Great words Ian!
Mostly I think they’re lovely, clueless ‘wanna-be-hustlers’ with no idea what they’re realling asking for. Like teenagers on summer holidays, within the warmth of a ‘guaranteed’ job. All we can do is say no, smile and be thankful it’s not our company’s brand taking a kick.
Thanks Leona! Good point about the teenagers, more clueless than malicious
[…] Also if you liked this why not read Why COVID Looting Will Cost You Long Term. […]