The founder keeps promising customers “mates rates”.

Dear Aunty B,

I have been brought in by the founder to manage a three year old business that has a lot of problems. There is a “she’ll be right” attitude – which also happens to be the founder’s favourite expression and seems to express his attitude to his clients. Not only do the staff seem to take the clients for granted, but the founder has done all these deals at “mates rates” with clients, so every time I try and raise the price they ring the founder and he gives them the nod and then he comes into my office and pleads their cause with excuses like “they have been with us from day one”.

He has set very high targets for me yet I don’t feel I have a lot of control to make the changes I need to.

Any solutions Aunty B as I am tearing my hair out and I don’t have much hair left anyway!

Going bald,
Perth

Dear Going bald,

Oh boy. The founder who loves his mates. First of all, understand that this is how many successful entrepreneurs get their venture off the ground. They offer special deals as part of a “relationship” building exercise. They often use these relationships as marketing channels and they get these customers to “champion” their businesses.

But by year three, you know so much about your customers and you have added so much value to the deal there are no “mates rates”. You also need to migrate the customers away from the founder to you and your sales team.

Here is what you must do. Have a “closed door” talk. This means what it says. Ask him into your office and close the door. Tell him this is a serious matter, that you understand his strategy but at the three years stage things need to change. To grow the business you must get proper yields, you must build the confidence and skills of the sales team, you must sell more products and services to the existing customers and the relationships must become more professional.

Make sure you don’t get personal as founders are often a complicated mix of insecurity and inflated egos, and easy to upset. Just keep talking about the evolution of the company and that it is natural these tensions arise when the smart start up is moving from the founder-owner model to a young corporate.

Have a great sales plan to present to him and show him the increase to the bottom line if he limits his involvement just to networking and listening to the customers rather than negotiating deals. Always make sure a sales person goes with him on visits to “talk the numbers”.

Be very strict. He really needs to get the sense it is “your way or the highway” on this issue. He will respect you for it, I promise!

Good luck,
Your Aunty B

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