Subscribe to CX E-News
Your Rules Are Out The Window
Business is a strange beast in these post-COVID times. So many carved-in-granite rules you’ve learned all your working life just aren’t true at the moment.
It’s a task to get your head around even more change. Especially for those of us in the events and entertainment game who just spent two years being repeatedly thrown over Niagara Falls for the good of the wider community, while our IT and tradie friends got showered in cash.
Now it’s skills and supply shortages. They can both work against you or to your advantage, depending on your ability to think and change. You now have more power over your customers than I’ve ever seen. If you use that situation wisely, you’ll make some good money now. Or if you let it go to your head, you can create customer resentment that will come back to bite you when things inevitably turn around.
My industry, AV rental, has a long and shameful history of giving discounts purely because the client asked for one. We’re so helpful and conditioned to say “yes” to every customer request.
“Can we change the setup from 10am to 1am?”
“I know it’s already set up and lit but can we move the lectern to the other side of the stage?”
“Can I have a discount? Because my budget is much lower than your quote.”
AV comrades, the correct answer to that last question in 2022 is: no. Your client’s budget problems are not your problems. If they walked into a restaurant and asked for the lobster, “but management only gave me a $19.50 budget this year”, you know what the answer is. They can have the prawn crackers, or they can leave.
Every client knows of skills shortages. Politely let them know it’s a constant battle to find enough people to deliver the work, and it’s really up to them to book in early or you may not be able to do the job. Which is the truth. Discounts shouldn’t enter the conversation.
If their budget is lower, help them with a specification more modest than their grand lobster ambitions.
An outbreak of supply cost madness
You need to charge more, because we’re dealing with increased costs at every turn. Our businesses need some new trucks. If we order now, the delivery date is mid-2024. Do you think we’ll be getting a discount?
Here’s a yarn to illustrate how far the balance has shifted. A friend who runs a listed finance firm had a weekend in the country planned with his wife. He got home on the Friday to find a brand new, top-of-the-range SUV on his driveway. His wife told him a dealer had dropped it off earlier and told her it was theirs for the weekend.
He called the dealer and asked, “what’s the go with this car on my driveway?”
“Ah, I just thought you might like to give it a run up the country, see what you reckon, keen to hear your thoughts,” the dealer said.
My friend pointed out it was not a demonstrator. It had fifteen kilometres on the clock. As an experience finance professional in the leasing industry, he knew that old line your dad always told you: the biggest depreciation is the moment you drive your car off the lot. So why burn that value for a country weekend?
“Get with the program,” said the dealer. “If I sell it new, I have to sell it for list price. If it’s used, I can sell it for 120% of list price because people are desperate to get one right now. Otherwise, it’s an 8-12 month wait. So enjoy your weekend.”
Strange times. If you’re rich, you go to the used cars department and pay over the odds to drive away today. If you’re a regular povvo customer, you go to new cars, where you’ll get no deal on a car arriving in the distant future. That’s the reality in so many sectors, and those of us who own expensive assets have to snap out of our old ways fast.
Time to look after your staff like never before
You know who won’t do well in 2023? Traditional tight-arse business operators who pay their staff the bare minimum and believe they should be grateful for a job. Their staff will leave for places where they get a bit of respect. When you’re used to ordering people around, having to persuade them will be too much of a jolt for some.
There are a lot of business owners who started in a time when tech staff were treated like 19th century plantation labour. They feel that if they suffered, today’s staff must also suffer. But really, shouldn’t you hope for things to get better over time? If you were a Dickensian chimney sweep, would you want your kids to inhale the same amount of soot you did? Or would you hope for jobs that are less dirty and dangerous?
In our industry, there’s less soot. But there is the total destruction of your family and social life from long shifts and unpredictable schedule changes. Because the client kept changing their mind. In a time when there’s not enough skill to keep up with demand, we have a mental health obligation to push back a bit.
The standard event model is out of date
So many rules going out the window. Here’s another close to home: the conference model. Audiences come to a generic box of a room in a hotel, where they sit quietly as a presenter projects slides at them.
Let’s step back and look at the wider view. In 2022, your corporate audience most likely spends much of their week remote working. On Zoom all day. In a chair, watching talking heads and slides for hours. A conference presentation room is basically a larger, slightly more 3-D version of Zoom, plus a bowl of Mentos and sandwiches at half time.
Conferences have always been run on the school model. Fun time with friends at lunch, cut short by a bell that rings too early. Conference managers run around and hurry everyone back to class. Obedient silence as authorities tell you how it is.
Why would you want to come into the city for that? One of the biggest issues with remote workforces is the decline of company culture. It’s hard to feel a sense of team bonding with tiny screen people you’ve never met.
When you go to the expense of bringing those people together, smart businesses want them to have a great time together. To experience something amazing, and to bond with workmates and industry associates. We’re seeing clients putting on festival-style events where there’s no compulsory agenda and no company presentations. Just hanging out and being with your people for a few days, doing a bunch of fun stuff that’s on offer, or not doing it if that’s your vibe. The audience satisfaction ratings have been off the scale.
This presents a challenge to an industry built on rooms with two drop-down screens, a lectern and PA. We’re going to have to understand that clients’ commercial goals and challenges have changed real fast. It’s a chance for us to put on a great show with a bigger budget, if you ask the clients better, wider questions and listen.
Ask “what are you trying to achieve here?” before you ask “how many screens and mics do you need?” Bonus: the client will love you because talking about themselves makes them happy.
Chaotic change means it’s opportunity time
Now is opportunity time. Because there’s chaos and that’s when customers change suppliers. Normally they’re quite conservative about that. They tell you they’re thinking about it, then … don’t. I have painful experience in this. We launched our business in 2006, after a bunch of potential clients said, “We love you guys and would totally change suppliers if you set up an AV company!”
We were so up for that sweet prospect. We borrowed all the money we could and opened in four cities in year one. Looking back, I think: were we drunk? We put in proposals to all those clients. Every one came back with:
“Thanks for all your effort, but on this occasion, we decided . . . better the devil you know.”
So we knuckled down for a couple of years of self-financed cash burn. Sometimes you have to live off two-minute noodles for a while. Then in 2008 Lehman Brothers went down, the world plunged into financial crisis, corporate budgets got slashed, and . . . the enquiries started. ‘Hi, cheaper, faster alternative people, can you give us a quote?’
It was customer habit-breaking time. We were off, and it’s all been fine since then. I’m not wishing another global financial crisis on you, but all this turbulence can present openings you won’t see in the normal times.
- Ian Whitworth is the co-founder of national AV business Scene Change. He was once an AV tech but his staff won’t let him near the equipment now. His business book ‘Undisruptable: Timeless business truths for thriving in a world of nonstop change’ is out on Penguin Random House. It’s been the #1 Customer Reviewed business book on Booktopia for the last year.
Published monthly since 1991, our famous AV industry magazine is free for download or pay for print. Subscribers also receive CX News, our free weekly email with the latest industry news and jobs.