A lot of the staging technology we see on most big shows has been around for a while. How do we upsell clients in an environment where a lot of prices for displays, projectors, etc., are actually declining?
I'm reminded of the Coen Brothers movie, Fargo, where the hapless protagonist, Gufstafson, cons a young couple out of $100 for undercoating they specifically declined on their new car. The slimy sales guy's obvious lack of ethics made me cringe. On the other hand, he did make the sale, padded with a few more bucks of profit thanks to the unwanted add on.
How often have we, in the course of our business day, charged a client for something they didn't need and felt proud of it? If so, what are the ethical standard are we expected to uphold? Doesn't caveat emptor apply to our market? To help me consider these issues I pretended to ask an expert in the subject to join me in a short Q&A session just before he was scheduled to appear in court for the opening statements in his fraud trial. Kenneth Lay, former CEO of the former energy company Enron, presided over a corporate culture where fleecing the customer was often the goal. That, in some cases, the customer was entities like the State of California made it only more startling. I figured he was the perfect person to help us understand the ethics of selling, so I made up this interview with him.
:The readers of Rental & Stagingreally appreciate you taking the time to discuss the ethics of the upsell with us, as you are generally acknowledged to be a master of the form having successfully sold concepts that didn't really exist to governments and financial markets for many years.
Fake Ken Lay: Well, upselling is really an art. It's the art of convincing the client to pay for something they didn't even know they wanted. For example, let's say a client has been doing his annual conference with your old analog camera system and has been perfectly happy. However, this year, your new SDI camera system is sitting idle and you'd really love to rent it to this client. Here's what I'd do: I'd call the client's boss and invite him out for a round of golf at my club and take the opportunity to tell him how his underling has been screwing the company by not having the best available equipment at the conference and should he decide to upgrade to the new system, the CEO will look like a Hollywood star and will probably give him a big, fat bonus.
Wouldn't it be more respectful of the client to offer to provide the new gear at the same cost as the old as a one-time enticement, hoping that the demonstrated improvement will convince the client to pay more the new system next time?
FKL: Uh, yeah I guess it would, but don't discount the importance of taking the big guys out for a round of golf. After all, they're usually the only ones who have time for leisure activities since your client is likely to be too busy working the shows. I remember the time I was playing golf with some clients and they mentioned they were looking for someone to handle some specialized energy services. At the time, my company didn't provide those services and had no intention of doing so, but in my view any business is good business so I opened my mouth and told him we could provide those services at 10 percent lower cost than his current provider. We got the contract and ended up charging the client more than they had been paying.
But how did you gear up to provide this new service so quickly?
FKL: Hey buddy, that wasn't my problem. You know I wasn't dealing with all the little details. As CEO I have to concentrate on the big picture.
Wouldn't it have been more appropriate to research this new market as a possibility, gauge your client's requirements, and make an offer after all the contingencies had been analyzed? For example, you might have been able to find a willing partner to joint venture the project and provide the needed expertise, prior to making the commitment. I can recall examples in the rental and staging industry where staging companies partnered with specialized providers such as simultaneous translation companies to expand their markets.
FKL: Well, you've got a point there and since that particular venture didn't turn out so good some additional analysis might have come in handy. But you know what they say; the Monday morning quarterback can always make the big play. The thing is, you guys in the AV business have an issue because clients are constantly provided with opportunities to downsize their projects by using equipment that costs half the amount of the old stuff but works even better. While it's always possible to convince the client that he should pay the same higher costs he paid for the older more expensive gear, you'll need the selling chops of Ol' Kenny-boy to make it work. Probably better to play it straight and look for opportunities to provide more gear in the context of the client's requirements. In essence, find ways to improve the client's image and experience incrementally by working within the client's concept. For example, have the client consider using simple scenic elements and using media technology to dress those elements rather than pay some scenic shop to build expensive, complicated scenic pieces.
I see what you mean. Use the technology to take over more of the show's non-technology budget.