Our company, and many of our client companies, relies on the services of outside advertising providers, consultants, coaches, and salesmen. These outsourced providers make many promises and while most deliver on those promises sometimes a services falls short of expectation. Owners and managers should regularly review the performance of their services, especially those on a subscription or contract. But, the demands of business operations sometimes makes fulfilling that a challenge.
Here is a tip on the fastest and easiest way to measure the success of every service subscription. We refer to it as the LOU Principal, or Lack of Up-sell Principal.lou ferrigno
A Powerful Measurement
Have you ever been on the fence about a service provider’s effectiveness (or lack thereof)? Have you ever inquired about changing or cancelling am advertising contract, only to be informed that you already renewed it? Ordinarily this means the provider is counting on a lack of engagement when they process the auto-renewal, but just to make certain they don’t bother to notify you your renewal is upcoming. Why? Because, they know that if they ask your permission there is a high probability that the response from you will be to cancel the subscription.
This is especially true when you hibernate or suspend any service. It is very common for the monthly charges to resume without any prior notification. “We have a 60-day suspension term limit” or “the representative must have informed you that our policy is to automatically resume accounts after 30 days”.
The LOU premise is simple: if their advertising service or product was truly effective wouldn’t a professional account executive attempt to up-sell you at time of renewal? I’d imagine the representative having charts and data to show you how their service drove this metric and that data-point, and the results just scream that you should move from their silver level to their gold one.
Jeez! Where do I sign?
Instead, you learn your contract has just been renewed after the lack of engagement forces you to question the renewal dates! Funny how often that timing scenario plays out.
So How Can You Avoid This?
The LOU principal only works if you play by the other side of the table’s rules and need to make a determination for the future of the relationship. Here is a process that has proven effective for us and our clients.
With every service subscription we schedule a quarterly meeting with our account executive. We record the meeting dates at the actual signing. Today’s providers offer great analytics backed by the latest in technology but they hide it deep in websites and, frankly, business owners are too busy to diligently do the analysis.
Our policy is to make the account executive a stakeholder in the success or failure of their service or product, and to make the contract a shared investment, rather than an annuity for them.
In addition, we also set up a reminder for 30-days prior to the end of the term. Then we set up another one for 12-days later. This helps us insure the vendor is contacted before the auto-renewal is acted upon.
But, by the third meeting with the advertising account executive it’s pretty clear whether or not we will be renewing, and this gets communicated well before the term ends.
So, make a list of your third party suppliers and check off those who aren’t trying to up-sell you. It might teach you something important and save some capital.
And for any service providers reading this post take note- the word of mouth about these tactics is killing you!
