Customer and subcontractor. Two mistakes manager

In this topic, I would like to talk about the relationship between the customer and the subcontractor. I will try to classify and characterize the main types of interaction between them and highlight two mistakes of managers, one of which leads to the loss of a client, and the second to a loss of profit. Well, let's touch on the moral and ethical aspects of this relationship. These errors are very simple and understandable, however, managers and managers of companies continue to attack these rakes, resulting in unnecessary monetary losses and unreasonable claims to each other.

We define in terms of

A customer is a person or company that appeals to a customer in order for the latter to do some work.
The customer is the company that the customer turned to.
A subcontractor is a company or individual (freelancer) to whom the customer wants to transfer the work.
Fixed payment and fixed work - a clearly defined amount of work, for which a clearly defined fee is imposed (paid service agreement).
Work for a percentage is a kind of, possibly variable, scope of work that the subcontractor performs on behalf of the customer (a partnership agreement).

Types of relationship between customer and subcontractor

Consider the 2 most common types of interactions. This is a work under a paid service agreement and a partnership agreement.

For a paid service agreement, it is typical:

• The customer pays the subcontractor a small percentage of the amount received from the client. The goal of the customer is the maximum profit, he can always transfer the order to another, more “cheaper” subcontractor.
• In order to guarantee the quality of the work of the subcontractor, the customer exercises strict control over his activities, sets specific tasks for him, and tests the results of the work.
• Because the customer is always aware of the progress of work at the subcontractor (due to control) and is sufficiently qualified, he can competently communicate with the client through all phases of work.
• The client constantly communicates with the representative of the customer, makes sure of his competence. All the competence of the subcontractor is transferred to the customer. As a result of all this, the client is tied to the customer and is more likely to turn to him in the future.

The advantages of this type of cooperation:

For the customer: the maximum possible profit from the client; tying the client to yourself
For the subcontractor: clear and understandable objectives; no off-line communication with the client
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Disadvantages of this type of collaboration:

For the customer: you need to have an intelligent manager who understands all aspects of the work; control of the subcontractor and communication with the client is time consuming
For a subcontractor: they pay all the same significantly less than if he communicated directly with the client; in most cases you will not put work in the portfolio

For a partnership agreement is typical:

• The customer pays the subcontractor most of the amount received from the client, leaving himself a small partnership reward. The goal of the customer is to give the client away, not to mess with him and just get a small income for attracting him without any extra work.
• The customer actually gives the client to the subcontractor. He can carry out a cap of control over the work of the subcontractor, but in fact all the work, testing and quality control is carried out by the subcontractor.
• Communication with the client in the course of work, payment is also carried out directly with the subcontractor. The customer, if in the course of the work, is certainly worse than the subcontractor.
• The client constantly communicates with the subcontractor, makes sure of his competence. About the original customer no one remembers. As a result of all this, the client is not tied to the customer, but to the subcontractor, and with a greater degree of probability the next time he will turn to the latter.

The advantages of this type of cooperation:

For the customer: gave the client, received the money, but do not need to do anything
For the subcontractor: the maximum possible profit from the client; tying the client to yourself; if this is not an obviously unequal partnership agreement, then the work can be published under your own name and put in the portfolio

Disadvantages of this type of collaboration:

For the customer: the profit from the client is small; client actually give subcontractor
For a subcontractor: in addition to the main work, you must also communicate with the customer during the work, which requires a manager; the cost of such a partnership with the customer may be high and the conditions are unprofitable

Management mistakes

Now we come to the most interesting. Thus, we can distinguish two key features of the types of cooperation between the customer and the subcontractor: the nature of communication between the parties and the amount of payment to each other (here you can also enter non-material values ​​such as placing work in a portfolio). Make a table based on these parameters.

	strict control of the work of the subcontractor, the customer communicates with the client	lack of control over the work of the subcontractor by the customer, the subcontractor communicates with the client
fixed payment	paid service agreement	losing a client
work for interest	losing money	partnership agreement

Of course this is 4 perfect cases. Dozens of intermediate options may successfully or alternatively fail. We have already considered two typical cases of the contract of paid services and a partnership contract above. Two other cases are errors. Let's see why they still arise and what they lead to.

How to lose a customer

Fixed payment for the work of a subcontractor and the lack of control over it in its pure form is probably quite rare. Usually, the client communicates with the client manager, and on all technical issues he sends to specialists, i.e. to the subcontractor.

What does the client see? The client turns to the customer, a spectacular blonde manager talks to him, the client places an order. Next, he talks to the blonde only on issues where I can transfer money, and all technical issues are resolved with a certain type that has a mailbox on gmail.com, and not on the corporate domain. Then it turns out that this type is quite a pleasant and competent person who quickly and clearly answers questions, and the glamorous blonde is not always able to send the right bill the first time. Who will the client next time contact the customer, who is essentially an intermediary, or a subcontractor who does all the work? If the client is not initially focused on the design made by the studio You Know Who, then I think the answer is obvious.

What should a subcontractor do? And now the work has been completed, and the client has a new project. Who does he refer to? That's right, to the subcontractor to whom the customer brought the customer on a silver platter. In this situation, there are customer claims to a subcontractor of the form "Oh, you are ####, we are ####, and you are ###." But how justified are they? The customer received his excess profits from the first project, receiving most of the client's money and shifting most of the managerial work from his specialist, who should do this, to the subcontractor's specialists. The subcontractor has completed work on this contract with the customer and is now free from obligations to him. But the next time the customer can throw you a new big project ... for a minimum percentage of their profits from the client and even more will pass the communication with the client onto the shoulders of the subcontractor. Tell the customer, no, ###.

What should the customer do? First of all, hire the right PM that can competently communicate with both the client and the subcontractor. Ideally, PM should be aware of all aspects, including technical, of the services provided by the company in order to be able to speak both in a simple language for the client and in a technical language for its specialists and subcontractor’s specialists.

And, yes, it is not necessary to let technical specialists communicate with customers. Firstly, they are not trained in this, and secondly, you thereby bind the competence of your company to the competence of this technical specialist, which in turn leads to the loss of the client, because The company is eternal (well, let's consider it conditionally), and the specialist is with you only for a while. I understand that there are situations in which the best PM cannot answer the question. In such a situation, it is better to take a pause and clarify the answer from a technician. If the question is so specific that the PM cannot correctly explain it, then it is possible to talk to the client directly with the technical specialists, but let it be no more than 10% of all communication with the PM. Then the client will be sure that the PM, and therefore the company, can solve most of the problems, and technical specialists without PM can do nothing. Everything, the client will remain with you.

How to lose profit

You transferred the client to the subcontractor and at the same time control the work? In its pure form, this situation is rather hypothetical, usually errors with loss of a client are much more common. Money is able to count everything, but somehow they forget about clients.

So, if you transfer a client to a subcontractor, while retaining a substantial partner percentage for yourself, then you can control the development, suggest a subcontractor, and ultimately you can add yourself a link in the portfolio. This is one of the intermediate options, when you pay, say, half the profit to the subcontractor, give him all the work and daily reports to the client, and act as the gurus who control the process. And the client is equally likely to contact both you and the subcontractor.

But usually the client is transferred “for good and cheap”, i.e. without any control over the work of the customer and for a small percentage. What will happen if for this small percentage, you will do all the managerial work?

What does the client see? All communication takes place with the customer’s manager, the customer is tied to your company and is more likely to contact you a second time. If you had temporary problems with staff employment, then you can work at a loss, but if you simply do not have the technical ability to serve the client, then you will work at a loss on this and the next project.

What should the customer do? In this situation, control of the work can eat all the profits received from the subcontractor. Why did you give a client? Probably it was a non-core order or all of its specialists were busy ... That's all, given away - forget it. If the client is done well, he will go to the subcontractor a second time, and if it is bad, he will not return to you either.

In this situation, you can either agree with the subcontractor on a permanent partnership, according to which he will transfer you a percentage of the profits from the transferred clients, or enter into a regular paid service agreement and continue to continue to control the work of the subcontractor, but not leaving order, while paying him a fixed amount.

What should a subcontractor do? If you see that the customer is not able to serve the client, then offer him to take on all the responsibilities of communicating with the client, in the end he pays you most of the profit from the client for the work. And so the customer decided, gave you the client, got his percentage. The project was successfully completed, and the client came to you with a new one. Then there are claims of another kind: “How is it that we are such a client to you ... and you are only ### to us from the first transaction, and now you have ### profit from it”. Is such a claim justified? Yes! The customer gave you a client, along with him, and most of the profits from the first project, did not burden excessive communication with the client and bureaucratic red tape ... It is logical to pay him a percentage of the profits from subsequent projects, and a satisfied customer will still give you customers for such chocolate conditions.

findings

Customers hire competent PM and do not allow the client to communicate with the subcontractor, bypassing it; Do not be surprised when savings on the PM and the transfer of authority to communicate with the client to the subcontractor leads to the loss of the client; do not control projects submitted to the subcontractor for a percentage of the work, they are no longer yours.

Subcontractors say goodbye to customers who shift to you all their obligations to communicate with the client and pay a penny; rejoice customers who shift to you all their responsibilities to communicate with the client - with them they give you the client; Encourage a percentage of the profits of customers who transfer customers to you and do not expose unfavorable requirements.

UPD Everything described above is valid for projects in which a subcontractor is one and performs most of the work (thanks to messersveet for the comment).