Screening Out Collection Problems
Start-up technology hardware and software firms make up most of the client base of High Tech Connect (HTC), a nationwide marketing and public relations consultant brokering firm, based in Pleasanton, California. "They're desperately in need of marketing and public relations skills," says Rene Siegel, president and managing partner. "As start-ups, they can't afford the retainers and high hourly fees of major agencies. We charge $100 to $200 per hour and require no retainer. There are more requests than we could possibly handle."
In business since 1997, her firm has only seven direct staff, and a network of over 500 consultants who work on a contract basis. "Most of the consultants in our national network work out of their homes, and have a great deal of experience in marketing," she says. "Our office matches clients with consultants to achieve the best fit of experience with a business's needs.
They may never work face-to-face, communicating via computer, phone and fax."
More than locating potential clients, Siegel and her staff take great care choosing clients. Start-up companies can have strong leadership and financial backing, with very attractive products to market. The reverse also is possible. That is why HTC evaluates potential clients before taking them on.
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As one result, only one client out of more than 100 has not paid, and that one has filed for bankruptcy.
Siegel has developed a four-part method for evaluating potential clients:
"HTC is sort of a start-up, in a unique niche, and we focus on quality not quantity," Siegel concludes. "It takes time to match clients with consultants, and for work to be done correctly. We can't afford to make a bad client choice, for many reasons, not the least of which is the chance of not getting paid."
Editor's Note: This article originally appeared in the Credit & Collection Manager's Letter.
- Gather background information. "I try to gather as much information as possible," Siegel says. Particularly helpful have been the Forum for Women Entrepreneurs and Grace Net, a network for women executives in high technology. She sends out requests for e-mail information on both prospective clients and their management. "I'm trying to find out what the company and its leadership have done, and what kinds of financial backing they have," she adds. "It is quick and very helpful, even if I get information from just a few people."
- Interview the prospective clients. Siegel takes the time to talk with them by phone. "I try to find out more about their company, and what they expect from a marketing and public relations program," Siegel points out. Of particular concern is how much they value what we do. "Those who think that these services are too costly $150 are rarely taken on. They don't have an understanding or respect for what marketing costs when done professionally and what results it can produce.
- Check Web information. Sometimes a Web page will provide additional information about the company, its mission, products, and uniqueness. It often provides valuable background on the start-up's executives and investors, enabling Siegel to gauge the company's financial backing, stability, and even integrity.
- Listen to your intuition. The sound of a potential client's voice is very important. It provides an indication of the level of commitment the company will have to marketing and public relations. The executive team's strength also is very important; HTC looks for managers with a proven track record in the high-tech industry These elements are put together with Siegel's 13 years of experience, discussed with staff and consultants, and used to make a decision.