Startups: Are You A Trusted Adviser Or A Responsive Assistant?

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Startups: Are You A Trusted Adviser Or A Responsive Assistant?

 

We've all heard the cliche "The Customer Is Always Right".  Those of us that have actually been in any type of business and had real interactions with customers for more than 2 days have learned that this statement is factually incorrect.  The customer is decidedly not always right.  The real question then becomes, when (if ever) should you act as if the customer is always right -- even when you know he's not.

My simple mind addresses this with one simple question:

Are you a trusted adviser or a responsive assistant?

My best analog for the trusted adviser is a doctor (or an attorney -- all lawyer jokes aside).  If you're doing something really stupid, a trusted adviser should know better and has a sufficiently strong relationship with you to smack you upside the head and tell you you're being stupid.  They're the expert, and that's their job.  The fact that you're paying them money has little influence on the relationship.  They don't think of you as a "customer", and they know you are not always right.  On the other hand, a responsive assistant is someone that does what the customer wants because they don't have (or are not perceived to have) any special skills or talents beyond the customer themselves.  They're not experts, they're time-savers.  There's nothing wrong with either of these types of businesses (and both product companies and service companies can be categorized this way).  Problems arise when you think of yourself as one type and act in the other.

I've met many startups that are faced with this dilemma (especially in the early stages).  My current startup, HubSpot, is a decent case study.  We're in the internet marketing software business.  Our target customers are small businesses.  The problem that we have at HubSpot frequently (that I think many of you might have as well) is that customers often ask for things that are clearly not in their best interests. 

All modesty aside, most startups are experts when it comes to understanding their domain and their product offering.  In most cases, our understanding is much higher than that of our customers.  I'd like to think that's why customers decide to license our software in the first place.  We eat, breathe and live this stuff.  As it turns out, customers don't always recognize their own limitations or they don't trust you enough to let you push-back on their requests.

Here are the things that I think influence this dynamic of the trusted adviser (and why so many of us end up sometimes getting treated as assistants instead).  Here are some of the questions that go on in customer's minds when they try and decide whether you are a trusted adviser:

How Customers Decide If You're a Trusted Adviser

1  What's in it for you?:  Will you benefit somehow by directing me to your line of thinking?  For example, by denying my request are you reducing the amount of low-margin business you get from me?  Raising your level of profitability is not my problem, it's yours.  If you're going to make more money by guiding me in a certain direction, I'm going to be concerned.

2.  Do you understand me?  Perhaps in most cases, what you're telling me is the "right" thing.  But perhaps my business is different in important ways.  You may think you're giving me the right advice, but you're really not.  Do you really understand me and my business such that you can give me great advice and steer me in the right direction?

3.  Are you really an expert?  How can I be certain that you really know as much as you claim you do?  What if you're simply wrong and an animated logo with cool sound on my home page really will get me more customers?

4.  Did the expert make the call?  How do I know that this advice is not coming from some junior person that was just hired last week because the "experts" haven't really had a chance to spend much time on my business?

So, my advice to those of you in startup-land that want to be trusted advisers is to focus on the above questions and make sure you understand where the customer is coming from and what you can do about it.  Be transparent.  Be objective.  Be empathetic.  Trusted adviser relationships are earned but are well worth it. 

What are your thoughts?  Have you ever had to tell a customer they were wrong?  How did you handle it?  Would love to read your comments.

Posted by Dharmesh Shah on Fri, Jul 06, 2007

COMMENTS

This is a great frame to look at the customer relationship experience. Another way to ask the question - should you give the customer what he wants or what is best for him? In terms of growing a business would it be safe to say that you can reach critical mass once your market understands that the solution you create is in their best interest? Before that, you are just grinding it out with individual customers. Good Post

posted on Friday, July 06, 2007 at 2:07 PM by Mike Sabat


I was once approached by a web developer who had what he thought was a great business idea and wanted to spend money on me to market it. I felt uneasy about a copyright issue linked to his business idea which I thought he hadn't considered. At my suggestion he talked to his lawyer and the idea fell apart. I got no work from him. I did get several referrals though. I'd saved him some money.

posted on Friday, July 06, 2007 at 5:47 PM by Alex Bellinger


Very on point post and I'd actually go a step further. During the sales process, sift out the customers that are going to treat you as a responsive assistant and DON'T SELL THEM. My experience is that these customers will beat you up on price, demand services that weren't promised, never be happy and never be profitable. Why bother spending so much time on low margin customers. We teach our client's how to develop what we call "speed on bases" early in the relationship. Doing so establishes us as the expert, us as the doctor, us as the trusted advisor and we don't waste time being a responsive assistant.

posted on Saturday, July 07, 2007 at 5:24 AM by Rick Roberge


Brilliant post. I'm in this situation myself. There are features that might not be the best for the end user, but all the competitors have it, and the people who are in charge of the purchasing (often not the end users) request it. To keep or to remove...argh!

posted on Monday, July 09, 2007 at 12:18 AM by Siddharta


Great post!
Don't you find that small business owners really really appreciate it when you tell them they are wrong . . . in the sense of bringing them somethat that makes their life better. More than any other customer group, SBOs can change their opinions on a dime when something truly better comes along.

The risk, I find, is that many big companies tell their small business customers they are wrong, without really understanding why business owners are doing what they are doing. Guess who ends up with egg on face?

Mr Big Bank might think it's stupid to microwave checks. Mr. Small Business knows it buys him an extra 5 days to clear.

As a consultant, I often balance between . . . is the customer REALLY wrong or do I just not understand their circumstances well enough? AND "whoa, that is just a lame idea that you heard somewhere else".

posted on Wednesday, August 01, 2007 at 10:43 AM by Katherine Chan


This is a great post! I believe that small businesses rely on those that "know" the biz as being more knowledgeable and trusted advisers. It is important not to abuse the relationship and tell customers they are wrong all the time without true cause. I would pick one's battles carefully. However, once you figure out which customer is wrong on a given goal or point, pointing it out can build your credibility as a trusted adviser who is unafraid to tell a client when they should look at solving a problem another way...

posted on Sunday, August 05, 2007 at 12:59 AM by jonathan treiber


We offer strategic advice and business development consulting to early stage firms. As such we fit your model of "trusted adviser" to entrepreneurs. In my experience it's very difficult to tell an entrepreneur "you are wrong" (and have them listen and change their actions) because they hear this from so many of the folks around them ("get a real job", "your idea will never work", "no one else does it that way",...) that they are no longer sure who to trust. In some instances this is like waving a red flag in front of a bull: we meet entrepreneurs who are more interested in proving someone else wrong (typically from their last company) than in building a company. We work with them to estimate the likely future impacts of present decisions and understand the likely consequences. I find that a simple plan or decision tree can do more to illuminate the situation for an entrepreneurial team than any amount of telling. It's normally the question that gets them to think through likely consequences that is more likely to change behavior than statements like "you're wrong" or "this is a mistake." We also try and follow Russell Ackoff's "decision record" approach where we treat decisions as experiments and write down our hypotheses ("guesses" or "informed judgment" depending upon your perspective) about results in advance and then review them against measurable outcomes after enough time has passed. True expertise means that you should be able to explain the symptoms you looked at, symptoms you discarded as not germane, the diagnosis you have reached, the differential between the customer's relevant symptoms and your diagnosis versus other potential diagnoses, the prescription (advice) and how to apply it, and a prognosis or range of likely outcomes. In some sense it's less about who's right and more about developing a shared understanding and shared situational awareness. Trust is built over time and you have to find a model that let's you work with a customer and earn their trust. I think you also have to distinguish between decisions that are values conflicts (e.g. we want you to misrepresent a product or service to the point where you are knowingly committing a fraud) and decisions that are less than optimal, or may not necessarily get good results but are not in conflict with your values. If they want to call their product a DeNibulator, even though none of their customers have Nibs, never had Nibs, won't come to possess Nibs, and therefore don't need them removed, this is probably more of a disagreement over tactics. At the end of the day it's still their company and it's distinct from yours.

posted on Thursday, September 20, 2007 at 7:53 PM by Sean Murphy


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