|
The Specter of Bad Press
By: Nancy L. Somers
Editor’s note. This article raises particularly interesting questions as factoring becomes more mainstream and more people learn about our business: How do we handle (incorrect) criticism of our industry? Can bad/unfair press be overcome? What can and should you do if you become the target of negative press? Replies are welcome!
+ + +
In early 2002, I decided to start focusing on using the printed media as a significant opportunity to promote by business. My
strategy was simple, and consisted of sending press releases and stories to local newspapers in the hopes that they would run a story about my company. My efforts had yielded moderate results though nothing
spectacular. I really yearned to land a big score and get a story in a major business journal. An article with the big publications, I thought, would allow me to position my company as a national player.
As luck would have it, soon after I started working on my new marketing strategy, I got a call from John. John was an
independent business writer who wrote business articles for very prestigious publications. His roster of customers read like the who’s who of the business-publishing world.
However, these publications, like most large business, were slow (albeit reliable) payers. This had caused a cash flow crunch in John’s business. He had researched factoring thoroughly and was convinced that factoring would help his business.
A Match Made in Heaven
John submitted an application and we agreed to have a conference call to go through his questions. During the call I explained
factoring in detail and worked with John to determine if factoring was the best financial tool for his business. After going through some numbers, John became convinced that factoring would help his business grow.
John got very excited about factoring and started talking about the possibility of doing an article about my company. He had spoken to some large factors who had ignored him because his business was small. He was
happy to know there was a new breed of factors that specialize in small ticket accounts and would be delighted to do an article about them. This was truly going to be a match made in heaven – a true win-win
situation, and of course, my chance to get published in a prestigious journal.
During the conversation, John started asking numerous questions about the factoring agreement. I went through an explanation
of how factoring works. During the conversation, John started asking about the things that could happen if things went wrong. Specifically, he started asking about the powers that factors could have if he did not
get paid.
Now, as we all know, there are numerous reasons why factors don’t get paid. They range from customers going insolvent to
disputes to outright fraud. I answered this question as I had fielded all other questions – diplomatically and to the point. I explained to John how we handled each situation and mentioned that the contract
did contain some clauses that provided us with avenues to recoup our investment if we did not get paid as agreed in the contract. However, I explained that these clauses only got invoked when things went very wrong,
usually when there was a breech of contract, a default or intent to defraud. John’s questions started getting pointier and I could tell he was not very pleased. I told John that in my years as a factor I had never
had to invoke those clauses, however, I suggested that he best consult an attorney. My parting words were literally, “Please review these documents carefully as I want to make sure you are comfortable with the
details. We should only enter into an agreement if it will work for both parties”.
Although I started to get a bad feeling about the conversation I felt good with how I had answered his questions. I had been
straightforward and given him all the details that he asked for without sugarcoating anything.
No Good Deed Goes Unpunished
John got the contract and reviewed it with his attorney. He then faxed me a very large questionnaire asking about a number of
details about the contract. His fax had dozens of questions and took me well over an hour to respond to. By this time, I felt almost certain that this deal would not work. However, rather than bowing out, I chose to
answer John’s questions as best I could. His reply came within two days and I could tell by the way he worded his questions that he was not happy with my answers. His continued focus seemed to be on the
default clauses – which define the powers granted to the factor in the event of default. It was soon after that the dam broke and I got “the letter”.
In his letter John expressed his concern and frustration about the factoring process. He thought that all factors were
scoundrels that only looked after themselves, at the expense of other businesses. What is worse, John also threatened to write a negative article about the field of factoring. His last threat struck a chord with me
because I feared that his article could prominently feature my company. Even though I had done nothing wrong – and actually done everything right (or at least, I think so) – I now ran the risk of getting a bad name.
After reviewing all communications twice, it was clear to me that John’s analysis of the facts and conclusions were clearly
incorrect, however the damage was done. However, I now ran the risk of bearing some of the brunt of those conclusions.
So – How Do You Handle the Potential for Bad Press?
This experience has certainly been a lesson for me – as a person, as a factor and as a business owner. It is not everyday that
someone questions what I do for a living and makes derogatory comments about my company. Although I knew John’s conclusions were incorrect, the repercussions of his writing an article that mentioned my company could
be significant. I have examined all my options and to this day, I am not sure what I will do if John publishes an article with my company’s name in it. I guess it will depend on the content and context. Of course,
there is also the chance that John will not write the article – or – that his publisher will not be interested in it.
After this little life-changing event, I have come up with some two cardinal rules to help minimize the possibility of getting
bad press. They are fairly basic and should be obvious to anyone. Ideally, this is the way we all should run our businesses.
Always conduct yourself with integrity The best way to avoid the potential for bad press is to always conduct yourself with the utmost and most impeccable
integrity. Behaving with integrity includes always telling the truth, never omitting important details and always treating people with respect. Newspaper complaint columns are chock full of letters from people
complaining that businesses have not been honest with them and did not treat them with integrity. This is a cardinal rule and should never be broken.
Be fair - always It is interesting to note that the second cause for newspaper complaints and disputes arise from unfair people complaining
about unfair treatment. The old adage that you should treat people like you would like to be treated still is true today. Be sure to always treat clients, customers and prospects fairly.
Will following these rules guarantee that your business never gets bad press? Well, no, nothing can guarantee that. However,
they will minimize your chances of being caught in a bad press vortex….and they will increase your chances of being able to defend yourself. After the “John ordeal” I ran a quick survey of my clients to try to get a
good gauge of their feelings toward my company. Without any exceptions they all reported that they were glad they had entered into a factoring agreement and that factoring had helped them grow their business.
Furthermore, they liked my company because we were always respectful, professional and responsive to their concerns. So yes, integrity, honesty and fairness are a factors best defense against bad press.
And with that, I conclude this short article and wish you all happy holidays!
|
Each publication we announce the winner for that issue’s free drawing.