Every week, we will seek out expert advice to help a small or medium-sized company overcome a key issue it is facing in its business.
Ali Ghafour has the big one in his sights. Now he has to decide what he’ll give up to reel it in, or whether he should let it get away.
Mr. Ghafour is the founder and chief technology officer of Viafoura Inc., a Toronto-based technology company that tracks user engagement for content publishers.
Until now, the 15-employee company has been working with Canadian media outlets, but a potential deal with a U.S. company could catapult the small business to a whole new level.
“Having this client would take us into the next stratosphere. There’s a lot at stake,” Mr. Ghafour says.
The problem: The companies so far haven’t been able to come to terms on how best to deploy Viafoura’s service.
The potential client wants Viafoura to track just one of its user-engagement metrics, rather than the several it usually pays attention to. Mr. Ghafour fears that change could bring inaccurate results.
And because Viafoura is paid based on performance, he worries the change might affect compensation, too.
“We have concerns [the specific metric]doesn’t completely measure the success of what we’re going to deliver,” he says.
He doesn’t want to give in, nor does he want to lose such a huge opportunity.
“We’re dealing with big guys… How can you stick to your guns?” Mr. Ghafour asks.
The Challenge: How can Viafoura land a big opportunity on terms it feels comfortable with, or decide to walk away?
THE EXPERTS WEIGH IN
Jeremy Jagt, partner, assurance services with Grant Thornton LLP , a Mississauga-based business consulting firm
Before walking away, they should start with the premise that the customer is always right.
If they’re telling you there’s one particular metric they want to measure, and that’s what’s critical to their valuation of the project, then I think Viafoura needs to at least do a gut check and ask themselves if this is the market telling them that they need to adapt.
If they really don’t want to adapt, he needs to figure out if he should get out. To come to that conclusion, he needs to understand how significant his investment is. Not just dollars but manpower, too. Say he’s throwing 75 per cent of the company’s resources into this effort. That means he’s taking his eyes off the sales funnel and maybe off other customers.
If all of that doesn’t justify the end reward, because he has to flex so far to make this one client happy, then he needs to step back.
David Eaves , Vancouver-based negotiation and public policy expert
They shouldn’t look at it like they’re giving in. They can always go back and say we tried it your way and it didn’t work, so let’s try it our way. Nothing is permanent.
They need to be honest with the company, too. They think they’re taking a risk because of the way they’re compensated. So tell the client that it’s critical that they be financially viable. It’s in the customer’s best interest, too; otherwise they invest time in rolling out a product that doesn’t sustain itself.
Say “we proposed this other model because we had assumed it would make X amount of money. The model you’re proposing won’t make us that amount and won’t make us viable. Maybe it’s in our best interests if that financial arrangement is restructured.”
Kevin Leflar, founder, president and CEO of Toronto-based officialCOMMUNITY , which builds websites and e-businesses for musicians
We’ve been in this exact situation with an artist from the U.K. It would have been our first big British client, but his manager was...asking for oodles of custom development.
Maybe we could have done it, but it would have taken over our entire company. So we walked away. It hurt, but we ended up getting more substantial U.K. artists soon after.
So, they need to ask themselves, is this feature going to develop anyway? Or is it not relevant at all? In that case they may be smart to say no. There will another big client.
THREE THINGS VIAFOURA SHOULD DO NOW
Weigh client’s request more carefully
If a big client is asking for something, consider whether it really is untenable or the market is demanding something different that you need to adapt to.
Change the payment structure
Frankly discuss payment issues. If the service changes, change the payment structure, too, to ensure fair compensation.
Weigh the resources
Decide how much and how different required resources will be for this single client, and how it will affect other business to help decide whether it is worth the investment or better to walk away.
Special to The Globe and Mail
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