Show Me The Data: Keeping a Family Business Objective

Dec 04, 2006 10:31 PM  By

The experience I have had in meeting and working with several small- to medium-sized family run companies this year makes me question how objective they can be about their businesses. When any marketer invests time and money in aggressive prospecting mailing programs, they do so because they believe the optimism of their assumptions and forecasts. But, when they look at the results they will rationalize, deny, or ignore figures that disprove their sunny projections.

Family businesses can be more prone to not accepting poor results for three reasons. First, unless family members have circulated through other firms in the industry, they can have gaps in their experience that would not be tolerated in a firm hiring on skills and experience alone.

Second, “best practices” are what keeps the family happy, not practices that are the state of the art in that segment of companies using direct marketing. A bad decision in such a firm doesn’t just impact this quarter, it impacts that sibling or cousin at every family gathering for years.

Third, even though well run family firms bring in consultants, the consultants’ own tactics can foil their objectivity. The consultants that are hired to supplement the businesses’ knowledge bases often want long-term retainer arrangements. To the extent that they do, this compromises their capability of delivering bad news and limits the objectivity of the information the family managers receive.

If you are in a family-run direct marketing business, working with a consulting firm with broad industry experience can help you more clearly evaluate your prospecting programs. That step overcomes the limitations of growing up in the business and not seeing the world from another company’s point of view. Then, limit the engagement of consultants and other supplemental service firms. You should make clear that no amount of good news will extend the contract nor any amount of bad news will hold up fee payments. This arrangement will limit the temptation for the consultants to give an improved version of the truth in the hopes of getting a retainer.

These steps can bring a new level of clear analysis and objective reporting about good and bad direct marketing results to any firm. Some family firms are more prone to these issues – and more resistant to outside help. These firms will gain the most from an outsider’s analysis and point of view. If the news is good, the firm receives unbiased reassurance of their methods. If the news is bad, the messenger can be shot with impunity and the firm gets a valuable dose of reality and a chance to correct the marketing methods for the next promotion. When you limit the consultant’s engagement, you can increase your objectivity about what you are doing, good or bad.

Bill Singleton, president of Algonquin, IL-based consultancy Singleton Marketing, and pens “Show Me the Data” for the Lists & Data Strategies e-newsletter.