‘Milking the virus’: Why you shouldn’t ask your suppliers for a discount or special treatment

Companies that exploit suppliers during COVID19 pandemic will pay long-termthe long-term

Scene Change co-founder and Motivation for Sceptics blogger Ian Whitworth. Source: supplied.

The call had all the hallmarks of a potential paying job. And in these austere times, the prospect of any revenue was quite intoxicating.

When a sales inquiry comes in from a big financial institution, we light up like a dog sighting a juicy tennis ball: “We really like those chat shows you’ve been doing with all the guest speakers, just wondering if you’d be interested in doing something similar for us.”

Woo hoo! We’ve set up pop-up studios full of very expensive gear to do virtual events in most of our offices. Compared with our regular revenue, it’s beer money at best. But every dollar is significant right now, and it keeps our people occupied and motivated.

We’ve been using the studios to do interviews with a range of experts. These are presenters who normally cost thousands. But the shows we’re making are free, to help our community through the lockdown grimness. And if that leads to some actual paying gigs, great.

This call felt like it had some solid potential, as it came from a company with thousands of staff.

Then they casually dropped this: “Oh, we don’t have a budget. You know, things are tight with the COVID stuff, is it possible you could do it for free, to help us through till we get more funding?”

What the actual fuck?

Someone on a salary, who works for an organisation with a multi-billion-dollar balance sheet, is asking a modest family-owned company in an industry they know to be on its knees, to work for free. They would like their internal budget cuts to be our problem. Because, you know, nobody’s paying for much at the moment.

This is not the same as picking up a sweet bargain at the half-yearly sale. This is essentially looting.

It’s walking past stores that have been torn apart by the virus shutdown hurricane, noticing that their front door is swinging open, and helping yourself to a free television from their front window. Because you can.

Meanwhile, in next-level dog acts: in the first days after lockdown restrictions were eased and restaurants were allowed to sit an unprofitable 10 people at a time, food journo Anthony Huckstepp reported multiple restaurants were getting no-shows from customers with bookings.

Honestly, how much of an unfeeling sociopath would you have to be? Especially at a time when most people are discovering new reserves of niceness and public spirit, supporting their local businesses and generally doing the right thing.

Looting your own staff

‘COVID-19 Looter Syndrome’ isn’t just a supplier thing.

Right now, another huge financial institution, whose revenues haven’t dropped much at all, is asking the majority of its staff to accept a 20% pay cut. Why? Because virus-affected industries are doing it, so it saw the opportunity. The company is quite open about how that 20% pay cut will ensure this year’s dividend payout goes ahead. Of course, the CEO gets a cut of that.

Everyone who works there knows what they’re up to. Is it even legal? They think they have a workaround for that, but even if it’s not illegal, it’s deeply immoral. It’s a smash ‘n’ grab raid on your own staff.

Their competitors aren’t doing it. What does Looter Corp think is going to happen over the next five years? Do they think those staff are going to forget? Or will they bail at the first opportunity?

The long-term cost of looting

I can’t believe I even have to write this, but it is not okay to take advantage of suppliers and staff under these conditions. Sure, ask for a deal, but don’t resort to extortion. Whatever small, dirty wins you stand to clock up, you will lose many times over from the evil smell emanating from your reputation.

During the peak business inferno after Black Friday in March, I wrote: “The actions you take through these few weeks will be remembered for decades.”

We, and others in our field, kept the majority of our staff. You can read about that experience here. However, plenty in our industry threw all of their staff overboard that same week, as if they were on some hideous 18th-century slave ship. A week or so later, the government subsidies arrived and most of those businesses brought those staff back.

Too late. We all saw what you did. It’s seared into the memories of your staff and they will never trust you again. Ask them to ‘go the extra mile’ or whatever in 2021 and they’ll say ‘sure’, but the truth is they will not go an extra inch for you until the end of time.

If you’re a buyer in any field, it’s important to think further ahead than this quarter. Suppliers you took for granted will not be there in a year. Yes, there will be surviving suppliers. The question to ask is: will there be good ones?

It costs more to be good in any field. Let the good ones die and you’re left with the bare-bones, zero-response, pay-for-every-extra companies, and your entire business life will be a series of risky, untrustworthy transactions.

There is no leg-up from being a looter

If you’re a desperate supplier and you’re thinking that doing free work will give you a leg-up for future paid work, let me give you my personal research findings from decades of testing that theory for you.

There is no leg-up.

Think about the rat-like mindset of clients who ask you to do free work. In the future, will they choose you, or will they keep trying to sniff out others who’ll take their bait? They certainly don’t care about the quality of the work they get, or they wouldn’t be asking you to do it for free.

I have literally never seen up-front free work turn into a legit paying client. Not. Fucking. Once.

Our industry has plenty of those jackals, and one of the few pleasures of COVID-19 has been watching some of them get torched. Most clients have behaved with above-and-beyond honour through all of this.

I have been speaking to our competitors regularly throughout the virus times, and we’re looking out for each other. Do we all know who’s been naughty and who’s been nice?

Oh, yes indeed! Santa’s CRM is nothing compared to our list. Business karma is real, and it’s a long game. Be good and you’ll get nice things.

This article was first published on Motivation for Sceptics.

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