Consultants, whether they are independent or part of a large consulting firm, come in two forms. Those that are loyal to you and those that have a hidden loyalty.
Let me get this part out of the way first. I do consult within the offsite and modular industry. I’ve been doing it for years and have never wavered in my loyalty to my client. Now let’s talk about the consulting industry’s loyalty factor.
Loyalty is a strong feeling of support or allegiance. In this case, I’m talking about the advice and help you get from your consultant. That gut feeling that you might have made a mistake after entering a contract with the consultant just might be correct. Here is the easiest way to tell who’s loyal to whom.
If the words “I highly recommend you buy…” ever come up in a conversation with your consultant, red flags, sirens and horns should go off.
A couple of months ago I got a call from a company owner asking what I thought of a certain consultant. I always refuse to answer that question, but I did ask why they called me and the answer is one I’ve heard many times. The consultant told them to buy a piece of automated equipment costing over $500,000 they later discovered they could have bought a very similar product from a competing company for $160,000 less.
When they finally got it installed, they found the cost savings was nowhere near what the consultant said it would be. That’s when the owner did some digging into the purchase and learned the consultant got a referral fee for recommending their equipment.
How do you prevent this from happening to you? I’m sure you have prospective consultants sign a Non-Disclosure Agreement. Why not have your legal counsel draw up an agreement forbidding prospective consultants from recommending products they get a referral fee from?
If the consultant balks at signing the referral fee agreement, show them the door.
The good news…The majority of consultants are ready to help you solve your problems and offer sound advice.
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Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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