Today I have some thoughts on business that I’d like to share. It’s about getting the best return or outcome from a situation.
One thing I have learned through the years and have experienced firsthand is the person who is willing to walk away from a negotiation or situation is the one who has the upper hand. This is a pretty simple concept and goes with Stephen Covey’s principal of win/win or no deal.
I have seen situations with companies where although they preach this principal they don’t follow it in practice.
A company has a very large customer that at one time represented over 75 percent of their total annual sales. Over the past 5 or 6 years the business has eroded, not due to a lack of or drop in quality and service from the company but the customer’s overall business has been declining. The large customer has dropped to less than 25 percent of the company’s annual sales.
Now even though this customer’s revenue has dropped so substantially they continue to increase demands on the company. They push for lower prices and increased service which will eat in to the company’s already dwindling profit margin.
They also continue to become more arrogant and threatening as a customer. Gone are the days of the customer supplier partnership. Gone is the win/win attitude. The customer will win and doesn’t care if the company loses. Basically to hell with the supplier I have my numbers to hit.
You could see this attitude change in the customer as they became larger and larger. Also at one point there was an influx of fired GM management, managers who came from an industry that was squeezing every drop of blood from their suppliers and ended up losing billions of dollars. Yes I want them to now run my business.
The company continually allows the customer to beat them up making greater and greater demands and allows the customer to be abusive, condescending and outright assholes towards the company representatives who are trying to help the customer. They allow the people in the trenches to be treated as non-important people. All of this while the annual revenues from the customer decline year after year.
So why is the customer allowed to continue to drain resources, morale and profits? Perhaps the company thinks it will all get better and business will go back to the good old days but I really don’t think that will happen.
Personally I would have walked away from this customer years ago. And I would bet that even now if the company was to speak up and say your business is no longer profitable to us and we would like to cancel our contract the customer’s attitude would change.
But the customer knows and sees the desperation and uses it to their advantage to the determent of the company.
No business is worth losing money over. No business should be given away in hopes that someday it will get better or return to its heyday.
Don’t sell yourself short. You know you have a market worth don’t give it away.
I’ve heard talk like well you have to take the good with the bad and in the long run we make out and at first I thought that was true. But what I have seen over the years is generally the customer see’s you’re willing to take the bad and after while takes away the good.
So what are you left with, bad business and then hard feelings.
Stand up, the customer needs you otherwise they wouldn’t give you the business. But if like a child you set no boundaries they’ll walk all over you.
© Otis P Smith and About the Groove, 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Otis P Smith and About the Groove with appropriate and specific direction to the original content.