I was with a group of bicycle-riding friends one afternoon and we stopped into a local restaurant that we often frequent. The waiter told us, “I’m sorry, but where there are more than six people seated at a table, we will no longer write separate checks.”
Well, I’m sure we all enjoy going over the bill and trying to figure who owes what in a restaurant, right? Think of the paper the restaurant is saving!
What is the rationale for such a customer-unfriendly decision? Would they prefer to have 10 people sitting alone at 10 separate tables, or have 60 people sitting there? This isn’t brain surgery. You want as many customers as possible doing business with you!
But as stupid and irrational as this true story may sound, we see similar business-killing decisions being made every day by supply house managers (I listen to what a lot of your salespeople are saying).
Oh, I know how it all starts out: with a huge loss to a customer who goes bankrupt or who cheats you. Then comes the inevitable announcement: “As of this date, our company will no longer allow…” Suddenly, you start losing customers and business because of these bad actions by one account, or one employee, or whatever.
Whenever someone in your company comes up with a customer-unfriendly ruling, ultimatum, proclamation, or whatever, everyone involved (yes, salespeople, counter help and management) should sit down together and openly discuss just what this will do to your company’s business in the long term. Such business-changing decisions should never be made by one person alone - everyone should be allowed to have their say and input. Where the majority feels that it is a bad idea, it should be tabled!
You have to ask: “What has brought our company into the successful position that it currently holds and has held for many years? Have we been operating all this time without using sound business practices? And if so, then why have we been succeeding?”
Knee-jerk decisions are always bad ideas! Anything that puts your company on a new course and changes the perception of who and what you are needs to be thought out and discussed with everyone involved, including major customers, before it is carved into stone.
I’m not just talking about how credit is applied. Decisions on how warranty credits are issued, how much a customer must order, how much rigmarole they have to go through to purchase from you or to pay you, or even changes in your sales staff should be thoroughly considered and discussed with everyone who may have a viewpoint before a firm decision is made. Yes, it may be your company, but don’t let your decisions drive it under!
Ask: “Will whatever this customer (or these customers) did possibly cause our business to fail, or did it just hurt?” If you just got hurt, you’ll get over it - that’s business. But don’t drive your other customers away in retaliation! If you must create a ruling, choose one that makes it easier for customers to do business with you. How about a new ruling that makes your sales, counter and billing departments much friendlier and customer responsive? How about friendlier voices answering your telephones?
We’ve seen a lot of supply houses go under or be gobbled up over the past few years - I don’t think any of them lost out because they were too customer friendly.