A Treasure of Long-Term Agreements…..Waiting……

By Sid Chadwick

“I want you to provide Earl coaching to be successful with business development ……without that….his probability for success…. owning this company, any company… is not good…”…………President, Regarding His Company’s Future

INTRODUCTION:

Earl had become a “comfortable” Customer Service Department supervisor at his employer. However, his company president….was not wired….for comfort. His legacy included development of a series of successful local publications --- which were successfully sold, providing a long-term income for his family.

While accomplishing that, he’d continued his commercial printing operation, and in the process….become a noticeable figure in his community’s development --- particularly with non-profit, charitable organizations. At this very moment, he was preparing to take his fifth medical team to Haiti, including organizing to again – dig wells --- for safe drinking water --- for outlying, rural villages.

My honored working relationship with this rare president….went back…..over twenty years.

By Sid Chadwick

“Our banker was thrilled when we explained the number of Long-Term Customer Agreements we’d developed……..he recognized that our value as a borrower and customer --- had gone up…..and then he saw that at least one-third of our L.T. Agreements were with current customers….of the bank.”…………..Client CEO

INTRODUCTION:

"From a client's current Customer Survey returns, we have almost 20 requests to discuss "Long-Term Agreements". I expect to finish with over 30 --- many --- from major customers. Their ability to influence when and how work comes to them --- may never be the same."

Customers’ benefits from Long-term Agreements with preferred suppliers include:

Less time invested in quoting --- freeing key personnel for more important projects.
More consistent, and higher quality of product received.
More consistent, and higher quality of service received.
Better value --- per cost, as the customer was more valuable to the supplier.
More influence --- for getting what you want --- with your preferred supplier.
Opportunities for “performance reviews” with your supplier --- either quarterly or semi-annually --- for Continuous Improvement.
Better budgeting, better credit terms, especially when we run a “negative cash flow in our higher season”….plus…. more predictable cash-flow.

Supplier’s benefits from Long-term Agreements with preferred customers include:

Better influence on reducing the number of paper stocks needed.
Better understanding and more predictable execution of what’s expected --- on all issues, from the management of information, to proofing, to Press-OK’s , to packaging, to inventory management.
Better management of company resources --- and therefore --- lower costs.
The ability to call and receive work, when we want and need it.
Improved frequency of work from a customer tends to lead to improved production costs.
Improved predictability of what the customer wants --- leads to our obtaining improved costs from our suppliers.
Lower spoilage and waste, plus increased productivity --- the more frequently we produce work for a specific customer.
More frequent “automatic renewals” --- of previous Long-term Agreements.

SUMMARY:

With this number of meaningful benefits, why don’t we have more Long-term Agreements?

How often do these mutually beneficial arrangements have the opportunity to be discussed between supplier and buyer management, senior management-to-senior management?

How many of our Senior Account Executives are comfortable at that level of the customer’s organization --- engaging, initiating…. these types of discussions?

Option: How often does senior management from my organization --- go on Joint Sales Calls, and initiate these types of discussions, since the long-term commitment of resources is almost always involved?

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order to things”………..Niccolo Machiavelli