By Sid Chadwick
“As I walked out the door toward the gate that would lead to my freedom, I knew if I didn’t leave my bitterness and hatred behind, I’d still be in prison.”…….Nelson Mandela
INTRODUCTION:
What “shadows” in the marketplace are quietly stalking… you… and your company…?
Why did your Reps overcharge a customer…because they could…? (There were no policies re. overcharging. In fact, some Reps claimed department “bragging rights” over who was able to overcharge the most – each month.)
Does your incentive commission program encourage your Reps to (quietly) overcharge in order to earn significant additional commission…?
What we don’t see…but somehow…inevitably occurs (It’s too often just a matter of time):
- Suddenly announced competitive bidding – at an important account - that reveals dramatically lower pricing available – from multiple competitors (and not just one - who’s trying to buy their way in).
A local charitable golf tournament involving several of your best customers and prospects – includes an informal and unexpected discussion of what competitive bidding revealed about your company’s sometimes excessive pricing - by one of the participants. (Yes, it’s like a highly contagious virus. And when that “fuse of pricing practices starts burning, it’s nearly impossible to stop.”) - Suddenly, for unexplained reasons, your company is facing multiple highly competitive bidding situations.
- More Heat: Your competitors have learned to pursue your customers - in particular – and they’re winning work (and new customers).
SUMMARY:
A long-term client recently asked us to draft a Sales Rep Agreement that in particular, included the maximum mark-up allowed for pricing without senior management review.
Why is the maximum markup – allowed without senior management review?
He had one Sales Rep in particular, who was charismatic, and had repeatedly demonstrated her ability to embarrassingly over-charge her customers. (Turnover of her customers - was noticeable.)
She was interested in short-term, immediate income for herself, with little concern for negative long-term market consequences – that can become catastrophic.
Her company owner had very different perspectives, different responsibilities, and financial obligations. He wanted long-term customer relationships – that would last – and not having to predictably, inevitably - rebuild his account base.
That was the first time an owner had made such a request in my professional experience.
That limitation was written into his Sales Rep Agreement, and my understanding, after some discussion, was accepted.
I thought his thinking – was thoughtful, respectful – and had a long-term commitment of values – that his company’s customers - would cherish.
Our great industry needs more long-term perspectives and planning.
“A good head and a good heart are a formidable combination. But when you add to that a literate tongue and pen, then you have something very special.”………………………Nelson Mandela
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