What Shadows Are Stalking Your Company….?

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):

1. 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).
2. 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.”)
3. Suddenly, for unexplained reasons, your company is facing multiple highly competitive bidding situations.
4. 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