Not good to great
How do you fire a million dollar account? Should you? Sometimes, the answer is yes.
I once had the experience of selling to a very fast growing technology company, way back in the day when hardware was still manufactured in Silicon Valley! This company was the type of fast rising star that had annual growth rates in the 300% to 500% range, shooting from nothing to $500mil in just a few years. And no, it wasn’t Sun Microsystems, which back in its day grew at similar rates. (In fact, I also handled Sun Microsystems at the very same time.) The company noted here was on the top of all fast growth companies lists and was noted in numerous business magazines and newspapers.
As you can imagine, managing sales and relationships in a company like this was both challenging and exhausting. When a company grows at this incredible pace everyone in the growth company is operating at an intense level and the demands put on vendors are just as intense. These fast growth companies come to rely on their vendors to help keep the supply chain moving. Their MRP systems are usually behind the growth curve for two reasons- things happen too fast for people to keep up with analysis of needs and people make mistakes in the input of data.
The business had good margins and volume for our company. We jumped through hoops every day to make things happen and make certain that at quarter end, when numbers would be reported, their shipments would not be impacted by our inability to supply product. We never let them down and in fact, we lifted them up in many ways and saved their bacon.
Now, this would seem like a pretty good thing, but it wasn’t because we were not appreciated for our excellent work. In spite of our amazing performance of high quality and 99% on time delivery, we were verbally abused every day by the people in purchasing and shipping, and by the Director of Operations. The D.O. also managed the accounting group. We had trouble getting paid…not only on time or with extensions, but getting paid at all. Our customer service people would be in tears, our manufacturing people would be swearing and our accounting group would be upset. One day, I was abused and it was ‘the straw that broke the camel’s back’. The D.O. screamed at me, with full helpings of profanity as his main course, in their accounting department when I brought in duplicate documentation to verify shipments made…months before. That was it for me.
Although I did not have an ownership position in the company I worked for, I approached the owners and suggested we should fire the account. Guess what- they agreed! The hassle factor of dealing with such an abusive customer was damaging other customer relationships and hurting our employee morale. We were not employing our resources or assets as efficiently as we could to grow our business because of this customer.
So, we fired the customer and never looked back. It was a gusty decision at the time and it shocked the D.O. He couldn’t believe it. Our company had a hiccup for a few months but we regained our growth rate and took off. It was a lesson learned. As a side note, this company eventually went down as a result of poor management and shady accounting practices, so in the end their ‘M.O.’ didn’t work.
Let’s be real- in today’s extremely tough economy it is very hard to suck it up and walk away from any business. Most businesses (there are exceptions) are happy just to have customers. They feel that they cannot afford to be fussy and they can’t lose any business. However, even now you may be doing business with customers who greatly impact your business in a negative way. Be aware of this and examine your customer roster. Don’t put up with a customer who abuses your business and your people, and sidetracks you from moving forward in tough times. You are better off doing business elsewhere with people who you like and trust. You are better off when you can focus your energies on things that make a real difference in the survival and ultimate growth of your company.
© 2009 All Rights Reserved Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
No frills
I like to read the Wall Street Journal, to get a different slant in the news than what is reported daily in the local Seattle media. The WSJ always has interesting articles that you won’t find elsewhere. On Monday, one article caught my attention because it has relevance to every business, I think. This is a great example of business strategic planning in the midst of challenging times.
C.F. Martin, the maker of Martin Guitars, is using a Depression Era strategy to keep production flowing and avoid layoffs. By the way, the guitars are a $472mil industry, much larger than I thought. Their strategy? Simplify the product and sell it at a much lower price. Take out the frills and extras. Take out manufacturing costs of labor and material to provide a very decent product that meets today’s consumer’s low price needs. Their top end guitars sell for as much as $100,000 and much of their line is in the $2,000 to $3,000 range. These newer, low cost guitars are well under $1,000. Martin’s strategy is to keep their lines flowing and maintain a strong presence in the market.
We’re seeing similar strategies played out in other industries as well. The restaurant business, especially those in the higher end price range, is delivering high quality meals with lower pricing or providing incentives to customers to come in and spend. Witness the countless Happy Hour offerings under $5 on items that used to command $8 or more. Or, the three course dinners for around $30. The mentality is to drive volume and cash flow, and continue to have a strong, recognizable brand. You don’t want to risk losing customers or top-of-mind-awareness. It’s important to survive, be seen and to be in a position to grow strongly once again when the market turns.
What can this type of business strategic planning mean for your business? Where can your production or service expertise deliver real value at lower cost and still provide workable and acceptable margins in order to contribute cash to the business and retain valuable and experienced employees? It’s something to consider whether you provide a physical product or tangible service. It takes combined best thinking of your entire team to reap the benefits.
© 2009 All Rights Reserved Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
M5…not the car
Meddling Micro Managers Make Mayhem
Too true, eh? And yet, how often do we witness and experience this in businesses large and small? I’ve experienced this way too much and it astounds me that people don’t get the concept of losing control to get more enjoyment and better results in a business. These types of managers or owners typically think they are the only ones with intelligence. They think they are the only ones who truly care about the success of the business and its profitability and prosperity. So, they continually make all of the decisions about the business, be they tactical or strategic. They rely on self to have important conversations about how the business is doing- why it’s getting the results it gets and how things must change. There is little to no desire to seek out opinions and ideas elsewhere. There are no meetings with key staff to dive into issues and ask tough, honest questions. There is no discipline in getting a collaborative strategy developed and employed. They dive into the smallest details and watch everyone and every project like a hawk. After all, the owner is the main player, has the answers and must not let you get away with thinking.
Ask yourself this- why are so many small businesses, and even large ones too, going out of business in this tough environment? Is it really all just about the economy and the market they serve? Let’s be clear, I’m sure those are definitely big factors. But, they are far from the only reasons. Typically, owners of businesses don’t seek counsel, advice and ideas from the broad slate of stakeholders or advisors until it is way too late. In the past year, a consulting associate and I have had a number of desperate inquiries from businesses about our services. We definitely could help them. There’s a problem though- they are out of money. It’s too late. And it’s not unusual for us to hear, “Gosh, I wish I contacted you much earlier. You could have really helped me.” You see, they believe they can solve their problems by themselves.
How do you lose control to get more? Actually, you’re give up control by delegating tasks with clear personal responsibility, accountability, and goals and by encouraging and fostering the flow of ideas, opinions and expertise from your staff and others (such as mentors, your board, important stakeholders). It takes swallowing your pride and admitting that you don’t have to know it all. It takes developing a real trust in your people. It takes a commitment to developing your people. It takes leadership in visioning and then communicating a course and objective.
It’s done by some and it works tremendously well. It’s just that too many people don’t practice these things. Sad and unfortunate.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
Five Easy Things To Address
So, you know now that we’re in a deep and most likely long recession. You can either sit and bemoan the fact that things are not so great, or you can recalibrate. You can do a few things, right now, to move forward while everyone else is moving backward. Here are five areas you can get to work on:
- Enhance your field sales force effectiveness through additional product and sales technique training so that no competitor in your industry knows more and closes faster;
- Enhance/Improve the market perception and your sales team’s reputation through the image and messaging they project;
- Enhance your brand reputation through developing a brand management strategy and then implementing it;
- Increase the number of referral clients by asking current contacts and others, obviously those who would be happy to champion you, who could they refer you to with a personal introduction;
- Increase your customer satisfaction rate (CSI) and customer retention rate (CRR) by developing and conducting a survey to find out why they love you and what else you can do to be more valuable and preferred.
Oh yes, there are a lot more things that you can do to drive your business forward. But this is enough for now if you’re stuck and in a rut. The challenge is this: DO SOMETHING. Take action, develop target goals, use metrics to monitor progress. Just don’t keep doing things the same ways you have before. The world is different.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
Clarity and Specificity
Perhaps you have the same challenge as me. I’m always challenged on how I can be clearer and more specific in my words, both written and verbal. It’s critical because everything that I communicate has to be well understood. It must be so crisp and to the point that instantly, people ‘get it’. Frankly, I have a lot of improving to do in this regard. I’m going to be reworking and simplifying my simple web site once again, because I think the messaging can be much better.
I got thinking about this today because I had had received an email from a business friend that, for me, wasn’t as clear and specific as it should be. The person was asking for my feedback on the wording of a communication. Now, it may be that I didn’t process it well. But that’s the point. I didn’t get it. Kudos go to my friend for taking the time to reach out to me (and others) and ask for feedback.
This may be something for you to think about also. Is your marketing message clear and specific? Is your sales conversation clear and specific? Are work order instructions in your company clear and specific? Are job descriptions and expectations clear and specific? They should be. If they’re not you may be wasting valuable resources- money and time.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Konnects, Linked In, Plaxo and Twitter.
