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

pete@performabusdev.com

Web @ http://www.performabusdev.com

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