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HVAC
Articles |
Protecting
Your Good Accounts from the Competition
We all know the feeling. Your key contact in one of your
good accounts sheepishly admits that they have moved
some business to a competitor. No problem with your
service, it was just a price issue.
Nothing is more discouraging. You've spent years
developing this account, building relationships, working
hard at meeting their needs, and then, in the blink of
an eye, you lose the business to a price-cutter.
Is there anything you can do to prevent this? Of course.
Here are four proven strategies that will help you
prevent your hard-earned business from disappearing into
the hands of price cutting competition.
Strategy One: Deepen your personal
relationships with the key decision makers.
It is really difficult, though not impossible, for your
friends to take the business away from you. So, turn the
key decision makers into your friends.
Don't rely just on the business aspect of your
relationship, no matter how sound, to see you through.
Make it a point to develop personal relationships with
the key people. Try to spend time with them socially.
Take them to a ball game, a concert, golfing or fishing.
Spend one-on-one time with them outside of the work
environment. Arrange to have them meet your spouse and
family. Get to know them more deeply than you would
normally.
These efforts to turn them from business acquaintances
to personal friends is almost never wasted. As the
relationship grows, the natural tendency to keep doing
business with you grows proportionately.
Strategy Number Two: Close any open doors that
may exist in the account.
When I'm coaching salespeople on how to get their foot
in the door of an account that is in the hands of the
competition, I have them look for open doors. "
Open doors" are lingering issues that make you, the
established vendor, vulnerable to the competition, and
that are within your capability to close.
When you are on the inside, trying to protect your
business, you need to make sure that there are no open
doors for your competitors. For example, you may have a
pile of returns that are sitting on the account's
shipping dock, waiting for a return authorization from
you. It may not be a big deal to you, but from the
perspective of a competitor salesperson, it may be an
example of your lack of attention to that account. And
that can be a little opening into which a competitor can
wedge themselves.
Make sure you take care of any lingering service-type
issues that could serve as opening for the competition.
Lingering invoice problems, ignored back orders,
promises made that haven't been kept - all these are
potential open doors for your competition. Clean them
up.
Another open door has to do with your keeping the
account up to date on the latest products and services.
Ensure that the account is aware of all the product
updates and innovations for the things you are
supplying. For example, the account may have bought some
machines from you. In the last six months, the machine
maker has introduced some updates to get greater
productivity out of those machines.
You make sure that you have communicated that option to
your key contacts. That prevents the competition from
being the source of information about something that you
should have communicated to your customer. If that
happens, it makes you look bad, and opens the door for
the competitor.
The largest open door, however, is pricing. If this is a
good account, they probably have been doing business
with you for a while. And, since they have been doing
business for a few years, it's entirely possible that
you have allowed the prices on some products to rise
above market levels. In fact, it may be that you are
getting significantly higher than market prices on
several products. That can be an open door if your
competition decides to attack it. You may be better
served in the long run to discretely and strategically
lower your prices on those items that are head and
shoulders above market rates.
Strategy Number Three: Hold regular
"business reviews."
Gather all the computer printouts your IT person can
produce for this account.
Put them inside a three ring binder. Make a cover with
the account's name and logo on the front. Then, schedule
a meeting with your key contact and his/her boss,
yourself and your manager. Go through all the reports,
describing your service levels, how many SKUs they are
buying from you compared to last year, their payment
history, etc.
Then, all four of you go out to lunch together.
This regular (at least twice a year) business review
establishes you in the minds of your customer as a cut
above just another vendor. You are willing to measure
and disclose your performance, and to talk frankly about
the business relationship. You become more of a
consultant in the eyes of the customer. That's certainly
worth a few percentage points. Strategy Number Four:
Bundle it up.
Your good account is probably buying multiple products
from you. Probably, over the years, each of those
products has been evaluated and selected on its own
basis, without regard to other things that the account
is buying from you. Now is the time to change that.
Propose a " bundled" contract to the account.
It looks something like this:
You'll agree to rebate some percentage (three to five
percent) of the increase in the total dollars of
purchases when compared to last year. This accounting
takes place at the end of the year.
Here's an example. Smith Brothers, your good account,
did $200,000 with you last year. You offer a four
percent rebate on the increase in purchases. As a
result, this year Smith Brothers does $250,000 with you,
adding five new SKUs. Your rebate is on the $50,000.
Calculated at four percent, you give them a check for
$2000. Your four percent rebate is really eight tenths
of a percent (.008) of the entire business. Well worth
it in the long run.
Not only does this encourage the customer to work with
you to find additional opportunities, but it also locks
up the business you have. Now, if the account was to
switch some portion of the total business, it will
impact their ability to receive that check at the end of
the year. You have effectively locked up the business,
protecting it from a price-cutting competitor.
While none of these strategies are guaranteed, they each
have their place and customers for whom they will be
effective. It's always easier to prevent the loss of
business to a price-cutter, than it is to regain it
after the fact.
Use any of these strategies and you will have enhanced
your ability to protect your good accounts from the
competition.
About Dave Kahle, The Growth Coach®:
Dave Kahle is a consultant and trainer who helps his
clients increase their sales and improve their sales
productivity. He speaks from real world experience,
having been the number one salesperson in the country
for two companies in two distinct industries. Dave has
trained thousands of salespeople to be more successful
in the Information Age economy. He's the author of over
1,000 articles, a monthly ezine, and six books
including: 10
Secrets of Time Management for Salespeople and Transforming
Your Sales Force for the 21st Century. He has a
gift for creating powerful training events that get
audiences thinking differently about sales.
His "Thinking About Sales" Ezine features
content-filled motivating articles, practical tips for
immediate improvements, useful resources and helpful
tips to help increase sales. Join for NOTHING on-line at
www.davekahle.com/mailinglist.htm.
You can reach Dave at:
The DaCo Corporation
3736 West River Drive
Comstock Park, MI 49321
Phone: 800-331-1287 / 616-451-9377
Fax: 616-451-9412
info@davekahle.com
www.davekahle.com
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