As much as we all like to pretend that business is more about people and companies getting along with each other for mutual benefit, I think we are grown up enough to admit the truth now. Whether you are negotiating a multibillion dollar oil pipeline contract with interested parties in six central Asian countries or haggling over the price of a new plasma TV with a hockey dad at Best Buy, you know this elemental truth: Business is little more than war without the guns. And depending upon the size of the deal and the parties involved, sometimes the guns are an option as well. (I wish I was kidding, but I just recently found out I have two degrees of separation from not one but TWO different arms dealers – neat, eh? And no, I absolutely will not connect you.)
The cold hard truth is that in business, as in war, you are working to accomplish your own agenda and whoever you are doing business with generally is working to their own, often contrary, agenda. There is no real middle ground, the winner is the one who meets more of their own goals and anyone who talks of a win-win situation is just trying to hide the fact that they lost. As a seller of products your goal is to sell as much product at the highest price with the lowest cost as you possibly can. As a buyer of products your goal is buy as much as you need, at the lowest price possible. Economic theorists can talk a good talk about how it is in the best interest of both parties to ensure that their economic counterbalances are fiscally sound, but that’s a load of crap. As a buyer you know that if your supplier goes bankrupt another one will take its place, and as a seller you know if your buyer goes out of business he will in all likelihood be replaced by another company with the same or similar needs.We do business with the companies we do business with because of mutual need, for sure, but at the end of the day loyalty is just a human emotion best suited for families and friendships and has no place in business as much as we would like to believe otherwise.
That’s not to say we have to treat every customer as an enemy, or that it is impossible to like the people you do business with. Some of my best friends are people I’ve done business with. But it does mean that when you sit down to conduct yourself in a business environment, especially as a sales professional you need to know which side of the negotiating table you belong on.
I was reminded of this today as I sat on a conference call baffled by a sales rep who was doing his very best to find a way to give away the marketing fund we had just allocated to provide incentives for new business opportunities by rewarding deals that his customer has closed weeks before. He seemed truly amazed that a program launched at the beginning of September could not be used to provide incentives for deals closed as far back as June. JUNE! I agree there are times and places when we need to reward and thank our customers for their business. While you cannot buy loyalty you can buy mind-share, and recognizing past performance is a good way to do that. However when you are working with a limited budget, are behind on your quota attainment, and are trying to provide an incentive to your customer to buy more right now, rewarding past deals instead of new deals is pointless at best and counter-productive in the worst cases.
And yet here I sit, with one of my biggest territories well behind their target and one of my most seasoned sales reps trying to convince me to give $40,000 to a customer to reward them for deals they closed four months ago. Deals we already negotiated. Deals we already collected payment for. Products that have long since shipped, been installed and have been in use without complaint for weeks. How this will get them to book another 40 or 50 deals this quarter is never explained. In fact when asked what the pipeline holds for this quarter in this country the answer is a sad, but unsurprising, “nothing”…
Who’s team is this rep on anyway? Clearly he’s not playing for the home team now, is he? Unfortunately he’s not alone… I’ve run into this same behavior too many times to count: Reps who completely miss the point of marketing and incentive programs and think that the objective is to find a way to spend the largest amount of money without actually making any measurable improvement to the business. I’ve had suggestions to pay a SPIF on run-rate products – business that we would book regardless of sales behavior. I’ve had suggestions that we should use marketing funds to more than offset the cost of a deal so that not only does our distributor essentially get the product for free, but we actually pay them to take it. I’ve even had a suggestion that we use our marketing funds to help one of our customers throw a party for THEIR customers – despite the fact that we would not be at the party, would not have anything at the party to indicate we sponsored the event and would not be told who the attendees were.
I have to ask these people every time: Whose team are you on? I get it that you want your customers to love you. I get it that you want to be the hero who brings money to the table and throws fun parties. But in doing this, who’s interests are you serving? Sure you feel like a hero, but last time I checked you couldn’t deposit “being well liked” in the bank. “My customers think I’m cool” won’t pay the rent. As business professionals, in sales and in other fields, we get paid when our company meets its goals. Forgetting whose team you are on means you risk delivering more to someone else’s agenda rather than your own.
Of course it is possible to drawn the line too firmly. I give you the case of the operations manager who, because it costs us less money to have customers pick up product from the warehouse instead of shipping it to their door, refuses to meet customer requests for direct delivery. Unfortunately because our products are made in five cities in three countries it just isn’t possible to guarantee that any customer’s orders will always be available for pick up in the same place each time. The resulting cost variance is not one that the customer is willing to accept as their own risk, and because we have competitors who WILL do this, they quite rightly will likely not do business with us much longer unless we agree to what is actually quite a reasonable compromise – ship all products regardless of point of manufacture to a single freight forwarder in one location for pick up. It’s simple logic really – but will that ops manager make the change? Probably not, because you see he didn’t forget which team he is on… he forgot he is on a team at all. I genuinely hope the day comes that he orders a new car – hopefully a nice Japanese model. And is told that he cannot collect it from the dealership. Instead he needs to get it from the factory. And that maybe that factory is in Osaka, Japan… or maybe Mexico City… or perhaps Cork, Ireland. And that he won’t be told which until the day that he needs to pick his car up. At his own expense.
Business is hard enough – the battle grueling and long enough – without nimrods like Dr. No and the Giveaway Emperor who are supposed to be there helping the corporate cause getting in the way.
And on that note, I hope you will grant me my leave… I’ve got a customer to take golfing tomorrow and I need my rest!