Sales Magic and Why Companies Fail
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[/media-credit]LinkedIn is a website that specializes in professional social networking and they regularly send me email messages with links to articles that I might be interested in. In today’s message was a link to a great article by Geoffrey James entitle 8 ways to Build Customer Loyalty. In this article James points out that if you want to increase your sales you need to build a relationship with your customer, put your relationship ahead of making your quota, deliver on your promises, and provide impeccable service after a sale.
This is how I was taught to do consultative sales when I sold electronic components for one of the largest electronic component distributors in the world. My territory covered ¾ of the state of Oregon and I was on the road a lot. What I was up against in my territory were two things. My company had treated my territory like a revolving door for sales people and my competition had one person who had been in that territory for at least 10 years. Was my competitor better than me? No, I don’t think so, but the companies that she called on trusted her, and that she would be there for them.
One of my accounts was huge, I had worked for this company in the past and I think that the distributor that I was working for thought I might be able to use that to my advantage. And it did help a little, but it was still an uphill battle. I was working for a company that they didn’t trust, and millions of dollars were going to my competitor. I went to work on providing the best services that I could for them and many time not making any money at all, I wanted to earn back the trust that was lost for the company that I now worked for.
In the meantime I had a couple other accounts that were under serviced by my competitors. One was buying more processors from Brand X than anyone else in the state. They also couldn’t get this chip from my main competitor because the didn’t sell it. When the owner of this company said jump I asked “how high?” I was his go-to guy, and I was providing him with all of the expertise he could ask for.
The other company I targeted was out of the way and in the country. They had goats walking around and on my first visit I got a flat tire from a nail I picked up driving on their gravel driveway. They were buying a lot of components, and their business doubled each year. But they had no loyalty to anyone because no one was giving them any attention until I showed up.
I would drive out to their business with manufacturer representatives in tow, we would have engineering meetings to help them grow their business by using the most suitable products. Things were looking up and more business was coming my way. I was gaining trust and I was helping this business and developing a friendship.
The company I worked for was huge, and very bottom line driven. The relationships that I was building and the income wave that would follow didn’t matter. The quarter was slow, so they axed half of the staff. I had only worked for them for 8 months so was given my pink slip. The company made their profit by axing people, but they threw away all the investment in relationship building that I and others had done. The company that was buying all of the Brand X processors from me was pissed off, so they gave the business to a small competitor that was also selling them. The business with the goats went back to buying from whoever because they didn’t trust anyone. And the huge company that bought millions from my competitor just shook their heads and said yep my company is unreliable.
When big businesses or even small ones only care about the quarter end results then their businesses will perform poorly. Some people may make some short term profits but those companies don’t become great. Apple is an example of how a company does well by taking care of their customers, but it’s also an example of a failure when it comes to how they manufacture their products. Apple treats their customers well, and have a reputation of quality all the way around. How else can a company like this charge more for laptops and tablets than anyone else, and have them flying off the shelves. You certainly aren’t going to get this sort of loyalty if you dump your products one month after you release them for half price like other manufacturers have done. People look at those companies as flaky.
Somewhere along the line businesses got lost, the bottom line became king, and nothing else mattered. This attitude is one of the reasons our economy has been in the drink, and part of this is how companies like Apple have failed in the long run. Companies moved their manufacturing overseas to save a nickel on the cost of manufacturing a tape measure, and slashed their workforce just so they can make a little more money for the end of the quarter. It’s a failure because you’ve just produced fewer customers to buy your products.
If you want to make your business the most successful business in your field then forget about the end of the quarter numbers and put your customers first. Don’t slash your workforce to save a nickel and build a relationship with them too. Your company will reap the benefits in your pocket. Oh and by the way give some stuff way for free, Free The Future of the Radical Price by Chris Anderson explains how companies like Google have made a fortune by giving stuff away for free.
Now go make some money, and be nice.
Sales Magic and Why Companies Fail,
I would describe myself as a father first, and married to a wonderfully supportive spouse that works her butt off for the family. I'm also a writer, techno nerd, and humorist. I always have more things to do than I have time to do them, and have many interests. View My Profile
As far as my writing goes I consider myself an observer of human nature, and a lifelong writing student.
Tags: Chris Anderson, Dan LaFollette, Free, Geoffrey James, google, manufacturing, sales
“Somewhere along the line businesses got lost, the bottom line became king, and nothing else mattered.” You have such great insights, Dan. What a shame they did not learn from you. You would be an asset to any company!
Cher, I was but a fly speck to the company as a whole. It’s such a shame that the only people who matter to these monster companies is the few on top, and everyone else is disposable. Make a quick buck and run seems to be the way things are. Loyalty, effort, and the long game are not even considered.
There are some companies that get it, and I even saw an advertisement for car floor mats in a magazine yesterday with a CEO basically saying the same thing that I just wrote as a selling point. Who knows maybe the sanity pendulum will swing back someday. We can only hope.
Thanks for the comments Cher
Hey Dan! Such rudeness that they let you go! I heard a few stories that employees in the USA are easily seen as being ‘disposable’ and that making a quick buck is top priority. I would do my internship at Six Flags, but it got sold to Walibi World as the American owners didn’t get the revenue they wanted, plus they couldn’t expand the park to the size they wanted. Holland isn’t that big hehe. Also interesting to see minor clashes when I worked for Eastman Chemicals. There was often a small disagreement in what people in the States wanted and how we worked in Holland. But you can’t just let people go here, you need valid reasons and evidence to back it up. Unless the company goes bankrupt…then you have all the evidence you need.
I definitely agree with building relationships and trust with customers and workforce. You need them both to have a successful business ^_^
TJ, in the U.S. there is no real protection for workers. Much of the protections workers have had has been chipped away at over the years. There are some good companies out there that work with their employees, but I think a majority of big companies are run by sociopaths who couldn’t care less at about the people who are on the payroll. “Make a quick dollar then to hell with everyone” is there motto.
Something I’ve noticed in my business is that customers no longer expect people to get personal. It’s nice, but they’re so used to dealing with bigger corporations who shuffle them in and out like cattle that they don’t know quite how to handle a more personal interaction. Some people like it, and some people don’t.
I’m so glad you brought up Apple because I don’t like working with them. I must say that from a B2B perspective, Apple is THE WORST company I have ever dealt with. Their individual customers may love them, but their corporate side stinks. However, they’ve built an empire that makes it hard to go around them. They make the rules, and we all play by them.
Jen, I have spent many years dealing with gig High Tech. companies at the B2B level. The people that I really hated to deal with was the Intel people at just about any level. I didn’t have a lot of Intel processor opportunities in my area, and I felt if I did find them Intel would give the best price to my competitor anyway.
Working in distribution of electronics components was brutal. You never knew ho to trust. I remember having a lunch manufacture’s reps from different companies. I had competitors sitting with me and fighting over who got my attention on big accounts. The politics were amazing.
I remember one day having to drive 100 miles to Portland to attend a mandatory beer drinking get-together with the Texas Instruments sales team.
Oh, and I quit a job as a trainer at a call center to get the aforementioned sales job, so I understand what it’s like in that environment.
I did have some very good interactions with Century Link here recently, it was very refreshing.
Ah I find this so interesting. You would think that a company like Apple who puts all its effort in making it’s customer happy and dependent on its products would use the same principle for it’s employees right? Sometimes I just don’t get how a business that is build out of people eventually shuts down everything that is human. But then again society is build around money. Quite frustrating at times -_-’
Dan, if you had said ‘No. I can not go to that beer drinking gathering it is 100 miles away!’, would that be a enough reason to fire you?
Absolutely TJ, the law in the state of Oregon uses “At Will,” this means:
From Wikipedia, “Any hiring is presumed to be “at will”; that is, the employer is free to discharge individuals “for good cause, or bad cause, or no cause at all,” and the employee is equally free to quit, strike, or otherwise cease work. that you can quit at will or be fired at will.”
I know someone who was fired for not going on a “business excursion” to a strip club.
Isn’t that pathetic.