February 7th, 2010 12:19 EST
Selling Yourself Out of Business
All too often, the ultimate sale turns into the ultimate nightmare. It doesn`t usually start out that way. Then, when you`re least expecting it, you get a call out of the blue. That one call changes your, and your company`s, life forever.
The scenario goes something like this:
You`re pitching your product or service to a large organization. The type of company that most sales people and/or entrepreneurs dream about doing business with. You finally get a meeting and a chance to make your presentation. You`ve made all the right moves and continue to follow-up. Things look good - they seem to love you and your company.
Congratulations, you get the contract! Everything is going great. Products and/or services are delivered on time. Your client is using more and more of your capacity. Payments come in like clockwork.
Everybody in your company is pulling together, working full tilt. In fact, you`ve even added a few people to help with the extra demand. Your new client now accounts for a sizable percentage your company`s total business.
Sounds great, right? Wrong.
Never let one client represent such a large portion of your business that if you lose that client, you`re either out of business or really working for them!
Clients can be fickle. They can change their minds, or change the terms of doing business, which could of course, adversely affect your business.
To prevent this from happening, it`s extremely important to continuously monitor the time, money and effort that your company expends on servicing and satisfying the largest clients. The key is to keep a balance. When you acquire a very large client, you need to plan how you can strategically service that client, while still keeping your other clients happy, and still be able to grow your business by adding additional clients.
There`s a classic case in the clothing business that illustrates this point. A certain huge department store chain was very adept at bringing on new vendors. Little by little the chain would demand greater and greater amounts of production time by placing more orders. However, at the same time, the client began to turn the screws on the vendor. It returned slow moving inventory contrary to the original deal. It demanded better prices, beyond the great ones it was already getting. And then, it started to pay slower. But what could the vendor do? Risk losing the business?
A recipe for disaster!
Being dependent on a large volume of business creates a quandary. It`s a lot like trying to negotiate with a thousand pound grizzly bear? It`s impossible.
The salesperson, once ecstatic about landing the account, now finds him/herself returning commissions, losing points on new commissions, or worse yet, losing the job. The company now finds itself working for lower profit margins, or in extreme situations, for no profits at all.
Unfortunately, many businesses succumb to financial disaster in situations similar to the case above. Though the temptation to acquire a huge client is great, remember, you`re really hunting for a thousand pound grizzly bear and could be consumed.
A better strategy would be to have all your strategic plans in place beforehand and to fully understand the risks, as well as the rewards. And if you aren`t fully prepared to deal with this beast, you may be better off letting it go.
Dan Goldberg is a keynote speaker and the President of Dan Goldberg Consulting, L.L.C. a training, coaching and business development firm located in the Philadelphia, PA area. He is the author of the book Lighten Up and Lead, " co-author (with Don Martin) of the book, The Entrepreneur`s Guide to Successful Leadership, " and author of The Six Steps To Solid Sales Success™, " and The Seven Elements of Successful Leadership™ " programs and the audio tape Growing A Successful Business ". You can contact him at firstname.lastname@example.org, visit his website at www.dangoldberg.com or reach him at (215) 233-5352. You can also follow Dan on twitter at: http://twitter.com/dannygoldberg, become a fan of Dan on facebook at: http://www.facebook.com/DanGoldbergFB, and/or join his new facebook group; Mastering enLightened Leadership™at: http://bit.ly/DanGMeL.