Tag Archives: saving the deal

When Things Go Wrong: How to Stay CompetitionProof When You Fail

I had a recent situation where I wasn’t able to meet a commitment to my customers. It wasn’t completely my fault—a delayed flight because of weather meant I missed a remote training event that I was paid to deliver.

Yet it was my responsibility because I agreed to deliver the class and knew that I would be coming off of a flight 90 minutes before the event, not leaving a lot of margin for error. But arrogant confidence got the better of me and I didn’t make alternate arrangements. (I’ll tell you how it turned out later in this article.)

I want to share with you the seven things to do when you can’t keep your commitment to your customer. 

But first, a little background…

When I ask a group of sales professionals, “What do you think gets a buyer—someone who is in procurement—fired? What is their key performance indicator that if they keep it high, they stay in their job, but if it’s low, they get canned?”

Almost every group answers, “Paying too much!”

That’s a reasonable answer based on how buyers behave. They always act like they’ll lose their job if you don’t give them the best possible price and undercut the competition. Or at least that’s what they’re taught to do in negotiating classes. If you didn’t believe them, you’d never give them a better deal.

Reality is different. Buyers get fired if they are out of stock or can’t get delivery by their internal deadline because if the company doesn’t have what it needs to run their business, they’re out of business.

According to a survey by Laurence Steinmetz in his book “Selling at Prices Higher Then Your Competitors” (which, notably, costs more than other sales books of the same size), a buyer’s greatest fear is non-delivery. Eighty percent of buyers interviewed stated that they choose the vendor with the best delivery record. 

Think about it this way, a buyer never gets fired for paying too much, because if they did, the most expensive companies in the world would never get orders. Taking a page from IBM’s sales playbook, “No one has ever been fired for buying IBM.”

You can replace IBM with a wide variety of vendors: Cisco, HP, Xerox, AT&T, and so forth. Rarely are these vendors the cheapest and often they are the most expensive. Yet, they command the lion’s share of their market for their areas of expertise. Customers buy from these market—and price—leaders because they deliver every time!

This means that you have got to deliver when you promise or you lose credibility with your customer, damaging your critical relationship.

Your entire sales life, you’ve heard the phrase, “Under promise and over deliver.” I suggest that you take it a step further. “Promise what the customer needs, and over deliver on that.” 

Which brings me to the first point.

1) Make Room for Error

Make sure your delivery promise matches the customer’s requirements, with room to adjust it sooner or later if their situation changes. While many customers will do their best to make accurate delivery demands, if they’ve been burned before, they’ll require that you deliver sooner than they really need in response to the sins of other venders (hopefully not in reaction your transgressions.) 

Most prudent, experienced customers will include a time buffer for critical orders. And who could blame them; for example, expectant parents always set up the nursery months before the scheduled arrival date, just in case.

There are always flat tires, and someone gets sick, and a kid or three needs to go to the doctor. You’ve got to make room for life to happen. With that in mind, you’ll need some buffer.

2) What are the Options?

Brainstorm options to make the delivery schedule. What can you think of that could solve the problem? Explore other sources for the product or service, even if you might have to take a loss on the deal. Better to buy from a competitor and keep customer commitment than spoil your valuable relationship. Besides, your customer will be forced to buy from the competitor if you can’t deliver.

Or maybe you can hijack a demo unit for a couple of weeks.

Surely you can shuffle another customer delivery that has more slack in the schedule. What if you slipped the delivery for that customer that just called to say, “Can we push out delivery by a month?” Everybody’s happy with this outcome.

3) Alert the Boss

The instant you detect that there might be a delivery problem, let your management know. I learned early in my career to approach the boss with a list of options and an attitude of, “…and I’m open to other suggestions.” (Just a technical note: the word, alternative implies only two choices. That’s why I use the word, options instead of alternatives.)

Your manager often has solutions to problems that you haven’t yet faced—otherwise they wouldn’t be managers (theoretically). They might know an easy fix or have access to resources and contacts that you don’t (yet).

One of the things I’ve learned about management is that they hate surprises. If you wait until the last minute, they’ll have to scramble—reprioritizing elements that you don’t know about—and you’ll be tagged as a problem child (a career-killing label).

Give your manager breathing room and they can be their best. And when they’re their best, you make more money and get what you want in your career.

4) Communicate Now!

Communicate with the customer as soon as you can with your options. The sooner you let them know, the more breathing room they’ll have, and the better it will go for everyone. 

(In my case, the moment my delayed plane hit the ground, I unsuccessfully battled the iPhone browser to access my list server to alert my customers. I ended up crashing an airline-club WiFi connection to get on-line with my laptop. The alert hit their mailboxes two minutes before show time. I’m not trying to sound heroic, I sure learned from that experience!)

Although you might think it will be painful, I recommend the personal touch with a phone call. Most customers will really appreciate that you called to fill them in and in the face of trouble, you’ll reinforce your relationship.

An alternative is a well-written e-mail that outlines the situation and your solution. Keep in mind that email counts as a written communication in many courts of law, so make sure that you write in integrity, knowing that you’ll have to deliver on that promise, too. 

5) Increase Customer Comfort

If there are things that you can offer to improve your customer’s situation, find out what the customer thinks. That could bring them some comfort.

Don’t make your customer wrong and whenever possible, don’t make your customer take the hit. Your customer will go through their emotions ranging from disappointment to fear, so even though this is business, be prepared for something emotional to show up. 

It’s always wise to have your manager contact the customer to see if there is something that they can communicate to the customer’s boss. Don’t contact the customer’s boss without their permission! The customer may have reasons of their own to not let their boss know. Although for us, we know different.

6) Apologize Appropriately

After presenting the solution to your customer’s satisfaction, then it’s time to apologize for the inconvenience and hassle. Psychologically, until the customer can be receptive to an apology, saying, “I’m sorry” can cause more harm than good because it may come across as condescending.

Until they know that it’s going to work out, they will begrudgingly accept your apology because they are still injured. After they see that all is well, they can accept your apology and mean it. 

Saying, “I apologize for the inconvenience and heartburn this situation has created” acknowledges the damage done. But that’s not enough. The four most powerful words that begin to erase the effects of a mistake are, “Will you forgive me?”

The great thing about forgiveness is that once they do, they can’t bring it up again. It’s really cheesy to un-forgive someone.

7) Give Them Compensation

Compensate the customer for more than their loss.

My son, Harrison, yesterday told me a story about the restaurant where he works; it’s one of the city’s finest and a top pick for business dinners. A rogue waitress melted down and began to insult diners, being rude and unresponsive. The owner fired her on the spot after multiple complaints from diners, including hand-delivered, written feedback. Harrison had to clean it up with some of the diners. “We bought their entire dinner, and they still were unhappy,” he told me. Can you blame them? 

The real issue here is that social media accelerates the travel of bad news. If I “dis” a vendor on Facebook, hundreds of people find out about it. If I Tweet about it, thousands may take notice. That’s why you have to make it more than better immediately.

I recommend going beyond the customer’s loss and making them come out ahead because of the problem. In the case of the restaurant, after confirming that the paying party was a local, I would have pulled out my business card and hand write a coupon good for $100 at the bar valid for the next month. If they were from out of town, I would have written $25 bar tabs for the locals around the table. You’ve got to get them back for a great experience as soon as you can to erase the negative night out.

Why a bar tab? Because it’s the highest margin item in the restaurant which means the lowest cost to deliver the compensation. A $100 bar tab costs $25 to deliver and you save a client.

For other industries, it might be a free seat in a class that’s scheduled. It only incurs the cost of training materials and coffee yet delivers a lot of value to the customer and creates the opportunity to create a most positive outcome.

In the case of IT, I recommend looking for a high margin consumable, such as supplies, accessories, and upgrades. They’ll have a better experience because of the failure and you’ll ultimately benefit.

Airlines have been good at this in the case of denied boarding by giving away free air travel and still getting you to your destination, usually in a first class seat (ask the gate agent for a inconvenience upgrade).

So how much should you spend to compensate them? That depends on how valuable they are. At the very least, you should be willing to spend what it takes to get a new customer. You can calculate this by dividing your marketing budget by the number of new customers you get from that budget. For example, if you spend $5,000 to get 50 customers, you should be willing to spend at least $100 ($5000/50) to keep a customer. Some would argue that it’s worth more than that. Leave that to your boss to determine what’s the right number.

When you choose to use these tactics to implement a perfect-delivery-record strategy, you’ll find that you can easily recover from a mis-delivery, cementing your relationship with your customer and creating a CompetitionProof customer environment.

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