The Complacency Factor

Filed Under (Uncategorized) by Don on 13-06-2007

Graham Hill in his very informative blog referenced a paper by Kim & Mauborgne titled Value Innovation.   An interesting point was raised in the paper that I believe is a real issue confronting many dealers and reps today.  That issue is what I refer to as the complacency factor.  I have observed companies and especially reps come to a point where they are very complacent in their surroundings.  Their daily work schedule and earnings have come to a place where they are comfortable.  They can do a minimum amount of work and maintain their earnings without regard to attrition and the stress that prospecting brings.  The end result is they lack growth and therefore the company doesn’t grow either.  This “ho-hum” attitude needs to be recognized early on and dealt with immediately.  I understand how easy it can be to fall into this trap of complacency but I can assure you that the only outcome will be lost margins and revenues that will sneak up on you faster than a sunburn at the beach.  If you are not cautious in this area you will have lost valuable business amounting to tens of thousands of dollars in lost revenues and you will have a panic attack trying to figure out how to replace those lost sales.  Attrition is a reality that you cannot ignore.  It takes time and diligence to bring on new business yet it takes only moments to lose an account. 

I can attest to this factor myself.  Many years ago I had a large account that did over $38K per month with me and I enjoyed a healthy 36% margin.  I spent a lot of time in the account an soon began to ignore my smaller accounts.  My sales still grew but only due to the increased spending of this one large account.  If I had paid attention I would have seen in my reports that I was losing three to five smaller customers every month due to my own negligence.  One day my large account made a surprise announcement that they had been purchased by an out of state competitor.  Guess what happened.  Within two months I lost the account and a very considerable amount of income for myself and my company.  After the shock wore off it didn’t take long for me to see the damage I had done to my customer base.  It took me nearly two years to recover those lost sales and replace that business.  My customers were very honest with me and said they quit buying because they never saw me any longer.  I salvaged a few of them but the better ones never returned because they found someone to fill the void I left when I got complacent. 

You may think that your relationship with your customers will save you from such losses.  Don’t be so arrogant as to think that your competition isn’t in there every week trying to take the business from you!  Those relationships have to be nurtured and you must constantly be introducing new products and services to your customers and educate them on the value of doing business with you and your company.  People still prefer to associate a face with the company they do business with.  We marketers can get caught up in thinking that we can communicate with everyone by e-mail, snail-mail or on the web.  However the most successful businesses know that it is the human touch that stands out in the crowd.  This personal touch is where you find the highest margins and the most satisfied customers.  These are customers that you have educated on the who, what, where, when, how and why to do business with you and your company. 

If you’re that comfortable then go ahead an retire!  What’s your opinion?  Have you gotten so complacent that you have forgotten how to prospect?

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