National Contracts

Filed Under (OP Sales Training, The Competition) by Don on 19-01-2007

An account rep was complaining to me the other day that they were likely to loose a large account to one of the power channel players.  I recognize their concern and have personally had to deal with this issue in the past.  It is frustrating to compete with a national organization that is very fluent at bait and switch tactics and loading the contracts with fine print to make it nearly impossible to qualify for the rebates and incentives they promise.  Their incentives are based on inflated numbers and the odds are good that the customer will never be able to meet the volume required.  Presuming the rep has been actively working to build a solid relationship with the customer it should not be a problem to point out some of the potential issues they (the customer) will be facing.  It may be possible to retain their furniture or promotional products business or even their janitorial and custom printing.  All their business may not be a total loss and the products you keep may be the ones with the highest profit margins!

Another significant advantage of the independent dealer is that the national players have scaled back significantly on the quality and quantity of their field reps, specifically the knowledgable and experienced ones.  The time is very near when they will not have ANY field reps, all customer service will come over the phone or email.  The power channels cut back in this area has virtually eliminated the odds of an experienced and knowledgable rep being available for the customer to consult, solve problems and provide the superior level of customer service that the customer has come to rely on.  The reason for these cutbacks are simply cost savings measures.  In order for them to continue to be as price aggressive as they have been in the past they are forced to cut costs.  By cutting costs in the area of field reps and experience customer service reps the customer stands to loose the most. 

I have to admit that I get very frustrated at companies that send down directives from the ‘board room’ dictating that the staff comply with contracts and purchase agreements that the board or CEO has agreed to.  It is easy for someone to bark orders down the line when they themselves don’t have to deal with the poor service issues the buyers and users have to endure.  I have experienced a large customer loss when she informed me that the company CEO directed her to stop purchasing her supplies from me and to start with another supplier.  When my customer objected she was told to do it because she was the employee and needed to keep her job.  Several months later she complained that her “new supplier” had horrible customer service and they were actually paying higher prices than before.  She was abruptly told that the new supplier was the CEO’s neighbor and the CEO could care less about the price, he only wanted to appease his neighbor.  Ha!  Who do you think the CEO will blame when he see his costs rise and has to explain that to the shareholders!  The blame will be passed down the line to the buyer, that’s who!

I can think of at least a dozen such stories and I’m sure you have a few also!  The thing to remember here is you can compete against these national contracts.  Don’t loose your temper or your head.  Depend on your relationship, your integrity and customer service skills to win back and educate your customer.  When the time is right, ask to review their contract, you may discover than you are more price competitive than you imagined.  Consider all the services you can provide to them and the ‘value’ of doing business with you.  Continue to give your customer a unique ‘customer experience’ and you will always have an edge on the competition.  Keep your arsenol of selling skills stocked and your customers well serviced and hopefully when this problem arises you will be smart and prepared to win!

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