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The most powerful word in marketing is free. Well, we all know that nothing really is free. I had this point made clearly to me by a major customer. The renewal date was fast approaching on a supply contract with a fortune 500 industrial customer. We served this customer from four branches as the client had manufacturing plants in four states.
As all politics are local, prior to my trip, I surveyed each plant’s purchasing, maintenance and engineering contacts and they all agreed we were an excellent supplier. They could influence the corporate purchasing person who negotiated the contract renewal, but as the corporate office was nine states away, they knew the buyer’s name but didn’t really have a personal relationship with her.
The other circumstance was that the previous buyer had been promoted and I would be meeting with the new sheriff in town. And of course, to make it more interesting, they invited three competitors to the negotiation ceremony.
Typically, the corporate office is never the direct beneficiary of all the goodness we had provided to the individual plants. When I was ushered in to meet the new decision maker, all the corporate buyer had with her was a blank piece of paper and an excel spreadsheet showing what we had sold the company and the unit price. Her opening statement was that her company had purchased several million dollars of material from my company. I responded, “Yes, that’s true, but not on purpose you didn’t!”
I explained that most of her company’s spend was the typical maintenance, repair and operations scenario of unplanned events where something broke unexpectedly. My company responded 24/7 to the 911 call with the material and expertise needed to fix the situation. I added that the company’s plants are in remote areas and our local branches communicate with their local people to make sure we have locally inventoried material that, in most cases, was exclusive to their manufacturing process.
I provided information outlining how many actual transactions were required to respond to their daily, unplanned crises. For emphasis, I added how often we provided free heroic recoveries, deliveries and educational training, etc. She asked if we had charged them for any of my anecdotal examples. I proudly said it was free. No charge.
She said that, unfortunately, there is no audit trail on free services. Everything I mentioned had a value and we should have included it on our invoices. Even if we had credited the service fees at least, it would be documented so that she could take it into consideration for her evaluation.
She then asked if I admired her strategy to have two or three competitors waiting in the lobby at the same time she would negotiate with the incumbent contract holder (me)? She smiled and said, “I only get to do this ceremony every three years, so I try to have some fun, too.”
We ended up talking about sustainability, green solutions, critical spares, continuous improvement, activity-based costing, ISO-9000, Six Sigma, total cost vs. unit cost, using technology to reduce the cost of acquisition, possession of products and usage of products in their unique manufacturing process. We spent an hour on these subjects and I was impressed with her input and ideas.
Our meeting occurred in Alabama, and at the end of our business discussion, she asked if I was an Alabama or Auburn sports fan? Instantly, I could sense that the wrong answer could be bad for me. I responded that I respected the rivalry and liked them both. I explained that my son-in-law went to Nebraska and he had converted me to being a Husker fan. She said, “Good answer!”
She ended our meeting with the encouraging statement that an incumbent supplier that performs at such a high level to have four plant managers personally reach out to her with a positive message and recommendation has an edge on retaining the business. One of the plant managers volunteered that we were his insurance policy — another cogent reminder that sales is all about creating memories your customer will never forget and each transaction is another opportunity to bond to the customer.
We wrapped up our discussion and she thanked me for being her supplier and partner. Her final parting statement was to admonish me to please remember her comment, that there is no audit trail on a free service. I replied that the lesson was learned, and thanked her.
Her last two words as I was walking out the door were “Roll Tide!” She has a sense of humor. Another lesson: Customers are real people, too!
Ernie Coutermarsh spent 50 years at F.W. Webb, retiring in December 2019 as senior vice president of industrial business development. Today, Coutermarsh is a wholesale distribution expert, advisor and mentor in the distribution arena. He can be reached at email@example.com.