Yesterday, during a telephone conversation, one of our customers mentioned the difficulties he is having with one of their current suppliers, whose contract has not been renewed. From a certain date a new supplier will take over, and in the meantime the outgoing one is not really facilitating the collaboration…
The story reminded me of one of the first lessons I learned many years ago when I first entered the world of marketing and sales.
It was the early ’90s. The Kodak division I joined was selling high-speed copiers for high volume production. To distinguish them from ordinary aisle copiers, they were called “duplicators”. This equipment cost between 50 and over 100 million lire at the time. The customers were (public or private) organisations with an in-house printing centre.
The type of sale was a classic complex sales model, because each negotiation involved several parties, there were application needs to be analysed to offer the right product, and the supply consisted of the product plus a technical support contract. Finally, all of this resulted in operational rental contracts that lasted from 3 to 5 years for a monthly turnover of millions of lire.
It goes without saying that when an expiring contract was neither upgraded to the new product, nor renewed/extended, it meant going out and stopping a ride. And that ride could last from 3 to 5 years. It was not a good moment.
The Sales Director of the division was called V.M. (I quote here for confidentiality only the initials). He was an authentic “commercial-commercial”, a real man of sales.
I still remember vividly the recommendations he made to service technicians and salespeople when we lost a customer.
He told the technicians:
Please, service technicians and call centre operators who handle service requests: I want us to provide impeccable service until the last call on the last day. We have to leave an absolutely professional image.
The customer’s recovery begins now.
To the salespeople, he said:
Sales Officer and Area Manager: Make sure you continue to visit the customer on a regular basis. Don’t make the mistake of forgetting about it for the next three years and then coming back to visit him in the near future, otherwise we will never enter again.
Do not miss the opportunity to go and present our new products and services, find new applications, propose solutions that allow us to keep a little foot inside.
Remember that we have to go out the door with our heads held high, and that if we continue to treat the customer without a vindictive spirit, it is more likely that the customer will offer us the opportunity to go back through the window.
The customer’s recovery begins now.
They were not motivational speeches to keep the morale of the troop up: V.M. said this because, as a professional salesman, he really believed it was the right approach.
And he didn’t back down personally either: he was able to pick up the phone and make an appointment with the customer to make sure that he was there the very morning our machine was uninstalled, and the model of the competition was installed.
When in internal meetings with management he told what he would do to stay within a certain account that was passing to the competition, what struck me most was the clarity of his vision. He had a clear idea of the next steps to take. And hearing him describe his action plan, it already seemed to see our product coming out of the door and magically coming in through the window …
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The best exit strategy
Needless to say, this exit strategy was in fact very often successful.
I can’t count the times when at the last minute the equipment intended to leave was kept inside. Sometimes just as a support machine for the hated product of the competitor who took over with much fanfare. Other times, instead, it was perhaps relocated to another customer site.
But in any case, three fundamental aims were achieved:
- the machine continued to produce clicks, and therefore to generate turnover (less than before, but always better than rusting in a warehouse);
- it helped to pay part of the salary of the technician and of the entire organization;
- it remained a bridgehead at the customer’s premises, which allowed us to offer updates with new products over time, as well as remaining an active supplier to the customer, ready to be invited for the next renewal in 36 or 48 or 60 months.
What’s the moral of this story?
These recommendations of twenty years ago sound just like what is today’s mantra for us at B2B:
Lead generation is not an event: it is an ongoing process.
We must never stop generating new leads, or continuing to cultivate and feed them, because lead generation is of little use if it does not accompany us in the nurturing of every relationship.
In particular, then, if a customer has chosen a different solution, it is from this moment that we must strive to continue to cultivate the relationship to make sure to generate the next opportunity.
The work to win back a customer begins the same day the customer tells you that your roads will separate.
I know: the temptation to send him to hell is strong. Raise your hand if you’ve never thought “Fuck you!” when a customer says NO. (I confess I did it too).
But after the first understandable impulsive outburst, the supplier does not benefit from victimhood or hatred. It’s much more effective to try not to look with resentment at the ex-customer or the non-customer. And to continue instead to cultivate the relationship, acknowledging that the ups and downs of the relationship are things that can happen.
Let’s use the “VM Method”: it works.