Sales in the Scotch whisky business was a relatively robust experience. Contracts were all renegotiated annually and competition was fierce since the packaging we sold was nearly always sourced from several suppliers. It kept suppliers like us hungry and it kept life interesting.
Fortunately for me something just clicked with the biggest of my new clients when I joined the business: I got on really well with their product development team, their operations people were open to new ideas and always willing to share what their agendas were in terms of business improvement, their marketing people seemed more than keen to find out what proactive suppliers like us were able to do. It was sales guy heaven and I was one of the gang on the inside.
There were times when my buddy buddy relationship with my customer was viewed quite critically by my own company. Sometimes I appeared to be a bit too much of the “customer’s champion” during internal discussions about pricing and cost sharing: “whose side are you on?” was an accusing question thrown at me more than once. To be fair it was a reasonable question and having mulled it over for a while I worked out a smarty pants response “I’m on the side of the business relationship.” I would say smugly and use this as my basis for spending ever more time hanging out with all my pals inside the customer.
The relationship deepened. We even shared a common enemy – their purchasing department. In almost every meeting we had there would be a great flow of energy between us and the customer with new ideas coming out all the time then somebody would throw a wet blanket over the whole thing by mentioning that we would need to get the Purchasing Zombie involved. Every joint project seemed to grind to a halt over such fun and productive subjects as cost base analysis, strategic purchasing policies, vendor approval ratings and the ever popular business case presentation. Every question we answered created two more questions straight back, more paperwork more justification and more delay.
We would sit long into the evening with our counterparts from the customer side dreaming up ways to try and circumvent the evil grasp of Purchasing which earned the name the Progress Prevention Department. More than once we would go to the customer’s senior management together with their own team to get their blessing for one of our clever workarounds in order to thwart the procurement enemy and often we won.
Then came the annual contract negotiations.
With so much of our business with this customer being sourced from multiple suppliers we always knew that we had to fight our corner so we put together a great negotiation pack we worked out our opening stance, what we actually expected to get and what our true “walk away” pricing was. I personally spent a long, long time creating a truly marvellous 45 slide PowerPoint modestly boasting about our tremendous contribution to the client’s business with our agile and innovative product development process. Our management were pleased and I was just a little bit of a star internally with my snappy pitch. Other members of the sales team were told to “copy Bill’s approach” so I was popular with my colleagues too.
The client team sat patiently through our contract proposal and slept quietly through my PowerPoint presentation and told us they would respond to all suppliers in due course.
When they eventually made their responses to our proposal our share of their business had been reduced by nearly 30% which was a seven figure sum in cash terms. It was one of those moments you see in the movies when the room spins round and the dummy is in the middle of the screen staring at a sheet of paper. My world came to an end.
My bosses were not too happy and I was less of a star all of a sudden.
I set up a meeting between my CEO and their CEO to find out what had gone so horribly wrong. The meeting went a bit like this:
My CEO: Our people worked really hard with your people all year and I thought we had done some really good things so we were a bit surprised when you took 30% of our business away and gave it to our competitors.
Their CEO: Yes, I can well imagine that was an unpleasant piece of news.
My CEO: It was indeed very unpleasant and we are a bit confused, perhaps you could tell us what caused you to make such a big decision, if you don’t mind.
Their CEO: Well you see it turns out that some members of our leadership team actually think that your company can’t really be trusted.
My CEO: Can’t be trusted? What do you mean by that if you don’t mind me asking?
Their CEO: From the feedback we had during our internal contract review it seems that your team spends a lot of time finding creative ways to try and circumvent our strategic purchasing policies and our vendor approval rating system as well as our way of reviewing business cases. We hear that some of your people almost gang up with some of our people to create clever workarounds to avoid working with our Purchasing Department. We don’t like suppliers running clever games with our internal processes. That’s why we reduced your business with us.
I wasn’t fired but sacking me would have been a reasonable course of action. Worse came when I went and told my pals within the customer about how shocking the evil Purchasing leader had been with us. Their response? “Well he was just doing his job I suppose.”
No matter how close the personal bonds seem to be with your strongest allies in a customer it is the whole relationship that matters, and that means having a solid and cold perspective on who really drives the buying decisions. Customers may ask you along to their social events but there is no point in being invited to the barbecue if you are not invited to the board room too.
By: Bill Morrison
This article is an entrie for our Sales Story Contest