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What do customers want to know?
Saturday, July 19th, 2008

When Connie Customer looks at a potential supplier, what does Connie want and need to know? 

Reverse the roles for a minute and put yourself in Connie’s shoes.  What would you want to know if you were looking at a potential supplier? 

At the end of the day, the thing you want to know - the ONLY thing you want to know - is that, if you select the potential supplier, the potential supplier will help you meet your business goals.

In order to reach this conclusion, you will probably want to look at a variety of things such as:

  • Does the potential supplier work with customers that are like you?
  • What has the potential supplier helped these customers do?
  • How has the potential supplier worked with these customers?
  • When issues arose, how did the potential supplier deal with them?
  • What results did the potential supplier help the customers achieve?

Past experience of a firm is not a guarantee of future results.  A supplier may have been great in one context for one customer, but might be unable to help a different customer or the same customer achieve a different goal. 

Now that you know what Connie needs to know, what can Connie do to make sure that the potential supplier helps Connie achieve her business objectives?

Posted in Achieving Goals, Business Acumen, Negotiations, Planning Tips | No Comments »



Relationship tip: prevent problems
Wednesday, November 7th, 2007

The other day, John had a terrible negotiation. It went downhill from the instant he picked up the telephone. The customer was angry about how John had handled an issue. John was unprepared for the discussion. The customer started yelling at him, and John went on the defensive. The situation went from bad to worse.

What might John have done to avoid or deal with this issue?

For me, this is the cost justification for voice mail, caller ID, answering machines, and having people screen calls. These approaches yield results in two ways.

First, this approach reduces the risk that John will say something he regrets, or in anger. Once the words are spoken, it is very difficult to retract them. Often, if people have a built-in pause, they are less likely to say something they regret.

Second, this approach can provide John with enough information to prepare for the discussion. When John knows who is calling, he can (1) talk with his team about the account and see if there are known issues, (2) find out how the relationship is working from his team’s perspective, and (3) prepare for the discussion. In many cases, John may identify options or solutions that address the problems before returning the call. If John can do this, his value to all parties increases.

What other steps can John take to prevent or deal with the situation?

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Posted in Business Acumen, Business Trends, Negotiations, Planning Tips, Solving Problems | No Comments »



How important is attitude?
Sunday, October 28th, 2007

The other day, Joe wanted his supplier to give a discount because part of an order was defective. Joe started with a friendly approach. When the supplier wanted more information to understand the problem, Joe became hostile and accused the supplier of unethical behavior.

At this point, the supplier became frustrated and said, “Joe, you have been a good customer for several years. I think that I have been a good supplier for your business for several years. That said, your business isn’t worth the insults and abuse. Joe, I am going to eat the cost of your order. In the future though, please take your business elsewhere.”

To this comment, Joe replied, “You mean that you are going to give up my business that has brought you several thousand dollars a year?”

The supplier said, “Yes, Joe. That is exactly what I mean. The cost of having you as a customer outweighs the benefits. I hope that you find a supplier that better meets your needs.”

What steps might have enabled Joe or the supplier to avoid this situation? How could the issue have been defused in the conversation? Are these issues that you have encountered in your supplier or customer relationships? If so, what steps did you take? What would you do differently, if you faced this issue today?

In short, how important is attitude in your business (and what action do you take to manage it)?

Posted in Business Acumen, Customers, Negotiations, Solving Problems, Sourcing | No Comments »



Emotions in negotiation
Sunday, October 7th, 2007

In simple negotiations, emotions can lead to faster agreements. Think about the person who “falls in love” with a new car. In many cases, the person buys the car without regard to the fact that his or her current car is just a few years old and running fine.
When negotiations are more complex, longer, or fulfillment of the contract will require effort and commitment from all parties, some rely on emotion. Does it work? Well, it may work for some individuals even in this situation.
In these more complex negotiations, emotional responses can be a negative. When emotions are involved, important questions may go unanswered. These questions may include:

  1. How will we fulfill the deal?
  2. Why is this deal important to both parties?
  3. How can we make the deal better for everyone involved?
  4. What issues are likely to arise as part of the project? How will we know that the issues have arisen? What should happen if these issues arise?
  5. Who needs to have what information? Why? When do they need it?

In other words, emotional responses often prevent people from thinking through and planning for the real world issues that determine the success (or lack of success) associated with complex projects.
How can people deal with emotions in negotiations?

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Relationship tip: Communicate!
Thursday, September 6th, 2007

The other day, Sam said that he was going to come to the lodge with six boats (18 people). To prepare for Sam’s trip, we went to town and got groceries - milk, bread, eggs, and some other items.

Suppose that Sam calls tomorrow and says that the number of customers has changed and he is only bringing four boats (12 people).

Think about what this change might mean for a small business.

Is it material?

How might it impact groceries?

Might it impact other reservations?

Could it affect the number of people needed?

How would it impact the gross and net profit for the trip?

Asking questions like these can help people see the world through another person’s eyes. Before communication occurs, the people involved have to understand each other’s perspectives.

Posted in Business Tips, Negotiations, Solving Problems | No Comments »



Relationship Tip: Act in a manner consistent with the relationship sought
Friday, August 31st, 2007

Think about the way people act in personal relationships. In such situations, many are more open about feelings and make decisions based on feelings.

When these same people move into business relationships, they may act very differently. Why is that?

In many cases, the individuals have learned the importance of acting in a manner that is consistent with the relationship sought. The other persona - whether business or social - may have developed as insulation or because it is more effective, based on their prior experience.

Think about political or business leaders, for example. What would happen if they behaved on the campaign trail like they do when they are fighting to achieve a particular objective or their personal lives? While it might give constituents a good idea of who the person is at a human level, would this give constituents a good idea of how the person would act, if elected?

Consider context and the nature of the relationship sought (by one or both parties) in deciding the conduct, tone, and degree of information disclosed. Much of the communication in any “negotiation” is determined by the context and the nature of the relationship.

Perhaps, a good leader is a person who is able to adapt and behave in an appropriate manner based on the particular relationship involved? If so, a good leader is a person who is able to negotiate in a particular context. After all, that ability is what makes the good leader effective and that is one of the requirements that I have for good leaders. How about you? Can a good leader be ineffective?

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Relationship Tip: Walk your talk
Wednesday, August 15th, 2007

When handling contracts at large companies, I had to rely on suppliers to tell me the truth and to follow through on their commitments.

Many firms and people make commitments that they are not prepared and able to honor at the time the commitment is made. This usually leads to frustration and disappointment.

Rather than disappointing the customer, supplier, or friend, it makes more sense to make promises if and only if a person or business is ready, willing, and able to honor commitments to the letter.

This approach can frustrate and annoy people initially, especially those who are accustomed to promises and sales hype. Once they realize that you are serious, many people appreciate someone who stands behind his or her words and, in other words, “walks their talk,” even (or, perhaps, especially) in business.

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