767 words.  Reading time:  2 - 3 minutes.

One Smart Way to Move Ahead 

with Demanding Customers 
 

by Dov Gordon

Customers and will sometimes make expensive demands that may even look like deal breakers.  In the following three scenarios I offered essentially the same simple insight, helping generate ideas and possibilities no one had seen before.

SCENARIO 1:  A fast growing specialty manufacturer with about $12,000,000 in annual revenues sells their products exclusively through a specific type of retailer.

"How can we help the retailers sell more product?" senior management wanted to know.  To their credit, they did the obvious but often overlooked: They visited retailers and asked.

"Give us more free product to use with our own customers,” they said.  “You should also advertise more to create demand.”

Maybe.  But maybe not.

The company chose to sell through these kinds of retailers because these retailers have the trust and respect of the end user.  Many would buy this high end product on their say-so. Advertising and more free samples might help, and it might not. Are more free samples and advertising really the points of highest leverage here?

SCENARIO 2:  At a recent event, a professional service provider complained that her clients only want to work with her and not her employees. While flattering, this demand obviously limited her growth and profitability.

SCENARIO 3:  The owners of a small company had been in talks with a web designer about redoing their website.  They liked the web designer and felt they could trust him. However, they were ready to walk because they were concerned about his fee structure.  He offered a fixed price for a certain number of options and revisions.  Anything after that would incur an hourly fee.  Cash was very tight so his hourly fee concerned them.


A SINGLE POINT OF LEVERAGE FOR ALL THREE SCENARIOS

There is a classic story told in negotiation circles about two kids who came crying to their mother, each demanding the last orange in the fridge.  Their exasperated mother cut it in half and gave half to each. Was anyone happy now? No.

One child had wanted to eat the pulp, which he did and promptly threw away the peel. The other child had wanted to make candied orange peel. He candied his half and threw away the pulp.

Unfortunate compromises like these happen when we focus on positions rather than interests.

The specialty retailer's position was essentially "If you, the manufacturer, spend more on advertising and free samples, we will be able to sell more."

What was his interest?  He wants to sell as much as possible, with the fattest possible profit margins while deepening the trust and respect his own clients have for him. He will promote the product that best meets this cocktail of sometimes competing objectives.

So before throwing money into advertising (which, as an aside, is so often a crap shoot and a big waste) and more free samples, I helped the company generate ideas for less expensive ways to help meet the retailers’ real interests, rather than just their position.

The service provider faced the same dynamic: Her client doesn't really care who does the work and how, as long as the result is what they wanted. The conversation she needs to have with her client is this:  "You say you want me to do this myself. What I'm hearing is that you want to be comfortable and confident that the results will be exactly as we agreed, giving you A, B and C. Is that correct?"

Once they agree on clear project outcomes, she can say "So here's what we will do:  I will be responsible for meeting the objectives.  You and I will both be responsible for measuring and monitoring our progress.  This way you don't need to concern yourself at all with how things get done, only enjoy them once they are done."

Finally, the company looking for a new website.  The designer's position was that he charges an hourly fee if the client wants more than a ‘x’ number of revisions.  His interest is in avoiding endless revisions with nitpicky or irrational clients.  The client's interest was to know their total investment upfront, thereby limiting their risk. If they sit down and discuss interests rather than positions they can figure out how to do business together.

REDUCE THE COST OF MISUNDERSTANDINGS BY UNEARTHING INTERESTS.

We find ourselves in these kinds of situations many times a day in both the professional and personal spheres.  So much money and time is wasted on poor communication and so much poor communication is caused by people debating or negotiation positions and not interests.

Next time someone tells you what they want, ask…  “Why?”

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DOV GORDON helps senior executives transcend the challenges, and leverage the opportunities, caused by growth and success.   He is sought after for his perspective and advice on formulating and implementing strategy, developing strong management at all levels and cultivating innovation. Dov can be reached via his websites http://www.GordonGroupEC.com and http://www.IsraeliCEO.com or via email at dovgordon@gmail.com.

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Archives of The CEO Thought-Provoker™ are here:  http://www.gordongroupec.com/articles.html

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Dov Gordon helps senior executives at small and mid-sized companies around the world to earn the respect and admiration of their marketplace.  Clients benefit from clarifying their strategies, sharpening their focus, better decision making, improved teamwork and growing into great leaders.

Management and Strategy Consulting.

Executive Coaching.

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Copyright 2008 © by Dov Gordon.  All rights reserved.