How do I stop my salespeople from taking my customers?

Monday, May 4th, 2009

Dear Norm:
I’ve heard you say that—if you run your business right—departing employees shouldn’t be able to take your customers with them. So what am I doing wrong? I give our project managers and salespeople a lot of freedom to serve customers. After a year or two, the employees walk off with the account. Each time, I get the same feeling as when I receive a letter from the IRS.

Dear Charles,
Start by looking at your hiring practices. It sounds as though you could do a better job of spotting salespeople who want to be around for the long term. You also need to be proactive. You’re asking for trouble if you and your operations people don’t have regular contact with customers. That’s the only way to make sure a customer belongs to the company, not to the salesperson. I’m careful not to step on the toes of our salespeople, and they’re happy I’m so visible. My presence gives them a competitive advantage. They’d have only one reason to object: if they didn’t really have the company’s interests at heart.
Yours truly, Norm

Permalink  |  Posted in Customers, Employees, Ethics

Will selling to customers online upset our dealers?

Monday, March 16th, 2009

Dear Norm,
We are a $40-million manufacturer, and we distribute our products through 250 independent dealers in North America and Europe. How can we use the Internet to sell products to the end user without upsetting our loyal dealers?

Dear Chris,
I doubt your dealers will be upset as long as you sell at the same price they charge and give them a commission on any sales in their area. In fact, they’ll probably encourage you. It’s trickier if you’re planning to sell your products for less. You’re going to need the dealers’ permission to do that, and you may have to agree to pay them their normal commission on the sales in their area. In any case, the key here is communication. I’d start by sending out a questionnaire to the dealers. Tell them you want to give them an opportunity to make a lot more money by earning commissions on sales over the Internet. Explain how the system would work, and ask them what they think. As long as you communicate properly, you should be all right. If you don’t, you’ll have a problem no matter what you do.
Yours truly, Norm

Permalink  |  Posted in Customers, Dealers, Ethics, Internet

Should I give up on a sale?

Monday, January 19th, 2009

Dear Norm,
I am a fledgling neckwear designer, and I’ve finally gotten all my ducks in a row. I contacted a local menswear chain and persuaded the buyer to take a look. I sent him tie samples, fabric swatches, photos, everything. Two months ago he assured me he was going to place an order. Since then I’ve called him repeatedly, and he always tells me he’s about to fax the order, but he never does. I’m having second thoughts about doing business with someone whose word doesn’t mean anything. Should I keep pestering him?

Dear Pam,
I’d bill him for the ties with a tongue-in-cheek note. Say something like, “I’m sure you loved my ties so much, you’re probably wearing them, but as a small-business person, I have to get paid for my services. If you are not satisfied with the ties for any reason, you can always return them. Otherwise please send me a check.”
Yours truly, Norm

Permalink  |  Posted in Customers, Sales

What should I do about an unethical competitor?

Monday, January 5th, 2009

Dear Norm,
What should I do about an unethical competitor? I recently opened a service business that has been very successful, but our success has drawn the attention of a large established company in town, which is taking aim at us with marketing materials that misrepresent our service and professionalism. These people have played dirty before. I’d like to think their practices would catch up with them, but that hasn’t happened yet, and I’m afraid they have so much cash they can outlast the rest of us. Any advice?

Dear Rob,
Yes. Don’t lose your focus. Provide great service at competitive prices and develop a reputation as the class act in town. Give prospects the names of customers they can call to check you out. Above all, don’t badmouth your competitor, even if it’s badmouthing you. Customers will think less of you if you do. That’s an iron rule in my company. If I’m asked about a competitor I consider unethical, I say only, “I don’t think they can provide the type of service you want.” People get the message. If your competitor doesn’t mend its ways, it will be the loser in the long run.
Yours truly, Norm

Permalink  |  Posted in Competitors, Customers, Ethics

How do I attract customers to my new business?

Monday, November 10th, 2008

Dear Norm,
I’m in the process of opening an educational facility, but I can’t get anybody to sign up. I’ve blanketed fairs and festivals with my information. I’ve run newspaper ads and held open houses. Our prices are lower than our competitors’ and we charge no registration fee, but we have no takers. What else can I do?

Dear Kathy,
Never assume a business can’t succeed just because you get nowhere with your initial marketing attempts. I started my messenger company with a mass mailing, offering to do the first five deliveries for free. I got zero response. I was baffled until an office manager told me, “We do dozens of deliveries everyday. Five means nothing. What about the next fifty?” So the market was there. I was just trying to get customers the wrong way. In your case, price is not the main concern of parents. If they’re going to send you their children, they have to know you, trust you, think well of you. I’d try working through community clubs, social groups, churches, and synagogues. Do a brochure with testimonials from local people saying how terrific you are with children. Later on, open houses will be important, and price may become an issue, but first you have to establish your trustworthiness.
Yours truly, Norm

Permalink  |  Posted in Customers, Startups