Making people and ideas findable
Going Green With Your Customers - Does doing the right thing by your customer stop when it impacts your profit?
So this is a snapshot of the conversation I had last week with a potential reseller.
Reseller: “So Chris you want me to offer your product instead of what I currently sell.”
Chris: “Yes that is correct.”
Reseller: “Chris your product pays me a $1500 commission every 3 years. But if I sold them what I always sell everyone I will make between $6,000 and $10,000 every year for the rest of that small business owners life. WHY would I sell them your product.”
Chris: “Because its the right thing to do for the small business owner and you know it.”
So I gave him this analogy. Currently you are selling your customer a gas guzzler car that gets 10 mpg and this guy is coming to you every 3 years for a new one and you just keep selling him this car. One day he will run into someone who will introduce him to a new hybrid model that gets 45 mpg and he will no longer be your customer. As he leaves you will say to him wait I can sell you that same hybrid! The customer will ask then why didn't you years ago when they first started being offered???? I decided to take it a step farther and add “and you won't ever get that guy back even if you are offering hybrids exclusively from here on out” Why because he trusted that you were watching his back and now that trust has been shattered.
So the question is are we watching our customers and clients backs? Are we scouting out new and innovative ways to save our customers money or are we just selling them the same old gas guzzler that we have always sold them and hoping they never open their eyes to what innovation has brought to the market place? The old saying is “Its easier to keep a customer than it is to find a new one.” Will you go green with your current and new customers or stick with the same ole same old hoping the customers never wise up?
Tags: backup, business, data, fileengine, going-green, green, hybrid, microsoft, offsite, safety
9 Comments
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Comment by Matt Zentz on September 30, 2008 at 9:54pm - Let's see.... others selling an inferior product for an amazingly steep price? Sounds familiar.
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Comment by Kyle Lacy on September 30, 2008 at 9:56pm - Great analogy in the post Chris! I am ready to go green. Where do I sign up?
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Comment by Colin Clark on October 1, 2008 at 9:42am - It's actually 5 times as expensive to recruit a new customer than to maintain an existing customer (I don't know if that stat is actually real, they said it on an episode of 'the Office'). But really Chris, are you seriously suggesting that we do the RIGHT THING! That's just crazy. I won't do it. All right...maybe I will.
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Comment by Bob Hoffman on October 1, 2008 at 10:30am -
It is hard to argue against doing the right thing for your customer, so I won't. If you do the right thing then you never have to worry about how you are going to stick up for yourself because you believe in what you are doing. I couldn't agree more with the expense of getting new clients vs. keeping the clients we have.
Questions / food for thought: would you do the same thing for a dollar if you knew it would put you out of business? Is it really possible that the products mentioned do the exact same things? Are the clients being "upsold" on bells and whistles that they do not really need? 100 times a day...can't be.
Thanks for the green thoughts.
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Comment by Chris Reed on October 1, 2008 at 10:35am - Thanks Bob for mentioning that. As for FileEngine we only serve a small business customer that has between 3 and 30 computers. So to your statement yes they are being oversold something with many more bells and whistles than they really need. Thanks again for that input!
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Comment by Jeff Bowe on October 1, 2008 at 10:35am
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Chris,
You pose an excellent point and one that is not new. Yes, there are suppliers out there not looking out for the best interests of their customers. If you were wearing different shoes, they might feel just fine on that walk. Wrong? Not the issue. Not a fight you will win every time. Will some suppliers eventually go out of business if they do not offer long term what customers want? Ask the Oldsmobile dealers--if you can track them down since they are all gone from not changing with the market. Will demand change the market? Yes. Demand is the pull side of economics, and the hybrid analogy illustrates it well. "The Giant" (your competition) uses push marketing because they can. New startups have to create incredible demand in a niche market and then add verticals to grow momentum. So, look for reseller partners who want to be around in five years, and be a part of a new wave which will, long term, be more profitable since their income per hour (wow, there's a novel thing to track!) will be much higher. And for those who won't convert, find their clients and ask if they want an Oldsmobile or Toyota.
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Comment by Mack Earnhardt on October 1, 2008 at 3:23pm - I'm sure some consultants knowingly rely on their clients' ignorance to make the sale. But far more sell what they do because of their own ignorance. Focus on enlightening the Geek Squad refugees who want to take it up a notch. Salvation for the predators is a waste of your time.
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Comment by Graham C. Peck on October 2, 2008 at 1:10pm -
These are all great comments I feel! Mack you are definitely right that people who sell these solutions are counting on everyone's collective ignorance so that they are able to stay in business. I also agree with you Jeff that the market will correct this but it will take some time. I truly feel that it is important to do what is right for the customers because this will lead to a longer life of a client even if their value is a little smaller at any given point in time but feeling better about what is being sold will lead to a higher level of confidence which will show to your customers. The question that I have is as a small business how does one do that and make the market begin to swing faster?
G
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- Focus...with small resources, time and money, find one market that works and exploit it. Multiple markets are geometrically more expensive. Start ups find a narrow niche ignored (or underserved) by the market goliath, and stay under the radar while building momentum. Market one can fund the intro to market two, and market two to market three.
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