TOUGH CALL: Murphy’s Law and Your Biggest Customer

You and your company are in the midst of those crazy few months of summer that you spend the rest of the year hoping, praying and preparing for. Sales and revenues are up, and margins are maintaining a healthy level. And considering the volume of materials moving through your store, you couldn’t be prouder of your team. They’re working hard, obviously taking pride in their work and, overall, doing exactly what they need to do in order to deliver the results your company needs if it is to continue growing.

Indeed, considering the number of transactions that your company is generating—both large and small—it’s quite amazing how few of them have problems. And that’s by design, as you’ve worked to put solid systems in place to minimize mistakes. Inevitably, however, problems do exist.

Unfortunately, in your case, they seem to happen with only one client. Worst of all, this client just happens to be the largest builder in your market, and your company’s single largest customer. For instance:

Delivery errors. Understanding that time is money—especially on the jobsite—your company strives for (and promotes) the fact that 99% of orders are delivered on-time and in-full. Somehow, the 1% of mistakes always seem to happen with your #1 customer. The first time, it was an incomplete delivery that pushed their production schedule back 10 days. The second time, the delivery was complete, but the products were not exactly what they’d ordered, which led to another delay. Next, a paperwork error led to a delivery exactly 10 days late, leading to more lost time on the jobsite.

Billing errors. Due to miscommunication between departments, there have been consistent billing errors that mirror the delivery errors. In other words, charges for items not received, charges for items received but not ordered, etc. It is bad enough to waste their time on the jobsite. It’s another thing entirely to have created a situation where they have to do a careful, line-by-line check on each invoice. It not only wastes their time, it creates unnecessary aggravation.

Those errors (and others) led to a closed-door discussion between you and their top people last week that went something like this: “We’ve been doing business together for more than 20 years. You’ve told us that we’re your biggest customer, and that you value our business. But it’s tough to reconcile that with the reality of persistent errors that cost us serious time and money. As much as we like you and your team, we simply can’t afford to continue down this path. We have one more job scheduled with your yard; after that, we’re going to try some new vendors.”

• What would you do?
  1. Micromanage. It’s time for you, as the owner, to get fully engaged in all aspects of this client’s business. Then, hopefully, your error-free performance will convince them to stay.
• 2. Let ‘em go. Tell them you understand, and that you’d do the same. Then, put systems in place to eliminate these issues—and go about re-earning their business.
• 3. Go down fighting. Emphasize the services you offer that no one else does, cut their prices, negotiate a rebate. Do whatever’s necessary to keep their business.
• 4. One more chance. Tell them you understand their position, and ask them to just give you one more chance. If they say yes, make sure you and your team hit it out of the park.