Wednesday, September 24, 2014

Deal Me In

You hear the word relationship a lot in business- often to give indication that one has a favorable position over a competing interest.

We have a relationship with XYZ Company. WE HAVE CONTACTS. We’ll be able to get the business…we have the relationship.

I’m calling bullshit on this mindset.

I think contacts and relationships have never been worth less. Especially between vendors and their customers. The vendor is always playing the relationship card. Customers want the best deal, period.

Roger Waters sang: I’ve got some bad news for you, sunshine. Some pop fiction writer I’m too lazy to Google said: They’re Just Not That Into You.

The Information Age- once again- has put all the leverage in the hands of the buyer. It’s so ridiculously easy for buyers to shop around. While you’re telling everyone about your gilded status with a buyer, they’re looking for a better deal.

If your product or service has been commoditized (some or entirely) what else are you bringing that keeps them buying from you? In only the last 2 decades, untold offerings have moved from proprietary to commodity. Even incredibly sophisticated technologies can now be manufactured by dozens or hundreds of low-cost competitors. That $400 laptop you own cost $1,800 15 years ago. Services in/around telecommunications? Forget about it. Not even a generation ago, people used the expression: “I’m on the phone, LONG DISTANCE!!”. How hilarious does that sound now? Not only is it a commodity, it’s essentially free. And the tailored service you once provided can be provided by others in short time or immediately- soon your customers will be getting their Christmas Cards from someone else- not you.(and you thought that card was such a nice sentiment, didn't you?).

Ask a retailer about their “relationships” with their customers. While their answering your question, their customers just dropped three hundo online with Or worse, they went to “Wally World” Wal-Mart and got what they needed for 20% less.

Of course there are many, many exceptions that will keep them loyal to you. Great service still counts plenty. Innovative and creative value-adds; most buyers like and appreciate these plenty. But if customers feel you’ve profited enough without upping your game, they’re looking for a better deal. It doesn’t matter if their assertion about your value is correct or fair….they’re gone.

You might say “good riddance” to this type of customer. They’ve been squeezing you for years, you shout. You’ve bent over backwards for them a thousand times and all they do is fight you on everything. Fire your lousy customers, I get it. But it’s a mighty slippery slope you’re on because you can’t fire them all. And even the sweetheart customers will leave you too. This is nothing short of the everyday reality of 21st century commerce. Competition has always been a beast and this beast has never been more fierce.

Can someone deliver on what you deliver and charge less? To a degree, the answer is almost always going to be “yes”. Don’t hit the “Panic” button…yet. But if at your core you know many of your customers buy from you because you believe they like you, you may be in for a world of hurt.

This doesn’t mean you lower your prices. But it does mean you get REAL HONEST with yourself on why people buy from you. They like you or even the convenience of familiarity isn’t cutting it anymore. You treasure these “relationships” more than they do. They want the best deal.

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