Managing your customer’s business

Customer sales managementDon’t ever forget that your customers are juggling many business issues that you aren’t privy to. It can be tempting to scream at them because they aren’t doing the logical thing – from your point of view anyway.

For this example imagine that you sell raw material, say plastic pellets, to a company that makes plastic injection molding machines. They buy relatively small quantities, because they don’t manufacture parts in production. Their business plan is to sell machines to industry and allow them to make the parts. So your target here is their customer base, but they are difficult to account for and reach.

On the surface, this might not sound like a set up for a recycling sales example. What you need to realize here, however, is that getting recycled sales with your machine maker friend is orders of magnitude easier than tracking down all their customers and selling to and servicing them on a continuous basis.

So how would you handle this situation?

The Idea

Your idea is to sell large quantities of plastic pellets to the machine maker and have them turn around and directly supply the material to all their customers. Both you and your customer get a cut and you’ve helped your customer create a predictable and repeatable revenue stream. They no longer have to wait for a huge cash windfall from selling a million dollar machine a few times per quarter. They can now count on all their customers ordering raw materials direct with a steady cash flow.

You would not know that your customer has issues with holding out for a big sale and then stocking that money away in case the next machine has a delivery problem, if you weren’t so engrained in their organization. They trust you and value your input to solve their most pressing problems. And that’s what you’re going to do.

The Idea in Action

Assuming that you’ve built a strong level of trust with your machine maker customer, call them on the phone and ask for a visit to discuss “uncovering new growth and business opportunities.”

They will ask exactly what you have in mind and you can reply, “Well, we’ve been trying to think of ways to try to create more repeatable and predictable revenue streams for our company and one idea is to distribute our pellets through you directly to your customers. Of course, you’d get a markup on every pound sold – it would probably make a nice complimentary line to your machine sales. Your customers get the satisfaction of knowing that they have a reliable source of quality raw material at their fingertips.”

Hmm, that actually does sound like a good idea – I think we’ve talked about this before.

“That’s great to hear. Do you think we should tie in anyone else at this time? Since I’ll be flying out there and spending a few days, I think maybe we could nail an agreement down on the spot if your upper management could be involved.”

OK, let me set something up.

Do you see what just happened here? You went inside your customer’s business and saw an opportunity for a better business model and acted on that idea. You had your customer’s best interest at heart and found a way to increase their bottom line – and yours in the process.

If you do get invited, be ready to close and sign an agreement because they are obviously interested. So you’d have to do your homework and get the correct level of authority to give you a range of circumstances in which you have the freedom to sign the company up for a binding agreement. You don’t want to get into a situation where at the end of the day, they sign up and you have to say that you’ll take it back to your boss for review.

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