The Ex Factor: When Should You Break Up With a Customer?
Some clients will steal your heart; others will steal your product. Just ask Gerry Barker, president of Barker Specialty Company, a distributor based in Cheshire, Connecticut. This was the situation he found himself in when his company partnered with a client that ordered a substantial amount of product, including golf balls.
As with any new relationship, there’s an initial chemistry that pulls two parties together — or at least that’s the hope. But, for Barker, what perhaps felt exciting and fresh quickly soured. His team started to notice that the client would take large, unauthorized discounts after receiving shipments. When questioned, the client said it received a quantity that didn’t match up with Barker’s records. It was puzzling. After a lot of back and forth with the factories, Barker realized theft was occurring on the loading docks, and the client was only paying for what was delivered to its marketing department.
“It turned out that whenever a package said ‘Barker Specialty,’ everyone realized on the dock that these were ‘fun’ items,” Barker related.
The client suggested all orders be hand-delivered to the marketing department, which could’ve worked if it had a parking lot. The absence of one meant Barker’s team would have to push a cart containing one or two boxes of product for about a quarter of a mile, past security and thousands of employees. It was time for Plan C.
Barker asked the golf ball manufacturer to ship the product in plain, unbranded boxes to make them less appealing. They sort of complied. The golf balls were in fact sent in plain boxes — inside the branded packaging.
Aside from learning anything goes in this industry, Barker realized he couldn’t charge enough to stay on with a difficult client ... with tough requests ... at a low margin. He broke it off, and within a couple of months, the client was sold and relocated to the west coast, leaving its staff jobless, Barker said.
Not all cases are this extreme. But, in an industry that’s built on relationships, distributors often find themselves in “it’s complicated” entanglements. So, what happens when one party loses that loving feeling, and when is it appropriate to see other people?
And We Both Still Got Room Left to Grow...
Breakups can be mutual or sudden. Rarely are they a good time. Yet, in the United States alone, an estimated 41% of all first marriages will end in divorce or separation, according to data from California-based law firm Wilkinson & Finkbeiner. That number jumps to 60% for second marriages and 73% for third marriages. On the business side, new research from Gartner Inc. predicts that by 2025, 75% of companies will “break up” with poor-fit customers. It’s not for lack of trying.
“Reputation goes a long way in this industry, and how you conduct yourself has repercussions moving forward,” Burlace said. “Clients change roles, as well as companies, and you don’t want them having a negative view of you or your company.”
Burlace reminded that not everyone works the same, which can lead to personality clashes. When that happens, he’s found success by moving the salesperson off the account. It’s also possible that the client is simply unaware they are the problem. This puts the spotlight on distributors, allowing their talent for collaborative selling to shine through.
“A client might not understand how being even a day late with artwork or sitting on a proof can have a big effect on scheduling production time, or how edits, even if minor, require time and expense to alter and run new proofs,” Burlace explained. “The client giving a heads up on projects and allowing you to collaborate on them will usually produce the best outcome. Providing all needed details on a job so there isn’t confusion instead of an email with art and a purchase order.”
All I’m Askin’ Is for a Little Respect...
Relationships fracture for many reasons, but Parker believes misaligned expectations top the list. With supply chain problems continuing to wreak havoc, she was crystal clear on what she wants in a partner.
“Return on investment has become more of an issue as prices have risen so dramatically over the last couple of years,” Parker noted. “We pride ourselves on our customer service and always saying ‘yes’ to the client, but when the ‘yes’ comes at the expense of too much time, energy and resources from our company, with very little return, it becomes difficult to maintain the relationship. ... I would prefer to direct my time and attention to clients that are working with me, rather than against me.”
This is when distributors should consider pulling back or setting boundaries. For Parker, this can include changing the client from Net 30 to C.O.D., requiring prepayment for orders, rejecting requests for endless samples or charging for art/design time.
Burlace agreed that distributors should be fairly compensated for the work they do and the valuable services they provide. While he prefers setting expectations versus boundaries, he acknowledged that if the same issues repeat, tougher conversations need
He recalled a less-than-favorable experience from a few years ago where a client contested previously agreed upon charges and delivery dates. The client missed artwork deadlines and then had Burlace’s team make edits to it for a couple days. As soon as the art was approved — after hours of prepress or design time had passed — the client demanded the original delivery date be moved up or that the distributor work overtime on the weekends to have it ready.
“I spent more time working with and thinking about this client who, at the end of the day, had become minimally profitable,” Burlace said. “I discussed this with the client and let them know we were going to continue to provide the service they had been accustomed to receiving, but we’d have to charge fair market rates on things we previously did not invoice. I also let them know the delivery dates we discussed would be the best we could offer, and it wasn’t going to be possible to move up or rush every job without the potential of paying additional expenses we might incur.”
The client understood his position, but they weren’t pleased and pulled the next few jobs. Roughly nine months later, they called Burlace after not being able to find a reliable vendor.
How I Wish You Could See the Potential...
It’s common for people to ignore relationship red flags. The good times are so good that they’re hung up on what could be instead of what is. What happens if you genuinely love working with the client? Does that influence a distributor’s approach? “Absolutely,” said Barker.
“If you have a great relationship, you might continue with the customer or might simply say, ‘I really like you, but can we just be friends?’” he added. “I have many clients who I really enjoy, but they are clients that one may want to fire, as they compare pricing online, they ask for multiple samples, they ask for constant art revisions and they pay poorly. However, they are good people who just don’t understand the realities we face — no matter how many times you explain that an artist just doesn’t ‘click a button!’”
Barker has also had friendships emerge from rocky beginnings. In one example, he interacted with a client he described as “very cold.” As the two got to know each other, Barker saw a different side to the person — one that was “warm, friendly and outgoing.”
“They told me that the company wanted the buyers to have little interaction with vendors other than price and delivery,” Barker said. “I asked one day if that is how their salesforce wanted clients to treat them. It was eye-opening and we developed a nice relationship.”
I Know Someday You’ll Have a Beautiful Life…
Let’s say you’ve been transparent, put in the work, set the boundaries and nothing has changed. If a relationship is unable to move forward due to irreconcilable differences, how distributors remove themselves from the situation is important.
Due to the nature of her business, most of Parker’s professional interactions occur via email, so that’s what makes sense for her. “I am not in this situation often, but on the rare occasion that I have found myself facing a separation, if it is due to a disrespectful client, I am proactive, but if it’s due to something like ROI, I might be less forthcoming,” she said. “For example, I might raise their rates to make sense for my bottom line, with the knowledge that this might very well sever the relationship.”
Burlace prefers face-to-face meetings, though he acknowledged this can be tricky with so many employees still working remotely. In his experience, people respond better in-person, their body language is easier to read and there is less room for misunderstandings.
“It isn’t always the client who is at fault and [by] having honest conversations, you can learn their pain points and things that they are disappointed in with you or your company,” he said. “In many cases, these adjustments can be made, but, of course, there will be times where they don’t and won’t ever mesh.”
Perhaps Barker summed it up best. “We can determine the lifetime value of a customer, but we can’t determine the pain and heartache caused by a difficult client,” he said. “When no salespeople are willing to work with a customer, you know it is time to let that client go.”
Related story: Second Chances