This is number 7 in the series of lessons-learned the hard way together with reflections on what I would do differently next time around.
This skeleton always gives me nightmares…
I thought I was the hero; I’d landed a major order for a piece of equipment at the end of the quarter and the technical specifications were relatively easy for us to achieve (the customer hadn’t pushed too hard during the negotiations on the specs – they just wanted to just get the project moving and get into production as soon as possible).
The machine build went to schedule and we delivered the machine on time. The commissioning engineers optimised the process on the customer product and we achieved all of the parameters defined in the specification. The customer, however, refused to sign-off and accept the machine… it wasn’t running as fast as they were expecting. I pointed out that speed wasn’t part of the contractual specification and asked that they sign-off, offering to work with them to optimise the process speed as they ramped up production. They refused and we entered a painful period of stand-off and negotiation. What I hadn’t appreciated was how tight their business planning had been… the machine running at the current speed would actually lose them money. They had based their throughput and production cost calculations on some “ball-park” numbers that had been bounced around during the demo stage.
After a few weeks of additional engineering trials and several tough rounds of negotiation, we agreed a commercial settlement which saw them buying consumables (process chemical) from us at a reduced price, so that they could at least break-even on their production.
The stand-off undoubtedly soured the relationship and certainly resulted in us losing the opportunity for future revenue; we were now selling consumables at close to cost price and the customer was reluctant to come back to us for further improvements and upgrades. As a business, we also spent a lot of time trying to get to a satisfactory resolution – time that could have been spent winning more business or developing our products further.
I learnt the hard way that the job of a sales-person is not simply to win sales… it is to ensure that the customer benefits from your products and services; resulting in them coming back for more and also referring others to you in the future. Contracts and specifications should be used to clarify and define expectations – not just minimum standards. I should have known the customer well enough to understand that the process speed was important to them and made sure that this was included in the contract, even if it would have made our job as a supplier more difficult.
In the next instalment of this blog, I’ll talk more about the importance of understanding exactly how your customer will use the product.
Telegraph Materials offers advisory services and practical support to fast-growth businesses bringing new materials-science based technologies and processes to international B2B markets.