As much as we all hate to hear it, in today’s market many of our “Cash Cow” customers are calling it quits. It is not only the small independent businesses that can’t make it in this economy closing their doors, it is some very large profitable businesses moving their operations overseas or south of the boarder.
Why they are moving or going out of business isn’t important for this post (although it is very important to each of us) what is important is what we do as sales reps when we hear that one of our profitable accounts that has been a major part of our commission checks over the past years is moving or closing.
A reps reaction to this tells the true story of the professionalism of the rep. I have seen all sorts of reactions. I have seen reps walk out and not go back to the customer, reps start to indiscriminately raise prices, place “false orders” to load the customer up, and many more things that I am not proud to have been done by people in my profession.
Just before the New Year started a close friend of mine from the west coast called me and told me his number 3 account was moving to Brazil by July of 2012. He received a phone call from his main contact letting him know what was happening. He asked me what he should do. I asked him how big the account was to him, he said it was about 20% of his income. He sounded devastated.
He told me that he spends about one full day a week with this customer and he is their number one supplier. I told him that was great news, he didn’t understand. I said first thing you need to do is go by their and find out what their plan is for the move. I said you need to know what they will be doing until July and how that will affect your products and services.
We talked for a few more minutes and I told him to call me when he finds out.
It was about 4 days later that he called me back. He started telling me about what their plans were. He said they would be in full production until the first week of April. Then they would be shutting down one line at a time for the next 2 months until they are shut down completely which will be the first week of June. After the first week of June everyone will be relocated or let go. The engineers and construction people would be coming in to break down everything and move it.
I asked him about the move, did he know if the new location is a new one or if they are already in production there. He said it is being built as we spoke. They expect it to be finished in the next 3 months and in production by the shut down date of the CA plant.
I asked him what his plan was for the account now that he knew what he was up against. He said he was going to keep business as usual for as long as he could and expected there would be no change until the middle of March, and then as the lines close he would lose that portion of the business.
I asked him what other plans he had. He told me none!
I asked if he had discussed their needs for the move, what products would they need of his to get things moved. Would the construction and engineers need anything? Will there be any need for additional products that he isn’t presently selling them. I then asked him if he had gotten any contacts in Brazil so he could keep his products being used. He said he couldn’t sell in Brazil but he knew the agent down there. I said if he could make all the arrangements from here before they move and hand the agent a large account he may be able to broker himself into a small piece of the commissions.
We talked and I helped him put together a plan of action. He had his arsenal ready when we hung up the phone and I felt like he would get busy and do the right things.
The rep called me today; he said the first line had shut down as planned. He received his last order for that line about a week ago. He told me the plan had worked GREAT and that he and the Brazilian agent are splitting the account until the move is complete and he will retain 5% from then on.
I asked him how he was going to make up the 15% loss. He told me he already had. I was a little puzzled so
I asked him how he did it so fast. He told me the main contact person that called him the first time to tell him what was going on wasn’t transferring with the company and had moved to another company in their industry. The contact took the rep and his products with him to his new company. The rep told me that with the new company he has made up the 15% and added another 10% to it.
As I hung up I realized that my friend had taken his cash cow and butchered it into some delicious steaks. It will never be the same cow, but he now has a new one that is bigger and better than the first.
Never kill your cash cow and leave it behind when you find out it is moving or going out of business. Make the best darn steaks and roasts you can out of it and find another cow to raise.
I will admit this is about a good an ending as there could ever be to a major account leaving. I know that in most cases this will not be the way it happens. I also know that even if the ending isn’t as good as what happened to this rep, you can still get a burger or two out of your cash cows if you make your plan, do your homework, and keep doing the right things until the cow is gone.
Lorin
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