Tag Archives: management

Your most important customers

Seth Godin has had a couple of posts recently about how to treat your best customers. One of the thing that he observes is that the way you define “best” is not necessarily the most obvious. Is a customer that pays full price always better than one that recommends your service to five of their friends?

In defining the best customers, my mind wandered to the opposite extreme, the worst customers. This reminds me of something that happened a few years ago. It’s only fair to note that I heard this “through the grape-vine.” It could be completely true or mostly made up, but where-ever it falls I think it’s an interesting anecdote.

As a reaction to, potentially, being taken for granted, customers often remind suppliers how important they are and how much money they allow the supplier to make. Undoubtedly this is a standard negotiation tactic. But where it goes wrong is where the clients self-image doesn’t match reality.

This anecdote starts with a client demanding extra resources, more commercial concessions and some impossible deadlines. Their argument: we’re you’re most important customer. We, therefore, get what we want.

Discussions had not resulted in any change in their stance. This is what we want (a lot). This is how much we will pay (not much, or at least enough to offset the pain).

The anecdote ends with a meeting. In the meeting are senior figures from both organisations. The supplier is presenting and the Powerpoint effectively has a single slide. The slide shows a simple bar chart. The bars are ordered with the largest on the left, the smallest on the right. The axis are unlabelled.

After pleasantries, the presentation starts with a statement followed by a simple question.

“This chart represents our top ten customers by revenue for the last year. Which bar are you?”

The client quickly points to the bar on the far left, the largest.

“I can’t name them, but that bar represents around £x.”

The figure was left to hang in the air. It was nearly double what this client had spent in the last year and they knew it.

The relationship had deteriorated to the point where the client was asked to make two more guesses before it was revealed that they were, in fact, the second bar from the right. It was still, I should add, a reasonable chunk of change but it quickly became clear that their “most important customer” argument would need some refining.

Anyone who has worked with difficult clients will probably be smiling at this, though of course the fact that it got to the point where this strategy was even thinkable shows a failure for both parties. While it worked, for a short time, this is a strategy that you’d only try if walking away was a reasonable option.

I guess what I’m saying is that relationships work both ways, and the best ones are made out of mutual respect. Not everyone is out to screw you. You might think that taking your supplier or client for a ride makes them your best customer or your best supplier but in the end it will likely come back to haunt you.

My delicious.com bookmarks for July 17th through July 23rd

  • Senior City-zens: The World's 10 Oldest Still-Inhabited Cities – "I grew up in Europe, where the history comes from." Maybe Eddie Izzard should have gone with "I was born in the middle east, where the really old history comes from."
  • Maker's Schedule, Manager's Schedule – If you can't actually avoid meetings, then at least try to schedule them so you can maximise your productivity. Rings true…
  • There’s a pretty significant problem in the new… – I'm starting to expect Graham Chapman to burst in at any second and announce that this is getting far too silly. Apparently any iPhone app that allows "unfiltered internet access," everything from web browsers to Twitter clients to, presumably, delicious.com clients, now requires a 17+ rating.

Professionalism

A few years ago I was subcontracted to one of the large consultancies. I was taking over from someone who was, supposedly, quite senior and the task at hand, I was told, was very hard. I should take copious notes as she wouldn’t necessarily be around afterwards to help me. Making a mistake or missing out any one step could be disastrous to the whole process. If I did everything properly each new installation would take about a week.

This turned out not to be entirely correct.

After sitting through over a week of her spelling out each and every step in excruciating detail — much of which I don’t think she really understood — I spent three days writing a shell script to automate over ninety percent of the process. I don’t mean a quick, shoddy hack either. I spent the time to gold-plate it. It was a work of art. I set it up so that you only needed to copy the one file and allowed for the user forgetting to switch FTP into binary mode1.

In the end, my three days of work reduced the week long process to about an hour, and most of that was waiting for the file to transfer over the network.

I say all this not to show off. I think any engineer would have thought to do this. I note the extra refinements so you realise that it could have been done in much less than three days had I not wanted to practice my Unix-fu.

Result: I was heavily criticised for not following the proscribed process. I pointed out that my new scheme was quicker, easier and less error-prone. They countered that I had been unprofessional to begin a “development project without authorisation.”

What does “professionalism” mean to you?

Sometimes, I think, it’s used as an excuse to do or not do something in a particular way. “That’s not professional” is kind of a cop-out. In this case I can only assume that the real reason was that they wanted to bill a week of my time to the client for each installation. Of course they couldn’t say that.

Since then, every time I hear the phrase “that’s not professional” I try to drill down and find the real, underlying reason. I’m hoping that one of these days I won’t be disappointed with what I find. It hasn’t happened yet.

  1. I basically appended a tar’d and uuencoded file to the end of the shell script which it knew how to extract and decode. []

My del.icio.us bookmarks for January 12th through January 16th

  • Apple introduces new Apple TV software, lowers hardware pricing – Now potentially more useful with the movie rentals. But where is the price drop in the UK?!
  • Dell tells customer ‘Mac is good option’ – “Now, it’s possible that the techie was referring to a 1970s rock band, or to an item of waterproof clothing. But we can’t help concluding that he was indeed talking about Apple’s operating system.”
  • Steve Jobs gets cohesive – Some cool stuff from Apple at the MacExpo. I think the Time Capsule is going to be on my shopping list when it ships next month. The movie rentals (when they get to the UK) look interesting but they really need to build their catalogue!
  • How to recognise a good programmer – Great discussion on recognising great developers. The problem would seem to be finding them! Most recruiters just pattern match on CVs which tends to favour the “career” developer.