The art of the win-win situation. Why you need to be your vendors' best customer.

As I get involved with more businesses and, in particular, with individuals who are working on my teams it has occurred to me that their are several business axioms that are very important to me and should be to all of my team members. One of those axioms is always finding a win-win situation.

In basic terms this means that everyone who is involved with a transaction should “win” when that transaction is complete. For instance, if I’m selling my house, at closing we should have a win-win-win-win situation. My house should be sold at a price I was willing to accept, the buyer should have a house that was accurately represented, and that they’re happy with, the realtor should be reasonably paid for her services, and the mortgage broker should be paid for his. Everyone got what they wanted so everyone wins.

In business you occasionally have an unscrupulous salesman who will tell a prospect anything to get the sale. You may even have instances where a boss will go to his grave spouting “The customer is always right!” when in reality the customer was wrong and the employee deserved the boss’ support. However in my experience, the number 1 area people forget this win-win philosophy is when dealing with vendors.

It first became very clear to me that you always treat your vendors well when I was a paperboy. As a paperboy with 50+ papers to deliver, almost any time it rained you inevitably end up with a few wet papers. So you have some choices. You can wait for hours as you request the newspaper company to come replace your wet papers which would make the papers late – or you deliver them as is. Generally, as long as it was only a few papers and they weren’t destroyed, I chose the latter. Now out of 50 people, who do you give those few wet papers to? Certainly not the people who are nice to you, invite you inside when its cold, and give you a big tip. Why would you take the risk of upsetting them? No, you choose the people who are mean and cheap. For me personally, mean always trumped cheap.

In one instance, I recall a customer blatantly accusing me of lying and trying to cheat them by me asking them to pay more weeks than they owed. To this day, I’m 100% certain that wasn’t the case and even if I had made a mistake, accusing me of lying was something I took VERY personally. At that point, I would have preferred to just erase their debt and lose them as a customer. However, that wasn’t an option so, from then on, they became my only customer who mailed their checks to the newspaper directly. In their minds, the problem was solved. In reality, they now received every wet and late paper I ever delivered. Since I never had to confront them again to collect money, it made it very easy for me. After all, someone had to get the late and/or wet paper, why not them?

In the “real world” of business this has rung true for me more times than I can possibly remember. As a business consultant I travel a lot and have personally worked with nearly 100 business owners. Without a doubt, a few jump out in my mind as people who have treated me exceedingly well. One client in New Mexico made a point of always taking me out to the most fancy restaurants and putting me in nice hotels. He probably spent a few hundred dollars extra per trip that he didn’t “need to.” He was also one of the only customers who always paid me with a check in full before I walked out the door to fly home – a check that he guaranteed was as solid as oak. With those 2 actions, he endeared himself to me and my boss. In return, everyone on his staff had my cell phone number and felt very comfortable using it because I made sure to always help them as soon as I possibly could. He treated me better than any other customer and so, without giving it much thought, I did my best to provide the absolute best service for him.

Personally, I work hard and enjoy “living well.” My living style is anything but “cheap.” My father recognized this and so pointed out “that the quickest way to increase profits is to cut expenses.” If you think about it, it makes perfect sense. However, there’s a limit.

One out-of-state client I worked with happened to be located very close to a handful of friends and the university I attended. Because of that, I got to know them exceedingly well and routinely stopped by their office to make sure everything was going alright. I never charged for any of these services and in exchange received some free water (total value of the water was about $200 and at that point 2 hours of my time was worth that so they were WAY ahead on the deal). They had my cell phone number and used it when they needed and I helped as I could. Quite literally I spent more time with them than any other customer, including my father’s business, for several years. In one instance, I was visiting their office and emailed the General Manager ahead of time indicating that on this trip I’d stay with friends so all he had to worry about as far as travel expenses was my mileage for me to get there. When we spoke on the phone he agreed. When the owner of the business got the bill and learned that while visiting that customer I also took time while I was in the area to sell my house, he refused to pay. The house was sold 3 days before I even showed up in the office and because of that it allowed me to be in their office bright and early at 8am instead closer to noon if I would have driven directly to their office that morning. We’re talking about probably less than $200 (I can’t even remember the exact amount). Easily less than I had saved them by staying with friends for a few nights. So I spoke with the owner who happened to, at one time, be the CEO for a large international organization and apparently a staunch believer in “cutting expenses is the fastest way to increase profits.” I emailed the owner a copy of the emails that the GM had received and clarified that I told him ahead of time about the expenses and the GM had agreed. The GM lied and said that was not the case and the owner refused to pay saying that my emails didn’t matter since he had to backup his GM. Before this event, I would have considered this owner to be one whom I respected nearly the most out of all of the owner’s I had dealt with. In the end, my boss allowed them to not pay (though my boss did still pay me) and I felt cheated and taken advantage of. Over 3 years later and I still will not take a phone call from them and refuse to work onsite in their office again. I have no time to deal with unprincipled behavior and the money I could make by continuing to work with them would never be worth it.

I have dozens of stories to further illustrate this point – from the gentleman in Massachusetts who sends me cheese every year for Christmas, to the owner in Texas who forgave me when I billed him too much for gasoline. The people who have treated me the best, have received priority service. That is how it should be. Always treat your best customers the best. This also means that, your vendors should consider you one of their best customers for you to receive the best service.
This is NOT true for most businesses. In most businesses, the customer who screams the loudest receives the most attention. The employee who causes the most trouble receives the most attention. This irritates me to no end because it honestly makes no sense. If you want to bring ethics into the picture you could even argue that its unethical to treat superior customers as anything less than superior. In essence, it’s not “fair” to treat them as anything less. Criminals are treated as criminals. War heroes are treated as war heroes. Superior customers deserve to be treated as superior customers.
When you treat your vendors poorly, you will always lose. I know of businesses where particularly difficult customers will literally get billed EXTRA for being a pain in the butt! I’ve seen it happen time and time again.

So the lessons I’ve learned from all of these and many more experiences that every one of my team members should understand are:

1. When dealing with vendors, paying the least amount of money is NOT always getting the best deal.
2. In every situation, every party involved should have a “win” and be very excited about doing business with you again. If not, rework the deal.
3. You give your best team members (employees) and best customers your absolute best service.

As for #3, most business people have probably learned the 80/20 rule where the top 20% of your customers generate 80% of your profits and the bottom 20% of your customers generate 80% of your problems. After going through the situation with the client who refused to pay my mileage, I told my boss I could care less if we lost them as a customer and I sincerely meant it.

I’m not the only one who thinks this way as Brad Sugars talks about “grading your customers” and getting rid of those customers with a D or lower and possibly even those graded with a C. Literally sending them a letter indicating you will no longer serve them and offering some suggestions for who may. He has personally owned over 50 businesses and claims this is true for every business in every industry.

A few years back Sprint sent notices to thousands of their customers that they had 30 days to find a new cell phone company because Sprint would no longer service them.

Marcus Buckingham talks about how one of the “rules” that should be broken is always spend the most time with the people who need the most help. Instead, he says that you will always reap a greater reward by spending the most time with your best people.

Admittedly, when I was 16 years old running my paper route, I hadn’t read any business books or had anyone teach me that you treat your best customers the best. It just seemed to be common sense. If that’s the case, then why do so many businesses I visit spend so much time taking care of their worst customers and employees instead of finding new ways to serve their best customers and employees?

If you’re ever lucky enough to work with me, make sure you remember these lessons. 😉

To your success, Bryan