The Tomato’s Ate Your Profits

The Sales Essays # 2                                                                                                                       August 27, 2010

The Tomato’s Ate Your Profits

Here is tale of how to not lose your lunch and your profits.

Late last year I was in Calgary  touring some of our operations  where I met a potential new sales representative. An arrangement was made to meet at the local eatery and have a “get to know you meeting”. The meeting was going as planned right up and including to ordering lunch. Then crash,that’s when the wheels fell right off the proverbial bus.

The server came over and took our lunch orders, I ordered a cheese burger and I clearly specified to the server that I did not want any tomatoes on my cheese burger.In fact, I went so far as to have the server repeat my order back to me and to have her specifically confirm “no tomato’s” (Now I do in fact eat tomato’s, but I am a bit moody about them.When, where and in what form they are in are all items I take into account with tomato’s and rarely will they and my cheese burgers ever meet, but I have digressed, so back to the story).

10 minutes later and what did I have at my table? Well of course, I have my cheese burger and the tomatoes I had clearly asked and confirmed would not be on the cheese burger. I admit I was rather miffed, but it was not the end of the world, I simply removed the offending tomatoes ate my lunch and finished my meeting.

Well you say Gerry, come on, it’s not the end of the world its “just a tomato”. Remove the tomato and keep going, it’s not worth a second thought.

Well if it were only that simple there would be no issue, no life lesson and no business improvement opportunity. But there is a real issue, a serious life lesson and a specific and highly valuable business improvement opportunity.

Let me give you a little background on this supposedly “simple thing”.

One of my daughters has specific food allergies and if she comes into contact with these food items she can have very serious allergic reactions, up to and including dying. Everywhere she goes, she carries an  epi-pen and if she comes into contact with an offending food and develops and allergic reaction she is to rams the needle into her thigh and then gets herself to the closest emergency room for further treatment. I have seen this happen first hand right in front of my eyes and it is as scary as it gets in the life of a parent. Later you are then sitting around thinking about what just happened, and that a peanut or the touch of a tomato could have killed your daughter and what life would be like.

My daughter is in touch with all of this and is always making a point of not eating things that she knows are “risk” items for her. Likewise she asks restaurant servers to confirm recipe contents and at times orders specific menu items to be brought to her without certain ingredients to ensure that “risk” items are removed.  If the information she is provided with is incorrect or if the order she has placed is not followed correctly, the results for her could literally be fatal.  What’s worse is that this is the case for hundreds of thousands of people and their families.

The business lessons related to this on the surface appears simple:

1. Know your product(s)
2. Listen to your customers
3. Be able to effectively answer any and all questions related to your product(s)
4. Supply what your customers are specifically requesting when and where they want it
5. Understand that custom orders are always a way to secure your customers long term business
6. Leverage your ability to be a “unique” product(s) supplier to special needs customers and others like them

The reality however is not so simple:

1. Most company’s sales/service staff do not really know their product(s) and only know how to deliver their product(s) in a very standardized method, driven by corporately mandated Standard Operating Procedures (SOP) of which, “listen to your customer and adapt to meet their needs” has never even be conceived of let along acted on.
2. The skill of “listening” would appear to have died long ago with things like penmanship, common courtesy, and saying things like “please” and “thank you” (soon to be another sales essay all to itself).
3. Having and training staff in product knowledge and how to apply this knowledge is fading fast.Yet customers wanting to interact with knowledgeable and informed staff who are empowered to assist them is a consistently top rated customer request when assessing how top performing companies act and succeed in the marketplace.I would hazard a guess that the same people who would tell you they cannot afford to hire sharp staff, let alone cover the cost to train these staff, are in fact the same business owners who say that the big box store ate their lunch and stole their business.If this is you, think it over and get yourself a service/value based business plan built on real care of customer and then see how you are doing.
4. Most companies just want to sell mass produced items, take your money, and and then get lost. They play it out every day and you feel it every day. The very thought of building the ability to customize their product(s) and related services into the front end of what they offer is lost unless the business is a micro boutique literally built around the concept.While most companies have killed true customer service and thus listening to the customer’s needs, the companies who understand this on the macro level are clearly the front runners in the sales business. Case in point, when was the last time you tried out the customer service at Home Depot or placed a customer order and McDonalds? Both are examples of mass product distribution with a customer first and always philosophy built on listening to the customer’s needs and then meeting them.
5. Finally let’s come to terms with the value of a custom order. Have you ever tried to make a customer order at a big box store? In almost all cases you buy what they have and that’s it. Your needs are placed second to mass volume and the lowest price point. You are a consumer with the power to spend, but only to the point where you buy what is offered, after that you need to go to a whole new type of sales enterprise and sales process.Suppliers and sellers who can supply anything by way of a customized product and/or service should do so at every opportunity and should market the ability to do so as a major selling point.  In my business we know that price comes in at  a best 5^th or 6^th place down the list in why a customer chooses to buy. The values that rank above price all have to do with the breadth and quality of product(s) and services offered.

Supplying a customized product, service or better yet a product/service combination that is truly based on hearing your customer, listening to your customer and then enacting these desires into your offer, is what will truly set you apart from your competition.Rarely does a customer expect a customized product(s), service or product/service package for the list price.

Given the opportunity most people place great value on being heard and having unique solutions provided to them. These people will pay premiums and become loyal customers, not simply satisfied customers.

Now think it out; what if you could supply your product(s) and services in such a way that you were price competitive and left your customer with the feeling or perception that they have been treated in a way in which they felt heard, accommodated and valued. You guessed it; the people who can engineer their business to deliver in this way to their customers are today’s big winners in a terrible economy.
Now let’s go back to the tomatoes. Lets go back in time to just two months ago. Same eatery in Calgary, same lunch plans, different date. I again order the cheese burger (yes, there is a lunch pattern here I do need to address), but from a different server and I again make sure that I get the server to repeat my order back to me and again make sure they repeat back to me that I DO NOT WANT any tomato’s on my cheese burger.

And what do get at my table 10 minutes later, you guessed it, a cheese burger with tomatoes! This time I am just not up for this so… I call the server over, I tell her that she has A) not listened to me, B) not communicated my order right to the kitchen staff, or C) not checked my order prior to delivery to insure that good quality control was practiced as she delivered a defective product to me.

I then told her if I had serious allergies and had not noticed the tomatoes she had delivered to me that I might well be in the middle of a major allergic reaction at this very time and in this very place and as I did not have a emergency syringe with me that I might have literally died at the table in front of her and she would be personally responsible for my situation up to and including my death.  I then asked her (now a fully horrified server) if she would be so kind as to get me a completely new burger and to make sure that no tomatoes even come close to my burger, which she assured me would be the case, and it was.

Now let’s review the business case:

1. Buyer orders product from seller
2. Seller does not really listen to customer
3. Seller produces product not in alignment with buyer’s order
4. Seller delivers defective product to customer
5. Customer rejects product offering and demands new product
6. Seller (now really listening) retakes customers order, produces correct product and delivers correct product to customer
7. Customer pays seller
8. Seller has now paid at least 200% more in service costs
9. Seller has now paid at least 200% more in product manufacturing costs
10. Seller has lost all opportunities for staff to have sold to other customers (cost of lost opportunity)
11. Server gets no tip so servers personal income is reduced by over 50% on this sale
12. Customer decides never to return to sellers location
13. Customer tells at least 12 other people (or blogs it to 30,000 readers per month) about their experience and influences their decision about doing business with seller

This trail finishes on the 13^th point. I could have made a few more but somehow is just seemed proper to finish this line of thinking on the old unlucky number 13.

Now you say “Gerry this is just a cheese burger it’s like $8.00 and it’s not that big a deal, so chill out”. Well not a chance, if the seller does this once in every 100 sales it’s a cost of doing business, but if this listening error is on the rise to say even one in 20 sales, then simple business calculations will show:

• A rise in raw material costs with no corresponding increases in sales revenue
• A drop in overall sales revenues as customers exit and tell others not to buy there
• A decrease in employee earning and job satisfaction
• An across the board drop in profitability and a loss of business viability

One day the seller wakes up and asks “where did the profits go” the answer:  The Tomatoes Ate Your Profits.

Overall this is very bad news for the seller and in this case all because the sellers service staff was not engaging with a positive customer service attitude and basic communications which if done correctly would have simply consisted of listing to the customer, hearing them and then giving them what they asked for.

Now let’s change the stakes and look at the same philosophy in action in another real life example.

This past spring I was in the market for a different vehicle. I called up an acquaintance of mine who sold (past tense) cars at a lot that specializes in late model Japanese cars like Toyota, Nissan and Honda and after a short conversation to inform him of what I was looking for, he advised me he would go through the inventory and call me back with a few options.

Next morning he calls me up and gives me the run down, six or seven units later I am thinking that all the units he is offering me are a little too old and a little to plain, then he hits me with the real offer and I realize the first units where just to get me lined up for his real offer and what an offer it was… how about a three year old Infinity Q35 with very low mileage for under $20,000.

Well that lunch hour we are out for a test drive and I am telling you this was one fine automobile. It had everything money could buy, all the electronic due dads you could ever dream of, a deep navy blue exterior and a gorgeous tan leather and burl wood interior.I It was simply a fantastic car at a very decent price point.

My only conclusion… something had to be very wrong with this car and/or the cars situation so I sat my friend down over lunch (cheese burgers) and we had a little talk. I told him I loved the car but something had to be wrong with the situation, was it a reposition, rebuilt, a drug dealer’s car bought off the police auction, what was the story?

Well after some further prodding the back story comes out, my friend had a customer who asked him to find her a particular car (make, model, age mileage and specific trim package) inside a specific price range. If he could find the right unit at auction and confirm it with his customer and then buy it for her, he would get a favorable commission for his services. For my friend this was an easy service to provide so he worked out the paperwork and proceeded to find the right car.  When he did he checked with his customer who he assured that the car he had found was as per the customer’s order and once confirmed the car was purchased at auction and delivery was set up with the customer.

Very soon the customer comes to the dealership takes one look at the car and tells my friend that the car is not acceptable as she had clearly outlined that the car was to have a gray leather and walnut interior.  His customer (not happy) left without the car and my friend now owned the car.

This car was well above the lots usual day trade and so he had none of his regular clientele looking at this unit. In fact this unit had been sitting around for a few months and was tying up a lot of the owner’s working capital. The car needed to go and I was his best opportunity to date.

It was the tomato episode all over again someone did not listen to the customer or thought the customer would not mind a small variation to what they had clearly outlined, the result business mayhem except we are now talking about a $20,000 listening errors and how many of those can any business afford to make? Did my friend (or the car lot owner) make any money on this deal or enhance his reputation (not a chance). The final result, I bought a new Jeep and last I heard he is  working at a different car lot.

All I can say about this is: The Tomatoes Ate Your Profits.

What are the lessons we can learn from the above and how can we apply them?

1. Sales opportunities and good customer service both require active listening
   1. Developing good communications skills and using them at all times is a key element in any form of success
   2. Active listening is a developed skill, learn it, apply it and keep it sharp

1. Measure twice, cut once (get it right the first time)
   1. Seek to understand (Covey) first and always and make no assumptions
   2. We honor the speaker when we ask intelligent questions based on their outline and we leave customers with the sense of truly being cared for

1. Customization builds a locked in customer/seller relationship, do this whenever you can and market your ability to do this

The big finish:

You listen with the goal of hearing and understanding others in all situations, in business and in life, this is a critical skill and one that will always bring the user a significant return on investment. The more you learn to listen the more your relationships will prosper and the results of this in the form of intangibles like friends, reputation and integrity and tangibles like profits, lower costs and repeat customers will abound.

When you hear someone bad mouthing the upset customer who just left them, tell them “the tomatoes ate their profits and to go tune up their listening skills and attitude”.