One to a Customer

“Diplomacy is the art of letting someone else have your way.” – Daniel Varè

With the end of the year approaching, we are already well into our first round of customer negotiations. It is a time of confirmation and of confrontation. It is the sum of all things and the end of some things. I especially enjoy this time of year because it is when strategy hits the streets.

Our guess was that our toughest negotiation would be with our largest customer. Several issues are conspiring against us. First, some new faces have been added to their senior management team. It is most likely that these newcomers will want to make some very public changes to show that they are in charge, that they have a new vision for their organization, that this is now their company. We have been through this before and we learned the hard way that, with new people in place, you have to tread softly while making your presence known. They have to believe they need your support before they’ll give you theirs.

We did our best to meet with them in the run-up to the negotiations, to hear what they have to say, to figure out where they are headed. Our perceptive, almost empathic CEO, the Man from Glad, has few peers when it comes to cutting through the clutter and figuring out what’s really what. But their CEO has been well shielded and his intentions well camouflaged.

Also working against us is that they have recently acquired a company that is already a customer of ours. Their volume is now that much larger and they are looking for new discount plateaus to recognize this fact. So far, we have made it clear that we won’t pay more for business we already have, but what happens, I wonder, when push becomes shove. Will our resolve tumble like autumn leaves?

It is a time of confirmation and of confrontation.

The biggest problem with this particular negotiation is that all our other customers and all our competitors are watching closely. Seeing us as vulnerable, our principal competitor is going after this business with all guns blazing. With nothing to lose and plants to fill, it is offering the moon. Even if it doesn’t get the business, it will let our other customers know that we had to beat out an outrageous offer and that their own respective deals now likely pale by comparison, that they will no longer be competitive, that it is time for them to switch suppliers. Some might take the bait. In short, with all eyes now fixed on us, we are basically negotiating for the whole market.

Our clear-headed and always calculating CEO had other ideas. He has his own take on diplomacy which he might well have borrowed from Wynn Catlin’s Kiss Me Hardy: diplomacy is the art of saying ‘nice doggie’ until you can find a rock.

So he phoned this customer’s CEO and arranged a one-on-one meeting at a local art gallery. After a considerable amount of frottage, our ever so foxy Man from Glad explained that, while there are a number of interesting, outside-the-deal arrangements we could make, it would do nothing for either organization to drop the whole market and upset the equilibrium that currently exists. There is no benefit accruing to new management when a deal is struck that reduces profits. The best arrangement for everyone is to just quietly extend the current deal and – my favorite thing to do – create a secret war chest for exclusive promotions. Some more frottage to frame the conversation and an understanding was reached.

Bull Terrier, our V.P. Sales was then dispatched to iron out the details of an extension. His minions were told to quickly and quietly secure any customers that may be at risk. It was the equivalent of Winston Churchill’s advice not to disband your army until you’ve got your terms.

We have our marching orders.

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