Each one of us in business will eventually face what I call a, “reversal of the expected.” This month, I’d like to share some experiences I’ve seen in TEC over the years involving the unexpected. But with good thinking and action, you can often salvage a bad situation.
An old pilot adage remains true today, whether you’re flying a Piper Cub or a Boeing 747. It says that when the unexpected occurs, maintain the aircraft control at all costs, analyze the situation and take the appropriate action.
That applies to business, too.
When the unexpected occurs, look at the bigger picture, analyze the event in terms of its impact on the bigger picture and react in a positive way to keep the ship on course.
A “reversal of the expected” has three important qualifications:
Usually, the business relationship was built on a foundation of trust.
The players have had no reason to doubt one another in the past.
A mutual set of seemingly agreed upon expectations existed before the unexpected event.
The two unexpected events that occur most frequently are in sales transactions: a broken relationship with a key customer; and failure to consummate a business sale.
What to do when you lose a customer
Your customer might unexpectedly terminate a contract, or contract with one of your competitors based on a marginal price decision.
What’s your first step? Look at the bigger picture surrounding the event. A long-term contract that’s lost, as TEC members have explained, can always be reinstated based upon new terms. It might take a year or more, but a proactive approach can and will work.
If you lost a customer based upon a marginal price decision, that usually means that the new vendor will compromise somewhere.
Once again, stand back. Ask yourself, what’s the value proposition that won the customer in the first place? Then do what you need to do to put that value proposition back in place. It may take some time, but it will be well worth the effort.
What to do when the sale stalls
You’re down to the final hour. You and your attorneys are meeting with the seller and the seller’s attorneys to sign on the dotted line. At the last minute, the seller gets cold feet and backs away.
You’ve invested considerable time and money to make this happen, and you’ve diligently complied with all seller requests to provide minimum business disruptions among employees, vendors and customers.
Again, it’s important that you step back and consider the big-picture possibilities:
- The seller did get cold feet, and that’s the issue you must address.
- Another buyer emerged at the last minute, most likely a competitor, and offered a better deal.
- Family members never supported the sale to begin with and have intervened with a compelling argument.
- The seller’s advisors have reassessed the terms and conditions, and risk factors. They’ve concluded that the sale isn’t in the seller’s best interests.
If the decision by the seller appears to be based on finances, your alternatives are to consider a higher down payment, offer shorter terms, offer a higher interest rate, offer more secure paper, or suggest a consulting contract that covers other key benefits – or any combination of those.
Know who the influential players are in the overall decision. Know where they are coming from. And then readjust your approach accordingly. In most business sale transactions, things seldom are what they appear to be.
Until next month, make sure you’re prepared for the unexpected.