How to Discuss Change More Effectively
Barry Wright, Director Grosvenor USA — Grosvenor Training
• WayPoint Analytics • change management • balance • customer segmentation • high-profit accounts • business analytics • Randy MacLean • firing customers • cost cutting • sales strategy • cost analysis • cost reduction • cost reduction strategies • customer scorecard • managing customers for profit • fixing customer profitability • losing an account • customer mix and balance • negotiating with suppliers • negotiating • Barry Wright • Grosvenor Training
Thursday, March 05, 2020—Identifying drains on your profit is one thing, but ripping off the band-aid and removing them all together is another thing entirely. People are naturally resistant to change, especially when the things being changed are things they themselves put in place.
Once you know what customers, suppliers, etc. are causing leaks, the phrasing used can be important. Stating bluntly "this isn't working" may be true, but in some cases it can sound like you're blaming them, as if they were being unprofitable intentionally. There is no "bad guy" here, it's simply a situation of both parties unknowingly using a sub-optimal system.
How to go about having this conversation in an effective way? The first thing to focus on is that you want to aim to find a win for both sides. Often times the relationship in place is disadvantageous for both parties involved, and fixing them cooperatively can benefit everybody involved. When there are logistical hindrances present, often times fixing them can enable a lower price. It's a win-win scenario.
Despite the potential benefit, about 3/4 of customers will tend to be resistant to this kind of cooperation. Some people simply have a strong-armed way of negotiating in which while they are only interested in their gain, and see any gain from the other party as their loss. As a result many of these customers can have a structure that relies on their supplier (you) losing money. What to do with these kinds of customers?
Often times the best alternative is to find a way to stop doing business with them. Rather than simply firing the customer, make it your goal to replace them. Put the effort and resources that the old customer was draining into ensuring a good deal with a new customer who will most likely be more open-minded to making healthier deals all around with you in the future.
For more information about Barry Wright, visit: www.grosvenortraining.co.uk