B2B Extortion, the big company way

Big companies have big money, and that is especially apparent to small companies. Big companies know this and like to ‘lean’ on small companies. We all have war stories to tell of orders accepted under duress, to say the least.

Sometimes big companies take it farther and make up their own rules to suit their interests. Today is just such a day for our company, and I wanted to tell you about it.

A large aerospace/electronics customer of ours has decided to outsource vendor qualification and maintenance, especially for on-site contract services.  The amount of service work we do with this company is minimal (I’d guess 5-10 calls a year), as we only install and/or maintain what we manufacture. Over the years we’ve had to have our technicians take safety classes, or drug tests before they can work in a facility. It’s a pain, but we comply.

Now this third party steps in to keep track of insurance, certifications, and compliance to their rules. One might say it is some perversion of a union. And what do unions need to run? Dues.

Yes we have to pay this third party for the privilege of servicing our equipment at our customer’s site. Not to mention all the hoops they have for certifying us, as well. How much do we have to pay? $3,500 a year, plus $500 set-up fee. The fee is based on the size of our company, and not the amount of business we do with the customer.

Are you kidding me? This third party benefits the ‘hiring company’, not us, the ‘hirees’, yet we are the ones who have to pay.  Especially for us, while the equipment we sell may justify the initial $4K fee, the actual contract service work we do cannot. And if they expect us to do all the service work while they keep the equipment for ten years, the fees will add up significantly.

Honestly, if it wasn’t for the onerous fee, I might think this was a helpful ‘web 2.0’ service to streamline everything (their website even looks 2.0-ish). But the third party gave the big company the price of ‘free’ and pushed the cost to us poor schmucks who need the big company’s business.

Our salesperson is going to plead our case with the purchasing person enforcing this service. I’m sure she’s heard the whining before and won’t be able to do anything about it anyway.


Selling cars like selling B2B?

car-guyAt the end of 2013, NPR program This American Life ran a show  called Cars that followed the inside life of a new car dealer. It focused on their specific challenge of meeting a monthly quota by whatever means necessary.

We aren’t as intense on the quotas, I think, but all the drama kept reminding me of B2B sales. The all important deal-tracking board, the sales that fall thru, salespeople who are golden (or suck), managers managing (good or bad).  And the families who live with the demands of sales, too.

It was an episode of ‘This American Life’ that did exactly what their name says, capture a slice of American Life, our collective lives.

A payout for a sales referral … is 10K too much?

I found this email from our ERP software vendor stunning in so many ways:

I want to personally make you aware of a new program we have just launched, geared toward paying you $10,000 – as many times as you’d like!

The ZZZ referral program is simple: refer a colleague, partner or acquaintance (who has not engaged with ZZZ) that selects software from ZZZ, and we’ll pay you 5% of that software sale up to $10,000 per referral. It’s pretty much that easy! You win, and they win through improved business processes and state of the art enterprise software enhancing their organization.

For a recipient who knows someone to refer their company to, the initial reaction to this email must be cha-ching! (And that’s just going to be a couple people, you’ve got to figure.)

To other grown businesspeople (like me), our reaction is different:

  • Wow $10K isn’t incentive, its graft!
  • Do I get the money, or does my company?
  • Hmmm, they must be hurting for business.
  • A 5% cut, that’s more like a commission.
  • Would I do this … is this ethical?
  • This is questionable, and its coming from our vendor … ewww!

Now, as a disclaimer, I don’t sell software, I’m not tasked with lead gen quotas, so maybe I’m just over-reacting. What do you think about this marketing/sales tactic?

The TMI Trap

A trap in the jungle:
I wanted to start this blog citing a movie where someone gets lured into net or lasso in the jungle, and hung upside until rescued. As I started thinking about it, a number of movies blurred in my mind. Why do so many movies use this gag? Because it is true.

The sucker in the movie sees the object on the trail and is drawn to it. In the movies it seems to always be food or something valuable. How stupid you think as you see them propelled upward into the trap.

Why does this work? Because people’s self-centeredness thinks that what is open and available could be valuable to them. What they grab for deceives them, unfortunately. Its obvious to the natives setting the trap, and to the viewer, but the adventurer doesn’t have a clue until it is too late.

Traps in the sales jungle:
Prospects are just as astute as those natives. Those in active buying mode may call, even announcing that they are going to buy soon. They start asking a number of detailed questions about your company or product, or service. The trap has been set.

Oh, not me, you think. I’m not going to be trapped into losing this order because the customer doesn’t know enough. I’m going to answer his questions clearly and confidently. The phone call finishes and you pull up your CRM system to log all the exciting details and update your forecast.

You fool! Don’t you feel all the blood rushing to your head as you hang upside down? You should! You’ve just fallen for the TMI Trap.

The TMI Trap:
TMI in today’s slang is used to reference “too much information”. The prospect called looking for reasons to eliminate your product from their short-list. The questions they asked are about unique features of your product, but the prospect has already decided he doesn’t like those. He just wants to learn more to help him justify it to his boss.

The blood-rush comes when your hang up the phone and realize you’ve talked too much. Or realize the icy, yet rational tone of the conversation. Unfortunately, sometimes the blood-rush doesn’t come until you learn you’ve lost the sale.

Stay safe:
Once you’ve been caught in a trap a couple times, you learn to recognize it (hopefully). You walk around it warily, poke it with a stick until the trap is sprung and you are still on the ground. I wrote this because sometimes we can let our guard down and get trapped despite our previous experience. But that would never happen to me, would it? Would it?