In the late 1990s, "killing accounts" was a popular topic. A primary reason: realization that time and transaction costs are critical determinants of sales success. But the soft economy of recent years made the idea of voluntarily surrendering even one dollar of sales volume anathema to distributors. Today, interest in killing accounts is re-emerging. The subject sounds deceptively simple and straightforward. In truth, it's a complex issue with potential for hidden opportunity costs.
First, look at the circumstances that lead a distributor to conclude an account is better dead than alive. Inadequate sales volume is the most common. The salesperson believes it's simply not worth the time and effort to keep making calls. My experience is that the sales rep often may not adequately understand the client's buying potential. Today's sales rep has a multitude of products in his sales arsenal. Before ending an account, consider how much the customer knows about you--the full range of your products and services and your ability to create custom programs.
Another motive for killing an account is the "pain in the neck" factor. Be careful. Our surveys of end users tell us that print buyers you consider demanding and expensive to serve actually understand how they're viewed and often pay a premium for the extra service they demand.
The urge to kill an account can be a powerful emotion on a bad day. However, count to 10 before acting. Consider the ramifications. Most of all, consider the method you use to prune the account. The consequences may extend beyond your business relationship. The buyer is likely to speak to others. That feedback could be negative or positive, depending upon the manner in which the divorce message is communicated. Never forget that your organization has accepted business from this account in the past. You have an obligation to treat the scorned party with compassion and consideration. Remember, you never know where a buyer's career may take him.
Raising prices beyond reason is a common reaction, but that may create negative feedback in the marketplace. It's also easy to quit calling on the account or be unresponsive to the customer's attempts to communicate. That, too, may create dissatisfaction that could be broadcast to business acquaintances.
Do what's right, not only what's expedient. Schedule a meeting with the customer targeted for elimination. Calmly and professionally explain the reasons you're proposing a commercial divorce. Most buyers will accept and understand the rationale if it's logical and well-presented. I often see buyers moving to new employers that buy a great deal of print, and they remember the businesslike manner in which the issue was presented to them.
Most importantly, the salesperson proposing to sever the relationship should suggest the name of one or more printing companies that can satisfy the buyer's needs. Don't leave the customer high and dry.
Here's an actual example of misunderstood buying potential: An Upper Midwest print company changed its location and profit structure, and 22 long-time customers generating marginal sales volume were identified as eligible for elimination from the account portfolio. I urged the owner of the print company to personally visit each of the accounts over a 90-day period and do three things:
* Thank the account for its business during the past several years
* Explain the changes in capabilities and "fit"
* Recommend an alternative supplier
The results of these talks were unexpected--and lucrative. In 12 of the 22 cases, the visit by the CEO revealed a high degree of mutual ignorance. The buyer hadn't been educated about the range of the supplier's products and services. Conversely, the print company lacked information about the buyer's strategies, objectives and needs. The candid exchange between buyer and seller revealed a need for more structured information.
Bottom line: Visits to 22 customers targeted for elimination resulted in the retention of 12 active accounts, two of which are now top-10 clients. Moral of the story: Be careful before you fire an account.
Contributing Editor Dick Gorelick is an award-winning authority on sales, marketing and business strategies for the printing industry. As president of the Graphic Arts Sales Foundation in West Chester, Pa., he travels extensively, consulting, writing and speaking on sales training.
