It started off as a regular incoming sales call, then I told the customer that he wasn’t yet ready to buy our product and he should learn some more before he bought. You are probably saying to yourself “Why would you ever refuse to sell your product to a customer willing to give you money?” I did told the customer that I would sell to him but told him in all honesty that he wasn’t really ready to buy, and that if he bought it now he would regret it.
As you might imagine, the customer was dumbfounded. He couldn’t believe that I was recommending that he not buy. I was probably a bit too cheeky but over the 3 decades of selling industrial instruments to the contractor trades I had a better than average idea of what would happen.
In the contractor trades, the usual road to scaling up is to advertise more, hire more people, sell more of the same stuff. If they are a little more cutting edge, they actually increase prices, sell the same amount of stuff but get more money. There is a limit to this type of scaling up. You eventually reach a plateau and you have to come up with something different.
Don’t be a victim of fads
Over the years, a number of add-on products have been developed, especially for the HVAC industry. One time it was UV lights in duct work to combat airborne illnesses. The technology was new, tricky, didn’t last, high maintenance and more. The need back then was minuscule. Today with coronavirus, this is more of a sure bet, along with vast improvements to the technology. But back then, many embraced it and it fell flat.
Duct cleaning was another “hot” add-on. Some companies even started new companies just to do duct cleaning. The problem was that while it was billed as a continuous business for existing customers, existing customers eventually asked, “why are my ducts getting so dirty every year?” Sealing the ducts, eliminates all external issues related to dirty ducts. Again, it was embraced but fell flat.
Then came whole house contracting. Use whole house diagnostics to really identify the problem of the house affecting the customer instead of just swapping the AC unit. The idea was to sell a solution not a product. I was at a manufacturer conference for their dealers when the program was brought out. The reaction from the long time dealers was “is this going to be a flash in the pan idea like the UV lights?”. Like UV lights, the idea is a good one, there was lots of training on how to do the test. But no one taught them how to change their business to account for the major change in the business model. So again, giant thud.
The fad isn’t the issue, the issue is changing your business to incorporate the new business model
Back to my refusal to sell the product — I asked the customer how he heard about our product and why he wanted to buy it. He said that he had heard of it from a business associate, but one that was not in the business. He had heard stories of great successes around the country by offering these new services. I then asked what he really knew about the product and the service he was going to provide. He said he saw it on our website and that he was going to try it out on a few customers to see what they thought. That was when I told him he was wasting his money buying our product.
The issue wasn’t the product, the cost or the service. The issue was mindset
I have probably sold several million dollars of product to people who wanted to “try it out.” Most have fulfilled my expectation. They bought the product. They took it around to friends and family and maybe the more daring took it to a few existing customers to see how it worked and what it told him. At this point the 80/20 rule kicked in. The 80% didn’t understand the device, the test, the benefit or how to make money at it. They didn’t do any homework at all. Some would then hand it off to an employee and tell them to figure how to make money at it. Compounding the issue because what was the employee to really do? If the owner didn’t seem in favor of it why should they? At this point the product was too valuable to throw out so they stored it in a closet filled with other half hearted efforts to do something new.
For the 20%, when taking the product out to a building, they really saw the potential and then studied the market, got some education, developed methods for employees to use the product to drive more sales. They got it. And it was a long term success at increasing sales both in dollars as well as additional services and cut down on call backs which is the bane of all contractor trades.
Back to the customer
A little light must have come on for him because then he asked why I didn’t think he was ready to buy. I ran down the scenario of the 80%. I told him that he should find out more about the test, who else is doing it, go to a conference and learn about the broader market, talk to successful contractors on how they figured out a new business model and processes to incorporate the new testing procedure. He then told me that I was an arrogant sales person, that I was destroying my business and much more. I told him that those all might be true but that I have seen it happen hundreds if not thousands of times and it was hard to argue with facts. He was pretty steamed when he got off the phone.
Now the raving fan
Almost 6 months to the day, that customer called back and asked for me. He asked if I remembered him and I actually did and proceeded to replay the call to him. He also recounted that he told me that at the time I was making a mistake not selling to him. He then said to me “you were right not selling to me!” He then told me about the people he had talked to, the conferences that he attended, the incredible lessons he learned from other contractors at the conference. He then worked on a plan to have in house training and how he was changing the order of work by both the sales people and the technicians. He proceeded to place a very big order and then thanked me for refusing to sell to him originally.
We met in person at a conference and stayed in touch for some time. He always reminded me of when I refused to sell to him and would tell others the story. He would always follow it up by saying that it was the best thing to happen to him and his business.
Pivot, adjust, stay the course, new normal
While this current crisis has hit far too many people both personally and professionally, the answer isn’t the fad, the shift, the pivot or adapting to whatever the new normal might be. The answer is looking at your business the way it was or the way it is with clear and open eyes. Then asking how you can incorporate change that has a sustainable effect, how that change will affect you and your employees, how to communicate that change to the market and to customers.
It isn’t magic and it really isn’t “hard” work. It is thinking work. It is mindset adjustments. It is taking time to reflect on the current business and both intended and unintended consequences to the business. It is intentional work that requires time to think and process the changes needed to succeed.
Mediocre or magnificent
When you think about your business and understand that change is needed in you, your business can be magnificent. Be the 20%. Or you could be part of the 80% and think, “this guy has no idea what he is talking about.” If you stay in that 80% then you can rely on your business being mediocre and staying mediocre. Maybe that is ok for you. For me, I am tired of mediocre and will strive for magnificent.
Originally published in Medium - December 7, 2020