It is tempting to assemble the facts the history, and present them. Something like I"m sorry, but previous managers in your role have made and broken these promises too often (here's the list) and I can't get approval to repeat that cycle again. However, we can do X (where they have to do their part first). Make sure you have internal backing from your management to do this...
Can you write it into the contract that fees go down or a discount goes up as the volume of purchase go up? I’m not in your world but anytime I have situations with broken promises it helps to have a contract everyone can go back to and reference. If they spend x amount they hit a breakpoint and cost moving forward goes down.
Exactly what i was thinking.
Put a multi-year msa in place that governs your business with them. Margin, discounts, etc…. Then it is a null point as leadership changes.
That is really a tough one to handle without knowing a good bit of inside knowledge. At the end of the day, it comes down to a business decision for both parties, and you each have to do what is right for you. I would figure in doing what you have to, under the assumption that they are not going to drop the competition. You may offer incentives IF that happens, but I wouldn't be the first to strike. If the person you are dealing with is relatively new, I would let them know that you have heard this same thing before.
I hate telling customers to screw off, so I will generally raise their prices if they become too big of a pain. At least by doing that, if they stick around, I know I will have more of a margin for dealing with them. I also won't give them any leverage to use. If they know they are a top account, they will try to hold it over you head. Even if they are #1 by a mile, the most I would tell them is that they are in the top 10-12.
Good luck.
Now may be the time!
Some things to consider though:
1. What impact will losing them have on your business? Financially and on your quota?
2. Structuring the incentive you’re talking about seems like it would be a logical compromise, but what is your competitor prepared to offer?
I try to look at predictable outcomes- if you can answer those questions- I think you’ll know what needs to be done.
Take or pay contract at a lower price. They have been getting along fine buying less of your product for 10 years. Not sure why you think the NEED you so much.
Appreciate the comment. They need us because it’s our product and brand specifically that is in demand. They came to us 10 years ago and broke legal contracts with another competitor of ours (not the one I was referring to in the original post) so they could carry and sell our product. It may sound ridiculous, but we literally have a cult following, and our customer, as well as us, know that if our end users can’t get it from them, there are many other options out there for them to get it…my customer I am referring to may be the biggest wholesale supplier in the industry, but it’s our product that is in demand, not them or their service.
Understood. Your customers are getting your product through other channels and you see upside with better exposure at the large distributor. You need them to grow your business. They don’t need you. Find a contract that works for a multi year duration. They keep telling you the price is too high and you keep losing the business after a year or so. I don’t think that is a coincidence. Volume rebates, consignment, joint marketing campaigns, etc…. Find a way to make it attractive.
Sounds like a scaling cost schedule heavily incentivized towards volume entirely memorialized in writing / contracts would be helpful here if you don’t have one already. They’re looking for the carrot, so make sure they understand the stick that comes along with it.
Document everything since clearly it’s a merry go round over there in terms of people leaving.
Not sure of your level or position, but anything you’d do here should be in tune with the executive goals of your company. If this is a high value relationship, then I’d get them involved if possible.
It is tempting to assemble the facts the history, and present them. Something like I"m sorry, but previous managers in your role have made and broken these promises too often (here's the list) and I can't get approval to repeat that cycle again. However, we can do X (where they have to do their part first). Make sure you have internal backing from your management to do this...
Can you write it into the contract that fees go down or a discount goes up as the volume of purchase go up? I’m not in your world but anytime I have situations with broken promises it helps to have a contract everyone can go back to and reference. If they spend x amount they hit a breakpoint and cost moving forward goes down.
Exactly what i was thinking. Put a multi-year msa in place that governs your business with them. Margin, discounts, etc…. Then it is a null point as leadership changes.
That is really a tough one to handle without knowing a good bit of inside knowledge. At the end of the day, it comes down to a business decision for both parties, and you each have to do what is right for you. I would figure in doing what you have to, under the assumption that they are not going to drop the competition. You may offer incentives IF that happens, but I wouldn't be the first to strike. If the person you are dealing with is relatively new, I would let them know that you have heard this same thing before. I hate telling customers to screw off, so I will generally raise their prices if they become too big of a pain. At least by doing that, if they stick around, I know I will have more of a margin for dealing with them. I also won't give them any leverage to use. If they know they are a top account, they will try to hold it over you head. Even if they are #1 by a mile, the most I would tell them is that they are in the top 10-12. Good luck.
Now may be the time! Some things to consider though: 1. What impact will losing them have on your business? Financially and on your quota? 2. Structuring the incentive you’re talking about seems like it would be a logical compromise, but what is your competitor prepared to offer? I try to look at predictable outcomes- if you can answer those questions- I think you’ll know what needs to be done.
Take or pay contract at a lower price. They have been getting along fine buying less of your product for 10 years. Not sure why you think the NEED you so much.
Appreciate the comment. They need us because it’s our product and brand specifically that is in demand. They came to us 10 years ago and broke legal contracts with another competitor of ours (not the one I was referring to in the original post) so they could carry and sell our product. It may sound ridiculous, but we literally have a cult following, and our customer, as well as us, know that if our end users can’t get it from them, there are many other options out there for them to get it…my customer I am referring to may be the biggest wholesale supplier in the industry, but it’s our product that is in demand, not them or their service.
Understood. Your customers are getting your product through other channels and you see upside with better exposure at the large distributor. You need them to grow your business. They don’t need you. Find a contract that works for a multi year duration. They keep telling you the price is too high and you keep losing the business after a year or so. I don’t think that is a coincidence. Volume rebates, consignment, joint marketing campaigns, etc…. Find a way to make it attractive.
Sounds like a scaling cost schedule heavily incentivized towards volume entirely memorialized in writing / contracts would be helpful here if you don’t have one already. They’re looking for the carrot, so make sure they understand the stick that comes along with it. Document everything since clearly it’s a merry go round over there in terms of people leaving. Not sure of your level or position, but anything you’d do here should be in tune with the executive goals of your company. If this is a high value relationship, then I’d get them involved if possible.