What happens when you say no to a customer?

A common scenario in the metals industry is the last-minute challenge from your customer to fulfill a rush order for a project or a new, large, last-minute order or change. The problem is what do you do when you do not have the inventory in stock?

Some well-tried solutions include:

  1. Call up your supply chain team and have them frantically chase around existing suppliers for miracles and favors.
  2. Check your inventory in multiple locations to try and piecemeal together the right amount of inventory and absorb the additional freight and handling costs.
  3. Buy from a stocking distributor and pay a 10%+ premium, assuming you hit the jackpot and they have it in stock.

These typical responses on occasion can deliver the materials you want but more often they cause frustration, expend a lot of energy and time, and at the end of the day result in no solution. Please also remember your customer may also be going through the same exercise at the same time.

Then these famous words come from the sales team:

“if we cannot get exactly what they want when they want they will go to the competition”

The problem with that statement is that only 50% of it is true, in reality when you say no to your customer he will call your competition. But, at that moment they have already started to consider taking a different product when they have done this. Different thickness, slightly different color, different source, change to spangle, altered lead time and often higher pricing.

“Well that’s not fair,” I hear you say! It is fair he has no choice but to except these compromises to fulfill his order. The mistake you made is not giving them the same opportunity as going to the competition offers them. We have seen it far too often that companies will lose orders on a product they do not have and cannot get only for the customer to go buy a different alternative at the competition. It happens everyday!

So stop saying no and start by offering your customer some creative alternatives. They have to consider change they moment they say they will go to your competition, so make sure they consider change with you first! That way you keep you customers share of spend and prevent the competition from gaining a foothold at your most prized asset: the loyal and repeat customers.