Adventures with Lyrical: Buying a Business (REPOST)

Palum_sl said:

No offense, but I would have worded this a different way, maybe something a little bit less antagonistic (or more specifically not able to be misread and turned into an attack).

Mr. X:

I thank you for your continued patronage, however 35% lower than the industry standard is not something I can match at this time. As I am sure you are aware, we hold high standards for quality and service. We have priced our work to ensure consistency in those areas.

I appreciate your referrals and business and we are ready to assist you in the future should you have need of us.

Sincerely yours,
Y

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A final thought, he would have countered with his massive amount of referrals he claimed to be sending me. Only they haven't been massive. The last few years, if I counter back with service levels or industry standard, the answer back would have been "I send you a thousand referrals, so eat the loss."

Kaige_sl said:

All the business were referrals expecting the same reduced rate because of that guy, weren't they? He's just creating even more loss for Lyrical. Anyone he loses from that circle would just improve his finances I would think.

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A perfect example is from this past Friday. One of the crews came in, and me gave a contract they didn't complete. The customer was a referral from this organization. The customer added a bunch of work not on the contract, and said we had to do it because he was referred by that organization. The billings on the job tripled because of it. But we had to do it for the same price! This represents a 70% discount from industry standard. In my industry, a 10% discount is extreme.

I figure that 1.5% of sales comes from him, but I'm losing money doing these jobs. For some reason, he's giving them the expectation they should get the same rate. At the same time, we have jobs we can't get to because of our backlog that cancel. We won't notice a difference.

Moonarchia_sl said:

Palum's version is better. When he comes back don't offer any more discounts. If he tries going crazy over it, smile and say no. Don't argue, don't quibble, just say no and if he flips his shit ask him to close the door on his way out.

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You guys are looking at this like it's a rational customer. For the 4,000 customers I have, they get a more diplomatic answer. This guy is not built like that, a weak answer is seen as a sign of weakness. He's actually a nice guy, and I like him, but when it comes time to talk, he starts talking like Batman (closer to Christian Bale's version, not Adam West's). As soon as the contract signing is over, he goes back to being a nice guy. It's Dr. Jekyll/Mr. Hyde.

For the last eight years, if I try to lighten up the wording, whether it's email or in person, he doesn't even hear it. He's not usually this bad, but the other few times he's been like this, the only time I was able to get a fair deal has been when I've slammed the door. Other than that, he'll just yell for an hour straight and expect you to sit through it.

I don't know any other way to say it. He's one of those guys. You have to yell loud enough to get his attention, other than that, he's yelling so loudly he won't notice you.

Barraco Bisi_sl said:

As lyrical has said, this guy only responds to bluntness.

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My wife's looking at this thread and laughing. As she said it, this customer is "beyond blunt." In her words, you haven't met this guy. Anyway, in business, you have to communicate with your audience in mind.



I remember one time, I was on the phone with him, getting griped out, and we had an emergency call come in. I ask him to hold, I switched over. Ten minutes later, I realized I still had him on hold. I got caught up getting everything in line. When State Farm calls you up, you prioritize them. Apparently, he didn't hear me ask him to go on hold, and didn't realize I hadn't said a word. He was just ranting for ten minutes. I listened to him another five minutes, but I yelled that I had to go, and would call him back later. We met a day after that in person, and he got me in his office and yelled at me for 45 minutes. The only way I could end the conversation was by telling him he was crazy if he thought I was going to do it below cost. And this was at the top of my lungs. Then he signed the contract.

When one side is being aggressive in negotiations, the other side can walk away, or signal pain to gain power. This has worked with any number of corporations that get us to contract with them over the years. They act like assholes, I walk away, then they sign (or don't). Who cares? They get the price so low I can do without the contract anyway. Or they try to. Even when we have no work, we act like we have a lot, or these big customers will come after us like blood in the water.

Some of these companies take their negotiation tactics straight out of Wal Mart or Dell's playbook. I've even had some of them try to demand to see the company's tax returns and have unfettered access to my P&L. They try to say they are doing it so they can help the vendor be more efficient in operations. But what they really want to do extract every dime of profit. Don't ever let a customer see your books. If you fall into that trap, you are asking to be assraped. Last year, some utility company wanted unlimited access to my P&L, for a tiny contract, and said they had a right to have it LOL. I told them unless it was a multi-year deal, there was no P&L coming. It was a three hour job.

Borzak_sl said:

Some people are just like that. Working with some guys in our industry they will go back to the same supplier every year and throw a fit when there are 100 other places they could get it from. People just say stuff like "let him blow up and move on". It's like they can't negotiate without doing it or they know it's the best price but like bitching about being stuck or whatever. Part of the way they operate.

You could drop your price in half and eventually he would be back bitching about it I'm guessing.

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Yup. Some people want to negotiate everything, I could have bid this at $1, and he'd have bitched about that.

Tarrant_sl said:

Which is why in my mind, phrasing that much less passive aggressively was important. Lyrical will pass it off like it wasn't because he wont admit he may be wrong here, but firing him as your customer was your win...not treating him poorly so he can possibly take away business, no matter how small.

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Except he just emailed me while I was at the gym, asking me how close I can get to the other comparable bid. Because there is no comparable bid, and this is all a game to him.

He wasn't offended, this just saved me a few hours of bla bla bla. I'll review with the guys in the AM, but I'm going to probably tell him I can't go lower without knowing what company this is. I know the companies in the area, and I know who has the credentials, and who is bootleg. I keep my certifications up, and I know what the averages are. Anyone that can match me has to have a pretty significant cash outlay, and it will be painful for them to match.