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July 28, 2014

A little over 3 years a go we lost an account to a Global (Xerox) Branch selling Konica Minolta. It was a school that by all accounts they said that we were doing a good job supporting the equipment, and that our Canon equipment had run well. I think part of the problem was they asked us to include in the bid a price for a Document Management system with an AP Workflow. Our price was about $10K higher than the Global quote. Which I think pissed them off and made them think we were gouging them. We weren’t!

Global put in some Konica Minolta MFDs for a demo and the feedback we got was that it didn’t work well during the Demo, but they came in with a half dozen “Suits” and wowed the customer with promises of what they would do to make it “right”. We asked if we could put in our new equipment for a demo and they told us that there was no need because they knew our equipment. We truly thought that we had earned their business by what we had done to support them over the life of the lease. We did not realize just how upset they were over our DMS \ Workflow price. So they went with Global and their Konica Minolta proposal.

My sales guy was livid, beside himself that he had lost this good customer when he \ we had done such a good job supporting the customer. He resisted the urge to say bad things, and he sent an email to the customer’s key contacts and said he really appreciated their business in the past, and was sorry to hear that they had chosen to go with the competition. And If there was anything he could ever do for them, please don’t hesitate to call (a true sales professional). He did get a call six months into the new 3 year Global lease, and the customer was asking if there was any way he could get them out of their lease (2 & 1/2 years remaining). This school is 98% MACs. Mac boxes and Apple stickers were all over the IT Department’s office. Well the school updated there Mac OS from 10.5 to 10.6 and all there printing broke. They called us because the Global Branch was not able to get them printing (other than the Generic Print Driver) for six months. The Branch management finally sent the school a letter saying that the problem was the schools fault because they (Global) never knew that they were a “MAC House”.

I also found out that the DMS \ AP Workflow solution that Global proposed for $10K less than our proposal was never brought to an actual functional state. They had only booked 1 week of time for their SE that came in from Florida and when it wasn’t functional at the end of the week the SE still left to go back to Florida. THe local Global Branch apparently didn’t have any local SEs to finish the project. We were told that the school ended up spending tens of thousands of dollars more on this DMS \ Workflow solution and they never got it to work to the schools satisfaction.  When all was said and done the school ended up paying more than twice what I had proposed. I thought to myself that I too could have come in $10,000 cheaper if I didn’t have to make it work too. But that’s not how we do business!

We couldn’t get the customer out of their Global lease two and a half years early, but we stayed in touch and we did get the business back at a price we could all live with just recently. The customer said that they thought that they would get everything that we had provided PLUS all of the new promises that Global “Said” that they would provide. But that is not how it worked out. Sometimes customers take good service & support for granted. They think anyone can do it. But the truth is it is more rare than you think. And good service & support cost a little more. We never try to be the cheapest because even if you win the deal everyone loses! The sales person loses because he can’t make an honest profit on the deal. The Service department loses because they are not taking in enough money to provide the proper level of service to keep the customer happy. The customer loses because the sweet taste of a “cheap price” quickly fades in the face of poor service and support. Everyone SAYS that they have good service, or great service, but not everyone actually does! I think it is more the exception than the rule in our industry. But it is puzzling that a current customer would leave what by their own admission was good service & support on equipment that they said ran well for the “Promise” of the same from a company that has yet to prove anything to them. All because they were a little cheaper. Their is an old proverb that states “Well Done, is better than Well Said!”

This is not the first customer that we have let go, only to get back after that lease is up. And when we do get them back they don’t ask us to be the cheapest bid, because they have seen the cheapest and decided that’s not what they want!

That’s my $0.02

Vince McHugh

vince.mchugh@yahoo.com

 

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One comment

  1. Hey Vince,

    Yours is a philosophy I preached during my 25 years at Canon. And as in your case here most folks quickly learned that there truly is a difference between price and cost. Hope all is well.

    Ray Hevner
    Retired and living on a boat.



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