Question

Topic: Customer Behavior

What Would You Do When A Competitor Bribes One Of Your Accounts?

Posted by Anonymous on 5/16/2004 at 10:38 PM ET 250 Points
Since 1993, my firm has sold chef's knives and tools to the book store of a college that has a large culinary program.

The college’s buying decision is made as follows: The Culinary Department faculty decide what brand of knives and tools they want their students to purchase. This information is then given to the college bookstore. The bookstore in turn issues a PO for these items to the vendor selected by the culinary professors.

The current situation is such:

The buying cycle typically begins in February for the September semester. My sales rep called the various individuals at the college to arrange a meeting to determine the college’s needs for the students beginning class in September.

No one from the culinary department would return his phone calls or e-mails. The book store buyer did speak to my sales rep and let him know that she did not know what the culinary department was up to. From her point of view, our service, quality and pricing was excellent and a simple rebuy was in order.

To make a long story short, the rep from a competing firm began telling people in the industry that he had secured the business; this happened in early March. At that point, we had not even been given the product specifications, been allowed to make a sales presentation or present pricing.

Because of our positive relationship with the bookstore buyer, we learned that the order had not yet been placed with anyone (although our competitor boasted he had it). The book store buyer provided the product specifications to us. With this information, we were able to present price quotations to the book store buyer.

The book store buyer told us that our pricing was better than that of the competitor and quality was not an issue.

Late last week (May 13) we were notified officially that we lost the business after 12 years. The book store buyer can’t understand what is going on; as we are the incumbent firm, with an excellent track record and better pricing. In addition, we support the college with student scholarships and bursaries.

When a situation is handled so strangely, with no obvious best buying practices in place, I suspect that something unethical is involved. In this case, I believe that the culinary department has been promised money from our competitor to secure the business.

At this point I have nothing to loose. I would like to expose what I believe this competitor’s actions to be. What do you think?

At the same time, I would like to be able to convince my customer that best buying practices should be in place, as should a code of ethics. Both of these would help to prevent this type of situation from occurring again, would help to obtain the best value for the money, keep every one on a level playing field, compare apples to apples, etc.

PS. The higher prices charged by our competitor will be borne by the culinary students who have to buy their knives and tools at the college book store.
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RESPONSES

  • Posted by Blaine Wilkerson on 5/16/2004 at 11:12 PM Accepted
    Interesting dilemma.

    However, without a contract for services in place, I'm afraid there isn't much you can do. The Culinary Department may choose what products and how many, and the bookstore may issue the P.O., but ultimately, the college adminstration dictates relationships.

    Without solid evidence to PROVE your assumptions, I would NOT advise you to attempt to expose anything. You may easily open yourself to libel/sladerous defamation suits that will end up allowing your competitor to OWN your company.

    The word "competitor" imlpies what is happening here; competition. Perhaps they offered a better scholarship, more money to the department, free upgrades on current equipment. Who knows? Maybe the competitor has connections with one of the top Alumni.

    I understand your anger and the need for retaliation, but it will only make you look bad. I would recommend you ask for a meeting with the REAL decision makers to inquire why they terminated a 12 year relationship and see if they will give you a chance to match the offer AND continue your current pricing.

    If they refuse your offer or refuse to even meet with you, MOVE ON. Don't deface your company by trying to change things you cannot control. Accept it with dignity and utilize your 12 years of good standing to acquire another college's ordering.

    Lecturing your customer on ethics YOU think are proper will only delineate the relationship further. Just act as a professional, request a chance to re-acquire the account, and proceed in a dignified manner...no matter the outcome.

    Perhaps an outside source can call and make inquiries in an attempt to find out what has been placed on the table.

    Please feel free to send me an email if you require further assistance.

    Good Luck and and remember: I/E ("I" over "E") -Intellect over Emotion.
  • Posted by SRyan ;] on 5/17/2004 at 12:49 AM Accepted
    ML, don't let this situation eat you alive!

    Speaking from personal experience, the best you can do is swallow and digest the Lessons Learned here.

    In my first business, I had one big client (Chevron) that brought 99.9% of our revenue. Long term relationship, profits a-plenty, all seemed to be going well, and what did I do? I got complacent and assumed that in my behalf, I could let my employees keep the relationship flourishing with the customer. Then another company stepped in and essentially made job offers to my entire team, and things got ugly. No one at Chevron would return my calls, either. I wasted a lot of time, energy and anguish over this... and I got tired of debating the situation with attorneys (whom I didn't trust much, anyway).

    If you are going to pursue a conversation with the appropriate decision makers at the college, do it with a sincere and simple goal: Understanding what caused you to lose the account so that you can prevent this from happening with other customers!

    However, if you don't succeed in contacting them, let it go. Talk to your own team. Avoid demonizing the competitor, and instead determine the possibilites that are in your control. That's the best way to move forward and maintain the important relationships you still have with other customer and your own employees.

    This situation could become quicksand to failure or stepping stones to new successes. That's for you to decide!

    - Shelley
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