A new client can be like the bad candy in your trick-or-treat bag—except that by the time you’ve discovered whether or not you’ve found a trickster or a treat, it’s often too late.
A trickster is a client who negotiates prices combatively and constantly demands service concessions; a client who pays fair market value is a treat. The fair negotiators recognize the importance of your profit motive and agree to your standard payment terms. It seems too good to be true, but many builders and remodelers willingly pay fair margins.
A trickster is a client who constantly shops your prices on every project in spite of stellar service; a loyal client is a treat. Believe it or not, there are clients offering long-term loyalty to valued suppliers. They recognize that service quality reduces the overall cost of doing business. They avoid changing suppliers until it’s absolutely necessary.
A trickster is a client who constantly pressures you to put out fires caused by their poor planning; a client who allows you to help them schedule properly is a treat. Yes, many contractors seem to operate in a constant state of urgency. But there are many who plan properly, honor your requested lead times, and work cooperatively with you to make their projects run smoothly. These are the profitable clients you want.
If only you could ask a prospect that simple question, “Trick or treat?” Fortunately, you can. Just start your business relationship by conducting a behavioral interview. Then you will easily know if they are going to be a trick a treat to work with.
A behavioral interview is a standard tool used to recruit new employees, but also works with potential clients. It’s effective because past behaviors have consistently proven to be the best predictors of future performance. The behavioral interview with a prospect obviously can’t be a formal moment of interrogation. Instead it’s something you do before you conduct business in a strategic conversation that seems casual to your prospect. You can hope people will change, but they usually don’t.
So while you’re busy asking the usual qualifying questions to discover your prospect’s needs and the strengths and weaknesses of their current suppliers, try sprinkling in a few questions about their buying and scheduling practices.
- Start with a credit application. You already do this of course. But I mention it first to prove that it’s not impossible to conduct some due diligence about your prospect’s buying habits prior to the start of a business relationship. If you can get them to divulge their personal financial secrets, then surely you can discover less innocuous details of their business history.
- Ask prospects about their history with their existing suppliers. A prospect who has stable vendor relationships demonstrates the type of loyalty you are seeking in a buyer. It might take some time to land the loyal account, but the rewards are worth it. This is also why you want to open accounts with clients when they are starting their businesses. Loyal buyers stay loyal and therefore it is best to get them early in their growth path. This means prospecting, prospecting, and more prospecting.
- Discover how your prospects have scheduled projects in the past. You may come across one struggling to cope with production schedules and open to advice or, on the other hand, one who blames suppliers for his problems. If you encounter the blamer, you have a trickster. If you meet a prospect interested in scheduling guidance and willing to cooperate on your required lead times, you have a treat.
The start of a relationship is filled with uncertainty because you believe it’s impossible to know how cooperative and profitable a prospect will be. Fortunately you can find out. Just say “Trick or treat!”