SALES
W
e’ve all had to deal with price increases but also phasing out an old one in addition to
in one form or another. Similarly, many of dealing with the wide-range of conversion issues
us have been faced with a belligerent customer that will inevitably arise.
who not only is unwilling to accept your price in- To better help you understand the risk involved in
crease, but also threatens to switch to your num- actually making the change, think for a moment
ber one competitor. When this happens, we’re about the hassle you go through when you try
often left with the feeling that our business is on to alter a flight on the same airline or your cell
the brink of imploding. But, don’t panic! Take a phone plan even if you stay with the same carrier.
deep breath and relax! It’s not as bad as you may Similarly, consider what is necessary to adjust your
initially think. automobile insurance or to reschedule medical
tests. With each of these same examples, think
In talking with a variety of salespeople, of the added work you would go through if you
professional buyers, and purchasing departments were not just changing plans, but also changing
over the years, the reality is that when a customer companies. Because of the significant amount
is presented with a price increase, they will only required, you would probably think twice about
change to a competitor about 10% of the time. making a switch.
The reason is simple: the cost of switching to
a new supplier is too great. When a customer Now put yourself in the shoes of a business and
threatens to make the move, rarely have they think for a moment about the work that would be
taken the time to think through what they’re required for them to change to another supplier.
really saying. Their goal is to get the weak-kneed It’s easy for a business customer to say they’re
salesperson to cave in and give them a discount, going to drop you and go with someone else,
and many of them are successful in securing on- but keep in mind that at that point, it’s only talk.
the-spot price reductions just because of the Threatening you is not costing them anything.
forcefulness of their veiled warning of switching Carrying it out actually will. The decision to
vendors. switch is not just about the absolute cost. On
nearly every occasion, it takes time to make a
When you are presented with the threat of a switch, thus carrying an added element of risk.
customer moving to another supplier because
of a price increase, focus in on the cost of the The next time you are warned of a potential switch
conversion instead of allowing yourself to panic. from a customer, be proactive and prepared. Do
Remember, the process is never as easy as they your homework. Research what it would take
think it’s going to be. Start by looking at what for them to actually make the change to a new
they will have to go through to set up and to vendor. After you’ve discovered the cost of the
start receiving from a new vendor. Now, take conversion, figure out how long it would take for
this and multiply it by four. The reality is that the your customer to get a payback, let alone a return
customer is not just setting up a new vendor, on their investment. In most cases, it will be hard
 ThinkBusiness June 2009 
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