I'd like to relate a story that happened some time ago that I was thinking about the other day.

I was talking to an old pal of mine and he happened to remind me of the fact that he was a sailing aficionado. “Sailing”, I thought, “what a waste of a beautiful day in the sun - pulling on ropes and moving masts and letting out nylon … give me a powerboat any time.”

But he went on to mention that he was very excited about putting his boat in the water this spring because he “just had the barnacles scraped and the hull completely repainted” … and apparently he used some new type of paint that “minimizes friction and keeps the barnacles from re-attaching.”

He really had a problem with those barnacles. They made for some pretty rotten handling characteristics.  “They just flat-out slow you down. You really can’t maneuver or cut through the water,” he complained.

“CUSTOMERS!” I virtually screamed. You are describing customers!

He probably thought that I was carrying on another conversation with someone else in the room, but when I assured him that this wasn’t the case, he said, “So what the heck are you talking about?”

“Well”, I said, “when you start a business what do you have? You have no customers, right?” (How could he disagree?) “But before long, you have a bunch of customers. And, you need these customers to be repeat customers, right, and so you treat them like the potential goldmines that they are, you follow?”

“I follow,” he said.

“Well”, I went on, “so what do you do?”

“I, uh, listen to them”, he said.

“And?”

“And, he went on, “I generally try to accommodate them. Don’t you?”

“AH HA!  And for some of your bigger customers, you’ll probably even go so far as to modify either your products/services and/or the PROCESSES that you carefully developed to take care of them, RIGHT?”

“Well, sure”, he says, “Who wouldn’t?”

“What if I suggested that your penchant for modifying the products and product delivery processes for your customers was slowly putting you out of business. What then would you say?”

“Well, I’d say --- PROVE IT.”

“It would be a somewhat difficult proof,” I tell him.  “But I’ll bet that if I could spend time with the people who actually make, deliver, and bean-count the money as well as time with your top customers, I’d come back with stories that would scare the be-jeezus out of you.”

Think about your own organization, dear reader. Do you “make exceptions” for certain customers? Or worse, do you capitulate to one of your salespeople’s requests to “slightly alter the deliverable” so that he or she can cash a commission check? (I’ve always said that if you give a salesperson one of two variables --- either the form of the deliverable or the “price of the deliverable” ---- he or she will vault to the top of your sales producer list overnight.)

You see it’s all about margins in business. And here, I’m not necessarily talking about gross margins for an entire division or product line. No, I’m talking about margins per deal … how much did you make on THAT sale … on THAT customer.

I spent some twenty-five years in the software business, and about 2/3’s of those years were spent in software PRODUCTS. As such, I’ve been to a lot of user group meetings and I’ve seen the pressure that a strongly positioned customer can bring to bear on a less well-heeled software products producer. In fact, I’ve seen my share of well intentioned but self-serving product users basically bang their agenda into place right in front of their fellow users.

When you build a business, you build processes. In fact, it must be said that everything in business is a process. And the more you “freelance”, the more your margins shrink.

So, are your salespeople freelancing with your deliverable, thus rendering moot all of your processes related to manufacturing, installing, and training? And are they changing the SCOPE of your deliverable, so that you must also alter the scope of your quality control, as well as your accounting and quality metrics for that deliverable?

And what about the promises that your customer service group might be making? Does some loud and threatening customer get some “Cadillac” product delivery and/or product quality assurance program that nullifies your standard levels of service to ALL customers such that in a year or so you wake up to find that you now actually have two “identical but different” product lines?

Running a successful business is really two things:

•    Having the discipline to “stay the course”, and,

•    Saying the word “NO”.

Because if the hi-jinks described above become pernicious and pandemic in your organization, they will knock points off your margins. And unless you are in a business that is purely monopolistic by definition, “points” are the last thing that you can afford to give up.

Or should I have said, “Barnacles”?

So, scrape ‘em, paint it, and have the courage and discipline to say “sorry” the next time a big client whines or a salesperson demands to go “off-list” in terms of product scope.

Then, and in a couple of years from now, simply look me up and buy me the lunch that I just earned.

All my best,

Ron