I was competing for a deal with a paint manufacturing company in Florida. (I was based in New York at the time.) I had made numbers of trips down there, presenting, answering questions, performing demonstrations, and building relationships with key managers. We were getting closer to the point where the customer was going to make a decision.
My main competition was a smaller company who regularly and dramatically discounted in order to win. It was our company’s policy to determine a point below which we would not sell—even if it meant losing the deal. I knew that number. I knew it well.
But having gone through so much effort and expense up to this point, I couldn’t let the competitor undercut me. I made the deliberate decision that I just couldn’t let that happen again. So, in Florida once again, I closed the deal with the CEO of the customer’s company for a few thousand less than the competitor’s final, discounted offer.
I flew back to New York, proud to have brought in this business—until I handed the contract over to our CEO for signature. He refused to sign it. He told me to call the customer and tell her that we wouldn’t be able to do business with them at that price and that we were therefore withdrawing our offer.
Of course the customer was livid. She railed on and on about how unethical we were and how I wasted her time. She was right about all that.
There was a lot that I didn’t understand about business and sales before this happened. Needless to say I learned quite a bit since then and moved on, however much embarrassment and pain this unfortunate event caused me.
Many of you know me as someone who very rarely even uses the word “discount.” I’ll look for all sorts of ways to avoid discounting, as my clients will tell you. Well, now you know. It all started with an embarrassing mistake in Florida.
(Thanks to Codrut Turcanu for the idea…)