April 2015

Switchover Etiquette

 
 

business-fightLast week two unrelated events took place that got me thinking about switchover etiquette in door-to-door sales. First, my wife called to let me know that a salesman knocked on our door and tried to sell her a pest control contract. She told the sales rep we already had a service to which he replied, “Who did you sign up with this year?” She explained we’ve had the same provider for several years and without hesitation the sales rep thanked her for her time and proceeded on to our next door neighbor’s house.

I appreciated, and can relate to this sales rep’s approach of moving on quickly when discovering somebody has been with the same company for an extended period of time. I’ve witnessed in the past sales reps that will slander their competitors and/or offer absurd discounts to get them to switchover. However, this sales rep graciously moved on to the next door. In fact, he didn’t even ask what company we used, he just assumed since we’d been with them for several years that our needs were being met…and he was correct.

The second event occurred while meeting with the owners of another pest control company who are competitors in the same market as my company. Our discussion included knocking strategies, area management and scope of service. We shared candid information with the hope that both companies would be able to achieve their goals by working symbiotically. In fact, we even agreed to walk away from one another’s customers in order to preserve the integrity of our relationship as well as the profitability of the pest control industry.

In contrast to this meeting, I’ve heard of situations when competing companies deliberately seek out each other’s customers and offer them absurd discounts (in some instances they even offer free services) to switchover.

So what’s the big deal? After all, it’s not personal, it’s business. I abhor this cliché and couldn’t disagree more. These predatory tactics are personal…and unfortunately when they are used, industries as a whole can suffer.

Think about it, if companies lower their cost of service (thus lowering their margins) to switchover accounts, they end up hampering their own industry. First, as prices are lowered, competitors may be forced to do the same thing which could result in margins being compromised across the board.

Second, oftentimes business owners will make up for these lost margins by cutting corners on their service. For example, in the pest control industry a company may choose to purchase cheaper products. By doing so, the quality of service decreases as does the value customers place on the service, which once again results in the industry as a whole losing value.

Another effect of lowering service costs could be to force business owners to expect more from their employees without increasing their compensation. Of course these things could result in higher employee turnover, less satisfied customers and/or less qualified personnel to do the job.

The reality is this…employers, employees and customers all lose when companies lower their service cost to switchover accounts.

So why do companies continue to do it? From my experience it oftentimes boils down to pride. Business owners want to flex their muscles and do what they can to discourage competition because they think it will make it fade away into oblivion. However, the reality is that this behavior can actually enrage competitors and force them to employ similar switchover tactics. Nobody wins when this happens.

And how much is really gained by using these predatory switchover measures? Generally, competing companies will switch over roughly the same amount of accounts and by doing so are only affecting their own bottom line which makes no business sense whatsoever. What a foolish game this is.

Companies and industries have far more to gain if competitors set and follow parameters that will enable them all to prosper. Companies and consumers all win when industry prices and margins aren’t compromised and the quality of goods and services meet the needs of their customers.

If you are knocking doors and come across somebody using your competitors service, it might be in your best interest to ask if they are satisfied and then move on to the next door if that’s the case.

 
 LennyGray
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