- 26 Jan, 2023
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- 10 Mins Read
When a customer taught me about trust through his actions
In 1997 I was a front line sales officer selling monomers for a large multinational, we had a small (in terms of volume) customer who manufactured emulsions for the paint industry. The gentleman who owned the firm was old industry veteran perhaps in his mid 60’s. Though a warm hearted, cheerful and approachable person, he had this habit of hard negotiations before he bought even a kilo from us. We sold in metric tons.
At times negotiations would continue for weeks for differences as trivial as a rupee or sometimes even fifty paise per kilo of the material we sold.
There were times that we (me and my boss) would get so turned off by his hard negotiations that we would choose not to sell anything to him. “Tripathiji, let’s not go ahead with this deal. Let’s rather enjoy this cup of tea that you have served with so much warmth, have a nice chat and take leave of each other” I once told him with a sarcastic smile. He willingly obliged. I remember missing my sales target by 2 metric tons that month due to this deadlock.
The business was cyclical in nature and it so happened that summer, that we had prior intimation (which was classified by all measures) that prices of incoming shipments of fresh material would be cheaper by around 8% to 10% than current market prices, and that the market would soon be flooded with this cheaper material.
The business head called us for a meeting and briefed us of the situation saying that we need to liquidate our older and higher priced stocks. So we had to quickly realign our priorities if we were to remain profitable on both the old and the new stocks. He also promised us that if we are able to sell off the entire inventory of higher priced stocks at our current prices, he would allow us sell the cheaper stocks (when they arrive) at prices below that of the market. So we needed to act fast.
Most of the large paint manufacturers had a hint of this impeding price drop – though nobody was quite certain when that would happen, most refused to buy anything from us. Those who did oblige bought such miniscule quantities that we could not muster enough courage to show our Business head that we are making any meaningful progress towards our target.
Meanwhile the pressure to liquidate the old stock was mounting each day. Fortnightly meetings had become weekly ring fights, weekly meetings were now turning into daily tortures – orders v/s inventory. And we would get a bad beating almost every other evening from the business head.
The D Day was approaching fast and we still had around 5 metric tons of material to liquidate. We were ready to surrender when my boss (sales manager) decided to attempt selling some material Dr. Tripathi. Knowing very well that he will squeeze us to the last rupee, we strategized our sales approach such that we were left with some water to drink even after Dr. Tripathi had quenched his thirst.
A tough and bitter negotiations followed but we finally were able to strike a deal. Throughout the conversation it appeared that Dr. Tripathi who usually kept himself up to date about the smallest market movements, was not aware of this forthcoming drop in price. Though we were surprised we were careful not to show unnecessary excitement or curiosity.
Ok so I will buy 4 tons from you at that price, but I have a request – said Dr. Tripathi as we drank or last sip from the third round of tea that was served to us. I and my boss looked at each other puzzled. It was almost 9 in the evening and now a new condition emerges that we had not imagined leave alone being prepared for.
Very slowly and very guarded my boss asked “…and what is that.” Without lifting his eyes from his tea cup Dr. Tripathi replied. “I still have some stocks with me, but I also have a large order to fulfill. My inventory wont be enough to complete my order …(oh so that’s why you bought…I said to myself). So I wont pick up the material immediately. I will do so after two weeks from today after I have exhausted my current stocks. You know I don’t have much space on my shopfloor” He said looking at my boss. My boss looked back at him quizzically while I asked Dr. Tripathi – why not next week sir. It will help me show some numbers to my bosses. I said.
Dr. Tripathi gave me a very stern look and said in a firm voice: I am not sitting here to help you meet your numbers, I am sitting here to ensure that my work does not suffer and the trust that my customers have put in me is protected at all costs. My boss smiled. I fell silent. Dr. Tripathi continued “..the reason is I am leaving for Kanpur day after tomorrow. I have a family function to attend. I will be back after two weeks, but in the mean time my production team would have consumed whatever stocks I have, so when I come back I would know the exact quantity I would need and there would be enough space to hold your material too. So my request to pick up the material after I come back two weeks later”
Despite the earlier humiliation, I gathered my left over courage and proposed “Tripathi sir, at least we can invoice the material before the month closes next week. You can pick up whenever you are ready”. Dr. Tripathi smiled at me and agreed “Sure you can, just that while making payment I will consider 30 days from the date I receive the material here in my warehouse, not from the day you invoice me. If that is OK with you I have no issues” Usually we had the customers pick up their material from our warehouse.
I did not have any counter proposals because all three of us knew very well that our organization had minimum tolerance for credit outstanding and it was very aggressively applied to customers with small volumes like Dr. Tripathi
We left that day, with mixed feelings – feeling good that we were finally able to sell of the entire high priced stock before the lower priced material turned in. Feeling sad that the numbers wont show in my current month figures, though I will meet my target, I will not be able to exceed it, which I usually enjoyed doing.
Towards the end of the second week, I called up Dr. Tripathi’s office to check if he had returned and if I could proceed with the invoicing. The receptionist informed that Dr. Tripathi was not back and she did not know when he would return” I was dismayed but did not lose hope, we still had two more days before two weeks were over. My boss advised that I call him up on the third day from the date two weeks got over. I did so but received the same reply. “Not arrived, Don’t know”.
After a gap of another two days I visited his office, but everyone at his office drew a blank. The receptionist who was also his personal secretary too was not sure. She further added that they were unable to reach Dr. Tripathi at his Kanpur residence. I requested her to share Dr. Tripathi’s Kanpur number but she politely refused saying that the office was under strict instructions for not giving out any personal details to any vendor.
This process continued for the next twenty days or so, I would call up at least three to four times a week and get the same usual answer. I had not only given up hope, but I was beginning to feel let down perhaps even cheated. I assumed that this customer was perhaps hedging his own risks by negotiating with us.
The Business head, advised me to come out of my mental block and start looking for some other customer. “Lower the price by another 10 rupees if necessary but find somebody who will pick (up the stocks) and pay (advance) now. We cant sit on the old stocks anymore, the cheaper material has arrived and under custom clearance, it will be a matter of two or three days before they hit the market”.
It was becoming too much and I surrendered to my boss. “Sir, I am sorry but for now I have failed to liquidate the old stocks within the stipulated time” My boss did not say anything just reminded me to not lose focus. “Dr. Tripathi is not the end of the world..” is all I heard him saying.
As was predicted the cheaper material flooded the market. Every customer, every dealer, every broker in the market had only one word on their lips. The amazing price. They were selling at almost 12 rupees a kilo below the minimum price we could offer. Our lower priced material had also arrived but our average selling price had shot up because we were still sitting on those high priced stocks which Dr. Tripathi had promised to buy from us, and did not.
But Dr. Tripathi was neither seen nor heard. The deal we did that day now began to appear as if we had just walked straight into his trap that he had so carefully laid so that he could hedge his uncertainties while we sat saddled with the material and a commitment. Or so we thought.
Later that month while I was on my routine market visits meeting distributors and customers, as I stepped into the office of a dealer, he came out and said, there was a call from your office – your boss has asked you to report back to office immediately. I requested to use his telephone to call back my office. Ms. Thelma our receptionist answered the call and repeated the same thing “come back at once…”. It was 3 in the afternoon and it would be nearly 4.30 by the time I reach office. “never mind your boss wants you back in office so come back….” and she hung up.
When I reached office, my boss was sitting with the business head and signaled me to come in. I walked in nervous and sweating from the summer heat outside. The business head asked me to sit down and offered a glass of water. He then looked at me and handed me an envelope. I froze.
The envelope was addressed to me. I opened and pulled out a cheque. My boss spoke. Dr. Tripathi had visited our office this morning while you were away to the market. He was looking for you. So he reached out to me and left this cheque for you.
The cheque was an advance payment for the material. But more importantly, the amount on the cheque indicated that the price he had considered was what we had agreed upon that day, way higher than current market prices. And he had not picked the material yet but was making the payment. I looked at the calendar it was exactly 30 days from the end of two weeks Dr. Tripathi had indicated earlier.
I quickly called him up at his office on his direct line. In his usual cheerful voice he said you found the cheque, but didn’t you find the small note in the envelope?”
I looked into the envelope and saw a small piece of paper was stuck inside. I carefully pulled it out and opened. It read…
“If you would have invoiced me before I had asked for then trust me I would have paid you for that material at today’s market prices. But you did not. You trusted me that I would pick the material at our agreed price and I trusted you that you will not invoice the material before I pick up. You kept your commitment. How can I not keep mine? TRUST – its always a two way traffic – Regards Dr. Tripathi”