Any sales professional who's been selling for more than three years knows what I am talking about. It's that moment in the sales process when someone on your own team starts to go negative and
I recently interviewed a senior sales professional at a specialty chemical company who told me how brutal it is out there right now. She shared a story about conducting a quarterly account review with an important customer. She prepared especially well, researching the customer's business strategy, their customers' needs, their financial goals, and more. Based on this research and her institutional knowledge of the account, she developed an agenda filled with ideas and potential solutions to help the customer improve their business.
But instead of being gracious and thankful, the customer exploded.
"I have to be very open with you. I am taken aback that you would come in here and try to upsell me on new products and services. I thought in all of your research you would realize we are struggling with cash, margins, and budgets. The last thing I am thinking about is spending more money."
And then it happened. Five minutes after the meeting, the Technical Service Manager, who was there to support the sales professional and demonstrate some of the company's new technologies, turned to her and said the fateful words: "See, I knew this was a bad customer. I don't know why we waste our time."
A little while later, during a pipeline review meeting, an R&D leader said to the sales leader, "Our biggest problem is that we don't know how to sell the value." Needless to say, the sales team didn't take that observation well.
These scenarios happen every day in businesses worldwide. They represent the natural tension between the people who develop, manufacture, and support products and the people who convince customers to buy them.
And during challenging economic times, that tension gets even worse. Everyone suddenly becomes an expert in sales strategy and thinks selling is as easy as sprinkling some magic fairy dust on an account to make customers appreciate the value, pay premium prices, and enthusiastically order more products.
There Is No Perfect Customer
The non-sales departments sometimes think it's easy. Just weed out the "bad" customers who don't pay full prices, complain too much, demand discounts, and consume valuable technical resources.
That is unicorn thinking.
In more than 40 years of studying business acumen, developing business simulations, and working with thousands of sales professionals, I haven't met the mythical perfect customer. You know, the one with an unlimited budget, who never challenges prices, always appreciates innovation, pays invoices early, and sends thank-you notes to the sales team for the privilege of doing business with them.
If anyone knows where these customers are hiding, please send me their names. I have a few sales leaders who would love to meet them.
The reality is that customers have their own businesses to run. They have revenue targets, margin pressures, cash flow challenges, competitors, shareholders, and bosses demanding better results. And just like your company, they are trying to do more with less.
When a customer tells you they can't afford your solution, they aren't necessarily rejecting your value. They may simply be telling you that your solution doesn't address the problem keeping them awake at night.
That is a very different conversation.
The Difference Between a Bad Customer and a Customer Having a Bad Year
Let's be clear. There absolutely are bad customers. Customers who consistently refuse to pay, behave unethically, abuse your employees, demand economically unsustainable concessions, or consume so many resources that the relationship destroys value.
Every business needs the discipline and business acumen to recognize when a customer relationship is no longer economically viable. Sometimes walking away is the right strategic decision.
But that is very different from labeling a customer "bad" because they are negotiating aggressively, struggling financially, or unwilling to purchase something new.
Think about the specialty chemical customer in the opening story. The customer was struggling with cash, margins, and budgets. Those aren't reasons to abandon the account. Those are potentially three very good reasons to engage the customer in a different conversation.
Instead of presenting new technologies and asking the customer to spend more money, what if the sales professional and Technical Service Manager had collaborated on ways to improve manufacturing yields, reduce waste, optimize inventory, or lower the customer's total cost of operations?
Perhaps the new technology could actually accomplish some of those things. But if the customer sees only another expense, the value proposition hasn't connected with the customer's business reality.
And that brings me to an uncomfortable point for sales professionals. If you spend weeks researching a customer's strategy and still walk into a meeting with the wrong agenda, some of the responsibility belongs to you. Great research isn't measured by how much information you collect. It's measured by how effectively you turn that information into customer insight.
Selling Value Is an Organizational Responsibility
One of the most frustrating things I hear during our business acumen and strategic business selling programs is the accusation that salespeople don't know how to sell value.
Sometimes that's true. But I always want to ask the person making that statement a few questions.
Does your product actually deliver measurable economic value? Do you understand how that value translates into the customer's financial performance? Can you quantify the impact on revenue, operating margins, working capital, productivity, or return on invested capital? And have you equipped your sales professionals with the tools, knowledge, and support to communicate that value?
Or are you simply expecting them to walk into a customer's office, wave a beautiful PowerPoint presentation around, and convince someone to pay 15% more because your product is "innovative"?
Innovation isn't a value proposition. Neither is quality, service, or technical superiority. Those are capabilities that must translate into meaningful business outcomes for the customer.
If your customer is trying to preserve cash, the conversation needs to be about cash. If they are losing market share, the conversation needs to be about growth and competitiveness. If they are struggling with manufacturing efficiency, the conversation needs to be about productivity, waste, and cost.
This is where the entire organization needs to work together. R&D, Operations, Finance, Marketing, Technical Services, and Sales should be partners in understanding how their products and services improve the customer's business.
It's a lot easier to criticize the sales team from a conference room than it is to sit across the table from a customer who is trying to figure out how to make payroll next month.
The Business Acumen of Knowing When to Walk Away
One of the things we teach in our business simulations is that not all revenue is good revenue. A $10 million customer generating a 5% contribution margin may be less attractive than a $5 million customer generating a 25% contribution margin, particularly when you consider working capital, service costs, and the capital required to support the relationship.
But business acumen also teaches us that decisions need to be based on economics, strategy, and future potential, not frustration.
Before declaring a customer "bad," organizations should understand the actual profitability of the relationship, the cost to serve, the customer's long-term potential, and whether there are realistic opportunities to improve the economics.
Perhaps the customer is strategically important because they provide access to a growing market. Perhaps today's struggling customer will become tomorrow's market leader. Or perhaps the relationship really is destroying value, and the right decision is to reprice, restructure, or exit.
The point is that these are business decisions, not emotional reactions to an uncomfortable sales meeting.
Maybe the Customer Isn't the Problem
I keep thinking about that Technical Service Manager who walked out of the meeting and immediately declared the customer a waste of time.
What a missed opportunity.
Imagine if, instead, he had turned to the sales professional and said, "Well, that didn't go as planned. But now we know their biggest problems are cash and margins. Let's see if we can figure out how our technology can help them with those issues."
That is the kind of cross-functional collaboration that creates real competitive advantage. It turns a disappointing meeting into an opportunity to rethink the value proposition and potentially deepen the relationship.
In today's business environment, with customers facing enormous pressure to improve financial performance, the companies that win won't necessarily be the ones with the best products, the lowest prices, or the most sophisticated sales presentations.
They will be the companies whose people understand the customer's business well enough to help solve problems that matter.
So, the next time someone in your organization suggests walking away from a "bad customer," ask them a simple question:
"Is this really a bad customer, or are we just having a hard time figuring out how to create value for them?"
The answer might save an important customer relationship. And it might teach everyone in the organization a little something about business acumen.
Because if your growth strategy depends on finding customers who never complain, never negotiate, and always happily pay full price, you may be waiting a very long time for your next purchase order.