Recently heard three stories of incipient stupidity recently. Cases where major sales or a referral source had been burned due to simple lack of awareness and not understanding the customer.

While you’re reading them take a moment to pause and reflect, because you, like me might well have unwittingly done something similar over the years.

John lost a 3.5 million dollar deal because of 7 dollars and 35 cents.

The gig, worth $3.5M over 2 years was to deliver training for an organisation around the world.

They’d brought in 40 senior managers from around the world, put them up in 5 star accommodation and had 8 had 8 language translators doing simultaneous translation over 3 days. Money was no object.

John did his audition, made an appointment with the CEO to set up all the dates for the next 2 years and walked in for the meeting.

CEO says, “Before we get into the meeting and setting up the dates I have a question about the invoice. Rate’s good, airline tickets and accommodation are fine… all good. But what’s this $27.35 for?”

“Well that’s the phone bill for all the calls I made to you.”

“The phone bill? What did you do? Go down and check off each call?”

“Yeah – it’s part of the expenses”

“Oh, I just thought it was overhead – we are looking at a $3.5 million dollar deal. So you’re sure about this?”


“What’s this subtotal of $9.95?”

“That’s the courier charge for getting you the proposal.”

“Oh, that’s when you stuffed up, didn’t get me the proposal on time and had to overnight it?”
“ Yeah”.

“Oh, okay”.

CEO looks at his assistant and says go cut them a cheque. Then tells John he has to go to another meeting. $3.5 million just went with him.

John was so oblivious to what had just occurred he still thought he was going to get the deal. Thinking like an old school “professional consultant” where every 6 minutes is charged and every photocopy paid for, he completely missed the cues.

So what should he have done, assuming some level of awareness?

I’d have immediately looked at the invoice in horror and said, “I can’t believe that happened. I’m so sorry that should never have been in there.” Ask for the invoice back and amend it.

But by digging in his heels over $27.35 he lost out big time.

Now not every deal is worth $3.5 million. However the lifetime value of a referral source could be significant.

This story was relayed to me a couple of days ago by a colleague, Bill.

For the last 18 months Bill’s been having his computers looked after by Simon, an IT specialist.

Bill likes Simon’s work so referred him onto another organisation looking to replace their external IT support. Through Bill’s wife (who works at the company) Simon got the deal worth around $100,000.

Subsequently Bill had an issue with a laptop and asked Simon for help. Simon fixed it and sent a bill for $130. And when Bill didn’t immediately pay, sent him a “final notice”.

Speaking to Bill, his feelings of injustice were palpable. He’s referred lots of work onto Simon who’s never thanked him or acknowledged Bill in any way.

“I got him $100,000 worth of business and he sends me a bill for $130? And he sends me a final notice? Just pure ignorance on his part”

So Bill put the cash into an envelope, gave it to Simon who will never be allowed to set foot in his office again. Nor will he ever refer him on.

But Simon’s insensitivity didn’t stop there.

Bill had referred him onto another colleague in common, someone who comes across as a friendly, but non-descript Grandmother.

When Simon met Claire in her rather plush office his jaw dropped and first words were, “I didn’t expect you to have such a nice office.” Duh talk about getting off on the wrong foot!

Claire put in a large hardware order and then heard nothing. No response from Simon. So a couple of weeks later she called only to be told “I’ll start when you pay the 20% deposit”.

At no stage had he mentioned this. Annoyed, Claire simply cancelled the order. She’s now moved into an even larger office, ordered far more equipment, none of which will go Simon’s way.

Both John and Simon lack a key ingredient for success – emotional intelligence.

In neither case were they aware of the emotional effect they were having on other people – be it prospects or excellent referral sources.

Stupidly, they were both penny wise and pound foolish.

We all have an internal injustice meter. If we feel something is unfair or we’re being hard done by, watch out. We might not say anything, but whoosh is the sound of potential business going out the door. Don’t let it happen to you.

Bill made a very astute observation to me. “Many business owners have no understanding or appreciation of the life cycle of a client – and don’t grasp the concept of lifetime value. They think in the moment rather than long term – penny wise and pound foolish.”

And I have to agree. Figuring out your customer’s lifetime value is something we continually stress with all our clients. It gives you a framework to make emotionally intelligent decisions when it comes to how you deal with people. Long term versus short term thinking.

Rashid & Barbara.

P.S. Need help figuring out who your best customers really are and what their lifetime value to your business is? Our Two Heads consultations will set you on the right track. Call us on (02) 9499-7958 to get started.

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