Vice President – CSS India
A shipper had to award a shipment to a forwarder.
He selected a forwarder finally.
The shipment was booked at a freight of USD 10 w/m and was worth 5000 cbm.
The Managing Director heading the forwarding company thought that the freight is very low and below cost.
USD 11 w/m would be appropriate to at least break even but USD 10 w/m is a loss.
So they said, its a small increase of USD 1 w/m that needs to be done in the sell rate so let us send a management trainee (who spend at least USD 20000 these days to become a management trainee from their MBA schools)
The fresh management trainee went to the shipper and tried.
His often used words were: sir, kindly, please. It didn’t work, he came back.
Next they sent the junior executive.
His words were: can you , what if , why not , try. didn’t work, came back.
Next went the senior executive and his words were: not possible, loss , pressure from seniors. didn’t work, came back.
Next went the senior Manager and his words were: contract, global economy, cost pressures, recession, GDP. didn’t work, came back.
Next went the Vice president and his words were: Prime minister , European Union, Suez Canal, NASA, Federal reserve. almost worked but no, it didn’t actually and he came back.
The Managing Director was upset. His entire team failed from bottom to top for such a simple thing. so he decided to go himself.
Like a seasoned owner, he spoke very little, smiled more , had lunch with the customer, paid the bill , dropped the customer back in his Mercedes and in between all this, took his blood pressure pills on time and tried maximum to gain the customers sympathy. Humility is the new negotiating tool for modern entrepreneurs.
But he was a 21st century customer , over fed, over pampered, over informed. He didn’t budge. Sell rate remained USD 10 w/m.
The cost details of the above transaction:
Straight loss USD 1 w/m and 5000 cbm = USD 5000
Junior executive 1 day time cost : USD 50
Senior executive 1 day time cost: USD 100
Senior Manager 1 day time cost: USD 250
Vice President 1 day time cost: USD 500
Managing Director 1 day time cost: USD 2000
Total: USD 2900
junior executive went by train: cost USD 50
senior executive went by taxi: cost USD 100
senior manager went by personal hatchback car: cost USD 150
Vice president went by personal long wheelbase sedan: cost USD 200
Managing Director went by AMG Mercedes convertible: cost USD 500
Total: USD 1100
Lunch , memento , stationary, print outs, visiting cards etc Total USD 1000
Total money spent to purchase loss: USD 10,000
Now, they were left with a loss. They were feeling very bad about it. So they thought how to feel good. Suddenly they had creative ideas.
They published to all other customers that they have “ so and so elite customer “ as their client.
Other customers said: wow, really thats great. so they felt better now.
2) The Chartered accountant told them that by incurring a loss of USD 10,000, they have actually saved 30% tax or USD 3000 in it. They felt even better.
3) Next called their banker. He congratulated them. He said by doing just 5 more loss transactions like this , their turnover would anyway increase a lot and the bank would be pleased to offer them an additional loan facility based on the turnover and having such grade “ A “ clients. Now they started flying.
The managing director consulted his astrologer who said: your best time is beginning now. He thanked his stars. by incurring just a USD 1 w/m loss, so many good things are happening. god forbid if the customer had agreed to increasing the sell rate and not having a loss, so many other nice things would have been missed.
in his happy mood, he became his generous best and awarded himself a new convertible luxury car, awarded his people top to bottom , made the company 10% more expensive to run , and appointed new salesmen to search for such loss making customers.
meanwhile, what the astrologer said was right. his best time was beginning. best means when you do away with all those things in life which give you a false sense of yourself like money , yes men , fake relations, turnover, so called society respect etc and when all these falsehoods vanish, the inner self turns towards the real goal of life of self actualisation. indeed it was a start for him.
Meanwhile, CMA took over APL. Crude oil went down below USD 30 per barrel. Donald Trumps odds to win went up. Women of the century are more empowered. So what? The customer still doesn’t agree to pay USD 1 w/m more:)