Friday's post about the business advice from vendors generated some comments. Good.
Several revolved around vendors asking for a first right of refusal on your business. This is a HUGE deal in the business world. It is potentially giving your family wealth to someone else.
Here is how I encourage you to think.
Imagine I call you up, several times, and tell you I am interested in helping you with your car. At first you have no interest, but my people are very persistent. They also are very nice. We make you feel as if we are a group you would like to be associated with. Your gut tells you to be careful, but over the months we wear you down.
You think, if they really have the best gas and oil why don't they just offer to sell them to me?
Eventually you agree to listen to our pitch. (Part 1 of the sales process complete.)
We require you to sign a non-disclosure. We make you promise you won't share our "secrets" with others. You don't know if this is just to keep you from evaluating things honestly, or perhaps there is a "magic" secret. Your curiosity gets the better of you. You sign even though you aren't really sure what it means. I now have your curiosity and attention. (Part 2 of the sales process complete.)
It turns out I don't just sell gas and oil, but I help people get the most out of their cars.
I ask you: Are you confident you are maintaining your car as well as you can? Of course you say no. No one does.
I ask you: Do you have your exit strategy planned? Do you know what it is? Of course you say no. You feel vaguely uncomfortable, but we keep you moving to the next step. I mean sure someday you will sell your car.
I ask you: Are you interested in doing better? Sure you are.
I invite you to a "special" invitation only meeting at a fancy resort. I like you so much I will put you up at my expense. OK, you must listen to some business courses. (Sales pitches cloaked as business courses you sort of expect.)
You think about it, and then you agree to attend. No one has ever treated you so well in recent memory. You agree to go. (Part 3 of the sales process complete.)
At the end of the sales meetings, er business courses, you come to the conclusion that I ought to be your gas and oil supplier, and you will be glad to get my help in maintaining your car. (Part 4 of the sales process complete.)
Now we sit down for the hard sell. To get the best price on gas and oil, and the auto care advice, and the maintenance help, and the reminder calls and e-mails to make sure you do it, I want a first right of refusal on your car. I explain that this doesn't mean you cannot sell your car to someone else. But you must share their offer with me first. If I like their offer I will take it. If not you can sell it to anyone.
I have some advisors and attorneys I can recommend that you can talk to as you decide. You can opt out of my gas purchase program in the future; you can buy some gas from other people if you want. But I get copies of all of your mileage, insurance, travel, financial and maintenance records.
I assure you your car will never be better. You will really be happy.
You sign. (Part 5 of the sales process complete.) I pat you on the back and tell you how proud I am of you for making such a fine decision. I remind you of your confidentiality agreement and get you to promise you won't have anyone knowledgeable about business really evaluate this. It is our little secret.
You go home, at my expense, hoping you made a good decision.
My office immediately contacts you and starts getting you to work. Keeping you focused, making sure you drive as far and burn as much gas as possible. My people even coach you on how to drive more; I can help you finance another car, etc.
(Part 6 of the sales process complete.)
You are back at work doing what you like to do, help people hear. You don't even know what hit you.
I am absolutely thrilled. My team goes out to party in my fancy car. We are on to the next fancy resort hotel to meet the next group of "special" people.
I know someday, if you make your car look good, I will own it. If you don't I will try to get someone else into your car who will fix it up so I can own it. I have given you essentially nothing but a great week's vacation, and you have given me the keys to your car. If of course you make it into one I really want to buy.
Here is what really happened.
You just effectively sold your car to the low bidder.
They will do their best to get you to maintain your car, shine it up, and put their gas in it.
They will call you and remind you and keep you "focused".
They offer to finance another car for you so you can burn more gas, need more oil, more wax.
They call you to remind you to wax. You want your car to look good don't you?
Now when the time comes to sell they have you.
Independent buyers will not go to the effort to fully evaluate your car if someone else has the first right of refusal. Why would a buyer go to a lot of effort to fully evaluate your car when they know if they negotiate a good low price someone else has the right to snatch it away?
When they know they will only be allowed to buy your car if someone who knows you better than they do thinks they are overpaying?
Think about it.
I hope this helps you.
Rick
