Want it All? Be Careful!
We’ve spoken before about the dangers in taking just any type of catering event that is presented to you, especially if you are not exactly sure how to pull it off. While on the job catering training in some instances works, other times, it’s asking for trouble. There is another twist to this discussion that I would like to bring to you today.
Old School Business Consultants
Have you ever hired a “general business consultant?” They usually have a laundry list of easy solutions to difficult problems and one of their favorites deals with the continual need for more business. If your question is, “How can I get more business?” one of the answers will be, “Mine your current customers for all of the orders you can get.” While this may make sense to you at first, be aware that in some circumstances, it may be penny-wise and pound-foolish.
Not Just Box Lunches
We had many customers that only ordered box lunches from us. Occasionally, when I took a delivery myself, I would meet a competing caterer’s driver in the parking lot or on the elevator. Yes, we consistently got the box lunch orders, but they always did the cocktail parties, plated dinners and other more upscale events for that same customer.
I’m sure you have been faced with that situation, and if you asked a general business consultant what to do, he would say, “Make an appointment with the decision maker and get that business. XYZ Data is already a customer of yours, so the selling job will certainly be easier than cold-calling.”
He’s right, but it may not always be what’s best in the long run. I’ve always followed these two guiding principles:
1) I’d rather do regular business with a company for a long time, rather than all their business for a much shorter time.
2) NEVER be in a position that if you lose biggest client – you’re screwed. At any given time, I never want to see that our biggest client represents more than 10% of our total business.
Your company is in your customer’s catering rotation for an important reason: They want food that tastes different. It doesn’t matter that your tacos, chicken parmesan, BBQ, hamburger bar, salad display and continental breakfasts are each unique menu items. They still, however, come from the same kitchen and taste like your food. If you’re at one office constantly, they may tire of your product and look elsewhere. Or, something worse could happen.
Exclusive Looked Good Then
In my early catering years, I thought it would be great to get all the business a customer had. I wanted their hot breakfasts, sandwich platter lunches, awards dinners, holiday parties, picnics and even afternoon snacks. I didn’t want to see another caterer near their building, and if they ordered from someone else, I took it as a personal insult. I never considered the down side of this approach until this happened to me:
We had worked hard to garner all of a major accounting firm’s business. We were there five days a week; we had our own storage area and we cruised along past the $200,000 sales mark (for this customer only!) as this company became our best client. We did everything including private events at the CEO’s home. Then, we suffered a mis-communication, lost an order and blew an event. Unfortunately, it was for a high-level meeting with associates who were flown in from across the country. One of these associates was our customer’s national VP of sales and he was so upset that the meeting, in his eyes, was ruined, that he demanded that we be fired. All of built-up goodwill evaporated and we were gone, and we couldn’t do anything about it.
Since we always had this account to fall back upon, we had not done a good job of nurturing new business. Frankly, we were so busy with this company that we didn’t have time for anything else, and it definitely dented our cash flow for quite a while.
What We Learned
From that day on, we got as many customers as we could, and didn’t worry if we met other caterers along the way. If we made a mistake and it cost us a client, we had others who would take their place. We were happy that our customers could taste a variety of food and had something to compare our stellar service and wonderful cuisine to. We watched as other caterers made the errors since we were able to concentrate on what we did right.
It’s possible that you didn’t expect this story and conclusion from The Corporate Caterer. Sure, it’s important to have big volume customers, but you need to be careful. So many times we are told to mine our customers for everything we can get. While this certainly is not a “bad decision,” there is a flip side to consider. This, however, is the kind of real-world advice you get from those who have been there.