In the world of sales, there are often no right answers. What would you do in this tough sales situation? Make the call below, and see instantly how your judgment compares. Final results will appear in LBM Journal. Be sure to check back next month for a fresh Tough Call.

Tough Call - A Policy of Trust

Who comes first-your customer or your company?

As the leading sales rep (and grizzled old veteran) at Trust Lumber, the younger sales reps often look to you for advice and counsel in the battle to grow their sales. You’ve always been happy to help, because over the years, you’ve navigated many of the same landmines that they’re facing for the first time. While the details of each situation are unique, the solutions always share a common thread: a relationship built on trust.

Since solid relationships don’t happen overnight, your years on the job are one key to your success. The other: Your customers know that you’ll do everything in your power to make sure they get the best products at the best price—and you’ll go to bat for them with your company if necessary. Sometimes that means bending the rules almost to the point of breaking, but your boss has always given you enough leeway to do right by your customers while still building the bottom line.

Quality Custom Homes is the premier custom builder in your area, and they also happen to be your biggest client. While many other builders in your market focus on building homes cheap and fast, Quality has carved a niche in building affordable custom homes. You’ve built a solid relationship with them over the years, alerting them to special purchase opportunities and always making sure that they got their materials precisely when they needed them. You even came up with their slogan: “Come Home to Quality.” They trust you completely and treat you like a member of their company.

Through the years, you had never encountered a situation in which doing right by Quality would cost Trust Lumber serious money—that is, until now.

Quality Homes managed to dodge the housing correction bullet, somehow connecting with the few residents interested in building a new home. To meet this demand, Quality continued generating purchase orders for custom products. But today, their buyer called to cancel some special orders they’d placed two weeks ago. The homeowner’s financing fell through—and they put the plans for the new house on hold until the mortgage market mess improved.

Even though your company policy says no cancellations on special orders (and requires 50% down—which you’ve managed to negotiate down to 25% for your friends at Quality)—you know that the orders in question have yet to be submitted to the manufacturer. However, with your company’s sales down nearly 30% from last year, your boss is suddenly much less flexible. In fact, he’s standing firm on the company’s policy—and refusing to give back Quality’s down payment if they insist on canceling the order.

Bottom line: With the market down, your boss is suddenly making company policy inflexible.

Since the orders have yet to be submitted to the manufacturer, allowing Quality to cancel the order without penalty would cost Trust Lumber nothing except this one sale. You think the boss is being short-sighted and greedy—but he also signs your paychecks.

What would you do?

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