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 - Dealing with Junior Giant

What do you do when the son of your biggest client demands to renegotiate an existing contract?

Landing the majority of the business from Giant Homes, the area’s leading builder of production, custom, and multi-family homes, was a real feather in your cap. You’re not sure if it was luck or foresight that led them to expand heavily into remodeling, with a specific focus on homes damaged by moisture intrusion— but whatever the reason, this side business has kept their trucks on the road and their people on the payroll. Given the soft housing market, the purchase orders that continue to flow in from Giant Homes are a real blessing to your business.

Company founder Jim Giant decided at the beginning of 2008 to transition the day-to-day management to his son, Jim Giant Jr. Junior is definitely sharp—he earned his MBA from a prestigious business school. And he’s learned a lot from working side-by-side with his dad for the past four years. As sons are wired to do, Junior has been chomping at the bit to take over from his dad and “make some changes.” High on the agenda is reviewing relationships with existing vendors. With the volume of materials they buy, that put you at the top of Junior’s review list.

Your Vendor Review meeting with Junior lasted a full three hours, and included an exhaustive recap of projects you’ve supplied over the past few years. Fortunately, Giant’s documentation detailed surprisingly few missteps by your company. Even better, problems were taken care of immediately and to the site supervisor’s satisfaction. As the meeting wore on, you began to feel that you may have dodged a bullet—and that working with Junior wasn’t going to be so bad.

You were wrong.

Junior pulled out a contract for future material purchases that his dad signed with you last November. You know this agreement almost by heart. The negotiations went on for more than a month before both parties were satisfied. The signed and dated, fully-executed agreement was the foundation for all of Giant’s 2008 purchases. However, there’s a clause that Junior doesn’t like. He wants to sweeten the deal for his company by extending the payment terms from 30 to 90 days.

When you told him that the agreement is complete, and the time for negotiating terms was before the contract was signed, he blew up. “Look,” he said, “we’re Giant Homes, the biggest builder in the area. If I were you, I’d reconsider.” In the last few minutes of the meeting, Junior made it clear that if you don’t give in, your days as the vendor of choice are numbered.

You’re troubled by Junior’s attitude toward your company, and agreements his father created. Yet, Junior is the future of Giant Homes, and you can’t afford to lose their business. Then again, you’re not sure your company can afford to offer 90-day terms. What would you do?

GOT A TOUGH CALL OF YOUR OWN? Send it to Rick@LBMJournal.com. If we publish your Tough Call, you'll win a free LBM Journal shirt. And don't forget: there's a new Tough Call each month: check the back page of LBM Journal or come back to www.LBMJournal.com next month for a fresh challenge. If you don't get LBM Journal, subscribe today! It's free for qualified subscribers.