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 - Family Feud

You’ve found yourself in a middle of a feud between Montague Builders and Capulet Homes.

Through no fault of your own, you’ve found yourself in a sticky situation between two warring builders. In fact, it’s like one of those crazy “Tough Call” situations you read about each month in your favorite journal. The difference: this isn’t pretend. It’s very real, and what you decide could determine your company’s future.

Montague Builders has been around for decades. They’re an established company with a great reputation. As their community standing grew, they began focusing more on upper-end custom homes. And why not? The demand was there and the
local economy was solid. It was a niche that needed filling, so they filled it. Instead of maintaining a presence in the starter home market, Ben Montague made the strategic decision to leave the low-end home market to what he called, “lesser builders.”

Enter Ron Capulet, a hard-working, entrepreneurial young man who just happens to be married to Julie Montague—Ben’s only daughter. Ben was happy to bring his new son-in-law into the family business. But a decade later, when Ben opted to leave
behind the starter home market, Ron heartily disagreed. During one especially heated discussion (read: shouting match), Ben told Ron that if building cheap homes was that important to him, that he should go off on his own and do it.

So Ron did just that. Thanks to Ron’s background at Montague Builders, Capulet Homes got off to a successful start. It was never said aloud, but it was always understood that if you wanted to keep Montague Builders as a customer, you wouldn’t sell to Capulet Homes. Since Montague Builders was the dominant builder in your market, it wasn’t hard to turn away Ron Capulet’s business.

That was before the great economic meltdown of 2008. When credit tight-ened, then vanished, Montague Builders was among the casualties. Accustomed to good times, Ben allowed himself to get heavily leveraged. When the financing dried up, so did his projects. All of Montague Builders’ homes are at a standstill; and they’re heavily indebted to you. Ben has asked for your patience, and you’re being as patient as you can.

Meanwhile, Capulet Homes was a much smaller player in part because Ron believed firmly in “pay as you go.” He didn’t like owing money, so his debts were minimal. And the people he was building homes for weren’t wealthy, but their credit was solid and they were going to be fine.

The problem: Ron wants to buy from you. He argues that his Montague Builders may not recover, and you may never get the money they owe. On the other hand, he pays his bills and knows that your service ice would help him build more efficiently.

You know that selling to Ron would destroy your long-standing relationship with Ben. On the one hand, Ron would buy far less than Ben. On the other, some sales are better than no sales. That’s the other piece: without making sales (and getting paid), you’re out of business.

What would you do?

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