Sign Salespeople Caught Stealing Clients for Themselves
Bringing disastrous holiday consequences in “The Case of the Christmas Secession.”
THE NEWS HIT US like a mile-wide asteroid going a million miles an hour: Two of our top salespeople, two — fired for trying to lure their accounts to move to a new sign company they planned to launch together after the new year. We were all like, “What the ___?”
Our company, OH-Michga Signs in Toledo, OH, has… or had 27 employees, four of them in sales until now. Hilda Stewart, who co-owns the company with her younger brother Luke Roberts, made the announcement in an emergency all-hands meeting just two hours ago. While one of the clients they were trying to lure away — one of our oldest clients — tipped Hilda off to what Mason Stevenson, their sales rep was trying to do, Mason and his partner in crime Maddie Harrah managed to confuse enough of their customers to pause a number of jobs far along in development.
What this will mean in the short- and long-term is anybody’s guess…
ABOUT REAL DEAL
Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved and should not be confused with real people or places. Responses are peer-sourced opinions and are NOT a substitute for professional legal advice. Please contact your attorney if you any questions about an employee or customer situation in your own business.
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“What this will mean is a cash-flow crisis perfectly timed for the holiday season,” Hilda said to herself, sitting at her desk in her office behind a door she rarely closed. “Coupled with the payments just starting on the loan for our solar-panel installation and the lease on the two new bucket trucks, I don’t see how we can possibly afford to issue a bonus.”
Worse yet, Hilda was unsure additional days off could be given instead. The company would already be closed between Christmas Eve and New Year’s Day, so moving up the closure would mean jeopardizing additional projects that needed to be completed and billed before year end.
“It’s a worst-case scenario,” Hilda said.
All of us at OH-Michga are accustomed to getting a holiday bonus. Some of us even count on it for spending on gifts or travel. The designers, fabricators, installers — all of us are asking each other if we think bonuses are going to be affected. Most of us are saying, “I hope not.” Some are saying, “They better not,” followed by, “This isn’t our fault.”
We’re also wondering what extra efforts we might have to make just to un-pause some of the wavering customers. Are we going to win them back on price, on service, on whatever “extras” we have to come up with? How quickly are we going to replace Maddie and Mason?
It could be a very scary Christmas.
“What do you think, Luke?” Hilda asked her brother, who’d joined her in her office. “What are our options?”
“We can’t offer money,” Luke replied,” and we can’t risk more paid time off. If we do, we piss off those clients affected and deepen the financial hole.” After a moment, he concluded, “Whatever we do or don’t do, some people are going to be pretty upset. The question is, who is that going to be?”
“There’s got to be something else we can do,” Hilda said, more in hope than in certainty. “But what?”Advertisement
The Big Questions
- What would you do if you were Hilda and Luke? Do you disappoint your employees or your customers? Is there another option and if so, what is it?
Average Joe (Anonymous)
Here is a crazy idea: Maybe people should stop buying on credit! They decided to lease two bucket trucks and buy solar panels without enough cash to pay for them. They also should be aware of the time of year, and realize they will have to set aside bonus money for end of year.
We are not a huge shop but we have never purchased a printer or company car on credit. A business owner never knows when they will need money for either their company or personal emergencies, so the financial experts say to keep 3-6 months of expenses in the bank. Unfortunately, people don’t do this. They always need the latest cell phone or the car they can barely afford. As Warren Buffet said, “There is no secret to having money. Spend less than you make and invest the difference.”
Shame on M&M for not being up front with their employer! First to the customers they “confused,” if they can’t be loyal to their first choice, then they don’t deserve to be put first or ahead of the loyal customers. To the employees, they should want their company to succeed for their future benefit. Maybe you can offer a reduced bonus at this time with a promise of more once the company completes the projects on hold. Talk to everyone; you might be surprised at the ones willing to compromise for the good of the company.
You take out another loan for $11,500. You give each of the 23 employees a $500 bonus. You pay off the loan in 24 months at approx $500. You and your brother meet with all your customers and explain what the situation is. You and your brother become salespeople till you train or hire new peeps.
San Leandro, CA
Some of those other employees knew about this. Wait until after the crisis and give them a pink slip. They were planning on leaving with [Maddie and Mason] anyway.
If the company doesn’t survive, nothing else matters! Take care of the customer(s) first and let your employees know they will be rewarded with a bonus (or whatever the incentive may be) once the company is out of trouble.
Company meeting — all remaining 25 employees. Tell the truth — losing two of our more productive salespersons. Now is the time for all employees to focus on customer service/support. Cancel time off between Christmas and New Year’s so that everyone can send the message that “We are #1 in customer satisfaction.” As a team they will overcome the short-term prospects of lower sales/profits.
25 employees should rate pretty good credit at the bank. This is a case where one should consider a loan. Or, perhaps loaning the bonus money to the business from personal assets. If that can’t happen, the customers come first. Without them, your employees won’t get their regular paychecks, much less bonuses. Promise to make it up to them in the new year, then remember to do it.
Simple. There will be no bonus to the salespeople who just got fired plus no wages or commission to them either, so there is a few grand not being paid that can be used. Going forward the owners will need to step into the sales role and visit all the clients possibly lost and do their best to ensure they remain as customers along with securing new customers as possible in the new year. If there is an attorney on retainer I suggest a meeting with them to discuss possible legal action and monetary damages sought from the former salespeople which may yield some needed cash at some point. Give bonuses and time off and pick up the slack — that’s the owners’ job — or close the doors. Screwing the employees is not an option but taking responsibility for the sales actions is.
If the company doesn’t survive, nothing else matters!
Sad, explain to your customers what happened, anybody in business will understand, and most have had employees turn on them one way or another. Fire the employees and move on. If customer service and quality products were your company’s first priority, you will be fine.
Oklahoma City, OK
I would call an emergency meeting with the salespeople and employees reassuring them that the owners and managers are securing the client base the ex-sales reps are trying to steal by personally reaching out to the customers and reminding them of the company’s stability through the years, their unwavering commitment to customer satisfaction, asking them to be loyal to them, reminding them that it was the company that stood behind every project and not merely the salespeople. As the owner, I would meet with my sales force to decide who could take on the clients that the two sales reps had left behind. I would then work on a project analysis and forecast for the next quarter that could be taken to their financial institution(s) to reassure them that work is in progress, and new business is on the way and ask if they could count on them if they needed support getting through the new year with the holidays approaching. Then work on a marketing campaign that would help bring new business and salespeople into the company.Advertisement
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