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Is the customer always worth the effort?

A blog post by Nick Martin of Barnes MetalCrafters described a chain of events with a customer that made the shop question the value of its business. The customer was taking advantage of the shop to produce short, complicated runs at a moment’s notice and sending higher volume work elsewhere.

This post was featured in the April issue of “Stamping News Brief.” We asked newsletter subscribers if they had encountered similar difficulties with customers. Among the responses was one from Jim Harvey, co-owner with son Austin of Long Island, N.Y.-based HRE Fabrication.

Jim said, “I had to laugh when I read about the customer who took advantage of the shop by only using them for small runs to tide them over while another shop was getting the bulk of their business. Evidently, that is a recurring theme with a lot of customers. While we are lucky to have good accounts, we've learned that you can never be sure and ‘loyalty’ is a far rarer commodity than you might suspect.

“We had a large manufacturer having us design and fabricate electronic enclosures for them in their battery business (they made batteries and charging systems for motion picture and video equipment). Literally, every one of the products they offered were designed and built by us. We made prototypes with ridiculously short turnaround times, offered revisions in 24 hours, and produced hard copies in less than a week, pemmed, powder-coated, and assembled.

“When the client came to us with a need for a new adapter for an existing camera, we prototyped it, produced the model, and got it to them in under two weeks so that they could be ready for the Broadcast Show in Las Vegas (NAB).

“When the client returned, he didn't contact us for several weeks. When we called to see if he was pleased with the product, he was very evasive. It turns out that he took the prototype we made, and sourced it out to another company that produced them for less money.

“We got a sample and discovered that it was inferior to the part we had made by several orders of magnitude. Poor folds, loose pems, spotty powder-coating; well, if that's the kind of product you want, we could easily make junk too!

“Bottom line is that you can never tell with a customer. The economy is such that everyone is looking for the ‘best deal’ and a lot of companies don't care all that much about precision or final product. To me, that's the signature of a company that isn't long for the business world.

“We pride ourselves on the quality of work that we do coupled with extremely fast turnaround and complete customer satisfaction. No matter how hard you try, however, there will always be the skunks who are there to try to get one over on you.

“Lesson learned? Charge what you know to be a fair price, give reasonable turnaround times, and if they hem and haw, let them walk down the road. Also, if you do prototypes, it may be to your advantage to include an ‘intellectual property’ non-compete clause in the contract whereby you are the only producer allowed to make that particular part or component.”

Lesson learned, indeed. First-hand experience is the best teacher. Second-best is reading about and learning from others’ experiences. The second also can be less costly.