Honesty is the best policy

One afternoon, a new customer entered our office and asked to meet me. He told me that one of our existing customers had asked him to contact me, and gave a brief description of the equipment that he needed urgently. I confirmed to him that the equipment he needed could be supplied by us. The price was Rs. 20,000 + 10 % Sales Tax. Luckily, we had one piece in stock! He immediately confirmed that he would buy the equipment and would give us a cheque for Rs. 22,000. At that point, I asked him what exactly he needed the equipment for. After hearing his reply, I told him that the equipment we supplied was too precise for his work. I informed him that his requirement could be fulfilled by a similar product supplied by another company. That equipment was less precise than ours, but the price would also be lower by 50% or more. In response to his request, I gave him the address of that company.

After the customer left, my colleague, who was a few years my senior, expressed his exasperation at the fact that I had turned away a customer who was about to give me an order with full payment. “You are totally unsuitable for sales!” he declared. I shrugged and replied that my conscience did not permit me to let the customer buy something that he did not really need. If that meant I was unfit for a sales job, so be it!

This incident was soon forgotten by us since the particular equipment was among the lowest priced items in our product range.

About 6 months later, the same customer came to our office and met me. He had received a huge export order, and had to increase his production capacity. He gave me a list of the equipment that he needed. I told him that we could supply all the equipment in the list, but, again, I wanted to be sure that the equipment that we supplied would be most suitable for his requirement. After discussing for a few minutes, I confirmed that our equipment did meet his requirement. The total cost would be Rs.1.8 million + 10 % Sales Tax. The equipment could be delivered about 4 to 5 weeks after we received an order with 10 % advance. He immediately confirmed his order and gave me a cheque for Rs. 180,000. I was surprised that he had made a decision so quickly. I asked him if he had taken competitive offers from any other suppliers. He replied that he did not need any competitive offers. Based on our earlier encounter, he was sure that, if any other equipment was better suited for his requirement, I would have told him so myself!

After the customer left, I turned to my colleague and said, “We got a huge order on a platter today because, that day, I LOST the order but I WON the customer’s confidence!”

(This post was originally published on August 10, 2013 as Is honesty the best policy?)

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6 thoughts on “Honesty is the best policy

  1. Our company has recently started an ‘efficacy’ initiative … ie. make sure that the product we sell or work on is ‘effective’ for the end customer using measurable evidences or outcomes. Looks like you were already being ‘efficacious’ !

  2. Amazing! I think in today’s corrupt and sales-driven world, if someone is being honest, and as honest as you, people should simply start worshipping them like God, forget everything else 😛 🙂 Just kidding about that! But, totally appreciate your policy of ‘karm kar phal ki icchha mat kar’. People are too short-sighted these days to appreciate the value of honesty in business. I think nothing sells better than honesty and good relations with your customer.

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