The Cost of Keeping Your Word

outstretched hand with stack of pennies

Have you or your team ever misquoted a job? What do you? Do you refuse to own up to the contract? Do you run the job at a loss?

About three years ago, we took on some work from a customer whose molds were at a company in distress. Unfortunately, the pricing we offered wasn’t sustainable. So, in retrospect, we should have owned up to that, even passed on the whole project, instead of offering the aggressive pricing we did. The return has been negative for the last two plus years. As this example shows, we screwed up, and I allowed it!

But we have also lived up to our word.

Maybe we should draw the line in the sand? I know that’s what the business books I read would tell me to do. I don’t even want to think about the advice in negotiation books I have read.

But I don’t want us to be like that. Three years in to this project, we are now increasing the price slightly to get closer to break-even, and of course, the customer is upset. So am I. But our team has done everything it can to honor our agreement and serve this customer, even accepting a loss on our end. We are being transparent with our pricing because we want to prove honest and trustworthy.

And we appreciate beyond words when others are honest with us. In the midst of this experience, I had a sales call from someone that reads this blog. Without giving too much detail in order to preserve confidentiality, this person came to our team and let us in on details that he knew would change our decision to buy. He was willing to lose the sale for the sake of his reputation and long-term relationship with us. He wanted to be true to his word.

As leaders, our word is challenged every day. I challenge you to keep yours.

Even if you lose a sale.

Even if you run business at a negative margin, at least for the time being.

These financial costs are temporary. They are recoverable.

But once your trust is lost, it is gone forever.