How to handle customer pulling their business?
September 12th, 2010 | 
Author: Question by RM K: How to handle customer pulling their business?
I work for a plastics manufactucturer (injection molder).
A large profitable customer has informed us that they intend to start doing their own manufacturing of the items that we make for them (supposedly this is cost related, nothing to do with our service).
Any suggestions of ways to talk them out of moving their business?
Best answer:
Answer by kspauldinghome
Offer to do an anylasis for them. Show what the cost of you doing the work versus them doing it themselves. Show the value of what you offer.
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The best way to do this would be a cost analasys. You need to convince them that their investment in equipment, training and quality assurance would not pay off for many many years.
Just let them know that you understand their desire to save money in the manufacturing process, and that if they ever need your services again, you’ll be there for them, since it’s hard to find competent people to run the injection molding machinery.
You could also mention that the costs of resins fluctuate wildly with the raw materials being dependent on the price of crude, but your prices to them have remained fairly consistent, so their costings are reliable.