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Arment Dietrich

Short-term Revenue vs. Long-Term Lasting Business Relationship?

By: Arment Dietrich | October 2, 2008 | 
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Our firm has experienced growth and will be expanding in the next few months.  I was asked to contact current vendors to inquire as to the terms of our current contract, as well as a buy-out figure.  Most vendors were helpful and seemed to want to retain our business.  There is always an exception and in this case it was with Global-com Web site.

I spoke with an agent support coordinator who refused to give the information to me and insisted that she would only respond to our CEO.  Instead of picking up the phone to speak with our CEO directly the rep from Global-com (a communications company) sent our CEO an e-mail that stated our contract was automatically renewed until March 2011 with a buy-out figure of thousands of dollars and a brief pitch to sell us a phone system upgrade.  After much back and forth we were eventually referred to their “retention” department.  After dealing with a few people in the department we were eventually referred to an accounts retention supervisor and I thought – FINALLY someone who wants to retain the business our growing company  I let him know that a third party brought us into the contract with their company when we were a start-up with no employees in 2005.  He was cordial but said they would not budge on the auto renewal and told me that other Global-com customers are not happy with the auto-renewal clause.  I suggested that he might want to consider revisiting their auto-renewal clause policy to attract and build business relationships instead of their current policy that brings 3 years of revenue and a severed business relationship with their customer.  Lastly, I inquired if Global-com had notified of us of their intent to auto-renew and was shocked at the e-mail response (again from a communications company) that I received.  His e-mail response was “Globalcom does not provide any further documentation giving notification of the auto-renewal other than the initial Service Order Form signed by the customer.”   I have to ask if this was a sound business decision on the part of Global-com and specifically their retentions department…in these time of economic uncertainty I think not.

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