Whatever your industry, your customers most likely are delaying projects and looking for ways to cut costs. At the same time, it is becoming more challenging to develop new business as companies scale back expenditures and use competitive bidding processes to get better deals from suppliers.
This is a good time to take stock of your team's relationship-building capabilities. Do your salespeople know how to leverage personal and company assets to "competitor proof" their customer relationships? To build enduring connections with customers requires two distinctive kinds of skills focused on two distinctive kinds of relationships.
The Importance of "Little r" Relationships
The first type of relationship is based on interpersonal connections between members of a sales team and members of a buying team. These relationships might be thought of as "little r" connections. They are founded on a salesperson’s ability to demonstrate he or she is trustworthy, competent, and credible as a business consultant and advisor. Across time, profitable transactions and repeated demonstrations of customer focus forge strong personal relationships that become a valued business asset to individual buyers. They know they are assured of reliability, lowered personal risk, and none of the "hassle" of trying out new suppliers. They also know they can count on their trusted representative to protect their interests, respond quickly to help meet special needs, and offer reliable business results. Customers become highly averse to risking the loss of these payoffs, and are inclined to resist offers of discounts and price cuts from competing vendors.
Even one or two "little r" relationships have value, but the real relationship benefit occurs when sales representatives develop a whole network of connections with the right people in the customer organization. With a wide range of contacts who view the sales representative as a trusted business partner, inside information will be shared, and contacts step up as champions, advocates, and coaches. The salesperson will receive advanced notice of opportunities, and get critical "heads-up" notices when potential decisions could affect a sale adversely.
On the flip side, if these relationships are weak, or have been allowed to erode through neglect or sub-par performance, they offer no protection against competitive encroachment. In the worst cases, where deadlines have been missed, customer concerns left unaddressed, or there have been delays in responding to problems, a poor relationship actually can open the door to competitors. And once gone, the business usually is gone for good.
It may seem elementary, but to build extraordinary "little r" relationships, it's critical to ensure your sales team knows how to:
- Establish professional credibility.
- Build trust.
- Demonstrate the value of a relationship with every customer, on every call.
- Exercise a high level of skill in identifying the right people to contact.
- Be fully engaged and capable of carrying out "due diligence" in learning about each customer's personal and business concerns and issues.
The Value of "Big R" Relationships
As important as "little r" relationships are, they can be vulnerable to promotions, re-organizations, and downsizing, especially during tough economic times. An even more powerful and compelling relationship is the one that exists at the level of business-to-business—a different type of bond we can call "Big R." A "Big R" relationship transcends ties with individuals. "Big R" connections are based on business benefits that are highly valued because they are aligned with the customer's corporate business strategy and critical success factors.
For example, a company that provides its customers with complex high-tech solutions may be concerned about the supplier's R&D direction and technical capabilities of a critical component of its offering. Because "Big R" buyers have a long time horizon and higher risks, they want to understand the supplier's marketing and product strategy, and they depend on the supplier's stability. While still interested in inducements such as price, companies in "Big R" relationships are "buying a company," not just a product.
Though not every customer has the potential for developing a "Big R" relationship, your sales team needs to know how to identify these highly valuable customers, assess their potential, and establish the "Big R" relationship. This requires business acumen and gathering both internal and external information. Specifically, they must be able to:
- Fully understand the customer's solutions.
- Analyze the customer's marketplace and business strategy.
- Gain a clear understanding of the customer's business processes.
- Verify and articulate the customer's long-term goals and the priorities driving decision-making from the top of the organization.
The next step is to know how to create alignment between the way these select customers are doing business and the way your company does business with them. Once this alignment is solidly in place, it will take much more than the offer of a 10 percent discount or a better financing deal to break a "Big R" connection.
The Bottom Line
Today, every company is looking for an edge that will open the doors to new business and serve as protection against erosion of market share. Some are focused on renewed attempts to differentiate a product offering, some are talking about "building the brand," while others struggle to price-cut their way to a better revenue stream and higher profitability. These strategies can't work for every company—only one truly can be the lowest-cost provider in its category, and few can achieve sustainable differentiation.
On the other hand, strong and enduring relationships are not dependent on product features others can duplicate or price cuts that can hurt the seller's bottom line. Rather, both "little r" and "Big R" relationships offer a unique competitive advantage by delivering real business value derived from the relationship itself rather than from a product or price. The ability of a sales team to leverage interpersonal connections and corporate business alignments becomes the key to maintaining current market shares, even in an unpredictable economic environment.
As President of Wilson Learning, Ed Emde has overall responsibility for business strategy and operations in the Americas. Emde has 25 years of experience in the industry and has held executive positions with a number of the leading training and organizational development companies in the industry. To learn more about the concepts shared in this article contact Wilson Learning at 1.800.328.7937 or visit www.wilsonlearning.com.