What’s in a relationship?

You are browsing the archive for Sales Relationships.

What’s in a relationship?

January 29, 2009 in Attitudes & Behaviours, Communication, Ethics & Values, Sales Relationships, Self Development

The term ‘Relationship Selling’ is often bandied about by sales managers and sales people without properly defining what it really means.I often hear “We are in relationship selling” or “We need relationship sales people” however what I do not hear being asked is:

What type of relationship are we talking about?
What type of relationship are we looking for?
What do we mean by relationship selling anyway?

Relationship selling happens in any place where relationships are important. Thus when a husband and wife are negotiating about something, they will be more successful if they both consider the relationship as well as whatever it is they each want.

Most people’s intentions are to have healthy viable business relationships, but this does not always happen, just like in our personal lives.

And I see many businesses and sales people in trouble because they have set up the wrong types of relationships with their clients to begin with.

If you do not clearly define what you mean by Relationship Selling then you may end up with client relationships like these:

Abusive relationships

aggressive clients who bully and intimidate sales people/ suppliers, or the other way round

Professional Visitor relationships

Calling in for a chat, coffee, etc. In short being paid to have a social life.

Master/servant relationships

‘You are here to serve my every need.’ I see this all too often in business banking where some clients take advantage of the ‘over servicing’ of some business bankers using them a free accounting service. I am sure the accountants won’t be happy with this loss of revenue. I know the client is happy but is it a healthy relationship in the long run?

Big brother relationships

‘You’ll do as I say or else…”

Win:lose or lose:win relationships (someone has to lose out)
Friendships at the expense of profitable business partnerships (see professional visitor)
Broken promises relationships

“I’ll get you in here if you give me this…” but it never comes through despite all those promises

Exploitative or Deceitful relationships

double dipping or tricking people into something they were not aware of. For instance a course participant on one of our recent sales training programs told of a telco sales person who sold the handset separate to the call plan when in fact the handset was already part of the plan, so the customer paid twice of the handset. This is fraud and can easily ruin your business’ brand and reputation over night.

‘I work for you instead of my company’ relationship

sales people siding with the client by giving away excessive margins, products, etc. at the expense of the company. This is actually theft.

Hostage or Handcuff relationships

‘I have to deal with but you really add no value to me or my business and I really resent that.’
‘I have to deal with you because my parent company says so.’
Your payment terms are disregarded by bigger businesses because they only pay at 60+ days (not the 14 or 30 days you agreed to)

Relationships under pressure

Sales people having to meet monthly quotas hence they may use more pressured methods than perhaps they would like. This is a hazardous practice, as it may seriously damage an ongoing relationship, putting additional pressure on the hapless sales person who falls into the dangerous chasm. It amounts to selling stuff to make a quota not build a viable relationship.

And so on.

Do you have any of these types of relationships in your business?
What types of relationships are you attracting to your business?
Are they healthy or not?
What are they making or costing you?

Some of the relationships mentioned can be particularly relevant for SME’s when dealing with big business where, for instance, your size can be used against you. I also see sales people in relationship sales roles for big businesses as well as SME’s who over service existing client at the expense of selling and winning in new business thinking this is good relationship selling. It is not, as it sets up unrealistic expectations and costs too much.

So Relationship Selling needs to be clearly defined or else we are at risk of creating unhealthy, unprofitable relationships.

All relationships change and are continually evolving over time for better or for worse.

I recall a great saying I heard and often refer to which I think gets to the heart of this:

You have friends for a reason, a season, or a life time.

The same is true for business / client relationships too.

First of all consider this:

Buying is a value judgment made in the mind of a person who has the ability to purchase, a genuine need/ want and the capacity to pay.

Selling is understanding that mind set and the accompanying values and priorities, and delivering on expectations through effective communication (such as questioning and listening), ideas generation and collaboration, creative problem solving and relevant solution generation, and gaining commitment to move forward together.

Whether it is business to business or retail to consumer selling, this definition holds true.

Therefore Relationship Selling is an extension of this where the primary objective is the building of long-term viable business relationships with customers from which repeat and/or additional business will flow and a win:win outcome is achieved for both parties whether it is for a for a reason, a season or a life time.

In my research for this piece I also came across an article ‘How to have a healthy relationship’ which, while referring to personal relationships, was quite pertinent to business relationships and in particular Relationship Selling. It referred to the following steps:

Do not expect anyone to be responsible for your happiness
Make and keep clear agreements
Use communication
Approach your relationship as a learning experience
Tell the unarguable truth.
Do not do anything for your partner if it comes with an expectation of reciprocation.
Forgive one another
Review your expectations especially attitudes towards money
Be Responsible
Appreciate yourself and your partner.
Admit your mistakes and say sorry.
Spend some quality time together

You can find the full article at http://www.wikihow.com/Have-a-Healthy-Relationship

In addition I would like to add the following tips for sales people and their respective businesses.

Make sure you:

Clearly define your level of service/products offerings and pricing.
Know what you are good at and clearly communicate and deliver that.
Create a network of businesses who are experts in allied fields to you so you can refer your clients to them when a needs arises you cannot fill.
Learn to say ‘No’.
Stand up for yourself, just because you are small doesn’t mean you can’t be a professional, well regarded business in your market.
Don’t take it personally.
Know the line between friendship and professional business relationships

So in closing I wish you all the very best with all your relationships both personal and professional. May they be healthy, happy and prosperous for all.

Happy selling.

1 Comment »

Account Planning, Management & Development

September 10, 2008 in Sales Planning, Sales Relationships

As markets tighten and market competition increases, it becomes increasingly difficult for companies to achieve product differentiation in their market place. As such, businesses will find it harder and harder to optimise their profits unless they develop effective strategies to achieve differentiation. One way to accomplish this is through the enhancement of customer intimacy.

Account Planning, Management & Development is the process that organisations adopt in order to prioritise their customers in terms of value to the business. In most businesses, the 80/20 rule applies where 80% of current and/or potential revenue comes from 20% of the customer base. However, in recognising the value that these 20% of customers hold, it is important to adopt a strategy that is going to ensure that they are handled in such a way that maximum effort is focused on the activities that will yield the greatest potential for the company in a profitable fashion.

Successful Account Planning, Management & Development ensures that a company recognises the importance of certain customer relationships to the future of their organisation and treats these relationships as an asset to the company.

The process used to categorise customers in terms of potential as well as the process adopted to manage and develop these customers effectively are paramount to the success of any Account Planning, Management and Development strategy.

So what is a Key Account?
Essentially, it is a customer who can help to shape your company’s future. This may not necessarily be your largest customer nor the highest spending customer. In this way, the top 20 revenue, one-size-fits-all approach can be costly and risky.

Once you have completed your customer research, a number of factors should be assessed when deliberating your Account Planning, Management and Development strategy:

Current revenue profitability vs. potential revenue profitability
Complexity of needs
The industry in which they operate and its viability
Financial stability

Although the process of developing and managing Key Accounts more intimately yields greater customer penetration or share of wallet, the costs of maintaining an intimate relationship with clients can also be costly. It is for this reason that the ‘biggest’ clients do not always make the ‘best’ clients. It is a common mistake for organisations to simply segment their customer base into key accounts based on their revenue contribution, consider:

Larger companies often require more attention and expect not to pay for it
Larger companies tend to exert their power and negotiate lower prices, often exploiting suppliers by creating price wars (thus reducing profitability)
Larger companies employ the resources of smaller suppliers, only giving them small orders but getting the lowest prices so they can squeeze on their larger suppliers (again, affecting profitability)

It is often a hard lesson for salespeople to learn that many big companies rarely provide the return on investment proportionate to the amount of effort that’s required. In addition, these customers often compromise the company’s profitability significantly.

Analyse your accounts

So you need to analyse your accounts carefully. When analysing an account, your core focus is to interpret the customer data in such a way that will provide you with an understanding of how you can yield maximum potential from the client.

There are five key areas that need to be researched:
Strategic Information
This is the big picture information it explains why they are in business and where they are headed as an organisation. This information is critical to your basic understanding of the company.
Operational Information
The nuts and bolts of the organisation, the what, the when and the where.
Financial Information
This information is critical in assessing the ongoing viability of the customer.
Competitor Information
Recognise their strengths and minimise them. Recognise their weaknesses and exploit them. Understand what they are doing and know how to combat their activity.
Your Company History
Have a basic understanding of previous dealings with the customer but also know where to find more detailed records if or when required.

I hope this helps you plan and use your selling energy wisely.

Happy selling

No Comments »

Making Decisions

July 9, 2008 in Attitudes & Behaviours, Sales Relationships, Value Creation, Wellbeing Support Services

Several years ago I read a great book called ‘Kids Are Worth It – Giving Your Child the Gift of Inner Discipline’ by Barbara Coloroso.

This book has served me very well as a parent giving me guidance in how to raise self-aware and self-disciplined children. In particular, I learnt by heart the following questions which I ask myself whenever I make decisions and in turn, have taught my children to ask whenever they make decisions.

The 3 Decision Questions are:

Is it life threatening?
Is it morally threatening?
Is it unhealthy?

For instance, when my then 7 year old son asked if his 2 year old brother could get up on the cubby house roof with him I suggested he ask himself the 3 Decision Questions. He did so and decided it wasn’t a good idea for his brother to get up on the cubby house roof after all, for all the right reasons you would come up with. The good thing was that I didn’t have to tell him what they were, he came up with the reasons by himself.

The aim of the 3 Decision Questions is to give children ownership and control of their decisions. As they get older I will have less and less control over how they choose to live their lives and what paths they take so I hope that the 3 Decision Questions help them make the right choices and decisions. As we all know they may be pressured by peers to try drugs or do other things that may cause harm to themselves or others. My hope is that they can stand up for themselves and choose wisely and well. While what they do when I am there is important, it is what they do when I am not there that is most important.

So what has all this got to do with business or making sales? How can these questions apply to our roles in business? I happen to think the 3 Decision Questions can serve us very well especially when all of us could be tempted to do things that are potentially life threatening, morally threatening or unhealthy. Just think of some of the recent business and financial collapses. Or the sub prime fiasco in the US. Maybe if those in charge of sales and the businesses concerned had applied the 3 Decision Questions we may not be in such a state today.

Now I know some people may be bristling as they think ‘what’s wrong with that? It’s a free market. They can sell to whomever they like. Buyer beware and all that’. Sure these people are entitled to their opinions, however I just happen to think that deliberately going after victims instead of prospects and making money at someone else’s expense is wrong, that’s all. It’s not life enhancing, moral or healthy for anyone.

As a sales person, leader and business owner I choose to apply the 3 Decision Questions to my business dealings and found them to be very helpful when choosing who to do business with and how to do business with people. My team and I also use the 3 Decision Questions to review our product offerings and work practices to see if they meet ethical and environmental standards.

Do we get it right all the time? Of course not. However, I have found that by using the 3 Decision Questions it makes things very clear about where we stand, what we stand for and how we like to operate.

The 3 Decision Questions support findings from around the world that more and more people want to work with others (suppliers, partners and customers) in a spirit of cooperation, consultation and respect not competition or deceit. They want to know that you are not potentially life threatening, morally threatening or unhealthy to deal with.

In a world that is now asking for each of us to stand up and be counted and declare our position on sustainability at all levels maybe the 3 Decision Questions could serve us well in helping us choose the right path for us and our businesses and in turn help us be more successful and profitable for all the right reasons.

But rather than me tell you what to think I’d rather you decide for yourself.

No Comments »

A view for the other side

June 26, 2008 in Customer Service, Procurement, Sales Relationships

An Audience with Procurement Part 2

Following for last week’s piece on Procurement, I promised I would delve further into the view from the other side of the table and how, we, as sales people, view procurement and some of the practices which help or hinder sales and partnership effectiveness. And what our common enemy is.

So let’s take a look at the other side of the table.

Many a seasoned sales person can tell you story after story about the ‘Gunna Gunna’ customers:Gunna do this, gunna do that be it never goes anywhere.

Customers who spend very little with us but take up enormous amounts of our time or who are really nice but we know they do not have the potential to develop into long-term revenue generating accounts for our business in effect, keep us from working with customers where we can get a better return on investment.

And the cost of the sales effort escalates.

Fit sales organisations are really looking at the viability and potential of customers and whether they are worthwhile working or not.

Fit Sales Organisations segment their customers and their markets and then work out the most cost-effective way to sell and service these customers or not as the case may be. We have to work our what it cost us to get a sale.

Depending on the industry, it can costs an in-field sales person and their company anywhere from $1000 to $1,500 per client sales meeting (that’s taking into account things like the cost of travel and time in the meeting – approx. 1 hour). Given this cost we want to be very discerning about;

(a) how long it took us to get a customer on board and
(b) about the value and potential of the customer could give our business

What we are guarding against is trying to sell to those customers who do not and never will meet our criteria for high potential and high value.

In sales it is just as important to know when to say no and walk away. It’s about how you use your time and effort.

I am sure you are aware that today business is a 2-way street and while customer have often been in the drivers seat around choice of supplier the balance of power is being readdressed and shifted to a more partnership arrangement .

Suppliers are now weighing up their options as well. For instance before we accept an RFP (request for proposal) or Client Brief many of us weigh up is it worth it working with that organisation or not?

Personally I believe that Procurement is a public relations exercise.

Goods sales organisation will weigh up the cost of getting the sale. If your procurement process portrays your organisation as smart, easy-to-deal-with, enlightened, focused and disciplined and you fit our criteria for potential and value then we will put in the effort to work with you. If not then we will often go else where for better quality sales. Unless we are working in a very limited market we often have many customers to chose from in this global economy.

Making procurement processes too hard or unnecessarily complicated may limit a businesses from accessing the very tools, products, systems or advice they so desperately need.

For instance some of the recent e-procurement experiences I have had have been less than favourable. Meaning they failed to do the job. And wasted a lot of time, money and effort. Time, money and effort we could have been investing in better sales opportunities.

Just because a big company has a name doesn’t necessarily mean we want to work with them.

What good sales people would like is to be given a chance work with people in partnership not competition.

For all the “us’ versus ‘them’ that gets said about sales and procurement, we should all recognise the common enemy

Isn’t men against women or
Sales people against procurement people

The common enemy is WASTE.

Wasted resources
Wasted time,
Wasted relationships
Wasted opportunity
Wasted ideas

That is why I am finding more and more people saying they want to work with others (suppliers, partners and customers) in a spirit of cooperation, consultation and respect not competition or deceit. This personal insight and awareness makes for much better business relationships and much better business results for all concerned.

As the Buddhist saying goes: Without the cooperation and kindness of others we cannot exist.

No Comments »

An Audience with Procurement

June 20, 2008 in Procurement, Sales Relationships, Value Creation

Recently I was approached by the head of CISP Australia (Chartered Institute of Purchasing and Supply) www.cipsa.com.au, Jonathan Dutton to be their after dinner speaker at the Women in Procurement Conference on 19 June 2008.

This was a new event on CIPSA’s calendar which provided a unique educational and networking opportunity for those interested in the advancement of women within the procurement profession. While procurement has traditionally been a very male-dominated profession, an increasing number of women have achieved success and recognition in recent years. The conference aimed to examine the challenges women face as they try to make their way in this male-dominated environment and what lessons can be learned from those who have successfully gone before them.

So given my career background in sales it may have seemed like an odd choice to have me as their after dinner speaker. In fact if the truth be known they probably came to the conference to get away from people like me.

However the organisers had their reasons. They asked me if I would be prepared to give the audience an insight into what it is like being in sales today, what it’s like from the other side of the table and, in particular, what it’s like to be a sales woman in what has been a traditionally male dominated environment.

Given the tradition male orientation of sales and procurement, I thought that maybe it would be a good opportunity for women in procurement and women in sales to reflect on what we work with everyday and what we would like to see happen in the world of business to make our lives and those we work and interact with better.

In preparing for this presentation, I also realised that I had never given any real considered thought to the world of procurement and in particular women in procurement. I know technically speaking any sale is a form of procurement however I have always thought in terms of the ‘customer’ not procurement specifically.

While I have selectively responded to many an RFP in my time, participated in formal procurement processes good and bad and worked with various stake holders on large projects over the years, I realised that I had viewed procurement as a process rather than considering the people involved in the process. I realised I had missed something important. So I saw this invitation as an opportunity for me to learn more about the world of procurement and share experiences as women in business.

This was the fist time I had ever been asked to speak to formally to people in Procurement and I understand this was a first for CIPS Australia as well.

In preparation for this talk I contacted and spoke with a number of women in procurement. I asked them about their views and thoughts around sales people, being a woman in procurement and the changes they are seeing taking place in the world of business today.

Here is what the women had to say:

They were sick of dealing with sales people who promised the world and didn’t deliver what they say they would
or sales people who are too pushy and tried to bully their way into a sale by aggressive or intimidatory means
or sales people who didn’t listen to want you needed and just gave you want they wanted to sell
They were tired of the professional visitors masquerading as sales people who only want to ‘do coffee’
They wanted sales people to educate not just gesticulate.
They were also frustrated by their own managers who went behind their backs to do ‘deals’ and didn’t respect the procurement process, or managers who wouldn’t look outside the square at new opportunities, innovations or ideas or other suppliers who could bring better business outcomes
And the women didn’t want to go out and have lunch or dinner or drinks to ‘do the deal’ for all sorts of reasons including: they don’t have the time, they’re not interested, it’s not transparent, it could lead to other unsavory conclusions being made, and its OH SO 20th century.

They also pointed out the following to me:

They are noticing many of the younger sales people are taking a far more professional approach to selling, are better informed, more business savvy and are better to deal with overall than the more traditional transactional sales person who remained too product focused and blokey.
They believed that Procurement started from the top down and the more informed their people were about the business, personal and global benefits of procurement practices the better it would be for all concerned.
They stated that their ability to communicate and take quality briefs from their key stake holders was critical to their success.
They stated that the ability to assess the total live cost of procurement was critical as this related to the opportunity to really make a difference around overall sustainability, business viability, the environment and cost effective solutions.
They realised that procurement was more than just a numerical figure on a spread sheet and they were looking for real value add in the form of other services, creative ideas and innovative thinking to solve otherwise to hard to solve problems.
That procurement need to professionalise itself even more with better education and better career paths.
And rather than the adversarial model that is often talked about and promoted in business they see and regard a more professional consultative model as being better able to serve their needs to make informed business decisions based on value at all level not just economic ones.

These findings came as no surprise to me because this is what I am finding out in the sales field and what my Sell Like A Woman research has also highlighted.

I went on to give them overview of the changing face of sales and the shift away from the old stereo types and approaches which are making way for a more enlightened, consultative, big picture focused, business oriented, cooperative sales person who is well organised, disciplined, can prospect proactively, is fully aware of their product and business’ value to their customer market, their competitive edge and how to make business work for them and their customers.

Next week I will delve further into the view from the other side of the table and how, we, as sales people, view procurement and some of the practices which help or hinder sales and partnership effectiveness. And what our common enemy is.

1 Comment »

Barrett Sales Blog

You are browsing the archive for Sales Relationships.