Are your customer relationships all that great?

by Todd Youngblood

Ask any sales rep to name the single most important factor in successful selling, and nine out of 10 times the answer will focus on relationships. Having great relationships with the decision-makers and influencers in a sales territory is undeniably valuable.

But something about the concept bothers me. It’s like stubbing your toe. How much does it hurt? A lot? A little? Does it hurt more or less than the last time? A lot more? A little less? About the same? Does my stubbed toe hurt more than your stubbed toe?

The relative quality of customer relationships is every bit as vague. How good is your relationship with decision-maker X at customer Y? Is it better or worse than last year? How much better or worse is it than your relationship with decision-maker A at customer B? Is your definition of an “OK” relationship the same as my definition of an “OK” relationship? Or is your “great” the same as my “average?”  Can you believe that some reps think their relationship with a given customer is far better than the sales manger thinks it is?

If relationship-building is so critical to success, doesn’t it make sense to be a bit more specific about it?

Baseball teams track batting averages because players with higher averages produce more runs. Car drivers monitor their fuel gauges because a needle on “E” produces major aggravation. Sales reps and managers must scientifically scrutinize relationships because better ones generate more revenue growth. One way to measure relationships is to create a “Relationship Scorecard.”

Step one in creating a Relationship Scorecard is to reject the notion that friendship is all it’s cracked up to be. Granted, your old college roommate will (probably) never buy from a competitor. That 15-year client that has stuck with you through thick and thin all these years will (probably) never buy from a competitor.

But face the statistical facts. Very few customers are genuine friends. Even the real ones won’t always be able to overcome the wishes of the decision-maker, other influencers or all possible internal and external circumstances. A business relationship is based on the value you deliver, period. To depend on anything else is simply naive.

Step two, therefore, requires unambiguous definitions of degrees of value delivered. The definitions must fit not only what you articulate in your proposals, but also what customers expect from you and what criteria they use to evaluate your proposals. Several progressive distributors have found the following zero-to-four scale to be an excellent fit:

• Level 4 - Total Cost of Ownership (TCO). Your proposals provide a hard number analysis (dollars, time, quantities, etc.) of your company’s impact on the customer’s business according to the customer’s financial business model.

• Level 3 - Value Added. Justification is grounded in improvements to the customer’s business processes AND one of the following is also true:
   • the customer is willing to pay a premium because of the "extra" services provided;
   • the customer always calls you first for help and gives you the "last chance" to bid.

• Level 2 – Features and Benefits. Justification is based on how the features and functions provided by your proposal fulfill customer specifications.

• Level 1 – Price. Need I say more?

• Level 0 – Hope. You have no relationship.

Note carefully the requirements for Level 3. Quite often, one or both of the extra criteria are fulfilled without any connection to impact on customer business processes. When that’s the case, the relationship is a Level 2, not a Level 3. Just about everyone wants to claim “Value Add” status for every account. Without clear, clean connections to customer business process, however, that’s just wishful thinking.

Here’s another way to think about the levels. This time, the perspective is the skill level of the rep involved.

• Level 4 – A sought-after business resource with executive-level credibility and perspective that consistently creates innovative solutions with a proven, positive impact on customer financial statements.

• Level 3 – A consultative sales rep who understands the customer’s business in substantial detail.

• Level 2 – A useful business asset with good-to-strong product knowledge that keeps the customer up to date with literature and other relevant information.

• Level 1 – A messenger who transfers pricing information between the customer and the sales manager (could be replaced by a Web site and a decent e-mail system).

• Level 0 – A friendly, doughnut-carrying visitor.

Another level of detail is also critical. Most of the time, more than one individual is involved in the customer’s decision-making process. The astute sales rep or manager will be concerned about the relationships with all of the key constituencies at an account. For the distributor, relationships with executive management, engineering, production and purchasing usually make sense. Sometimes maintenance should also be considered. With OEM customers, you might include the sales department.

Whatever set of customer decision-makers and influencers you choose, the aggregate score for all of the relationships is what counts. Think about building a grid that looks like this for your top 25 accounts:

Fill in the blanks with scores using the definitions above. Calculate the average Relationship Score for each account. Total everything to get the score for each territory. Look for any big or important accounts with an average below three. They need attention because they are at risk. Look for reps that have a territory average above three. They’re probably kidding themselves. Set targets for improvement. Hold people accountable. Maybe pay a bonus.

Bottom line, relationships really are important. They’re too important to judge informally on a subjective scale. Get beyond relationship rhetoric.  Measure them objectively. Put some teeth into the measurements.

Todd Youngblood is Managing Partner and CEO of The YPS Group Inc., a sales process engineering and sales training firm. The YPS partners are all obsessed with the sales productivity of their clients. He can be reached at , or at www.ypsgroup.com. 

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