Relationship Selling – No Longer a Valid Approach

By Thomas Fee

In today's world of high tech, the nature of sales is changing. Sales reps that for years have developed multi–million dollar accounts based solely on good personal relationships are finding they must develop additional competitive advantages to retain them.

Why isn't relationship alone still sufficient? Because, technology, both, in the value chain and that being used by customers is forcing additional criteria to be considered in purchasing decisions. Personal relationship has taken a less than primary role with accounts. That's one reason many of them are pushing decisions down to lower levels in the organization.

Some of the new requirements for success are:

      • New and more sophisticated measures used in the business environment

      • Deeper knowledge of the connection between buyer and seller business objectives

      • Technical requirements for communication and support

• The requirement to translate the benefits of relationship into competitive advantages for the customer

      • Demonstrating sensitivity in the area of organizational culture and politics 

What Is Relationship Selling?

Relationship selling is a traditional approach to selling that emphasizes selling yourself. On the surface, this seems reasonable enough, but everyone buys products and services from people they don't like. Purchases are made based on information, need, interest, benefits and what's in it for the customer. People buy products and services for reasons that benefit them, not to make others feel good.

Customers don't buy from vendors they like, they buy from they can depend on to deliver what they promise. Vendors who are willing to make the sacrifices necessary to insure customer satisfaction get the business.

A Contrast of Models

There are two types of vendor relationships at each end of the spectrum. At the one end is pure Relationship Selling and the other is Strategic Supplier. Strategic Suppliers are those that enable the customer to succeed by the value that they provide.

Customers buy products and services they need or want for peculiar reasons. Here are some comparisons between the elements of Relationship Selling and the role of the Strategic Supplier:

Inwardly Focused Customers

Customers have become very inwardly focused. Their responsibility to themselves and their stakeholders (employees, stockholders, customers, etc.) has become their overriding concern.

In today's market, customers are much more concerned with their own success than with that of their suppliers. They are forced by their own customers to be that way to survive.

Customer Defined Relationships

The customer defines the relationship they want just like they define technical requirements. The concept of "partnering" has traditionally stood to mean that buyers and sellers would enter into a "mutually profitable" relationship. The problem is that buyers and sellers have developed different meanings for what partnering means.  Partnering is perceived by most buyers to be a gimmick, the jargon of an all too common sales approach.

What has changed in relationship selling is that it has become a buying concept versus a sales concept. Customer focused selling implies the customer prescribes the criteria for defining relationships, business requirements and the supplier decides whether they can adjust or accommodate themselves to that set of requirements.

Resources

In today's climate of doing more with less, sales resources are scarce and expensive. Many suppliers of goods and services are being forced to consider new and (formerly) unnatural relationships that often include alliances with third parties including competitors.

This resource pinch is forcing vendors to consider new for sales success. The return on investment for sales is the driving force behind their approach to whom they choose to do business with and how they structure the deal. Relationship selling is the most time consuming and costly method of selling; not a good fit in this environment.

Relationship Selling – No Longer a Valid Approach

New Skills

The challenge for sales is that those who have traditionally sold using only the relationship approach must add new skills. Many industries boasting individual high dollar sales are built on relationship selling but they are beginning to suffer losses as new competitors exhibit the value of a broader approach to new customer needs.

What new skills must be added?  Here are some suggestions:

   • Implement methodologies that help vendor sales people to understand the customers
business better

      • Use existing account profiles to qualify more successful targets for the vendor’s unique products, services and characteristics

      • Build on existing relationships helping them to set standards based on value that the
vendor provides

      • Learn the difference between relationship and politics in the sale

      • Articulate competitive differences as a part of the standard sales approach

Why Customers Buy

A sale is the result of a combination of the following elements:

      • Genuine or perceived need

      • Solution that will help customer achieve their business objectives

      • Relationship that facilitates movement of the decision process toward closure

      • Compelling reason for the customer to make a decision

A good relationship with the buying organization is important to success in sales, but it is not the only determining factor. If the elements for a successful sales campaign are not in place the vendor must be ready to lose or walk away. Otherwise their limited resources will be squandered and the right opportunities will get away.

Selling based on relationship alone is not a viable economic alternative in today's market. The best return on investment on sales employs a combination of; technology, best practices and account knowledge to help customers achieve their business objectives.

About the Author:

Thomas Fee is the founder of Performance Management Consultants™. Performance Management Consultants™ is dedicated to providing the next generation of professional development enhanced by technology and coaching to enable users to change their behavior resulting in improved performance.

Relationship Selling – No Longer a Valid Approach

They have developed numerous programs and processes to enhance the skills, behaviors and activities of managers, sales, client service and pre-sales (SE) professionals. Performance Management Consultant’s™ programs address the specific challenges faced by those working in the areas of business practice known as Customer Relationship Management and Complex Sales.

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