Is customer relationship still relevant in repeat business situations?
Monday 9th May 2016
David Sables, CEO at Sentinel Management Consultants, examines whether emphasis should still be placed on maintaining customer relationships.
The answer to almost every question is, of course, ‘it depends’. I contribute regularly to the constant debate about the validity of ‘relationship selling’. I know that most sales directors believe that building a strong relationship is imperative, because in their youth it worked for them. In most industries though, things have moved on. Professional buyers are now under immense pressure to deliver results and their job description does not include being friendly to sales teams. That said, you know that there are times when it does seem to work. The truth is, it depends on the situation and very often it doesn’t last.
Speaking at a recent grocery industry conference, I met several successful young companies who had words of wisdom about how they got on so well with their supermarket buyers. They also had one thing in common– they had all launched into food categories with a unique and premium product. Their offering gave the buyers a means of pressurising existing suppliers and helped them meet targets. Given all that, of course, they were just lovely to deal with! Speak to the same suppliers a couple of years later, though, and they will tell you that the loveliness didn’t last long; as soon as they had scale things really kicked off!
I should explain that 16 years ago at Sentinel we started training people on how to deal with the tough and tactical buyers in the supermarket retail sector and now the learning is rolling out into many other industries.
The food industry is undoubtedly a place to find the highest level of rigour in commercial practices. Retailers formally train buyers on their version of ‘tough love’ or ‘periodical power play’ and we now see this appearing across all sectors of business. This systemic abuse involves supporting supplier A while their competition supplier B is pressurised for better terms. During this phase, many sales directors in position ‘A’ believe they have a great relationship and budget for next year on the basis of this success. Big mistake, because it’s their turn over the cliff next year whilst Supplier ‘B’ gets the love. There is nothing illegal here, just excellent aggressive buying practice executed to perfection. Understand it, respect it and learn to deal with it. An obsession with old-fashioned relationships gets in the way for many. Strive instead for business-rapport built on respect, service reputation and a pipeline of insight to grow. If you can deliver that robotically, you don’t even need to be likeable. But even then, life doesn’t become easy; ask any of the major branded businesses.
You have to be tough to deal with variations in behaviour, but don’t have to sink to that level; just understand how to make the high ground work. Instead of being terminally trusting, constantly evaluate every behaviour and judge it to be positive or spiked, then react accordingly.
Getting this right means adopting an approach that combines your ‘selling magic’ with robust negotiation. Separating these two core skills has long been the trainer’s solution to a complex issue but I prefer to mesh them together in a simple and effective system that reflects reality; a concept I call ‘Total Commercial Call’. After all, people attend calls and meetings – selling and negotiation is just what happens in them.
So, can you make relationships work in the medium term? It depends, but don’t rely on it.
David Sables is CEO of Sentinel Management Consultants and a regular contributor to The Grocer. Find out more about David and Sentinel here.