The Best Way to Survive Hard Times: Build Strong Business Relationships
Jan 24, 2019
Whatever your industry, some of your current and potential customers are likely delaying some projects and looking for ways to cut costs. They may be scaling back expenditures and using competitive bidding processes to negotiate better deals from suppliers.
This is a good time to take stock of the relationship-building capabilities of your team. Are your current relationships strong enough to withstand the pressures of today’s tough economic environment? Do your salespeople know how to leverage personal assets and the assets of your company to “competitor proof” their customer relationships?
Building enduring connections with customers requires two distinctive kinds of skills focused on two distinctive kinds of relationships, “little r” and “Big R.”
The Importance of “Little r” Relationships
This type of relationship is based on interpersonal connections between members of a sales team and members of a buying team. They are based on a salesperson’s ability to demonstrate that he or she is trustworthy, competent, and credible as a business consultant and advisor.
Over 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 avoidance 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 meet special needs, and offer reliable business results. Customers become highly averse to risking the loss of these payoffs and so tend to resist offers of discounts and price cuts from competing vendors. Even when individual contacts are restrained by budget cuts or other internal issues, they will continue doing business with people they know and trust.
Even one or two little r relationships have value, but the real relationship benefit occurs when sales representatives develop a network of connections with the right people in the customer organization. When they have a wide range of contacts who view the sales representative as a trusted business partner, they learn inside information and their contacts step up as champions, advocates, and coaches. The salespeople receive advance notice of opportunities and get critical “heads up” notices about situations that could adversely affect a sale.
On the flip side, if these relationships are weak, or have been allowed to erode through neglect or subpar performance, they offer no protection against competitive encroachment. In the worst cases, where deadlines have been missed, customer concerns were left unaddressed, or there have been delays in responding to problems, a poor relationship can actually open the door to competitors. And once gone, the business is usually 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,” 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, reorganizations, and downsizing, especially during tough economic times, when customer organizations make changes in policies, structure, how decisions are made, and budget allocations. An even more powerful and compelling relationship is the one that exists at business-to-business level—a different type of bond we can call the “Big R.”
A Big R relationship transcends ties with individuals. Its connections are based on business benefits that are highly valued because they are aligned with the customer’s corporate business strategy, goals, and critical success factors.
For example, a company that provides its customers with complex high-tech solutions may be very concerned about the R&D direction and technical capabilities of the supplier of a critical component. 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 and predictability. While they remain interested in inducements such as price and delivery options, 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 with your firm, your sales team must know how to identify these high-value customers, assess their potential, and position and establish a Big R relationship with them. This requires business acumen and information gathering—both internal and external.
Specifically, your salespeople must be able to:
- Fully understand the customer’s problems and identify appropriate 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 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% discount to break the Big R connection.
The Bottom Line
Every company is looking today for an edge that will open the doors to new business and serve as a protection against erosion of market share. Some focus on differentiating a product offering; some talk 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, as only one company can truly 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 actually hurt the seller’s bottom line. Rather, both little r and Big R relationships offer a unique competitive advantage by delivering real business value deriving from the relationship itself rather than from a product or a price. The ability of a sales team to leverage interpersonal connections and corporate business alignment becomes the best and most reliable resource for maintaining current market share and driving growth, even in an unpredictable and chaotic economic environment.