For many companies, excellent customer relationships are the key success factor in B2B sales
A few weeks ago, one of our customers took responsibility for a sales organization that is very proud of their close personal relationships with their customers. Soon he discovered that the personal relationships were so good that they anticipate customer´s every wish, which results, among other things, in high and, above all, annually rising discounts.
When he told me this, I had several Déjà-Vu experiences. I remembered various discussions with other companies about sales employees with considerable weaknesses, which were retained on board, because they allegedly had very close relationships with important customers.
Other companies attach great importance in recruiting processes to the existing contacts of a new sales person, which he or she promise to bring along. (However, these contacts are most of the time not as valuable as they initially thought.) Other discussions dealt with the question, how companies can increase their market share. In this context, the excellent customer relationships of sales persons of the competitors were considered as the most substantial growth barrier.
This has prompted us to take a closer look at his topic.
How important are customer relationships in B2B sales?
In our research for more insight into the importance of customer relationships in B2B sales, a surprising finding turned out: the importance of personal customer relationships for sales success in B2B sales is massively overrated.
In addition, maintaining an “excellent” customer relationship at any price impedes the revenue growth of many companies and results in poor margins.
Top sales employees and –organizations do not (exclusively) place emphasis on good customer relationships.
In our research, we quickly found a comprehensive study, published in the book “Challenger Sales” by Matthew Dixon and Brent Adamson, which deals with the question, which types of sales persons were successful due to which reasons in the global economic crises in 2009.[i]
It turned out that among five different types of sales persons the “relationship builder” counts the fewest top-performer.[ii]
This somewhat surprising result becomes plausible on closer inspection. It corresponds to what we often see in our consulting activities:[iii]
- “Relationship Builders” spend a lot of time with personal relationship building activities. As a result, their productivity and success in the acquisition of new customers are often lower compared to other types of sales persons.
- “Relationship Builders” do everything for their customers. Therefore, they are more open to offer discounts to protect the customer relationships. This reduces their profitability.
- “Relationship Builders” mainly meet the (expressed) customer needs, but do not provide any additional benefits. As a result, they become interchangeable and are not very successful during periods of weak demand.
There are indications that the overall consumers´ purchasing loyalty based on personal relationships is decreasing. In the past, one felt obliged to buy from a local or personal known specialist dealer. Today at times of ecommerce this plays a less prominent role. A phenomenon that contributes greatly to the decline of the medium-sized retail sector and spills over to buying behaviour in B2B sales as well.
The example of the company Würth underlines the overvaluation of the importance of customer relationships. Würth is one of the very few companies with yearly double-digit growth rates, which comes along with a continuous reduction of the size of sales areas and a specialization in customer groups. Thus, customer relationships were constantly interrupted and new ones had to be built. Apparently, this has not damaged growth. Würth trust more than other B2B companies in a sales system that is constantly further developed and where all elements reinforce each other. [iv]
Are customer relationships no longer relevant?
Of course, good customer relationships are still important in B2B sales. But they are neither the central (nor even the only) success factor nor should they play a too important role in sales strategic and personnel decisions.
Much more important is a sales system that empowers sales employees to convince customers so much, that they build relationships that are not only based on personal affinity – and this not just between the customers and the sales person, but also between the customers and your company. In addition, such a sales system has to significantly improve the sales performance in terms of the new customer acquisition.
Such a sales system must be designed in a way that relationship-oriented salespeople are empowered to sell more pro-actively and to deliberately get in constructive conflicts with customers through suitable procedures, arguments and instruments. This is where marketing needs to contribute as well.
How to build a successful sales system?
Even if you can learn important things by analysing successful sales organisations, it is necessary to have an individually tailored sales system. Moreover, the development of the system must be designed in a way that it generates the highest possible acceptance in the sales team.
For these reasons we involve sales managers in the development process from the beginning. We also use agile methods for quickly testing new concepts. This methods generate specific success stories and therefore increase acceptance in the rest of the team.
Furthermore, you can quickly and pragmatically determine which increase in performance i.e. market share, revenue and coverage is possible.
How much more could you achieve if you would build a successful sales system that helps you to surpass sales expectations? Find it out!
[i] Dixon, Matthew; Adamson, Brent: The Challenger Sale, p. 1et seq.
[ii] Dixon, Matthew; Adamson, Brent: The Challenger Sale, p. 17 et seq.
[iii] Dixon, Matthew; Adamson, Brent: The Challenger Sale, p. 20 et seq., eigene Beobachtungen
[iv] Venohr, Bernd: Vortrag Beratergruppe Strategie e.V., Palma, October 21st, 2006, Download 12.3.2017 at https://static1.squarespace.com/static/548ac75ce4b0a10ad41f38e7/t/54ae8443e4b0c0577b186b32/1420723267874/Wuerth.pdf