How to use sales model to build profitable customer relationship
How to build profitable customer relationships using the sales model
Advertisement
No matter what your position is: Account Manager, Account Executive, Relationship Manager, Business Development Manager, or Value Manager, the sales role is one in which you are tasked with the objective of generating profit from existing and potential customers.
Sales model and roles
However to be able to achieve this, it is important to understand where your role sits in the four-step in the sales model which illustrates the classic roles as they are described in industry. Let’s look at each of the highly skilled but different four roles:
•The transactional seller: An individual – often very skilful – but in a role that is purely transactional where there is no ongoing business relationship e.g. fitted bathrooms. Often a very skilled seller who enjoys selling and likes the transactional role. It is a one off relationship.
•The functional seller: An individual with basic sales skills often found in a role with a ‘repeat’ or ‘call cycle’ element. A skilled individual who is seen by customers as someone who is there to sel. For example the non-alcoholic beverage seller who makes repeat sales calls to the same neigbourhood store.
•The consultative seller: An individual, who is trained to sell against customer needs and has good negotiation skills. An individual who is highly valued by customers.
•The strategic partner: An individual who is skilled in all aspects of sales, business management and strategic management. The rarest of all sales people, this is an individual who is seen by customers as a ‘professional’ who is an integral part of a business relationship – not an individual who simply ‘comes to sell.
It is important to understand that as your behavior moves to that of the ‘Strategic Partner’ then the role of price and the competition is desensitized. This happens particularly in a commoditized market where there is very few differentiation in ‘core products.’ Examples are banking and financial services, radio stations etc.
Other Trending Stories
With regards to the sales model, most organisation aim to achieve the ‘Consultative’ or Strategic Partner’ segments. A role in which there are two key elements in each relationship:
1.A relationship in which the sales person would only sell a product or service which meets the needs of, and brings benefit to, the customer!
2.A relationship in which the sales person has right and responsibility to make profit!
The key message here is that the Functional or Transactional seller will always take profit, but may not be too concerned about the issues of benefit, need and the development of the ongoing relationship. However most professionals seek to build long-term relationships that provide annual income and profit to the business, when this is the case benefit and need are factors, which have to be addressed.
Relationships – from “commodity’ to partnership”
In a very highly competitive market environment, one of the key issues you will face – like every salesperson – is the need to de-sensitise or minimise the impact of price and the competition in your relationships. To achieve this you must:
• Understand the different trading levels you will achieve with customers.
• Define the type of relationship you want to achieve with different customers
In dealing with different customers it is inevitable that you will form relationships which will fall into all of the categories illustrated below:
•Partnership
•Value added
•Service
•Commodity
It is important to understand that this model defines relationships as the customer sees them and not how you see them:
• Commodity – a price based relationship in which the customer will differentiate between suppliers purely on price. It is characterised by heavy discounts to secure deals or price wars among competitors.
Advertisement
• Service – a relationship in which the service provides starts to add value.
• Value added – a relationship in which the seller provides benefits e.g. ongoing support, extra service, guarantees, individual support that add value to the relationship.
• Partnership – a relationship in which the customer views you as a partner and would not make a decision without first seeking your views. Clearly in such a relationship you are the first choice product or service provider.
In looking at this model many salespeople make the mistake of setting out to develop ‘Partnership’ relationships with all of their customers. In reality this is not possible for three reasons:
Advertisement
• Few of us have the time to develop ‘Partnership’ style relationships with every customer.
• The income and profit from a customer must be at a level that warrants a ‘Partnership’ relationship.
• A customer may not want to develop a ‘Partnership’ relationship with you!
The task of developing relationships is one that must be addressed on an ongoing basis. It is a process in which you need to:
Advertisement
• Identify the type of relationship you want to achieve with each individual customer – Commodity to Partner.
• Identify the relationships that you have a partnership with and ensure that the income from the relationship justifies the service levels.
• Align your behaviour – Transactional to Strategic Partner –and service delivery to meet the needs of the relationship.
Conclusion
In conclusion if you are reading this article as a salesperson or sales leader, you need to review the relationships you or your salespeople have with customers. Which stage of the sales model would your customers say you are?