The limitations of relationship selling
Adding substance is the key
by Tom Halpin
If you’ve been in the selling game for any time at all, these quotes probably sound familiar:
“We’re in the relationship business.”
“People do business with people they like.”
Personally, I find them to be fascinating and a bit tired. The fact is, relationships are important, but not in the way most people think.
When it comes to relationships, I learned a valuable lesson after starting my own sales agency in 2004. As a new independent rep, I tried to leverage every relationship I had in order to build my business. I reached out to people I’d worked for and done business with over the previous 10 years, mostly in sales and marketing positions. To my amazement, people didn’t line up to do business with me upon learning I was available.
I had relationships with decision-makers that were content with the independent reps they were currently working with, while others believed in a different model like direct salespeople. I remember one instance where a friend had the opportunity to hire me over a multi-person agency, and did not select me. I was floored. I asked him to explain his decision and he said, “Tom, clearly you are head and shoulders over the individuals in this firm. But they have been in business for 20 years and you’ve been in business for less than two months. How do I know you will be in business a year from now? And, by the way, they provide me with access to three decent salespeople that can bang on doors in industrial parks. You are one person.” After processing his answer for a few days, I understood his decision and felt it was the right one for his business.
Once I did pick up a few principals, I started calling on end-users I’d done business with in the past. Again, I was surprised that many of my best relationships didn’t result in fast, significant business. Fast-forward three or four years. My business grew fairly rapidly, I was successful but it didn’t happen in the way I anticipated. While reviewing my customer list, I found the people I had enjoyed meals, golf and sporting events with weren’t the people driving my commissions. Interesting! What was I to learn?
I found that relationships will generally get you an audience to present a new product, or a meeting to discuss the new firm you represent. A good relationship will also get you candid answers on why you didn’t win the business. But, in the end, people do business with people because it’s in their own best interests. Are there exceptions? For example, are there companies winning business on an unethical basis? Sure. But, in my opinion, it is rare.
So, what is my take on the role of relationships in business? Healthy, long-standing relationships are built by first understanding one another’s business goals. Then, once fit is established, parties enter into a win-win relationship, which means both sides get what they want based upon a formal or informal agreement. Over time, people on both sides of the relationship have the opportunity to earn each other’s respect. However, if one party does not live up to their commitments and falls short consistently, the relationship will not last.
What about client dinners, lunches and sporting events? Salespeople should absolutely engage in relationship building activities, especially if you connect with the client on a personal level. But they should be done as a thank you, not as an attempt to get the upper hand in the relationship.
As my own business has evolved, relationships have been important. But my personal relationships have strengthened through the bond of business and delivering results.
Think of it this way: We operate in one of the most competitive marketplaces in the world. Decision-makers entrusted to source business want to partner with companies that will act in their best interests and perform at a high level. As a salesperson, if you want to separate yourselves from your counterparts, have substantive relationships with your customers. Be a resource to them by understanding their business at the deepest level possible. Deliver on your commitments, and your customer relationships will run so deep that the thought of unplugging will be too painful to consider.
Tom Halpin is president, The Halpin Group, a Michigan-based consulting firm focused on leadership, strategy and revenue generation. He can be reached at tom@thehalpingroup.net.
This article originally appeared in the March/April 2013 issue of Industrial Supply magazine. Copyright 2013, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
