Consultative selling, business partnering and value-added selling are all in-vogue sales terms and practices that focus on building relationships between producer and customer. But is the industry really delivering the relationships these promises offer? Our research shows definite weaknesses in implementation, and thus missed opportunities for those companies that could become competent partners with their contractors.
Do not assume that you deliver value because you say you do. Contractors are self-focused business people. Their business is the most important thing in their life. Help their business and you have a customer for life. If you make value-added promises and fail to deliver the program, you are just another supplier quoting the most recent buzzwords.
Focus on your relationship
Recently, we performed a successful series of standard sales training seminars for a distributor's sales reps. As follow-up, the owner wanted us to customize a sales training program for his company. We requested that sales reps ask their best "business partner" customers to participate in a focus group. The goal was to develop the customized sales-training program with practices and attitudes found in some of the successful business services and sales relationships between customer and distributor.
But our request was based on a faulty premise. Many of these "best" customers did not see themselves as business partners, even though they bought from the distributor and liked the rep. Since this initial project, we have tested this trend and found similar results in other industries.
Our focus groups have discovered many interesting facts about sales rep-customer partnering.
Both a business and personal relationship drives a partner relationship.
It takes time to build a relationship. A high sales-rep turnover limits the time available for building relationships. But even reps who have been around a long time, may never have taken the time to build a meaningful relationship with their customers.
It takes the right balance of respect. Some reps who are great people and respected personally are simply not respected on a business level. Some companies with great products employ reps that don't receive the same respect as the products. Other great reps don't have good companies and products.
Few reps really understand very much about the contractor's business.
While some want to, few sales reps know enough to have meaningful business conversations with their contractor customers. In fact, in training classes, we document this point by asking sales reps to price out a small residential flatwork project. More than 90% of the sales reps lost money on their bids because few knew what factors truly contributed to profitability. Before the pricing exercise, most reps seemed to define a good contractor as someone who buys a lot from them. This might explain some industry's credit issues favoring large quantity purchases. But after the exercise, sales reps realized good contractors developed profitability watching each project segment.
The contractor and the reps' perceptions of their partnering varied greatly.
Sales reps confuse business help with product service. Traditionally, sales reps are paid to sell and products, not act as business consultants or value-added providers. Our experience has shown that many sales reps believe they partner with their contractor customers, but few of the contractors see it as a partnership relationship. (Of 20 contractors selected because the supplier perceived a partnering relationship, only two felt they partnered with their supplier).
While contractors value service, they may not pay for it.
Yes, contractors acknowledged the value of service; however, they indicated they would not pay a premium for it. A prevailing attitude is, why pay a premium for what is supposed to be provided? Many contractors expect companies to carry an inventory, deliver product on time, hand out product literature and employ an intelligent sales rep. Why should they pay more for such services? Instead, contractors who are heavily influenced by services will use a preferred supplier but expect that supplier to match competitors' prices. One concrete contractor said, "Concrete sets up in a short period of time. How valuable is it if producers don't deliver it on time or within specs?"
Contractors are much more loyal than many reps think.
Contractors prefer suppliers who provide comfortable outcome. The nature of construction bidding forces contractors to gamble with competition, weather, employees, production rates, jobsite conditions and many other factors. They don't want to take an additional risk by using an unknown supplier.
Based upon these observations, we categorize a sales-rep partnering relationship with his contractor into four levels: Imager, Preferred Supplier, Competent Partner and Professional Parnter.
The Imager: This rep does a good job of promoting features and benefits. No in-depth relationship exists. The rep may be new or operating with a "milk-run" mentality, never taking the initiative to drive the relationship with the contractor to a deeper level.
The Preferred Supplier: Many reps and companies fall into this category. Contractors prefer a producer because they know the rep and company and are comfortable with the products and service. While this is a good position to be in, the relationship is still more price-driven than many companies and reps want to admit.
The Competent Partner: This relationship is driven by the rep's ability to help the contractor's business. It goes beyond the service and product level. The rep and supplier actually help develop the contractor's business through marketing, employee training or joint calls. The contractor asks for a price concession only when it is truly needed.
The Professional: This is the type of relationship contractors have with their lawyer or accountant. Professionals are seen as allies, not as people trying to sell a product or service. Given time and success, some sales-reps achieve this partnering level with key accounts.
Striving to become a competent partner
Most producers strive to reach at least the competent partner level. Here are some ideas you might consider implementing:
Teach "business-leveraging" skills to your reps. Reps must learn how to have a business-to-business conversation. Even in the best partnering, sales reps must remind the contractor of the value they bring as individuals and as part of a good company, or contractors may take the relationship for granted. Encourage reps to establish how each side's business-benefits from the other partner's success and not just make product pitches. Probe the customer's business philosophy. Learn about your customer's business and issues. Find some common business grounds to talk about. How is business? How are things with employees? How is competition? Then talk about your philosophy.
Create tangible marketing tools. Such tools can be simple: A lien law summary drawn up by your credit department, a business seminar, an organized and well laid out employee training program, a seminar, a presentation on how contractors utilize product warranties as quality-enhancers, a simple sheet detailing the benefits of your product with a place for the contractor to staple his or her business card. The list is endless. Don't expect sales people to merely promise value - give them some tangibles to deliver.
Use customer focus groups to develop meaningful feedback. Probe participants on strategic concerns, market expansion and technology. Use the results to provide solutions for the problems affecting your contractors' business.
Take your product introductions to the next level. If you have a new product, deve