Keys to Customer Loyalty Drivers and the Need for Sales People Who Deliver Value

In an earlier blog posting  (Different Selling Techniques - Challengers vs Relationship Builders, vs Lone Wolves vs Hard Workers vs Reactive Problem Solvers ), it was identified that "Challenger" Sales people were more successful than "Relationship" Sales People and other types of Sales people and customer service.

Obviously, a reasonable relationship needs to be maintained with a client, because otherwise, anything that the Sales Person may present to the client will be dismissed or not considered, or at most....the client will not allow a Sales Person to even meet with them to hear what they have to say. Given today's market place, just getting in the door to decision makers on any level, is much more challenging given the time constraints in heavily over worked and matrixed buying decision makers.

The context of the "Relationship Manager", however, is a person who builds a good rapport with the client but that is about all. This type person may answer questions about the product/service and help in simplified ways, but little more is provided. The needs by purchasing, or the customer, has become much more complex and as a result, more is being expected by a supplier than in the past.

Alternatively, in certain cases, the product/service may be viewed as a commodity, in which case the buying decision is driven mostly by price.

In recent research from the Sales Executive Council, this research has determined that the customer driver for loyalty for a supplier comes largely from the experienced Sales Person and amounts to a 53% loyalty influence. These Sales People demonstrate and provide significantly more support to the client by giving:
1) a unique value proposition(s),
2) navigating alternatives for the client,
3) avoiding landmines (how to use the product without problem(s))
4) demonstrating and showing a better understanding in how to use the products in unique or unusual way(s),
5) an easy methodology to buy from, and
6) the supplier has widespread support within the organization (i.e. depth of penetration at the account) on multiple levels.

In comparison, the other factors like: Company and Brand (19%), Product and Service Delivery (19%) and Value-to-Price Ratio (9%), were significantly lower in influence.

So the key to developing a strong and lasting relationship with the client is to demonstrate ways to use the product and service in ways that may not be immediately apparent to the client, or by highlighting the product in new and maybe more complex ways. However, it is also always better to penetrate the client on multiple levels than with just the single apparent buying decision person(s). While none of this is overly surprising, it it is helpful to refresh how to better serve the client by gaining their support and loyalty.

Building and developing strong Sales Teams along these lines will most likely be keys to success in the present, more complex and global World marketplace.

Social Media's Banging on Marketing's Door

In the past 3 years social media has fast become a required part of a company's marketing and strategic plan(s). Many of us are trying to determine how to effectively use it, reaching the right audiences with the right messages while helping to promote our products and services while also giving the customer and potential customer what they need, when they need it. This impacts sales, customer service, supply, our methodology of communication, and essentially involves the entire company.

The complexity of these interactions can be seen from the graphic (Customer's Preferences and Behaviors) taken from Accenture's recent research, who's link can be found below the graphic.

 Consumer's Changing Preferences and Behaviors

Taking social media and networking into consideration is critical, because either you lead, or follow your competition. Getting to markets  and understanding how to be use these channels, sooner rather later, can spell success or failure. The World is an oyster, but it can also be a labyrinth of dead-ends and sunken costs (in time, ineffective marketing methods and messaging). Good luck!

If you are interested, a portion of a part of the article is reposted here and the link is below this posting:

"The evolution of social media and other Web 2.0 tools is having a significant impact on both how consumers interact with companies and the level of control such companies have over the sales, marketing and service of their products. (Although it is difficult to find consensus on what exactly is meant by “social media,” for the purpose of our discussion, the term refers to Internet and mobile channels that enable users both to view and create content and to share that content with others.)
Today, consumers make their purchases either via retailers’ or manufacturers’ sites or retailers’ physical stores. However, as social networking and other Web 2.0 tools have exploded in popularity—consumers have many new sources of product information and buying advice, as well as answers to usage and technical questions about the products they have purchased.
In this new world, companies have an opportunity or a threat, depending on how they adapt marketing, sales and service of their own products to a new consumer ecosystem: one in which enthusiasts and detractors can dictate customer perception and experience for manufacturers.
Ramifications for providers—What are the ramifications of this shift? At a high level, the evolution of social media has introduced new contact channels that must be integrated into marketing, service and support strategies. However, while social networking and social media are certainly on the rise, there are still large groups of customers who do not communicate via these tools.
Therefore, differentiated service takes on an even greater role because of these new channels. A thorough understanding of customers’ channel preferences, combined with insights into the true value of customers to the business, must drive how companies interact with each respective segment.
In addition, because of the speed with which customers and information move today, companies must be able to incrementally, and very quickly, improve their operations based on what they learn from observing customers. As a result, many companies have shifted the focus of their investments from building channel infrastructure to creating nimble and robust content management and data collection and analysis capabilities.
From a marketing perspective, the evolution of social networks and online communities has resulted in a collapse of the marketing funnel. How so? Traditional, mainstream marketing forces a message through the marketing funnel, moving through stages from building awareness to earning loyalty. It only allows dialogue and relationship building as the prospect or customer progresses through the funnel.
By contrast, the digital revolution, and particularly social media, makes it possible to engage in a dialogue with prospects or customers much earlier and at many more touch points. The collapse of the marketing funnel, in turn, means the distinctions between marketing and sales become further blurred and, in some cases, disappear entirely. In fact, social media increasingly is being referred to not in terms of marketing or sales, but rather, as an “engagement channel,” which incorporates elements of both marketing and sales.
With consumers increasingly relying on third-party sites for usage and technical information, manufacturers must build capabilities to strengthen their brands and customer loyalty via these channels, as well as to up-sell and cross-sell relevant, related products and services, and gather and integrate cross-channel customer data. Indeed, smart use of these third-party channels can become a powerful way to boost image and customer satisfaction while reducing CRM operational costs."

CRM and Marketing

Different Selling Techniques - Challengers vs Relationship Builders, vs Lone Wolves vs Hard Workers vs Reactive Problem Solvers

 A recent article in Harvard's Business Review came out with an interesting study. They found that "Challengers" out performed the other forms of selling techniques or individuals. Why? Because they push the client to better understand the products being offered and their use. They are particularly effective in "down economies."

"Challengers" tailor their presentations and information in a teaching way, even showing new ways to use the information/products in a more effective manner or in specific situations that the client had not identified that they needed. They also take control of the sale and the customer needs identification and challengers are into solution-selling.

The question needs to be asked, where does your sales force fit into these classifications? Most likely you have a mixture of styles. Maybe there is a need to hire differently than we have in the past? Through change management techniques and training sales forces, they can be up-graded to handle more complex sales situations which the global marketplace is forcing us to adjust to.

It can be argued, that certain clients may respond to one type better than another. But this article begs the question that companies may need to have more Challengers and fewer Relationship Builders.

Enjoy the article!

Selling Is Not About Relationships

9:29 AM Friday September 30, 2011
by Matthew Dixon and Brent Adamson

This post, the first of a four-part series, is also part of the HBR Insight Center Growing the Top Line.
Ask any sales leader how selling has changed in the past decade, and you'll hear a lot of answers but only one recurring theme: It's a lot harder. Yet even in these difficult times, every sales organization has a few stellar performers. Who are these people? How can we bottle their magic?
To understand what sets apart this special group of sales reps, the Sales Executive Council launched a global study of sales rep productivity three years ago involving more than 6,000 reps across nearly 100 companies in multiple industries.
We now have an answer, which we've captured in the following three insights:
1. Every sales professional falls into one of five distinct profiles.
Quantitatively speaking, just about every B2B sales rep in the world is one of the following types, characterized by a specific set of skills and behaviors that defines the rep's primary mode of interacting with customers:

• Relationship Builders focus on developing strong personal and professional relationships and advocates across the customer organization. They are generous with their time, strive to meet customers' every need, and work hard to resolve tensions in the commercial relationship.
• Hard Workers show up early, stay late, and always go the extra mile. They'll make more calls in an hour and conduct more visits in a week than just about anyone else on the team.
• Lone Wolves are the deeply self-confident, the rule-breaking cowboys of the sales force who do things their way or not at all.
• Reactive Problem Solvers are, from the customers' standpoint, highly reliable and detail-oriented. They focus on post-sales follow-up, ensuring that service issues related to implementation and execution are addressed quickly and thoroughly.
• Challengers use their deep understanding of their customers' business to push their thinking and take control of the sales conversation. They're not afraid to share even potentially controversial views and are assertive — with both their customers and bosses.

2. Challengers dramatically outperform the other profiles, particularly Relationship Builders.
When we look at average reps, we find a fairly even distribution across all five of these profiles. But while there may be five ways to be average, there's only one way to be a star. We found that Challenger reps dominate the high-performer population, making up close to 40% of star reps in our study.

What makes the Challenger approach different?
The data tell us that these reps are defined by three key capabilities:
Challengers teach their customers. They focus the sales conversation not on features and benefits but on insight, bringing a unique (and typically provocative) perspective on the customer's business. They come to the table with new ideas for their customers that can make money or save money — often opportunities the customer hadn't realized even existed.
Challengers tailor their sales message to the customer They have a finely tuned sense of individual customer objectives and value drivers and use this knowledge to effectively position their sales pitch to different types of customer stakeholders within the organization.
Challengers take control of the sale. While not aggressive, they are certainly assertive. They are comfortable with tension and are unlikely to acquiesce to every customer demand. When necessary, they can press customers a bit — not just in terms of their thinking but around things like price.
We'll discuss each of these capabilities in more depth in our upcoming posts, but just as surprising as it is that Challengers win, it's almost more eye-opening who loses. In our study, Relationship Builders come in dead last, accounting for only 7% of all high performers.
Why is this? It's certainly not because relationships no longer matter in B2B sales--that would be a naïve conclusion. Rather, what the data tell us is that it is the nature of the relationships that matter. Challengers win by pushing customers to think differently, using insight to create constructive tension in the sale. Relationship Builders, on the other hand, focus on relieving tension by giving in to the customer's every demand. Where Challengers push customers outside their comfort zone, Relationship Builders are focused on being accepted into it. They focus on building strong personal relationships across the customer organization, being likable and generous with their time. The Relationship Builder adopts a service mentality. While the Challenger is focused on customer value, the Relationship Builder is more concerned with convenience. At the end of the day, a conversation with a Relationship Builder is probably professional, even enjoyable, but it isn't as effective because it doesn't ultimately help customers make progress against their goals.
This finding — that Challengers win and Relationship Builders lose — is one that sales leaders often find deeply troubling, because their organizations have placed by far their biggest bet on recruiting, developing, and rewarding Relationship Builders, the profile least likely to win.
Here's how one of our members in the hospitality industry put it when he saw these results: "You know, this is really hard to look at. For the past 10 years, it's been our explicit strategy to hire effective Relationship Builders. After all, we're in the hospitality business. And, for a while, that approach worked well. But ever since the economy crashed, my Relationship Builders are completely lost. They can't sell a thing. And as I look at this, now I know why."
3. Challengers dominate the world of complex "solution-selling"
Given the first two findings, it might be reasonable to conclude that Challengers are the down-economy reps and that when things return to normal, Relationship Builders will once again prevail. But our data suggest that this is wishful thinking.
When we cut the data by complexity of sale — that is, separating out transactional, product-selling reps from complex, solution-selling reps — we find that Challengers absolutely dominate as selling gets more complex. Fully 54% of all star reps in a solution-selling environment are Challengers. At the same time, Relationship Builders fall off the map almost entirely, representing only 4% of high-performing reps in complex environments.
Put differently, Challengers win because they've mastered the complex sale, not because they've mastered a complex economy. Your very best sales reps — the ones who carried you through the downturn — aren't just the top performers of today but the top performers of tomorrow, as they are far better able to drive sales and deliver customer value in any kind of economic environment. For any company on a journey from selling products to selling solutions — which is a migration that more than 75% of the companies I work with say they are pursuing — the Challenger selling approach represents a dramatically improved recipe for driving top-line growth.
In the next post, we'll look at how Challengers teach their customers and how leading companies are equipping their salespeople to do the same.

Selling Is Not About Relationships