There is a hierarchy of sales relationships. Where your relationship stands in the hierarchy will determine your level of success, and it is the customer, not you, who decides where you are on the hierarchy.
What I will share with you is attributable to Robert B. Miller and Stephen E. Heiman in their book, “Successful Large Account Management.” However, there are many variations on this in other books on sales and selling.
Level one in the hierarchy is commodity selling. At this level, the customer sees you as a supplier — nothing more and nothing less. The customer thinks your products and services are the same, or relatively the same as your competitor and you have no differentiated value.
At this level your position is weak and you have virtually no control over what happens. The customer operates under one simple rule — buy cheap. You are indistinguishable from the competition, and your only bargaining chip is price.
Level two selling is known as good product. On this level, the customer sees you as a “good” supplier of products and services. Your products might incorporate the latest technologies or the strongest set of features.
This position is better than commodity, but still needs improvement because good products are eventually matched by competitors. No product advantage is forever. When competition matches you, you are back to a commodity level with the client.
At level three in the sales hierarchy, you are a purveyor of good service. Customers perceive you differently because of the services and support you provide. This is important on several levels. First, competitors may have a difficult time matching your offerings. The longer you are different, the stronger your position. Second, customers can translate service and support into value in several areas, including personnel, time and energy investments they may not have to make. This builds your differentiated value beyond just the value of your product.
Studies have shown that 80 percent of businesses and salespeople operate at one of the three levels already discussed. The highly successful companies and salespeople, the top 20 percent, evolve their relationships to level four and level five on the hierarchy.
Level four selling provides solutions. Here customers attribute credit for help in actually running aspects of their financial lives or businesses. At this level, you understand your client’s problems and objectives. You generate ideas for addressing their ongoing concerns. You present to the client recommendations that produce a significant return on investment.
When you achieve this level, you are thinking as your customer would think, not as someone trying to sell something.
At level five, you are a partner with the customer. Your recommendations expand beyond just what you do or what you offer. You consider any issue the customer faces, and offer help wherever you can.
When you are in this position, the customer is a friend and confidant, not just a customer. You have a relationship with someone, and you offer value competitors cannot even see, let alone considering offering.
Evolving sales relationships has immediate benefits in decreasing competition and reducing price sensitivity. Most importantly, your mindset evolves and you realize there are not business relationships and personal relationships. There are only relationships. And in strong relationships, you have customers for life.
Ken Cook is managing director of Peer to Peer Advisors, an organization that facilitates business leaders helping each other. You can reach him at kcook@peertopeeradvisors.com.
