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Think the Customer Matters Most? Consider Your Entire Portfolio of Relationships

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Thu Aug 25 2016

Think the Customer Matters Most? Consider Your Entire Portfolio of Relationships
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Are a salesperson’s relationships and behaviors with customers the most important determinants of successful performance? The answer to this question might not be what many have been led to believe. 

In the past, salespeople and sales managers have noted (correctly) that prospects and customers should be the most important focus of their sales effort because they make the final purchase decision. In other words, the customer represents the constraint regarding whether a sale will be made. If they are on board, a deal gets made. Otherwise, no deal. Simple, right? 

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The challenge to this way of thinking comes from the fact that our business environment has increased in complexity to the point where a customer or prospect may no longer have the final say in whether a purchase will be made. Modern salespeople must now manage an entire portfolio of relationships with a variety of stakeholders to ensure their success. While this is especially true in business-to-business settings, it can also be observed in the business-to-consumer realm. 

Consider a simple example of a residential real estate agent: Janine is a realtor—a salesperson—helping a couple purchase a new home. She spends a lot of time understanding her customers’ needs, wants, and budget. She shows them listings online and takes them to visit properties that end up on their short list. The couple decides which house they like best and are ready to make an offer. How much of a commission has Janine earned at this point? That’s right—nothing! At best, she has reached a necessary, but not sufficient, condition for closing this deal. 

In addition to “selling” the customer, Janine also has to navigate relationships with other key stakeholders—namely, her internal business team and external business partners. 

Her internal business team includes those working in Janine’s company who help support her selling effort. These could be other salespeople who fill in for her if she gets double booked, marketing personnel at her office who assist with getting a property highlighted on the company website, or administrative workers who help process paperwork so Janine can focus her time on selling activities. 

Her external business partners include those outside Janine’s company who work with her to serve mutual customers. For example, she may need to leverage relationships with loan officers to work out financing options, home inspectors to expedite their services for a time-pressed customer, or contractors to identify post-purchase renovation options on a property. 

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So even after the customer is sold, Janine relies on these other individuals to actually close the deal. But how much of an impact do each of these groups have, relative to customers, on Janine’s (or any salesperson’s) sales performance? 

I explored this issue in a Journal of Marketing paper. My fellow researchers and I wanted to know, among other things, how predictive influence directed at each group (customers, internal business team, and external business partners) was of actual, objective salesperson performance. We collected data from multiple companies working in different industries, and the results surprised us! 

Our results show that customers are not the most predictive of salesperson performance. Both the internal business team and external business partners have a stronger impact on salesperson performance. In other words, the customer does not appear to matter most in complex modern business relationships. Again, selling the customer represents a necessary, but not sufficient, condition for driving salesperson performance. These other stakeholders must also be effectively sold, and doing so appears to have a larger impact on actual performance. 

So what should you do with this information? Here are a few ideas to try: 

  • If you are a salesperson, take care not to fall into the trap of being overly customer-centric. You have to do a good job selling to and managing relationships with customers and prospects, but keep the overall relationship portfolio in mind as you go about your day. Are you setting aside time each week or month to establish and strengthen relationships with those inside your company? Are you doing the same for external business partners? Individuals in these groups have the potential to provide you with what we sometimes call social capital, which can have a big impact on your sales performance!

  • If you are training new salespeople, make sure that in addition to detailing how to influence customer relationships, you also make it clear that they need to manage relationships with, and seek to influence, external business partners and internal team members. In addition to teaching a sales methodology and providing details about your industry and competitors, discuss the wisdom of building and managing relationships with these noncustomer stakeholders. Doing so may prove extremely valuable in the future.

  • If you are managing a team of salespeople on an ongoing basis, make sure that you are encouraging and monitoring their activities with external partners and internal team members, in addition to customers. Are you allowing salespeople time to build relationships with others in the office, or are you always rushing them out the door to get in front of customers and prospects? Make sure that your managing approach isn’t leading them to focus solely, and detrimentally, on customers. 

Please feel free to share your experiences in the Comments section!

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