On Monday, I posted about strategic customer relationships in “Do Your Customers Value You?” In that post, I present the observations of the experts at CSO Insights that there are five levels of customer relationships:
- Approved Vendor
- Preferred Supplier
- Solutions Consultant
- Strategic Contributor
- Trusted Partner
The higher the level (5 being highest), the greater the value you are to your customers.
That post received one of the most interesting comments that I’ve gotten to this blog. (And that’s saying a lot, because I’m convinced that you guys are a brain trust when it comes to selling.) For convenience, I’m going to quote the entire comment verbatim, followed by my own comments:
I think the concept is right, but the way it is described here is too simplistic because it ignores who the purchasing decision maker is at each level. The higher you go on this scale, the narrower your direct sphere of influence becomes, and the less long term security you have.
If you are selling commodities at level 1, then you have to compete with other commodity suppliers, usually through a tender process run by a procurement function that represents the whole company. Thus, you have surety of short term supply, but no surety at all once the contract period expires. However, you do have the surety of staying in the game as long as the customer survives.
At level 3, you tend to be providing goods and services to key parts of the customer organisation, working alongside knowledgeable staff members, as a peer. It is these knowledgeable staff members who value your contribution. But, they who also have the power of veto if somebody else comes along who is more valuable to them.
At level 4, you have a direct sphere of influence with a few middle or senior managers; say in one division of the customer organisation. Management politics tends to result in collateral damage, and you may be it!
At level 5, your relationship is almost entirely with executive management, and your tenure is only as long as the executive who trusts you, and therefore sponsors you, is in the organisation.
I worked for three years for the CEO of a retail company, as a trusted advisor. Then the CEO left, to head up a charitable organisation that he has a particular interest in. Trust is a very personal thing, and it was not automatically transferred to the new CEO, who’s reaction when he saw my name on executive team briefing papers was, “Who is this guy?”, and “Why is he here?”
So level 6 has to be, “Get your name on the organisation chart, as a direct report to whoever your sponsor is”. Even then, your strategic tenure is fragile.
In my view, “Onoropu” has a point — but only to a point. Strategic relationships (levels 3, 4, and 5) do depend more on personal contact than customer relationship that are more commodity in nature (1 and 2). And I agree that there’s a real danger of losing influence if those personal contacts lose power or leave the company.
However, I also believe that it’s up to the sales professional to build a wide enough circle of contacts with the account so that a reorganization or departure of a key person doesn’t wreak havoc.
The problem with the “trusted advisor” anecdote is that onoropu clearly thought of himself “working for the CEO” rather than working for the success of the entire company. As such, he made himself vulnerable in the event of the CEO’s departure. If he had build up a network within the entire organization, everybody who got asked “who is this guy?” and “why is he here?” would have answered: “Gosh, that’s Onoropu and he’s really valuable because…”
Furthermore, Onoropu made a major mistake in not having the departing CEO provide a personal introduction to the incoming CEO, ideally with just the three of them present. That way, those two dangerous questions would never have come up.
Of course, that advice is easy to give and difficult to implement. Onoropu’s final paragraph subtly expresses the biggest downside to strategic relationships — they take a lot of time and effort. So much, in fact, that a single account relationship can start looking like a full-time job.
I’m not sure there’s an answer to this dilemma, short of cloning yourself and putting the clones to work on multiple accounts.
Anybody else have some thoughts on this issue? Are strategic accounts worth the extra hassle?
