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The Second Essential Competency:
Relationship Building - Eight Powerful Rules

Excerpted from: How to Excel at Distributor Sales by Dave Kahle

Copyright MMXIII, by Dave Kahle

More than any other type of sales, distribution sales people must be good at relationship building.

You see your customers more often, and for longer periods of time than almost any other type of sales person.

This means that you must build relationships that provide you a competitive edge over all of your competition.

Imagine this. You walk into a standing appointment with one of your largest customers. The receptionist greets you by your first name, and asks about your family. The main decision maker calls you right in, while one of your competitors sits in the waiting room. You visit together for about an hour, during which time he shares some information about new items coming up on the budget, and suggests you see one of the department managers who is having a problem.

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You discuss a new product line your company recently acquired, and he indicates that the prospects are good for them to use it. He suggests price levels which would make your new product line attractive to the account.

While you're in his office, he calls and makes two appointments for you -- one with the department head, and the other with the main decision maker for the new product line.

You decide to go to lunch together. As you walk out, you see the competitor sales person is gone. Over lunch, you don't mention business, but just talk about personal things. You genuinely enjoy each other's company.

That's what the fruits of powerful relationship building look like.

The result of your skillful relationship building is that you have earned your customer's comfortable preference. That's your competitive edge. With everything else being equal, you get the business. In a world where the distinctions between your company and your competitors are growing less and less clear to your customer, your relationship may be your only real competitive edge.

Often, the only reason a piece of business goes to one sales person or the other is the depth and length of the personal relationship. They like you. So you get the business. Relationship building, then, is a key competency for success in our difficult economy.

The overriding strategy is to make yourself important to your customers. What does it mean to be important to your customers? It means being seen by the customer as a difficult to replace, integral part of his business and his job. Doing so gives you value to your manufacturers, as well as to your customers.

When it comes down to the most basic values, do you know what a manufacturer really wants from you?

It doesn't matter how efficient your distribution systems are, nor how powerful your computers. Those are nice, but from the manufacturer's perspective, they're icing on the cake. What they really want from you is access to the customer. If you are important to your customers, you have more access to them than your competitor. And that's called job security.

The more important you are to them, the more important you are to your manufacturers. You operate as a middleman in an extremely powerful and effective way.

In order to earn this importance, you will have to implement the following eight rules for relationship building.

Eight Rules for Relationship Building

1) Give first.

Remember the law of reciprocity? It may be one of the single-most powerful laws that governs human behavior for sales people. The law simply states that people will act towards you the way you first act toward them. If you want good information and honesty from them, what do you have to do first?

In every meeting with a customer, try to bring him something of value. It can be an idea, like what someone else is doing with a product or service you offer. It can be a story about a new product, or a new program. It can be something you read in an industry journal, or a clipping from a trade journal that has an idea your customer can use. The important thing is to try, at every meeting, to bring something of value.

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As you consistently do this, a couple of things will happen. First, your customers begin to see you as someone other than "just a sales person." Rather, they see you as a valuable associate, someone who really understands their business and has their best interests in mind.

Next, they begin to look forward to your visits, knowing that you'll bring something of value with you. After a while, they'll take your calls graciously, and try to make time to see you.

Additionally, when you give first, it creates a subconscious debt on their part. After a while, they feel like they have to return the gift with a piece of business or competitive information from which you can benefit.

This rule has a corollary. If you're always committed to giving first, it implies that if you don't have something of value to bring, you won't attempt to see your customer. Never take up their valuable time unless you have a legitimate, valuable item (valuable from their perspective, not from yours) to discuss.

Respect for your customers' time gradually creates a respect for yours in them. After a while, they'll see you every time you ask because they know that you have something of value to discuss. Your reputation precedes you -- and that's a reputation you have consciously built with discipline and forethought.

2) Avoid failure.

Simple enough. But like most of the simplest, most basic rules, we often violate it.

My father was a sales person. Interestingly, he was a sales person for a distributor. I remember as a child spending the day with him. I was 8 or 10, and it was my first taste of distribution sales. I clearly remember talking to him after one of his sales calls. He said, "Your enemies don't buy from you."

What a simple observation. But what profound implications. Of course! Your enemies don't buy from you. So, whatever you do, avoid making enemies. Do just the opposite -- make friends instead.

Making enemies is failure. Don't get thrown out. Don't aggravate people to the point where you make them an enemy. Don't be so strong and so pushy that you make an enemy. Enemies won't buy from you. Avoid failure.

I learned about avoiding failure by failing. At one point in my career, I sold surgical staplers. At the time, this was a new concept for surgeons, and it had to be sold in a novel way. Our first task was to sell ourselves into the hospital operating room suite, and then we sold ourselves into the surgeons' lounge. There, we changed out of our street clothes and into greens. We hung around the surgeons' lounge, drinking coffee and waiting for the right surgeons to come in. When one would come in to change clothes to get ready for surgery, we would approach him and demonstrate the staplers. Then we'd say "Now doctor, if you would like to try this, I'd be happy to scrub your next case with you."

And we did. We took part on the surgical team, standing right next to the surgeon -- gowned and gloved and "scrubbed" like the others. At that point, we had an opportunity to sell our equipment.

My lesson came when I was a little too strong in one hospital. The Chief of Surgery said to the OR supervisor, "Get him out of here." I left and was not welcome back there because I made an enemy. I failed.

I learned that I must keep the door open no matter what. The long-term relationship is always more important than the short-term sale. No single deal is worth jeopardizing the relationship.

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3) Add to trust.

See people only when you have something worthwhile about which to see them.

We distribution sales people often get caught up in the activity and the regularity of our sales calls. In other words, we spend much of our time going through the motions, out of habit. For example, we may see a certain customer every Tuesday at 10:00 A.M. We mindlessly go through the motions.

To overcome this tendency, have a reason to see each person each time. Make sure you have something worthwhile about which to talk to them. If you don't, then don't see them. Bring something worthwhile every time so you build up trust. They know you will not waste their time. And, time is the commodity of our age. It's the most important thing your customer has. Respect their time, and they'll respect you.

4) Reduce the risk of every decision.

The biggest issue in the minds of your customers and prospects is risk. Whenever you present them with a decision to make, the biggest thing they're thinking about subconsciously is risk. It's not just the money, it's the social, psychological and emotional cost that is also at risk.

In order to see this issue from your customers' perspective, you need to calculate the amount of risk that you expect your customers to take when you offer them an opportunity to say "yes" to you. You can then work to reduce that risk. The lower the risk of the decision, the more likely your customer will say "yes."

Here's an illustration to help you understand this concept. Imagine that you are under orders by your spouse to pick up a package of disposable cups on the way home from work today because you're having friends over for dessert and drinks tonight. You stop at the local grocery store, and make a selection between brand A and brand B. You pick brand A.

When you bring them home, your spouse mixes up a pitcher of margaritas and pours one. The drink leaks out of the bottom of the cup and puddles on the counter. There is a hole in the bottom of the cup. You pour your drink into another cup and it leaks, too. In fact, every one of the cups you bought is defective.

What happens to you in this instant in time? What is the consequence of your decision? I don't know about you, but I would be the recipient of some negative emotion. That may be the most painful cost of your decision. But there are other costs.

You're going to have to fix the problem. If there's time, you'll have to run back to the store and replace the cups. So, in addition to the emotional cost, you must pay in terms of extra time and additional money. All because of your bad decision. You accepted that risk when you made your decision.

Here's a simple exercise to help you understand this concept. Draw a short vertical line. At the top of the line write the number 25. At the bottom, write the number zero. Now on a scale of 0 - 25, where would you put the risk of buying a package of disposable cups? It's close to zero.

At the other end of the scale, I have an adoption agency as a client. When a young lady is in a crisis pregnancy, and she's making a decision whether or not to release her unborn child for adoption, how big a risk is that for her?

Most people say that it's a 25. It's a lifetime of consequences for at least four people. That's a very high risk. The point of this exercise is that when you ask your prospects to say yes to you, they are accepting some risk. Each decision you ask of them carries with it a different degree of risk.

Imagine a typical prospect. Then think of the typical offer or decision you ask of that person. Now, put yourself in his shoes, and see the situation through his eyes. On the 0 - 25 scale, how much risk does he accept when he says "yes" to you?

Here's an easy way of calculating it. Just ask yourself what happens to that individual if you, or your company, messes up.

If the risk to that person is high, then you need to work to reduce that risk. If you want to build relationships, look at every time you offer something to your customer and ask, "How do I reduce the risk?"

The winners in the competitive game are people who provide the same product or service at less risk.

Reducing risk is a strategy for building relationships. If your prospect sees you as the lowest-risk source, he becomes comfortable with you. The relationship develops on the basis of this issue of risk.

5) Be remembered favorably.

Try to end every interaction you have with a customer on a positive note. And, that generally means with some kind of an agreement. When you get into this mindset, it's not difficult to do. For example, a customer may call with a backorder problem. You say you'll check it out and call back tomorrow. You ask, "Will that be OK?"

When he says "OK," you have reached an agreement and you have ended the interaction favorably. This constant positive ending is an important factor in building positive relationships.

Here's an example from my personal experience. I recently changed car insurance after 15 years with the same company. I made the decision on the basis of price. Although I was delighted with the service my previous supplier had provided, the difference in price finally became more than I could justify.

So I switched my business. Then I called my former agent and told her. In that conversation, she said she appreciated the reason I was switching and could certainly understand. She appreciated me as a customer and asked if there was ever anything she could do for me to please call. She then said if there was any way she could facilitate the transfer, please tell her how she could help. Finally, she said that if I ever had a question about insurance to feel free to call her.

You can imagine how I felt. I wish she would have reacted angrily, that way I wouldn't have felt so bad. But, instead, she ended the interaction favorably. Now I look for my new company to mess up so I can give her back the business. That's a great example of ending every exchange favorably.

6) Keep the relationship process moving forward.

Remember the chart showing the progression from "Suspect" to "Prospect?" Not only does that model provide a neat way to think about your job, but it can also be a working set of objectives that govern every meeting you conduct with customers and prospects.

Your job, and your objective for every meeting, is to move people ever closer in a relationship with you.

Once you set your mind on the objective of continually moving people closer and closer to you, you'll find countless ways to do it.

However, if you never crystallize that as an objective, your relationship building will be happenstance rather than directed.

7) Broaden the relationship to include your company.

A good relationship with a customer is larger than just you. It's a relationship between companies as well as between people. It's important to have a personal relationship, that's part of the strength of what a distributor does, but realize that the companies have to have a relationship, too.

Facilitate that broader relationship at every occasion. Whenever you can arrange it, bring your managers in to see your customers. And do the opposite also. Bring your customers to see your facilities. The broader the relationship, the stronger it is. The more your customers know you, the more comfortable they are with you, and the more likely they are to do business with you.

8) Operate with 100% integrity.

In my first professional sales position, I learned a powerful lesson: complete honesty is not only morally right, it is good business.

People deal with people they trust. Complete honesty gives people reason to trust you. Lie to a customer, and they'll likely never forget it.

But integrity means more than just honesty. Integrity for a sales person means that you do what you say you're going to do. You don't make promises quickly, you never promise something of which you're not sure, you never over- promise, and you continually under-promise.

If you under-promise, you're in the position of always being able to deliver more than what your customer expected. That's an extremely powerful long-term relationship building strategy.

Integrity means that you never knowingly recommend something to a customer that you know isn't right for him. Remember, the long-term relationship is always more important than the short-term gain from an individual deal.

Finally, integrity means that you never speak badly about anyone, including your cheesiest competitor. It's a funny thing about judging someone -- it always tells the person to whom you're speaking more about you than it does about the person who is the subject of your scrutiny. Talk badly about someone, and the person you're talking to wonders if you'll say the same thing about him when you're talking to someone else.

If you're going to build solid relationships with your customers, be someone who is worth their trust and their time. Integrity gives you that standing.

To implement the ideas in this chapter...

1. Think about each of your "A" accounts, and ask yourself how you can become more important to each.

2. Brainstorm some ways you can give first. Try to implement at least one item on the list every day.

3. Reflect on a time when you have jeopardized a customer relationship. What did you do to cause that situation? What lesson is there in that for the future?

4. Resolve not to see your customers unless you have something of value to discuss with them.

5. Every time you present a proposal or demonstrate a product, ask yourself how you can reduce the risk of that decision for your customer.

6. Resolve to end every interaction with an agreement.

7. Identify the key decision makers within your "A" accounts. Label each as a "suspect, prospect, customer, client or partner." Then, think about each, and identify the things that have to happen to move each to the next category.

8. Resolve to bring some of the decision-makers from one of your "A" accounts into your facility at least once a month.

Dave Kahle has trained tens of thousands of B2B salespeople, sales managers and business owners to be more effective in the 21st Century economy. He's authored nine books, and presented in 47 states and seven countries. To access Dave's training, insights and tools online, visit The Sales Resource Center. Visit www.davekahle.com to check out a seminar near you.
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