Firing Your Customer?: 2 Customer Relationships Sales Should Ditch And Why The Customer Isn't The Problem

By Toby Reed

I find myself constantly having the same conversation with my team members, colleagues, and friends. The topic is relationships. The question is: “How do you know when to end a relationship?” For the purposes of this post I am going to focus on the customer relationship.

It is difficult to know when to call it quits with a customer relationship, especially when you are in sales. Most salespeople rely on the business, and the corresponding commission, generated from our customers to earn a living.  So deciding to cut ties with a customer seems sort of counter-intuitive. After all, you need to maintain customer relationships to grow your business right? So then why would I want to fire a customer?

When the Feeling is Mutual

You are right. I am not suggesting for you to go out and eliminate your entire customer base.The reality is there are many customer relationships that are positive, mutually beneficial, and worth spending the time to grow that can help your business thrive. In fact, those relationships are ESSENTIAL. But on the flip side, there are a fair share of business relationships we should not be involved with. Relationships that aren’t mutually beneficial, too time intensive for their corresponding return on investment, or lack a simple respect for you and what you bring to the table. These relationships, are the ones you should consider ditching. These customer relationships are the ones that can actually preventyou from growing your business.

Below I share with you 2 types of customer relationships that can adversely impact your overall business and tips on what you need to do to avoid them in the first place.

#1- ‘The Price Relationship’-You Are Regarded As A Commodity:

If a salesperson finds themselves in a customer relationship where they constantly provide more for less, or ‘defend’ their price against competitor quotes over and over, then they have been labeled a commodity by their customer. The salesperson in these relationships hasn’t been able to establish their value as a unique solution for their customer's needs. How do I know this? Because if they had, the ongoing customer conversations would not revolve exclusively around the “price” of their product, but instead the needs of their customer that have to be addressed to accomplish their business and personal goals.

Additionally, a respect for you (the salesperson) and what you bring to the table would be evident.  Instead, you will find yourself playing a game of Russian Roulette as a commodity player where the lowest price wins. Playing this game and appeasing the customer by reducing your price to keep the business simply reinforces the perception of you and your product/service as a commodity in your customer’s eyes. And while you may hold onto that piece of business in the short term, it is only a matter of time until either the relationship becomes unprofitable or someone with a cheaper price comes along and takes your business with them. In the end, spending too much time with these types of customer relationships prevents you from spending time developing positive, longer term, and more profitable ones.

TIP: Respect Your Own Value - Don’t Win On Price Alone -To avoid entering into these relationships in the first place you need to make sure you develop new accounts in the right way. If you understand your customer’s needs and develop a solution that can successfully address those needs you will begin to position yourself as a valued partner with your customer. Remember, people treat you the way you ask to be treated. If you discount your own value and what you bring to the table and win new business by simply being the lowest price ‘me-too’ option, expect to be viewed as a low-price ‘me-too’ provider. And expect to lose your new found business to someone in the future who is cheaper still.

 #2- ‘No Soup For You’ Relationship-Only Your Customer Benefits:

Just like in personal relationships, business relationships where there is mutual benefit tend to last longer. Normally, these types of relationships also share the common denominator of “respect” for one another. If you find yourself in a business relationship where you are doing all the “giving” and your customer is doing all the “taking”, this could be a key sign you are not in a mutually beneficial relationship. These relationships are bad because they eat up your time and prevent you from developing other profitable business relationships. These customers often have a high service need that requires large chunks of your time, but doesn’t offer you the opportunity to expand your service solution. In these relationships, your return on investment continues to diminish as you spend more time servicing the customer, and fail to grow your business with them.

TIP: Get Personal -As in my tip above, you need to earn your stripes with customers by helping them achieve a goal or fulfill a business need. 
But probably more important than that, you should get to understand your customer’s personal win/goals. When you demonstrate your desire to help your contact (customer) on a personal level and offer yourself as a resource not just for your customer’s business needs but for the customer’s needs personally, you are more apt to develop a better relationship.  As Simon Sinek the author of 'Start With Why' says, when you create an environment with someone where they realize you are looking out for them, it is highly probable that they will look out for you. Having that mutual trust and respect for each other as people is the foundation to building successful, long-term, mutually beneficial business relationships as well. Demonstrating you are invested in your customer personally is how those relationships begin.

Conclusion:

In truth, it is not always poor customers that need to be fired, but 

salespeople who need to do a better job upfront establishing their value in the customer relationship. Yes there are in fact truly bad customers you should not deal with out there, but all too often sales folks either lack the patience or the confidence to nurture healthy customer relationships from the start. We see an opportunity and assume the customer need is a lower price. We skip the discovery and collaborative solution generating process altogether. When we do this we not only miss the true needs of the customer and our opportunity to create value, but we simultaneously tell the customer ‘I am a commodity’. We tell them ‘I bring no value to the table’. We demonstrate that we are a ‘me-too’, low-price, commodity vendor and teach our customer to in turn treat us as one. This is where the poor relationship is born. The good news is that this is also the same moment in time that a great relationship can be born if you put in the effort up front.

As I said in the beginning, walking away from a bad business relationship is never easy. The best way to ensure you are not getting sucked into one is to make sure you begin the relationship the right way. Take your time, earn your customer’s trust by understanding not only what the customer’s business needs are but also understanding what your customer’s personal wins are. Then begin to earn their business by delivering solutions that address those needs. If you engage your new accounts in this fashion, you will have healthier relationships that last longer, are more rewarding, and offer you more time to grow new profitable relationships.

Good Selling!

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