Due to global competition and advanced manufacturing technologies it is becoming harder and harder to sustain a competitive advantage by product alone. If you have a great product, the competition is likely to have an equally good alternative on the street in a wink of an eye and at a better price. So the question becomes how do you stay ahead of the competition, continue to be a preferred supplier, and maintain the desired revenue stream?
Ed O’Boyle and Craig Kamins at Gallup recently published an interesting article addressing just this question. They point out that providing great products and services is just the starting point for creating value in B2B relationships. Yet the Gallup analysis showed that most companies operate just that way.
Let’s explore what Gallup had to say in answer to our question and what a sales team would need to do differently to execute that answer.
Gallup introduces the concept of Engagement. Fully engaged customers are attitudinally loyal and strongly attached – they go out of their way to do business with you and won’t accept substitutes. This level of customer commitment is achieved because the selling organization does more than just deliver products and services to address needs – they help the make sure those product and services have a positive business impact for the customer.
Gallup reports “fully engaged customers deliver 23% premium over average customers in share of wallet, profitability, and revenue growth.” Yet, a typical B2B company has such an optimal relationship with only about 14% of their customers.
Is it desirable and feasible to develop such a partnering type of relationship with all your customers? The answer is “No”. On the other hand, should more companies consider building this level of relationship with more of their customers? Probably yes. So, let’s take a look at one aspect of that challenge – what would a sales force have to do differently.
Meeting this challenge requires the sales force to keep in mind that what Gallup is talking about requires developing trust, confidence, and credibility to a new and higher level.
In addition to doing a better job delivering the ingredients for creating loyalty, they also need to develop a broader and deeper business understanding of the customer. You cannot move from just providing products and services to creating business impact unless you have a superior level of information and insight about the customer’s business.
Four specific areas where a more comprehensive level of information and insight is required are:
- Future business goals and strategic initiatives
- Economics of the business
- Trends in the industry
- Impact of outside forces such as: government regulations, competitive shifts, and technology innovations
As the future unfolds it will be increasingly difficult to maintain the loyalty of key customers. If products and pricing models are the only two assets in the “differentiation bank,” then the likelihood of success is decreased. However, if you can develop a superior type of relationship with the customer, then the odds increase.
Like most things that work, creating customers who are brand ambassadors, requires substantial commitment of time and resources. The sales team is one place where making that commitment can pay off.
