July 3, 2017 Ted Bauer

Does relationship selling actually work?

Everything is about relationships, right? We always hear that, especially now. A lot of the “thought leaders” raking in the nice speaker fees talk about relationships constantly. And we know that solid relationships can advance our careers and fulfill our lives (personally).

If you add all that together, it seems like relationship selling would work pretty well. Isn’t all sales kind of about relationships? Isn’t this the magic elixir that you need to super-charge your sales? A focus on relationship selling?

Not so fast! Read this before you hire your next relationship seller.

What “relationship selling” usually means

If you hire a sales principal (either internal or outsourced) who promises you that he’ll focus on relationship selling, this is what it commonly means:

  • He will sell to people he has pre-existing relationships with, but not necessarily your ideal customer profile
  • People end up buying from you because of the relationship and not necessarily the value of the product
  • Again, the sale is driven by relationship as opposed to buyer persona

There are a host of problems here.

Some of the main relationship selling problems

We know from Matt Dixon in The Challenger Sale that 5.4 decision-makers are usually involved in the purchase process. (He’s actually ticked that up to 6.8 in recent years.) Similarly, research from Bain has shown that companies reaching a $5B valuation typically have 14 levels between the lowest employee and the CEO.

Because of this stakeholder complexity, you actually need to sell to buyer persona — selling to relationship gets you a few quick wins, yes, but it doesn’t get you long-term, recurring business. First of all, the relationship cog could leave the company. Second of all, when the sale is on relationship and not product value, the chances of renewing the contract when it’s over (1 year, 18 months, etc.) are not good. Other stakeholders will enter, assess the value, and decline the renewal option.

After those quick wins — after the relationship selling contact list is done — can you work a market strategically with relationship selling? It’s very challenging. Even if the sales principal has been in a specific vertical for 20+ years, eventually the lack of focus on buyer persona and ideal customer profile and his lack of value based selling to unknown people far outside his comfort zone will dry up the potential leads.

In fact, as Matt Dixon has also argued, selling is not about relationships.

So what is selling about?

Here’s the ironic part. Most effective selling is about developing product-market fit, message-persona-fit, and figuring out how to overcome the common buyer objections. (Losing the status quo.)

Now, someone with a relationship selling background probably has enough experience in the industry/vertical to help you develop value proposition and messaging. They can be a great value-add in that way.

So while they can help you develop what you need to sell effectively, their relationships can’t be the backbone of your sales strategy. That’s not scalable and won’t lead to predictable revenue. It’ll just lead to a few quick wins off buyers they have a long, drunken, golf-infused history with. That’s nice in the early stages, but does nothing for you long-term.

Beware relationship selling. Sounds nice on face and the packaging seems good – everyone likes relationships, but for long-term business growth, it’s not the right approach.

 

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