Sales from a Customer Viewpoint - The Three Buckets

Recently, our VP of Sales had the unique opportunity to speak candidly with a strategic sourcing executive at one of our very large customers. Before you dismiss this as just another article on dealing with purchasing managers, consider that this sourcing executive is responsible for managing vendor relationships where his company spends tens of millions of dollars annually. This is not a typical purchasing manager. This is a seasoned professional who has seen just about everything, so getting some time with him was a real treat. And what he said changed the way we view our customer relationships.

In his view, there are three “buckets” in the strategic vendor/customer relationship.

The first bucket represents the existing business that the customer transacts with the vendor partner. What are they buying now? What kind of money is being spent? Is it good business for both parties? Do the problems that originally drove the decision to buy the products or services still exist? Is the product or service still relevant to the customer? Are the customer’s users still happy with the existing products and services? These are questions that should be addressed in an ongoing dialogue with the customer to ensure that they remain a loyal and satisfied customer.

Blog continued below . . .

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You can and should spend time with the customer talking about their current relationship with you. Growth can easily occur here. Maybe they want to add incremental business. Staff can turn-over. Maybe there is a training opportunity and chance to increase overall satisfaction. You might discover an under-utilization issue that can also increase revenue and/or customer satisfaction.

The second bucket represents the customer’s current initiatives that involve your products or services and may have near term sales cycles associated with them. Maybe they are expanding and need to duplicate existing products and services from an existing location to a new location. Or maybe they have asked you to speak with them about an upcoming project where your products or services may have a strong fit. Whatever the case, bucket two is the customer’s “today” priorities where they may be able to leverage your existing relationship. If you are delivering on bucket one, you may be invited in to discuss these new initiatives.

The first question you should ask yourself here is whether or not you know what your customer’s current initiatives are. Here’s how I found out recently while speaking with one of our customers. He had asked us about our product direction and we had obliged by providing him with a product road-map presentation. Towards the end of the presentation and after some great dialogue I asked him the following, “Brian, you’ve been great about hearing where we are headed from a product standpoint, but none of that really matters unless that matches up with your key initiatives for 2011. Can you give us a quick overview of what those are?” He was happy to oblige and told us all about their focus for the year. There were several projects underway and a few where our services were a perfect fit.

More importantly, there was a particular initiative where Brian had no idea that we had a product that was an exact match for his requirements. Without asking, we would have never been invited to participate in the project and could have lost out on a very lucrative deal. Your customer has a view of what your company does that may not always be 100% accurate. By listening and understanding what their key initiatives are, you have a chance to insert yourself where there is a fit – even though the customer may not have known there was.

The third bucket represents the products and services that you, the vendor, want to present to the customer. While these may not be a strong fit with customer’s current initiatives, there is a great match from your perspective. For example, maybe you have been providing payroll services and now you’ve got a new offering around dental benefits. While they may not have an initiative focused on that, it is a natural extension of your services and would be a great fit for the customer. Or what about a creative ad agency that now provides web design services? Whatever the offering, bucket three are those product offerings that you can’t wait to tell your existing customer about, even though they haven’t shown a demand for the product or service in the past. As a sales rep it is your responsibility to sell new products and your existing customer base provides the most fertile ground. Bucket three is obviously critical to your success.

In the mind of the purchasing executive, if you spend all of your time on bucket three, you’re out. You have to earn the right to talk about bucket three by delivering on buckets one and two. If all you do is pound your existing customers with new product offerings that may or may not matter to them, you have undermined your credibility. This is the rep that spends more time talking than listening. Customers don’t consider them a business partner because they are constantly bugging them about all their new stuff and seem to care less about how the existing business is performing. And if you think about it, it makes sense. What currently dissatisfied customer is interested in hearing all about your new products and services when you’re not delivering on your current commitments? The same question can be asked about bucket two – why would they include you in their key initiatives if you’re not delivering in bucket one? Again, you have to earn the right to talk about the bucket three initiatives because they are your initiatives at the moment, not your customers’.

Now that you have a better understanding of the customer/vendor relationship from the customer’s viewpoint, make it actionable. Here’s how.

Contact one of your best customers – maybe one that you take for granted. Ask for a one-hour meeting. Tell them that you want to start having quarterly business reviews. Here’s a high-level agenda:

1. Our current business.
2. Your key initiatives and how we may fit.
3. New products and services.

My team has tried this approach recently with great success. It provides a framework for a conversation that is very meaningful to the customer, provides great insight in to their top priorities, and gives the rep permission to talk about new product offerings. We have seen some really great opportunities emerge as a result.

Good reps are all about bucket one; great reps are all about buckets one and two; top reps are about all three. Manage buckets one and two well and earn the right to talk about bucket three. From there making your numbers will come much easier.

*NOTE* Many of you participated in a poll regarding a backpack or a briefcase. The results of the poll can be found in the post, "I'm Going on a Sales Call and I Don't Know What to Carry."