Is relationship building the key to customer loyalty?

Harvard Business Review (HBR) has just published the second in a four-part series featuring findings from a study by the Sales Executive Council which analyses the productivity of over 6,000 sales representatives.  5,000 business customers were also surveyed as part of the study.  The findings challenge some long-standing beliefs about what drives an effective customer engagement strategy.

The research identifies five ‘types’ of sales representatives (relationship builders; hard workers; lone wolves; reactive problem solvers and challengers).  The findings suggest that the most successful – by far – are the ‘Challengers’.  They are assertive and unafraid to take control of sales conversations.  They are capable of teaching their customers, not focusing on features of benefits but bringing insights in their conversations with customers.  They also have finely tuned understanding of what drives individual customers.  Not only are the Challengers the most successful, but Relationship Builders constitute only 7% of the high performers identified in the study.

If this finding is surprising, the survey also finds that where the sales experience itself is of a high quality, this is more likely to drive customer loyalty than just about anything else, including brand, product or price.  If the sales representative is one who can challenge the customer and bring new insights, then this can have a real impact.

And if you are surprised so far, wait till you get to the section about how asking customers “What keeps you up at night?” is ‘the worst question you can ask’!

The first and second part of the series are available on the HBR blog.

(Thanks to @Thepastamaster for alerting me to the story)

About Val Skelton

I am the editor of Information Today, Europe. On the main site, we cover news and publish feature articles by information, research and knoweldge practitioners and thought leaders. On this blog, we aim to cover other topics of interest to our readers.

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2 Responses to Is relationship building the key to customer loyalty?

  1. Editor, Driving Retention October 19, 2011 at 7:16 pm #

    HBR doesn’t try to indicate that relationship building isn’t key to building customer loyalty, but rather that “it is the nature of the relationships that matter.” Both B2C and B2B relationships are invariably P2P… individuals who desire to trust – at least on some level – the business (or sales rep) doing the selling. And that trust has to come from somewhere. Often that trust comes through new ways of thinking provided by “Challengers,” but this fact in no way diminishes the importance of relationships as they pertain to customer loyalty.

  2. Jack Dempsey October 28, 2011 at 8:30 pm #

    Thanks for identifying this super articles. Both provide opportunities to dig in and assess sales.

    Part 1 – This is an excellent blog and should be circulated to sales managers and sales trainers throughout the country. The
    selling environment today is certainly very difficult. Techniques that worked over the past 5 years, past year or even yesterday are ineffective today, yet so many of the old skill sets remain in active use.

    Salespeople often confuse activity with effectiveness.
    If I have all these great relationships and work hard, that’s all I’ll
    need to do. I’m active. I’m busy. The truth is that “relationship building” and “hard work” can also be great hiding places. Sometimes we need to step back to honestly assess how truly effective our activity has been from an actual sales success standpoint. Yes, we make some sales through relationship-building, and yes, we make some sales through
    other kinds of hard work. However…

    Here are some questions to consider: Are we achieving what is possible? Is our “success” actually underperformance? How many sales are we missing because of our old skill set?
    Because of the downsized and flattened nature of today’s corporate structures, companies need the skill set of a challenger. A challenger can be a strategic business partner without necessarily being on the payroll. Companies need all the help they can get in today’s competitive business environment – an effective challenger can help unlock the gap between current sales performance and what is achievable.

    Sales leaders – you must call out of all those great hiding places and old skill sets in your sales workforce and zero in on what is effective and ineffective.

    Sales trainers – you must ensure that you are training the right skills and the right mindset. Rehashing and reinforcing
    yesterday’s skills and behaviors will be costly for your organization.

    Part 2 – What keeps you up at night?

    Excellent insight – I had never thought about the impact of
    that simple question. Customers need their sales representatives to be strategic business partners. The goal of many salespeople is simply to generate a lot of sales to their customers.

    Salespeople who can transition from merely a generator of sales to a strategic business partner with their customers will ultimately produce more business at a higher level of profitability. Salespeople can do this by focusing on the customer’s true needs rather than on what can be
    sold to that customer.

    Salespeople who invest their time and energy in becoming a
    strategic partner with their customers will position themselves for success.