This question hounded me for weeks when I was leading the solution sales team in India.
One of my rising stars had been on to his clients for well over 12 weeks, without a whiff of any indication about their intention-I guess that got to him and he posed this question to me during out team meeting.
I asked for time and came back to him with my assessment. Let me share that with you.
Research conducted by Harvard and other independent institutions have established that clients clearly differentiate between valuable vendors while treating others like plug n play commodities.
B2B relationships basically fall into 5 levels. In this assessment I am taking the explanation from the lowest ( level 1) to the highest ( level 5) and tried to explain the “what” and “why” of the engagement, with appropriate examples
- Approved Vendor: “We are seen by the majority of our customers as a legitimate provider of the products or services we offer, but are not recognized for having any significant competitive edge over other alternative offerings. We therefore often compete on price, via discounting, as a key consideration to helping close a deal.” Example: Gateway is most often viewed as one of a number of vendors from which a company can buy reliable PCs, but rarely seen as unique.
- Preferred Supplier: “Based on our marketplace reputation/past dealings with our customers, we are normally seen as the preferred vendor for them to do business with. While competitors may offer alternative offerings, all things being considered equal we win the deal in the lion’s share of the deals over the competition.” Example: Salesforce.com has such a good reputation that when firms are looking for on-demand applications, the competition must create a significant advantage in the eyes of the customer to get the deal.
- Solutions Consultant: “Based on a specific set of product-related, value-add knowledge or services we bring to the table, our customers view us as not only a vendor, but a consulting resource on how to best use our products or services, as well. Because of this, during brief periods when our offerings may not be as robust or are more expensive than those of the competition, our customers will continue to buy from us because they consider the premium we bring to the table when making their final choice.” Example: MidMark sells a wide variety of products medical facilities use in their practice, AND offers specific advice on new ways that doctors can leverage those products to maximize revenues.
- Strategic Contributor: “Above and beyond the products and services we offer, our customers view us as a source of strategic planning assistance for dealing with broader-based business challenges they are currently dealing with. Based on this, we are regularly brought into business discussions that are above and beyond our products, to help the clients develop or implement key business strategies. This strategic focus often allows us to sole-bid deals, even though competitors may offer similar products.” Example: Hewlett Packard’s “Creatology” group which constantly identifies what other assets, besides the products that HP possesses, that the clients could leverage in their businesses – i.e. processes, relationships, intellectual property, etc.
- Trusted Partner: “At this highest level we are seen as a long-term partner whose contributions; products, insights, processes, etc., are seen as critical to the long-term success of their clients. Based on this, the occurrences of our clients seriously considering a competitive offering are next to nil.” Example: GE aircraft and Boeing, who co-bet their businesses on the mutual success of their long-term, multi-year relationship.