David Cummings on Startups

Sales – Percent Relationship and Percent Product

Written by

David Cummings

in

,

People buy from people they like — we all know that old adage. All too often people purchase inferior products even after reviewing the superior product. Yes, there are reasons like price, functionality, implementation timeframe, etc that drive purchasing decisions but people underestimate the importance of the relationship in the sale.

My guess is that the relationship with the prospect is 70% of winning the deal and the product details (features, price, etc) is 30% of winning the deal. The relationship really is that important. Some companies win a number of deals because their brand and marketing muscle open the door for relationships to begin. Companies that are market leaders get 10-100x more publicity than the second place vendor, and thus get in the door even more.

The next time you win or lose a sale ask yourself how you did on the relationship building side of the equation. Was it better or worse than you had hoped? How important was the relationship in winning the deal? Almost always when I talk to sales people that just lost a deal they down play the importance of the relationship.

People buy from people they like, especially with complex sales — it’s never going to change.

What else? What are your thoughts on the percent of the deal attributable to the relationship and the percent of the deal attributable to the product?

Comments

4 responses to “Sales – Percent Relationship and Percent Product”

  1. Kevin Avatar
    Kevin

    My only add on for consultative inside sales, I might put emphasis on rapport vs. relationship

    Regardless, 100% agree — proof point is that I have consistently seen lost reason codes from sales – “price” and “product” and win reason “relationship” BUT I rarely see it the other way around? It is difficult for someone in sales to say…”I lost because I wasn’t able to establish trust and rapport”…the trick is to identify when a relationship wasn’t established…here are my three ways to test sales:
    1. How many phone conversations did they have? Difficult to build relationship over email alone
    2. We’re we 3rd bidder? Client is already educated and evaluated options…sales person has to be really good at that point in building relationship
    3. If we lose, can the salesperson be able to get feedback as to why we lost? If they established rapport they at least get a call back vs…”they won’t call or email me back”

    Reply
  2. asteinb Avatar
    asteinb

    Relationship is certainly part of it. More specifically, it’s “Do you understand my role and business well enough to make us more successful?” Rapport, relationship, being easy to work with, etc all help you get to that point.

    Reply
  3. Matthew Avatar
    Matthew

    I prefer “People don’t buy from people they don’t like”. Saying it the other way always makes it sound like any friendly shuckster can navigate a complex sale! 🙂

    Reply
  4. Beata Avatar
    Beata

    I agree with you on the very basic level since it is one of those sayings that we are “born with”… BUT if the sales person can only build good human relationship without succeeding in solving the problems of the customer (being really valuable to them) then I don`t think that the relationship would be for the long-run. Little disclaimer – the desired ratio of human relations vs. solving problems depends on the context and industry. In Croatia, it is too much about human relationship and see where it got us 😦

    Reply

Leave a reply to Kevin Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More posts