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Is the Internet putting an End to Relationship Selling?

Sales, is is known as one of the oldest professions and for some cases not much change for thousands of years. Traders once ventured across the seas, across deserts and mountain ranges to obtain goods to bring back to their local markets. hot Then the industrial revolution of the 19th century started to alter the production of goods. Factories started to pump out products at an alarming rate that easily oversupplied the local markets. So, companies began to develop sales teams to build out their distribution network and go out to the customer.

In 1874, what is now the Canadian Professional Sales Association (www.cpsa.com) was formed to organize traveling sales professionals for the purpose of negotiating discounts on their travel which at that time was done mostly by train. The turn of the century brought us the automobile bringing even better access to customers. Everything was relationship selling. We knew our customers and they knew and depended on us to bring them the latest and greatest offerings.

As we made our way through this century, technology started to make an impact on the way we sell. We began to reach out and touch through direct mail, telesales, then fax and eventually e-mail broadcasting. Companies found with these technologies they could pitch products and services to hundreds, thousands and now even millions of customers and prospects with a few mouse clicks and keystrokes. but sadly today these technology tools are found the hands of stammers who continuously bombard us with offers most of us really don’t care about. All this technology that once seemed so productive has started to push us farther away from customers and eliminating many of the personal relationships we once had. we now conduce certainly more in less time and we can talk to hundreds of customers and prospects in a relatively short period time.

The truth of the matter is we seemed to be attacking our prospects and customer with technology in our attempt to stay top of mind. What recently witnessed at complete change in direction when one of my clients was asked to participate in an online auction. if you have witnessed one of these events Then along came the Internet a reversal of fortune for many sales organizations. In a very short time things have changed drastically. The Internet gave buyers more information than they ever had before along with new sets of buying options. There is no longer a dependency on a supplier sales people as an only source of buying information.

In fact, customers can surf the web and download all the current product information and pricing they need from suppliers web sites from around the world. In many industries they can also go to third party sites owned by associations, publications or industry experts to access industry news, product reviews and comparisons on your product and your competition. Or even web sites where they can anonymously post their requirements for competitive bids or participate in industry specific auctions.

This could very well be the End of Relationship Selling as we know it today. Your sales force in the future may be bidding on opportunities from unidentified opportunities in cyber space. This will be especially true for the commodity type suppliers. Chances are if you don’t add value the customer will not need you.

Several times in the last year I have met with commodity type suppliers who “dream an impossible dream” and look to build relationship selling models with their customers and prospects. From now on the customer will dictate which suppliers will get to have these coveted high value relationships.

The following are examples of relationships with suppliers:

The high value supplier, these are companies who the customer feels is important to have a close relationship with. For example, when I was president of a software company I wanted a high value relationship with my professional suppliers such as accountants, lawyers, bankers and PR firms. We felt their input was very valuable in growing our business. Also, suppliers of our phone systems and computer systems who we depended on a daily basis to keep us up and running. And I almost forgot Tim Horton’s Coffee Services whose beverages made many a deadline achievable.

A good example of our mid value suppliers would be our printers and graphics suppliers who handled our brochures and support materials. We wanted to meet them, get to know them and have input in major projects, but for commodity type jobs we would always look for 2-3 quotes.

Low value suppliers were companies that supplied us with office supplies, photocopier and long distance services. Prices ruled our decision making in these areas and if we could buy these items online we did so.

A good example of an industry moving from a high value relationship supplier to a low value, low touch supplier is the Encyclopedia Industry. Traditionally they had a national sales force calling directly on homeowners. Their selling model was based on getting in front of a family that fit their buying demographics and showing them the quality and value of their product, then to get the family to invest hundreds or even several thousands of dollars for their educational product.

First, along came the PC computer with the built in CD ROM. Families could now purchase a CD ROM encyclopedia for under $100 (many computer systems were purchased with encyclopedia CDs as part of a free software bundle). This really ate into the profit margins of the high value relationship supplier’s product. In fact, it got to a point where you could buy an entire computer system with the free software bundle for less than the price of the hard cover version of some encyclopedias. Fast forward a couple more years and along comes the Internet, and the free online encyclopedias. Now a world of knowledge was available to this same family for the cost of Internet access. This all lead to the extinction of the encyclopedia sales person. These publishers laid off their field sales forces and began to publish their books for free on the internet. Their plan is to have you come and read the publication online, view their advertisements and buy other products and services from their site. And if you choose to do so you have the opportunity order right on line. Or call a 1-800 number to order a beautiful set of encyclopedias for your home. And guess what, no salesman will ever call!

So in your industry how will your customers now and in the future perceive your value?

In order to tell if you have a high value, high touch relationships with your customers you should be able to answer yes to the following: Do you have a personal, trusting relationship with your customers? Are you considered part of the team? Do they look to you for solutions to their organization’s problems? Or is your relationship one that is more of a mid-value supplier where customers have a personal relationship when they want it? Do they look to you for solutions on specific projects and may have the same relationship with several suppliers? Or are you considered a low value supplier where they desire no relationship with you? Do the give you as little information as possible? Do they see no value in supplier opinion and continually shop you on price?

No matter where you sit today in the buyers’ eyes, it is important to look forward and see how your customers will buy your type of offering now and in the future.