Who Owns the End-User Relationship?
For decades in the promotional products industry, business owners and salespeople have disagreed on who exactly owns the client relationship. This generally comes to light when a salesperson chooses to leave one distributor company for another. In this edition of Salt and Pepper, Kirby and Bill take sides on this “hot topic."
Pepper - Bill Petrie
In our industry, we continually stress the importance of building client relationships – and rightfully so. When end-users have thousands of options in which to acquire the exact same products, one of the legitimate differentiators is the salesperson/client relationship.
Think about a real world example in a different industry: Financial Services. The products that one financial advisor sells is typically very similar – if not exactly the same – as that of their competition. Over time, a relationship is created with a financial advisor that supersedes the company that employs them. One day, the financial advisor decides to move from company A to company B. One could choose to stay with the company; after all, it would be easier as no one likes to go through the hassle of setting up new accounts and filling out forms. However, once a relationship has been formed with the person who shares a common vision for a financial future, the decision to follow the financial advisor to a different company is a no-brainer.
From a relationship building perspective, our industry isn’t any different. The salesperson is the one who, over time, builds, maintains, and owns the differentiating relationship which, in turn, creates client loyalty. To be certain, the company provides critical resources necessary to build that relationship. However, it’s the salesperson that the end-user will always identity as the key reason for why they make purchases where they make them.
While companies have tried to restrict this ownership of the relationship by requiring salespeople to sign non-compete clauses as a condition of employment, the end user is the ultimate decision maker. Time and time again they decide to follow the salesperson who has created value rather than simply stay with the company who invoices them. They, correctly, view the salesperson as the conduit of the relationship and not the overall company.
In short, relationship is king and the salesperson owns the relationship.
Salt - Kirby Hasseman
Anyone who knows me knows that I talk about relationships a lot. People still buy from people they like, know and trust. So Bill is right to address that in his well-reasoned argument, but business is also about money. So we need to consider both sides of this as we look at this issue.
First, let’s talk about the money. When a new sales person is brought into a company, there are very real resources (read: money) spent on them. The best promotional companies spend dollars on training the new team members. They take the time to work with the new team members and get them up to speed on the way the company goes to market. If this person is new to the industry, this takes on an even bigger task. We all know that you don’t learn this industry overnight.
But the cost doesn’t stop there.
There are samples and cards and promotional materials and, yes, even SWAG! There are real costs when a new team member joins. And the costs still don’t stop there!
There are costs today that did not exist 20 years ago in business. Companies have technology costs, cell phones, Internet, laptops, research costs, internal support team costs and more. These all exist today (often at the expense of the company) so that the salesperson CAN develop said relationships. So though it is sometimes distasteful, companies need to protect themselves.
Second, let’s talk relationships. We talk a great deal about the relationship between the salesperson and the client, but what about the relationship between the client and the company?
After the investment and time and training, where is the value of that relationship seen? Sometimes sales people have a pretty myopic point of view on where the value in these relationships lies.
As with most things in business, the road goes both ways.
Where do you stand on this issue? Have you had a salesperson leave? How did you handle the transition? When a salesperson leaves does that business relationship stay with the company, or leave with the salesperson?