David Maister - Professional Business, Professional Life
David’s ResourcesAbout David
NEW! Browse my materials by topic of interest:StrategyManagingClient RelationsCareersGeneral

Passion, People and Principles

Fat Smoker Principles: Build Relationship Plans Not Sales Plans

post # 409 — July 25, 2007 — a Strategy and the Fat Smoker post

Virtually every company I meet says they have a strategy of growing their key relationships.

However, whenever I ask to see the plans of what they intend to do to build these relationships, it becomes immediately clear that what they have is a sales plan, not a relationship plan.

The difference should be (but clearly isn’t) obvious. A sales plan is about getting straight to what the provider wants: assignments and revenues. Sales plans, which are almost always aimed at a short-term impact, are filled of activities about “cross-selling’ – making more contacts and setting up CRM systems to ensure that coverage and frequency is adhered to.

I have no moral objection to this approach, except for the misappropriation of the word “relationship” as a proxy for the word sales. However, I do have doubts that this kind of approach will produce what the firms are looking for.

A relationship plan is what it says it is: a set of activitites designed to build and deepen an asset – the relationship. The theory is that, where there is a strong asset – a strong relationship bond – there WILL BE a (greater) stream of revenues in the future. But to get there, you must focus on activities which are not designed to generate sales, but to earn and deserve the relationship.

A relationship plan, to be effective, is all, about figuring out what you could do FOR this client (unpaid) to invest in the relationship, in order to predispose the client to use you more frequently (and for more interesting things) in the future.

A good “invest in the relationship” tactic passes three tests:

  1. It shows that you are willing to invest your own time to earn and deserve the relationship
  2. It’s done insuch a way that, by doing it, you get to learn more about the client
  3. It’s done in such a way that you get the chance to illustrate, not assert, that you can be useful to the client above and beyond the specifics of what you are working on now for the client.

Tested against these criteria, few firms (or individuals) have well-thought-out relationship plans. All they have are vague plans to go see someone in the hopes that a job will come out of it.


John Caddell said:

Hi, David,

As someone relatively new to consulting (after a 20 year career working for tech companies), I’m learning that things that are in the long-term best interests of a relationship and in the short-term revenue interest can be at odds.

For example, in the short run, it’s very tempting for me to try to make the client as dependent on me as possible, the better to entrench my position there, bill more hours, extend the engagement, etc. To do that, I would keep my knowledge close to the vest, not communicate candidly, not try to build the skills of the client’s own people.

In the long run, though, I’ve been in situations where individual consultants could not be let go because of the knowledge they alone possessed. It was never good for the company, and the relationship with the consultant sooner or later soured. After all, no one likes to be over a barrel.

So, I’m trying to keep this in mind with my biggest customer. Trying to bring my expertise to bear, but also operating with a high degree of transparency and sharing lots with the customer’s staff. And helping them prepare for the day where they will not need me anymore.

But it ain’t easy.

Regards, John

posted on July 25, 2007

Tom Gimbel said:

I agree with relationship plans and would like to add one more thought…salespeople who view themselves as salespeople are destined to lose business over time to salespeople who view themselves as business people. Your goal in the relationship has to be to understand what your customer, internal or external, truly does. If you believe your product/service adds value and you know it inside and out, then what you are lacking is knowledge of what your client truly does. Relationships, personal and professional, are built on caring about the other party over all..not just how it affects you.

posted on July 25, 2007

Greg Krauska said:

David, I think the word “relationship” on its own triggers a “Yes, of course I want that” reaction among customers and suppliers alike. But the only way for a relationship to build real value is when there is mutual exchange of value. So in addition to the supplier figuring out how to be more relevant, drive more impact at less cost and be more proactive, etc., the customer should well determine what they offer in return for the supplier’s to energy and assets. In the best relationships, this exchange of value is clearly understood by both parties.

posted on July 25, 2007

Wally Bock said:

I agree with Gred. I’ve always thought about building relationships with clients. And I’ve thought of selling as “relationship selling” with a nod to Jim Cathcart. But those three little steps were a “scales falling from the eyes” moment. Thank you.

posted on July 26, 2007

Stefan Töpfer said:

David, my client group – one to five people businesses – build primarily relationships. They often do not have a sales-plan, it is interesting to realize that. A personal relationship is what gets them repeat work from their clients.

The building of these relationships often takes place over lunch in the pub or a long chat in the office. Often SOHOs have very local relationships, within 30 miles around their place of business. This in turn makes easier to maintain these relationships.

posted on July 27, 2007

David Kirk said:

If you take a look at someone who is successful at getting new business, a fairly common characteristic will be ” lots of time spent with clients”. From this it seems easy to draw the cause-effect conclusion that spending time with clients = new business.

Only problem is, we are only looking at those people who are successful. Plenty of consultants who are unsuccessful at getting new clients in the door and repeat business from existing clients also spend time with their clients and prospects. They just don’t necessarily get what they should be doing while there.

  1. Understand the client
  2. Understand the client’s problems
  3. Understand the client’s perspectives
  4. Understand the client’s personal and organisational goals
  5. Demonstrate your usefulness to the client

And oddly enough none of this requires the glossy pamphlet outlining your past achievements and why you are the best firm. Just spending time in front of clients doesn’t mean there’s a relationship.

I think I am basically agreeing with David M here, but also highlighting how “sampling bias” when looking at who is successul makes it easy to get warped idea of what it takes.

posted on August 1, 2007