The difference in quality of delivered services/products/whatever is essential in building good relationship with the customer, which can be leveraged in greater sales volume. I already hear you yelling at me “That’s obvious! Tell us something we don’t know.”
Well, maybe it is obvious but when I consider vast (and I mean vast) majority of organizations I know I see quite different model – putting more pressure/effort/resources on sales process brings greater sale volume, which can be leveraged to put more pressure/effort/resources on sales process and so on until we’re rich enough to buy Microsoft.
I’ve had several discussions about the subject, especially the quality part, but have never really considered the subject from the perspective of possible sales growth. Fortunately David Maister in his post about relationship plans and sales plans has already done that. David’s formula is simple: you build relationship by adding something from you for free. Strong relationships in the long run will result in more money. On the other hand building sales is “about getting straight to what the provider wants: assignments and revenues” but if it works as expected is in doubts. By the way, now I expect David is already looking for sophisticated tortures which I’ll suffer for drastically flattening his thoughts.
Anyway, I did some review about real cases with both approaches. Several examples.
1. A couple of projects with bunches of opened issues and regularly overrun resolution times. We invested a lot of time to clean the mess even though the industry standard (or competitive solutions in other words) is on the same low quality here. One customer said: “You’ve grown from the company which can make small not very important stuff to the one which can deliver mission-critical solutions.” Another customer hasn’t said much, they’ve just given us another contract.
2. Several years ago we had quite good contact between our salesmen and a customer. We were doing quite a lot of different things for them. Or I should say we were selling quite a lot of different things for them. Some of them were done too, some of them partially and some of them weren’t even started. OK, that was a bit below industry standard but the firm hasn’t even tried. It ended up with loosing reputation and soon the customer.
3. When I was support team manager I used to have a kind of informal contact channel with the best of our integrators (the best technical quality, not the biggest sales volume). They could contact me directly, skipping all those formal stuff, whenever they had serious issue. Somehow that worked perfectly as I wasn’t overflowed with piles of unimportant things and integrators knew they always have a backup. Months after I left the support team I was still hearing hither and you “What a pity you’re no longer in support.” That hasn’t brought us significant amount of money I guess.
4. I worked in a company which had average sales but very good engineering team and decent product. After company was acquired the new management brought a lot of investments into sales team. Profits skyrocketed. Growth was steady over 5 years or so. Sure the investments in engineering team followed soon, but the catalyst of success was a sales plan. Not a relationship plan. I think the company has some issues with the image, but profits are still high.
The set of images above is a bit mixed, as I don’t share David’s point that focusing on building sales won’t work well. It isn’t written in the stone. Generally it should bring profits in the short term. However, unless it is followed with hard work on relationships it will end up with some problems with reputation and image.
On the other hand working on relationships is really a safe play. Yes, it’s possible you spend some money on actions which don’t bring direct ROI, but you probably don’t spend bigger amount doing routine firefighting every time when emergency shows up. You deal with more content customers. Cooperation is easier. And at the end of the day net profit should be equal but your team is happier and healthier.