Transforming B2B Customer Relationships - Part 2: How to Turn Around Difficult Client Relationships
In this final part of our two-part series, Sterling Chase MD Steve Eungblut introduces the Sterling Chase INnOVATER Relationship Model, providing a simple 7-step approach that sales and service people can use to transform the value of their most important B2B customer relationships. The model is proven to accelerate the turnaround of key client relationships that are problematic, loss-making or simply underperforming, regardless of the size of the relationship or the markets your teams sell into.
In my previous post, I outlined five common mistakes that supply-side organisations make when managing customer relationships. In this post, I introduce the Sterling Chase INnOVATER Relationship Model, which covers seven steps that you can take to systematically work with both the client and your own people to turnaround difficult and loss-making relationships.
The model can be used to transform the performance of any B2B customer relationship that is delivering less value to either party than it could or should deliver.
The Sterling Chase INnOVATER Relationship Model
1. Insight
To affect a turnaround intervention in any client relationship that is problematic, declining in value or constantly underperforming, you should always start off by gaining the relevant insight. This insight should take the form of evidence-based facts, gained from all of the stakeholders in the relationship, detailing what’s going well and what’s factually wrong with the relationship.
By seeking evidence-based facts and an understanding of what’s gone, or is going, well with the relationship, you will force a balanced perspective and, hopefully, start to get communications back to an adult-to-adult level, so long as you remember to ask insight-gathering questions in an adult-to-adult way.
When seeking to understand what’s gone wrong, you shouldn’t seek or offer blame for any of the issues that the client (or your own company) has been experiencing. Instead, you should ask for the facts, listen actively, empathise, take detailed notes, probe and check your understanding by playing back (without paraphrasing) the key points of what you’ve heard to ensure that you have a true understanding of:
- The problems that exist now and their implications on both companies.
- The pressures, trends and events (e.g. market changes, personnel changes, budgetary constraints, etc.) that represent (or have represented) important contextual factors in the relationship in the past, now and potentially in the future.
- The specific opportunities and threats that these pressures, trends and events represent for the relationship.
- The implications of failing to respond to these opportunities and threats over a specific timescale.
Gaining this insight will help you to identify not only the cause of the problems that may currently exist between the client and the supplier, but also the impact of these problems, along with other opportunities or threats that may be on the horizon. After all, there’s no point in fixing problems as they look today if the world is going to change tomorrow.
This technique of gaining deep and wide contextual insight into the problems, opportunities and threats (past, present and future) will put you in a much better position to prioritise, group and categorise the key issues that need to be fixed, the threats that need to be averted and the opportunities that could be seized to turn around and transform the value derived from the relationship.
You might be surprised to find that, even after one session with each of the key stakeholders, the mood of the relationship will change if you have empathetically and professionally gained a deep understanding of the problems within their given context.
2. Needs
Once you have gained an insightful and contextual understanding of the problems, opportunities and threats that either exist or loom over the horizon, as seen by both sides of the relationship, you should then use a similar approach to understand where each side wants (and more importantly, needs) to get to in terms of their strategic and operational desires and goals for the relationship.
If possible, this ‘needs definition’ should be carried out in the same sessions as when you gain insight, so that the context is still fresh in the mind. Alternatively, you can replay a summary of the first session’s output before probing the needs.
As part of this step, you should ask people from both sides of the relationship to shift their perspectives from describing and explaining problems to sharing their thoughts on ‘what good looks like’ for the relationship, both now and in the future. If they reverse the problems they have already listed (e.g. “we need to fix problems with delivery”), probe the problems in greater detail and ask what good should actually look like (e.g. what the service should look like when the delivery problems are fixed).
By seeking to understand the strategic and operational needs and objectives from both sides of the relationship, you should be able to find common ground and align the needs of both organisations. Crucially, it will also start to shift (or reframe) thoughts and discussions towards positively working together on a journey that will result in a better outcome for both sides.
3. Ownership
When you have understood and aligned the needs of both organisations, you should (initially) take personal ownership for turning around the relationship and making the strategic and operational needs of both organisations become a reality.
Make it clear to both sides that you are committed to taking the relationship on a journey. Of course, it might be difficult to convince both the client and people within your own organisation that you can turn the relationship around if it seems doomed to failure. However, taking ownership, being bold about what you want to achieve with the relationship and maintaining a positive mindset can make a real difference.
Make it clear to both sides that you are committed to taking the relationship on a journey.
As well as being bold and maintaining a positive mindset, you should be realistic and highlight the risks that the journey is likely to present along the way. You should also have the courage and conviction to make the changes happen. Now is not the time for posturing or making false promises.
If you’re not committed or don’t take ownership right from the start, you’ll find it much harder to get others to take ownership further along the journey. You have to show leadership, even if nobody else will step forward.
4. Vision
Next, you need to get all of the key stakeholders and influencers to buy into a clearly defined vision that they have helped to articulate. If you’ve completed steps 1, 2 and 3 well, you should be in a great position to share and communicate a vision for where you (and all of your key stakeholders) want to take the relationship.
It’s crucial, right from the start, to get and to keep key individuals on both sides of the relationship aligned to a common vision of where you want to get to. If you’re going to go on a journey, it’s important that all of you are clear about where you want to get to.
You can also help to accelerate the journey towards the vision for the relationship by reminding everyone of why the journey needs to be made, i.e. the implications of no changes being made and the opportunities for both organisations that will be taken advantage of along the way. Whether you are in sales or service, your main function at this stage is to ‘sell’ a vision for change.
5. Action & Allies
Once you have developed insight into the context of the problems in the relationship (and the needs of both sides), taken ownership for turning the relationship around and sold your vision for change, you must take action and develop a strategic plan that will drive the necessary change.
You should then seek senior sponsorship, in terms of a commitment, to champion the successful implantation of your strategic plan to take the relationship forward. You need to get the key senior decision makers and influencers on both sides of the relationship to buy into your vision and the key actions that need to be taken to fix the relationship. With any change initiative, you have to get sponsorship from a group of influential supporters from all levels as early on as possible along the journey.
…seek senior sponsorship to champion the successful implantation of your strategic plan to take the relationship forward.
Since most senior decision makers and influencers in large organisations are very busy in their own roles, you may need to convince them that you will carry out (or get people on the front line to carry out) all of the actions required to fix the relationship. Meanwhile, you also need the seniors decision makers to throw their weight behind your plan, make the right decisions at the right time and allocate the resources you need as an ongoing priority to realise the shared vision for the relationship.
Gaining the ongoing support of key individuals from both organisations for realising a shared and common vision is critical to your success in improving B2B relationships, regardless of whether they are growing or declining in value.
It’s also wise, if possible, to get senior people to support your plan for a relationship before problems arise or, at least, before they get out of hand. As the old saying goes, it’s easier to fix a roof when the sun is shining. Creating a common vision for where you want to take a relationship while things are going well will make it much easier for you to avoid, or deal with, any problems should they arise in the future.
When you have gained senior sponsorship for your plan, you should be in a good position to take the relationship to the next stage of the journey for achieving value restoration and creation.
6. Building Trust through Execution & Value Creation
The next step towards transforming the value of any relationship involves gaining the trust of individuals within both the buying and supply-side organisations. To achieve this, you need to deliver and execute in line with your commitments. Once people see that you are making progress and starting to show some improvements, they will start to trust you to go all the way.
Make sure that you measure and communicate any successes, but don’t ignore the failures that are bound to occur. Just make sure that they are balanced with the successes and put in the context of progression along the plan. Failures may mean that elements of the plan need reviewing, rather than meaning that the whole plan is a failure.
By demonstrating measured progress and building trust, you will benefit from a customer that is more committed to realising your vision for taking the relationship forward. Building trust will also help to get your own people to be more committed to executing your strategy with a greater focus and willingness to support you in reaching your vision.
7. Recognition & Reinvention
Once you have built trust through the execution of your plan (in line with your commitments), it’s crucial that everyone involved gains recognition for the value that has been created and added to the relationship.
Getting and giving recognition for improvements to the relationship on both sides will assure people in both organisations that your plan is working. It will also give further encouragement to your sponsors and other key people who you need on your side to continue to support the strategy for creating additional value from the relationship.
When you have received and given recognition for improvements on both sides of the relationship, you should begin to think about the next most important level of value (from the perspective of both organisations) that you can create to reinvent (i.e. transform) the relationship between the two companies.
Reinvention (i.e. achieving transformation and taking the relationship to a different level) requires renewed insight, a reassessment of the needs (in light of the progress that has been made) and a review to ensure that the vision for the relationship is still relevant and strikes a good balance between being sufficiently stretching and realistic.
Hence, the INnOVATER Relationship Model represents a perpetual cycle of continuous stakeholder engagement to deliver incremental improvements and stepped increases in value that take both sides on a journey towards realising their vision of ‘what good looks like’ for the relationship.
In Conclusion
Difficult relationships can be frustrating and cost both the supplier and customer dearly. Although difficult and loss-making relationships can pose a big threat to the supplying organisation, they can also represent an important opportunity for change and transformation. At the end of the day, the options are limited to doing nothing (and losing money and good people over a prolonged period of time), terminating the relationship (and letting your competitor walk in and be seen as the saviour), or showing leadership by going on the ‘hero’s journey’ of turning the relationship around.
If you can successfully turn the relationship around, you will be rewarded with newfound loyalty and the opportunity to up-sell and cross-sell new services. Once you make progress, the transformation and results can happen very quickly. In our experience, a problem with a customer relationship should always be viewed as an opportunity to up-sell and cross-sell to deliver higher quality (and higher value) solutions.
Sterling Chase has over 10 years’ experience of coaching sales leaders and teams from across the world, helping them to turnaround difficult and complex client relationships from a diverse range of industries and marketplaces. If you need help to quickly turnaround your organisation’s B2B customer relationships, give us a call on 0845 371 3099 or send an email to [email protected].
