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Copyright © 2007
by the NADL
Journal of Dental Technology.
All rights reserved.

May 2008

Customer Relationships and Value Propositions
By Hector Cadena

I've written a lot about customer relationships in the past. But a good relationship with a customer or a prospect doesn't guarantee automatic or continuous success for any new business negotiations. A good relationship is only a doorway that gives you the opportunity to grant you the access that you need in order to probe for information and formulate a value proposition in order to better present your case. The better the relationship, the better the information that you will have access to, the better the feedback that you will receive in order to formulate a better value proposition, which should all lead to you being able to present a better, stronger case for your customer to select you, your firm and your offering.

So at this point, there's no further point in discussing your relationship to your customers anymore. I hope it's safe to assume that you understand the value of building strong customer relationships. So let's address how you can best utilize the access that a good relationship with your customers and prospects present.

Selling is all about information. The better your information, the better the chance you have of making the sale. If your information about your customers and prospects is better than your competitor's information, then it stands to reason that your chances of winning more sales are also better than your competitor's chances. That is because if you are trying to make a fair profit then you need to be able to justify your price and the way that you justify your pricing is by creating value for your customers. The more that you understand your customers, your customers buying motives, your customers business, your customers markets and your customers competitors, the easier it will be for you to create a value proposition. And you cannot possibly get all of this information without first having a strong relationship with your customers.

Let's talk briefly about a value proposition and what it means. If you are in sales and you don't understand what the term "value proposition" means, then I suggest that you do some more research in that area. In fact, if you are involved in any facet of business, from accounting to operations, it's imperative at some point that you understand a little bit about creating value propositions. But that is fodder for another time.

Anyway, value propositions are ways that you can build up your product and/or services in the eyes of your customers and prospects by other means besides just lowering your price. One example of a value proposition can be that your product has lower long-term maintenance costs than the offering of your competitors, which means a higher Return on Investment for your customer over the lifetime of your product. This has the effect of long-term lower costs and higher savings overall to your customer.

There are lots of other ways of creating value propositions, but that conversation is outside the scope of this discussion. Suffice it to say, that as a salesperson, your job is to provide your customers with optimum business solutions to their problems and to do it in such a way that you can make a reasonable profit for you company. Unless you want to just keep playing the pricing discount game, value propositions are your only other alternatives.

So how do you decide what your value proposition will be? That's where your relationship comes in. Through that door, a strong customer relationship is the access that you will need in order to gather enough information to formulate a strong value proposition. Most customers won't just come right out and tell you where their pain is. In fact, without an existing relationship, you might not even get in the door at all. But a strong relationship opens the door for an honest exchange of dialog. The dialog provides information for you to find the customers "points of pain". Without knowing the points of pain, you cannot formulate a value proposition for your product offering and you are left to assume that only by lowering your price can you bring any value to your prospect and his firm.

Once you find their points of pain, you customize a proposition that emphasizes the value of your product offering that addresses that pain. Your relationship with your customer should also provide you with enough feedback so that you know if your solution is addressing the correct points of pain. If your feedback is positive, then you are on track to making the sale, if it's not so positive, then you need to revisit your solution and address the shortcoming by tweaking it some or by scrapping it entirely and starting over. Either way, your relationship needs be strong enough or you won't get sufficient feedback. The stronger your relationships, the better your chances are for success.

About the Author
Hector Cadena is a 25 year sales veteran with a successful track history of building strong relationships with his customers. Cadena shares his proven sales knowledge with others on his web site at http://www.hectorcadena.com

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