- Preferred Vendor
- Solution Provider
If you want to reach the top tier, a Mentor to your best clients, you typically have to climb through all four previous stages.
Many companies are happy being in any of the four lower stages. But you need to understand what your relationship is from your client’s viewpoint, if you are in any of these stages.
Let’s have a look at each stage, and from there, you can decide what stage you want to be in.
These are quotation makers and order takers. In some industries, vendor is a perfectly acceptable term used to denote where someone falls in the supply chain.
You are viewed as a Vendor where your services and company reputation attract Requests for Proposals (RFPs), or similar bids. You’re almost always in reactive mode, waiting by the phone or your inbox to get involved.
You are mostly tactical, rarely strategic. Your main contacts are lower level managers such as the purchasing or procurement managers.
Often companies find themselves as Vendors when they are considered to be commodities. A Vendor only gets involved when the client is ready to evaluate commodity services, and exits soon after the deal is done.
Being a Vendor isn’t necessarily a bad thing; it depends upon you, your services and how clients perceive those services.
This is the the level where you become a steady, reliable supplier of products or services. You develop a few contacts apart from the purchasing or procurement manager in your account.
You’re considered a Reliable Source by lower management level contacts, if you consistently meet or exceed their expectations. You can be counted on to give them what they want.
In contrast to a vendor, as a preferred vendor, you enter the process just before a client is ready to evaluate services like yours, likely because you are on an approved vendor list already, which has the added bonus of providing a barrier to competitors looking for a slice of the pie.
You exit just after the solution has been implemented. Maybe you get a pretty fair share of the deals, along with the other suppliers.
You’re not dominant, but you have traction. Being a Source requires more interaction on your part, and it’s rewarded – much more so than a Vendor. But your main contacts are still the managers, usually within a specific department.
In both of these first two levels, you rarely, if ever, have any contact with VP level or higher. As either Preferred Vendor or Vendor, your margins are quite low, and you rely on volume to be profitable.
A larger part of a client’s fabric than the Reliable Source. This level takes on a strategic dimension; deeper and more rewarding. You become knowledgeable of the client’s industry and what makes it tick.
Being more proactive, at higher levels, gives you visibility of existing business problems. And you become a Solution Provider, helping even write their RFPs. And of course, you can guide it in the direction that best creates mutual value for you and the client.
As Solution Provider, your involvement expands, and your appearance in the decision process is longer. Sometimes you enter the process just before the client initiates a project, involved in the evaluation, proving, contract and implementation stages.
You exit after the measurement of results. You’re a valuable asset to your client, and you have every reason to feel pleased with yourself.
Generally, your margins increase as products and services are considered more valuable to clients. More importantly, your Account Manager and internal team become more valuable to your client.
At this level, it’s imperative to have strategic account plans in place to ensure you are working directly with your clients.
Above and beyond the services you offer, clients see you as a source of strategic planning assistance, for dealing with broader-based challenges they are currently facing.
You sometimes assist in the planning process, and often senior management calls on you, or someone in your company, to advise on issues they feel you give trusted counsel.
This level is where most professional service agencies end up. And while not quite the top of the ladder, this level gives you a say in how a client runs his or her business.
This is the hallowed ground. As Strategic Advisor – or Mentor – you work with executives to explore emerging needs and direction on a confidential basis, similar to a consultant.
In the context of the decision making process, you don’t enter or exit. You’re part of the circle and when the client and you identify issues together, you both assess a problem and create its solution.
Where do You Want to Be?
Now that we’ve described the various levels of relationship we see in account management, we can see how these map into involvement in the client’s decision-making process.
Clearly, being an Advisor carries major implications for Account Managers. But many B2B companies believe they’re already at the Strategic Business Advisor stage, until they realize a number of crucial things:
- How much time and effort it involves.
- Not all clients want this level of attention from you.
- You’re wasting effort with companies that do NOT want this level of attention, or who will not give you the ROI this effort needs.
This is when you tend to revise your opinion of the relationship. So having made those caveats, if you’re not one, how do you become the advisor?
You need to understand your client’s industry. When you develop a plan – it’s all about knowledge.
Knowing comes from understanding. Understanding comes from doing the homework, the research, the interviews.
Before you start planning, you need to know some things about a client. A few must-knows include:
- Markets & Segments
- Industry trends
- Market position
- Financial performance
But the key to being an Advisor is getting the client to invite you to the table when they are doing their annual planning sessions. If you are not invited, then you are not a true Advisor to the client.
So, don’t waste time trying to be the Advisor if a client doesn’t believe in them, or more specifically, doesn’t want you to be one.
Being at the Right Level for Your Business
For every level you move up in the relationship ladder, your are able to charge higher prices, because you’re perceived to be on a higher level by prospects and clients.
Want to learn how to move through the five stages? Or maybe just want to learn how to move up to the next level?
I’d be quite happy to share more about this with you in a short meeting. If you’re interested, please send us an email, and we’ll set up a time to go over the results.