How do you measure a relationship? Intuitively, originators in the commercial equipment finance and leasing industry usually measure their relationships by volume; and the vendor or end-user that produces the most volume is considered a top relationship. However, upon a deeper analysis, these relationships may not be the most efficient or even the most profitable relationships that an originator may have.
I recently spoke with an entrepreneur in a totally different industry. He explained that he doesn't seek to be the biggest player in his market. He focuses on quality, expertise, and reputation. He has large and small relationships. He offers discounts for large projects, but he never offers large discounts or sacrifices bottom line profits in order to brag about participating in a regional project. He recently bid on a large project and was not the highest or lowest bid. The large customer asked him to sharpen his pencil. They wanted his expertise but claimed that he was just too expensive. The seasoned entrepreneur explained that he could make double, if not triple, the profits on two or three smaller projects that would be more efficient, less time consuming, and better aligned with his capabilities. The entrepreneur was more than willing to win the deal at his original quoted price, was confident that his finished product would be superior to his competition, and was excited to complete the request in record time. But, as a strong entrepreneur, he was unable to reduce his quoted price. The large customer saw value in his product and services and was willing to pay for his expertise. Value won over price.
Large relationships are excellent. Additional volume is preferred.
Bottom line results are what matter. Build relationships with vendors and end-users that you can provide the most value and that are willing to pay for your expertise.
Survive - Thrive - Lead
This "Sales Tip" is provided by Wheeler Business Consulting.