Competition, Cooperation, and Creating and Capturing Value

The great game of sales is a competition. It is a zero sum game with one winner and all other competitors necessarily losing. We compete with other salespeople and with other companies. What we are competing for is the opportunity to cooperate with our dream clients.

Cooperation Instead of Competition

The competition ends when a decision has been reached. We don’t benefit from negotiating and finalizing our agreements with our dream clients as if it were a competition. They don’t benefit either.

Treating this stage of the sales process like a zero sum game isn’t a healthy place to start a long business relationship.

If anything you receive in the negotiation necessarily comes as a loss in the value you are creating for your dream client, you aren’t long for each other. But is equally true that anything they receive in value should not come as a loss to the value you obtain by entering into the agreement.

We’re back to the old business relationships maturity continuum, and it applies to every business and every businessperson, large or small. Working together means making certain that you both benefit as much as possible.

Creating Value

Both your dream client’s company and your company should be better off for having agreed to cooperate and to do business together than if they hadn’t.

Your role in sales (and as the sales organization) is to create value for your dream clients. Their role as your dream client is to allow you to capture part of the value that you create. They are stronger for having chosen you, and you are stronger by serving them.

It cannot be any other way . . . at least not for long.

If you don’t create value for your dream client in excess of your cost, you will not long be providing them your goods or services. If you and your company aren’t allowed to keep some of the value you create in the way of profits, if you are worse off by serving your client, then you damage your company’s profitability, you generate increased costs of serving them, you suffer increaded complaints for not serving them well enough, and you risk your reputation being damaged by what they share with their community. You can’t—and you shouldn’t—serve them for long, either.

Your Dream Client Wants You to Profit

If your dream client is truly a dream client, they will also be far enough on the good end of the business relationships maturity continuum to know that serving them has to be profitable for you. They’ll want you to have enough profit to serve them properly.

A great client, and I am privileged to have some great clients, will make sure they do everything in their power to reduce your cost of serving them. They treat you like a partner, and they expect you to treat them like a partner.

No client wants to be taken advantage of, but mature business people want you to capture enough of the value you create so that you can serve them the way that need to be served, so that you can deliver all of your promises, and so you can reinvest in your own company’s ability to innovate and bring them new value-creating ideas.

As a salesperson, you have to create enough value so that no one will object to you capturing some for yourself and your company. If you claim more than you really create, you cause a situation where you will be required to compete; your dream client will start looking for someone else with whom to cooperate.

If you can’t keep any of the value you create, you need to find a better client with whom to cooperate.

Questions

To succeed in sales you have to compete for your dream clients. Do you carry too much of that competitive nature into negotiating the final agreements with your dream client?

How do you create the cooperative and trust-based relationship that you need to succeed for and with your dream client?

What are your responsibilities as a partner when it comes to cooperating?

Do you generate enough value to justify capturing your fair share? Do your dream clients begrudge you your fair share?

Why does your company need to be profitable? How does it serve your dream clients that you remain profitable?