If you're one of Ron Kelly's regular customers, you probably know that he's 35 and has a wife named Michelle, a 9-year-old son named Andrew, and a German shepherd named Bones. You know that he majored in journalism and poly sci at SIU (that's Southern Illinois University) and was supposed to attend Northwestern's law school, but instead came to work at CDW (that's Computer Discount Warehouse). You know that he bleeds red and black for the Chicago Blackhawks.
You also know that he knows as much, if not more, about you.
Kelly, an affable account manager, is a master at relationship-based selling, which is CDW's specialty. It's the nonsales sales call: two friends catching up before eventually turning to a little business. Customers love it. "He's my sales rep, but he's also my friend," says Todd Greenwald, director of operations for Heartland Computers, which sells bar-code scanners. "Most of the time we don't even talk about price. I trust Ron."
Despite competing in a highly volatile industry against thousands of local rivals, CDW has managed to become a high-tech heavyweight in the 20 years since founder Michael Krasny started the business at his kitchen table. The company, based in Vernon Hills, Illinois, outside Chicago, now sells around $5 billion worth of computer equipment and services a year.
CDW is a middleman. It buys from the likes of HP, Microsoft, IBM, Apple, and Sony (pretty much everyone but Dell), and sells primarily to corporations but also to schools and government agencies. Those customers could buy directly from a manufacturer themselves or shop around and find a better price. But CDW wins them over with selection, speed, and service. It offers more than 80,000 products, ships more than 90% of its orders the same day, and acts as the de facto IT department for many of its 400,000-plus small-business clients.
While sales have been growing steadily, this is a grueling business: IT prices continue to drop, margins continue to narrow, and finding and keeping customers is more important than ever. The sales philosophy at CDW grew out of Krasny's belief that "people do business with people they like," as posters throughout the company remind the 1,880-member sales force. Plenty of sales organizations preach this truism. But CDW acts on it as few organizations do, particularly ones this big. In surveys, its customers consistently give CDW top marks and say they see it as a long-term partner. The number-one reason for such loyalty? The one-on-one relationships with account managers, customers say. Heartland's Greenwald even cites CDW as a model for his company's sales staff. "They're not just selling but getting into people's lives," he says.
What's particularly impressive is that, for the most part, the interaction occurs over the phone. Despite the lack of face time, CDW account managers forge close ties. One customer invited his CDW contact to his wedding. Kelly and Greenwald share Blackhawks season tickets. It's not uncommon to find customers and reps whose partnership has outlasted job changes, budget cuts, and marriages. "I've had customers who have been laid off who still call me at home," says Hayden Beadle, an account manager for nine years.
Of course, these relationships don't just happen. "There's a methodology," says Harry Harczak, executive vice president of sales. CDW's customer-management software, compensation, training, and culture are designed to encourage unusually close and long-lasting partnerships with clients. John Edwardson, the CEO of CDW and the former head of United Airlines, likes to point out that account managers get more training than some pilots: six weeks of orientation, then six months of sales training in CDW Academy, then another year of monthly training sessions in the "masters' program."
New hires start with the basics, the traits that make account managers successful: enthusiasm, empathy, and responsiveness, to name a few. They eavesdrop on calls and learn unwritten dos (use the customer's name frequently) and don'ts (don't lead with price). But there is no script. "We never say, 'This is what you want to say,' " says Tom Jay, a sales trainer at CDW Academy. "We say, 'This is the principle. Use your own touch.' "
New account managers are reminded to be patient yet persistent. They hear about salespeople who courted customers for months before making the first sale that unlocked a multimillion-dollar account. "It takes a while to build a relationship with people," says Jay. "It takes getting on the phone every day, not because it'll pay off tomorrow, but six months from now."
Edwardson says the key is letting account managers "own the business." They decide the tone, the pace, even the profit margin, since they have some leeway to set prices. The approach lets them entice new customers with low prices and gradually make up the difference over time as they gain a greater percentage of the IT budget.
The relationship isn't based solely on being likable. It's grounded in helping customers succeed. Account managers think like the customer and try to anticipate problems. For instance, before storms rocked Florida last summer, some account managers emailed clients there with battery and backup-storage solutions. "It's easy to fall into the trap of being an order taker in sales," says Shelly Troka, who runs orientation training. "Instead of just sending a purchase order, we want to ask, 'Why are you buying the router?' That's how you identify customers' needs."
But ultimately, the business revolves around lots and lots of phone calls, like one in early October between CDW's Beadle and Deborah Neff, an IT administrator at American Municipal Power-Ohio. The business part of the call — details about digital cameras that Neff was considering — could wait while Neff regaled Beadle with a story of how her PDA recently broke.
Three years ago, when Beadle tackled the AMPO account, Neff had a longtime local vendor, but she wanted a backup. She began testing Beadle with small orders. He came across as genuine and patient, not slick or pushy. He asked insightful questions. He was a good listener. He heard about the car Neff bought over eBay and about her sick cat. Because he proved himself to be conscientious and reliable with a sliver of her IT needs, he earned her
trust, and consequently got more and more orders — color printers, laptops, a $10,000 plotter. What was once a $10,000-a-year account has grown more than tenfold. Beadle and CDW have replaced the old vendor. "Sometimes I'll present a problem I'm having: 'This is driving me nuts, Hayden. Got any ideas?' " says Neff. "And he always does." Does Neff think of him as a salesman anymore? "Never," she says. "He's my business partner." That's a leap any sales rep would love to make.
Chuck Salter is a Fast Company senior writer based in Chicago.
A version of this article appeared in the January 2005 issue of Fast Company magazine.