Chapter 14 Building Long-Term Partnerships (Note: Continuation of five stages of relationships from Chapter 13)

Stages Of A Partnership (Introduced in Chapter 13) Awareness Exploration Expansion Commitment Dissolution

Exploration Set The Right Expectations Be aware of each others expectations Long-term relationships are built by making an honest presentation of the product’s capabilities and eliminating misconceptions prior to placing the order Monitor Order Processing The salesperson is responsible for delivering on time Electronic data interchange (EDI)- computer-to-computer linkages between suppliers and buyers for information sharing about sales, production, shipment, and receipt of products Critical step in developing a partnership

Exploration Internet of Things – the ability of devices and machines to talk to each other IOT is used by bars to monitor kegs of beer! CRM – Customer Relationship Management is very helpful in any number of ways to secure and maintain strong relationships

Continued Ensure Proper Initial Use Of The Product Or Service Salespeople should help customers understand how to use the product and realize the full potential benefits Customer service departments should be installed Follow Up After a sale, a thank you or a check up should take place Salespeople should regularly follow up accounts to stay in touch with any changing needs or possible problems Follow-ups help promote opportunities for securing references

Continued Make Personal Visits One of the most expensive forms of follow-ups Can be extremely productive Personal settings often stimulate trust Telephone Efficient means of two-way communication Mail Form letters or thank-you cards are encouraging Image of dependability and customer oriented

Continued Handle Customer Complaints – (See Exhibit 14.2 – P. 377) Critical to developing goodwill and maintaining partnerships Set a clear understanding of product expectations Disappointment comes from (1) the product performing poorly (2) being used improperly (3) terms of the sales contract not being met

Continued Openly accept customer problems and offer possible solutions Encourage The Buyer To Tell Their Story Openly accept customer problems and offer possible solutions Determine The Facts Keep an open mind, determine the cause, develop a solution Offer A Solution The customer desires quick action and fair treatment and wants to know the reason for the action

Continued Questions that affect the action to be taken: (P.379) What is the dollar value of the claim? How often has this customer made complaints? How will the action taken affect other customers? The solution must be clear Follow Through With Action Helps re-illustrate the company’s customer satisfaction image Always try to be prompt and keep the customer informed of the actions taking place – (see p. 375)

Achieve Customer Satisfaction Monitor customer satisfaction and perceptions, some buyers may be hesitant to voice their concerns Customer satisfaction is the most important reason for reordering at this stage in the relationship

Expansion Generating Repeat Orders Selling opportunities increase with higher levels of trust Generating Repeat Orders Be Present At Buying Time Know how often and when the company makes decisions Catalogs and specialty advertising items help keep the seller present in the buyer’s mind Help To Service The Product Increase customer satisfaction through routine maintenance and repairs Up-to-date service manuals and service mailing lists provide the buyer with extra support

Continued Provide Expert Guidance Salesperson usually prospers only if the buyer prospers Many firms have developed a team approach to provide guidance and suggestions Provide Special Assistance Salespeople are in a unique position to offer many types of assistance to the buyer Services above and beyond are always memorable

Upgrading, Full-Line & Cross-Selling Upgrading (also called up-selling) Definition: convincing the customer to use a higher-quality product or a newer product Emphasize during the needs identification phase that the initial decision was a good one, but needs or technology have changed and the newer product fits the customer’s requirements better Full-Line Selling Definition: selling the entire line of associated products Help the buyer realize the synergy of owning or carrying all of the products in that line

Cross-Selling Definition: similar to full-line selling except the additional products sold are not directly associated with the initial products Special training is necessary, but trust is already established so it shouldn’t be as difficult as selling to a new customer

Commitment There is a stated or implied pledge to continue the relationship Preferred supplier- supplier is assured of a large percentage of the buyer’s business and will get the first opportunity to earn new business - Preferred suppliers can be distributors or manufacturers (P.385) The expansion stage continues during the commitment stage

Commitment Example – Types of relationships with suppliers – DaimlerChrysler *Solo exchange - once *Coordinative – Annual Contract *Selective partnership - integrated *Strategic partnership - alliances

Commitment Note that all of the following continue to take place during the commitment phase: *Upgrading *Full line selling *Cross-selling *Handling complaints

Securing Commitment To A Partnership Commitment Must Be Complete Devote the resources necessary to satisfy the customer’s needs and also anticipate needs All employees must be empowered to handle the needs of the customer

Commitment Communication Actively seek to communicate during times other than selling or solving a problem It is important to encourage direct communication between similar functional areas Corporate Culture Definition: the values and beliefs held by senior management Culture shapes the attitudes and actions of employees and influences the development of policies and programs Some type of fit must occur between a buyer’s and seller’s cultures Difficulties may occur between international partners

Continued The Salesperson As Change Agent Definition: a cause of change in the organization Often requires change in both the buying and selling organizations Two critical elements to consider about change: Rate of change- how quickly the change is made Scope of change- the degree to which the change affects the organization

Commitment Champions Definition: (advocates or internal salespeople) work for the buying firm in the areas most affected by the proposed change and work with the salesperson to make the proposal successful They help persuade the firm to change, but also help implement the change once the decision is made A keen knowledge of the product is important Positioning The Change Salesperson examines needs and wants of various constituencies and positions the change for the greatest likelihood of success Positioning a change may determine who is involved in a decision

Commitment Determining The Necessary Resources Customer needs might be beyond the salesperson’s expertise Expert advice may be needed from various departments Assess the situation and determine what resources are needed to secure the buyer’s commitment Developing A Time-Based Strategy Set a strategy for the proposed change and formulate a strategy against a time line -the strategy is an outline of planned sales calls, with call objectives -the time line gives estimates on when each call should occur

Causes Of Dissolution Limited Personal Relationships Develop multiple relationships within an account Different champions can be selected for each proposal Failing To Monitor Competitor Actions There will always be times where an account is vulnerable to competitors Changes in personnel, direction, and divisions Monitor competition at all times Analyze benefits of competitors, product offerings, and selling strategies

Dissolution Failing To Monitor The Industry Falling Into Complacency Missed opportunities due to change Falling Into Complacency Definition: assuming that the business is yours and will always be yours Important to perform at the same level as what was provided initially

Dissolution Conflict Occurs for different reasons, such as: *Conflicting organizational policies *Conflict between customer’s departments *Poor purchasing policies – can help with this – takes skills – bring in own people

Avoiding Conflict Start with a clean product description Define authority roles, e.g. change orders Realize small unresolved complaints can lead to the loss of a HUGE client. See textbook – P. 398 Consider using CRM software to track complaints, e.g. NetSuite or Microsoft Dynamics

Resolving Conflict Seven Steps – P. 390 Acknowledge loss of trust Take responsibility Gain support – save face, gain agreement Put bad experience in context of whole relationship Shift focus from blame to solutions Implement solution Move on!

Questions?