BusinesstoBusiness Selling: Developing and

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Chapter 11 Business-to-Business Selling
Developing and Managing the Customer Relationship
Prepared by John T. Drea, Western Illinois
University
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Both Sellers and Buyers Are Boundary Personnel
Boundary Personnel
Individuals in the organization who span the
boundaries of their own organizations and those
of customers.
Boundary personnel serve as the liaison
with other key organizations they can be a
major asset in the buyer-seller relationship.
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Exhibit 11-1 Business-to-Business Selling
Characteristics
1. Repeated, ongoing relationships
2. Solution-oriented, total system effort
3. Long time period before selling effort pays
off
4. Continuous adjustment of needs
5. Creativity in problem solving often demanded
by buyer of seller
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1. Repeated, ongoing relationships

• The relationship between the seller and buying
  center members is a series of dyadic interactions
• One-to-one meetings or interactions between
  stakeholders in the buying center and the seller
  or other individuals in the selling
  organizations value chain.

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2. Solution-oriented, total system effort

• Customers buy solutions, not technologies or core
  products.
• The seller and the selling organization must
  understand the needs of the customer.
• The seller must also understand the different
  motivating elements between members of the
  customer buying center.

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3. Long time period before selling effort pays
off

• In business-to-business selling, the outcome of
  the sales effort may not be known for months (or
  years!)
• It is important to use the development period to
  reinforce the value offering relative to
  competitive offerings.
• Reduce buyer perceptions of risk by reinforcing
  the total value of the offering.

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4. Continuous adjustment of needs

• It is important to be flexible and responsive to
  the changing needs of customers.
• Customer needs evolve as they learn more about
  the sellers offering and how the offering can be
  applied to their needs.

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5. Creativity in problem solving often demanded
by buyer of seller

• Customization of the offering to meet the
  specific needs of the buyer is expected,
  especially by large customers.
• Approaching each customers problem in such a way
  that the customer perceives the offering as
  unique is particularly advantageous.
• Can relieve the seller of concerns relative to
  pricing

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What Constitutes a Relationship in Relationship
Marketing?
Differentiating an Undifferentiated Product
Discrete Exchange
Collaboration/ Partnering
Multiple Transactions
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Philosophies of Marketing
Production Era
Marketing Era
Societal/ Partnering/ Value Network Era
Sales Era
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Four Forms of Seller Roles
Order Taker
Primary role is taking orders and ensuring timely
delivery of products.
Persuader/ Sustainer
Updates customers about offerings, attempts to
convince customers of offering value.
Motivator/ Problem Solver
Assists customers in maximizing product value by
providing advice and customer education.
Creates a partnership with the buying center that
stimulates customers. Often built by sales and
marketing teams.
Relationship/ Value Creator
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Sellers must know and understand the customers
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Other Types of Selling Roles

• Missionary Sellers/Field Marketers
• Critical in finding new customers, new market
  segments, and developing business within existing
  accounts.
• Post-Sale Customer Service
• Effective customer service can reinforce the
  purchase decision and create superior value for a
  customer.

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Exhibit 11-2 Organizational Relationship - Field
Sales and Field Marketing
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Organizational buyers and sellers have three
needs to satisfy

• The needs of the
• job function

2. The needs of the organization
3. The individual needs of the buyer and seller.
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Selling Structure
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Top-Down and Bottom-Up Forecasts
Bottom-Up Begins with an analysis of how
much product can be sold to each customer in
a particular territory.
Top-Down The result of research efforts to
forecast market Potential, then Reducing it
to Segments in question
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Sales Force Compensation
Straight Commission
Straight Salary
Combination Plans
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Sales Force Compensation Methods

• Most appropriate where repeat efforts are
  necessary to sustain customer purchases.
• Rewards are linked to short-term, repeated
  performance.
• Sellers will likely concentrate on customers that
  have a patterns of frequent and substantial
  purchases.
• Inappropriate during new product introductions.
• May not work well for sophisticated products
  where missionary work is needed.
• Compensation variability/volatility may create
  problems for the sellers.

Straight Commission
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Sales Force Compensation Methods

• Management is able to exercise greater control
  over the sales force (compared to straight
  commission).
• Appropriate when personnel in selling roles are
  required to provide design and engineering
  assistance.
• Motivator/problem solver and relationship/value
  creator roles are appropriate for straight salary
  compensation.
• Creates stability of sales employees.
• Does not tie financial rewards to sales results
  may attract personnel who are security oriented
  instead of achievement oriented.

Straight Salary
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Sales Force Compensation Methods

• Most frequently used form of compensation.
• Salary portion of compensation corresponds to
  managements needs for the sales staff to perform
  administrative duties, while the commission
  portion encourages increased selling effort.
• The commission portion of the compensation is
  paid as it is earned, as opposed to a bonus (most
  likely paid on a quarterly or annual basis).

Combination Plan
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Manufacturers Representatives
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Direct Sales or Mfg. Representatives?

• Appropriate for mfg. representatives
• Product is generic or standardized
• Control is less important
• Reps have other complimentary lines
• Market is dispersed and matches reps existing
  call patterns
• Direct customer feedback is less critical

• Appropriate for direct sales force
• Product is technically complex
• Control is important
• Missionary work needed to build relationships
• Concentrated customer base
• Explicit customer feedback desired