Part II SALES FORCE ACTIVITIES

1. Part IISALES FORCE ACTIVITIES Chapter 4: Account Relationship Management

2. Building a Long Lasting Relationship:

3. Learning Objectives • Describe the steps in the professional purchasing process. • Identify the different buying influences in the buying center. • Explain how relationships are likely to evolve. • Describe factors critical to gaining commitment to a relationship.

4. Chapter Outline • Purchasing Process. • Buying Center. • Evolution of Relationship. • Relationship Binders.

5. Account Relationship Management Concepts Account Purchasing Process The Buying Center Building Account Relationships Account Relationship Binders Figure 4-1: Account Relationship Management Concepts

6. Purchasing Process: • Recognition of Needs. • Evaluation of Options. • Purchase Decision. • Implementation and Evaluation.

7. Recognition of Needs: • Help the account recognizes that a need exists. • Immediate need, resolving problems. • Derived Demand, understanding the needs of the customers’ customers.

8. Evaluation of Options: • Helping customers to evaluate options. • Determining product specifications. • Proposal development.

9. Purchase Decision: • Writing orders. • Persuading. • Negotiating. • Finalizing Terms. • Closing the sale. The role of Price in business to business marketing.

10. Implementation and Evaluation: • Immediate Post-Purchase Activities. • Customer Retention and Growth Activities. Value Analysis. Vendor Analysis. Supplier Tiers.

11. Recognition of Needs Evaluation of Options Purchase Decision Implementation and Evaluation Value Added Role of Sales Force: Figure 4-2:The Typical Purchasing Process

12. No 16% Yes 84% PURCHASING - Survey Results Do you track supplier performance? Do you single out certain suppliers as “preferred”? 9% N.A. Yes 55% No 36% (% of respondents) (% of respondents)

13. PURCHASING - Survey Results Do you have multiple tiersfor ranking suppliers? No 40% Yes 51% 9% N.A. (% of respondents)

14. PURCHASING - Survey Results Have any suppliers attained and lost top-level status? No 23% Yes 77% (% of respondents)

15. PURCHASING - Survey Results Traits of Top-Performing Suppliers (% of respondents) <5% 5% 7% 8% 12% 14% 28% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . Good Management . . . . . . . . . . . . . . . . . . . Good Response/Flexibility . . . . . . . . . . . . . . . . . . . . ISO 9000 Certification . . . . . . . . . . . . . . . . . . . . . . . . . Service . . . . . . . . . . . . . . . On-Time Delivery Quality

16. Figure 4-3:Tiering of Suppliers

17. Buying Center: The term buying center refers to all of the people formally or informally involved in the purchasing decision.

18. Buying Center Members

19. Purchasing Role: • Economic Buyer. • User Buyer. • Technical Buyer. • Advocate.

20. Economic Buying Influence ROLE: 4 Asks “Why” 4 Gives final approval CHARACTERISTICS: 4 Access to money 4 Can release money 4 Veto power FOCUS:4 Total organization 4 Bottom line 4 The Future

21. User Buying Influence ROLE:4To decide on how a purchase will affect job performance CHARACTERISTICS:4Implementation oriented 4Use or supervise use of product or service FOCUS: 4Tactical, not strategic 4The job to be performed

22. Technical Buying Influence ROLE: 4To eliminate alternatives 4To recommend CHARACTERISTICS:4Focuses on quantifiable aspects of product and service 4Gatekeeper 4Can only say “no,” not “yes” FOCUS:4Product specifications 4Asks “What,” not “Why”

23. Advocate ROLE:4Helps guide the sale CHARACTERISTICS:4May be inside or outside of the buying organization 4Furnishes and interprets information FOCUS:4Your success

24. Advocate:Ways in Which an Advocate can Help • Recommend selling strategies. • Build a groundswell of interest. • Refer you to other advocates. • Review your presentation. • Gain access to decision-makers.

25. Evolution of Relationships: • Awareness. • Exploration. • Expansion. • Commitment. • Dissolution.

26. Awareness:

27. Exploration:

28. Expansion:

29. Commitment:

30. Dissolution:

31. Figure 4-4: Stages in a Buyer-Seller Relationship

32. Dissolution Stage: Warning Signals • Missing information • Uncertainty about information • Uncontacted buying influence • Customer personnel new to the job • Reorganization

33. Relationship Binders: • Creating Value. • Meeting Expectations. • Building Trust.

34. Figure 4-7: Account Relationship Strategy and Relationship Binders

35. Earning Buyer TrustWhat is Most Important?

36. The Importance of TrustSelected Research Findings • Research has established that trust facilitates cooperation. A recent experiment demonstrated that when a seller was expected to be more trustworthy, there was also a higher level of buyer-seller cooperation.¹ • Once a salesperson has gained customer trust, the role of the salesperson changes to less emphasis on sales and more on service.² • Once trust is gained, the customer: • Becomes more cooperative; • Becomes more receptive to suggestions; • Allows more time for sales presentations; • Allows more access to other people in the organization; and • Informs the salesperson about future buying needs.² • ¹Paul Schurr and Julie Ozanne (1985), “Influences on Exchange Processes: Buyers’ Perceptions of a Seller’s Trustworthiness and Bargaining Toughness,” Journal of Consumer Research,11 (March), 939-953. • ²John Swan and Frederick Trawick,Jr. (1987), “Building Customer Trust in the IndustrialSalesperson: Process and Outcomes,” Advances in Business Marketing, 2, 81-113.