Chapter 13Chapter 13

Building Partnering Relationships

The Value Of CustomersThe Value Of Customers

Maintaining strong relationships with the customer is important

(Existing accounts contribute a large portion of sales)

Selling to satisfied customers not only costs less than acquiring new customers but also is easier

Customers are worth more in terms of revenue than some salespeople recognize

CVS – Customer lifetime value – combined total of all future sales (typically discounted back into current dollars).

Value of CustomersValue of Customers

Consultative customer-oriented sales approach – shown to improve customer retention & profitability

Another study – finds average company loses 20-50% of its customer base every year, and the rate is increasing!

Relationships and SellingRelationships and Selling

Relationship marketing – many definitionsFor selling, it means creating the type of

relationship that best suits a customer’s need

Behavioral loyalty – purchasing same product from same vendor over time (habit)

Attitudinal loyalty – emotional attachment to a product

Market exchangesMarket exchanges

Solo exchange – one time purchase

Example: car trouble out of town

Functional relationships – long term relationship characterized by behavioral loyalty – (habit or routine)

PartnershipsPartnerships

Relational Partnerships – close personal bond involved – know small details can be worked out

Strategic Partnerships – both make significant investments to improve profitability

Managing RelationshipsManaging Relationships

Some companies want a market exchange, some want a functional relationship, and others want a strategic partnership.

Size, access & image, & access to innovation help drive partnerships3

Choosing Right RelationshipsChoosing Right Relationships

Size – example: Keyser Group & McDonalds – worked for decades -P.348

OR J.C. Penney and Martha StewartAccess and Image – SRI (software

company)– can provide access to very specific markets – P. 350

Access to Innovation – Lead users face & resolve needs months/years ahead of others -HEB & (RFID)

Phases of Relationship Phases of Relationship DevelopmentDevelopment

AwarenessExplorationExpansionCommitmentDissolutionNote: Research shows the middle three

stages are the most important!

Characteristics of Successful Characteristics of Successful PartnershipsPartnerships

Mutual trustDependabilityCompetenceCustomer OrientationHonestyLikabilityOpen Communication & Common Goals

Successful PartnershipsSuccessful Partnerships

Commitment to Mutual GainOrganizational Support

– Structure & Culture– Training– Rewards

Selling Yourself VignetteSelling Yourself Vignette

Deeper relationship – Student Ambassadors!