Ch. 12: Business to Business Selling

1. Ch. 12: Business to Business Selling

2. What is B2B Selling? • Creatively joining your company’s capabilities with your customer’s needs.

3. Boundary Personnel • Comprised of buyers and sellers • Span boundaries of own organization and those of customer’s • Liaison to other key organizations • Can be major asset in buyer-seller relationship

4. Nature of Sales and Selling: B2B Selling • More time consuming • More relational between buyer and seller • Stakes are greater in terms of “value” of sale

5. Characteristics of B2B Selling Exhibit 12-1 • Repeated, ongoing relationships • Solution-oriented, total system effort • Long time period before sale pays off • Continuous adjustment of needs • Buyer demands creativity of seller in problem solving

6. Characteristics of B2B Selling:Repeated, ongoing relationships Relationship between seller and buying center is a series of dyadic interactions • One-on-One meetings between stakeholders of buying center and seller

7. Characteristics of B2B Selling: Solution-oriented, total system effort Customers buy solutions • Seller and selling organization must understand needs of customer • Also understand different motivating elements between members of buying center

8. Characteristics of B2B Selling:Long time period before sale pays off Outcome of sales not known for months/years • Use development period to reinforce value offering • Reducing customer’s feeling of risk

9. Characteristics of B2B Selling: Continuous adjustment of needs Be flexible and responsive to changes in customer needs • Customer needs evolve as learn more about offering

10. Characteristics of B2B Selling:Creativity of seller in problem solving Customization of offering to specific needs of customer is expected • Approach in a way where customers feel offering is unique and advantageous • Relieve pricing concerns

11. How to Build Successful Relationships Successful relationships between customer and seller involve: • Mutual Respect • Trust • Authenticity

12. How to Build Successful Relationships Levels of Relationship and Intricacy: • Discrete Exchange • Differentiating an undifferentiated product • Multiple Transactions • Collaboration/Partnering

13. Philosophies of Marketing: Inward, Sales Driven Cultures Maximizing production/sales is often the goal • Production Era • Product Era

14. Philosophies of Marketing: Market, Value Driven Cultures Maximizing market choice or life quality and focus on satisfying a need • Marketing Era • Societal/partnering/ value network Era

15. 4 Forms of Seller Roles Exhibit 12-6 Order Taker Takes orders, ensures correct and timely delivery of offering. Major effort in the “place” marketing mix variable. Persuader/ Sustainer Proactive role in relationship. Informs customers about offerings and ongoing updates. Attempts to convince customer of value of offering, though the focus is still on needs of selling organization. Motivator/ Problem Solver Focus on the needs of the customer organization, potentially creating unique customer solutions through match of supplier capabilities with customer needs. Considered a resource by the customer. Relationship/ Value Creator Build and maintain partnership with all elements of the customer buying center. Supplier/customer relationship is mutually inspiring and stimulating; both parties recognize an equity in the other’s success.

16. 4 Forms of Seller Roles Order Taker • Take Orders • Ensure Timely Deliver of Products – major effort in “place” in marketing mix.

17. 4 Forms of Seller Roles Persuader/Sustainer • Proactive role in relationship • Updates customers about offerings • Convinces customers of offering’s value

18. 4 Forms of Seller Roles Motivator/Problem Solver • Focused on the needs of the customer’s organization • Unique customer solutions through match of capabilities and needs • A customer resource

19. 4 Forms of Seller Roles Relationship/Value Creator • Builds and maintains partnership with all elements of the buying center • Relationship is mutually inspiring and stimulating • Both seller and buyer recognize equity in the other’s success

20. Knowing Your Market One must understand the Customer’s: • Technologies • Products • Markets and Customers • Competitors • Channels • Buying Center and Buying Patterns • Culture

21. Other Types of Seller Roles • Missionary Sellers—Task oriented • Field-Marketers—Market developers, focus in translation • Post-Sale Customer Service—Reinforce purchase decision

22. Vice President of Marketing & Sales Sales Manager Marketing Manager Regional Sales Manager Regional Sales Manager Programs Manager Field Manager Field Sales Team Field Sellers Headquarters Segment Specialists Headquarters Segment Specialists Field Marketing Team Purchasing Influences at customers who are contract providers to end users. Field Marketer Field Marketer Specifying Influences at End User customers who rely on contract providers Specifying Influences at End User customers who rely on contract providers Purchasing Influences at integrated customer facilities Specifying Influences at End User customers who have integrated manufacturing facilities Relationship Between Field Sales & Field Marketing Exhibit 12-7 Field Sellers Field Sellers Outsource/ Contract Provider Flow Field Marketing Flow Direct Sales Flow

23. Correlation of Value & Complexity of Relationships A Generalized Case Exhibit 12-8 Increasing Value Orientation Increasing complexity of Relationship Complexity of Seller Skills Relationship/Value Creator Motivator/Problem Solver Persuader/Sustainer Transactional Sales Relationship Sales Order Taker Degree of shading indicates relative degree of importance.

24. The Mutual Needs of Buyer Seller • Needs of Job Function • Needs of Organization • Individual Needs of Buyer/Seller

25. The Selling Structures

26. Selling Compensation • Straight Commission • Straight Salary • Combination Plans

27. Selling Compensation:Straight Commission • Repeat efforts necessary to sustain customer purchases • Rewards short term • Sellers focus on those who have frequent purchases • Inappropriate during new product introductions • Compensation variability/ volatility may be a problem for the seller

28. Selling Compensation:Straight Salary • Management has greater control over sales force • Appropriate when sellers provide design and engineering assistance • Motivator/Problem Solver, Relationship/Value Creator • Creates Stability • Does not tie financial rewards to sales results

29. Selling Compensation:Combination Plans • Frequently used form of compensation • Salary portion contributes to needs of management control • Commission encourages higher sales • Commission is paid as it is earned

30. Manufacturers’ Representatives • Specialists in a particular market segment or collection of segments that have common users or call patterns. • In business for themselves or as part of an agency of reps’

31. Manufacturers’ Representatives • No ownership for what they sell • Carry no inventory • Have low fixed costs • Have little or no transaction between principle and customer • Commission given only after sale is booked

32. Appropriate Market Conditions:Direct Sales Force Exhibit 12-11 • The product is technically complex • The situation requires a specialized background • Control is important – the organization selects, trains, and controls personnel • Long lead times expected for results • Prospecting for new customers is required • The customer base is concentrated • Explicit customer feedback is desired • High fixed costs

33. Appropriate Market Conditions:Manufacturer’s Representative Exhibit 12-11 • The product is standardized or generic • For technical products, a technical background is important • Control of personnel is less important • Short sales cycles are common • The reps have other complementary lines • Reps have established relationships with target customer segments • Match of reps’ existing call patterns • The market is dispersed and/or when the market consists of many small customers • Customer feedback is less critical • Low fixed costs are required