Stephen B. Castleberry | John F. Tanner Jr. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHAPTER 14 BUILDING LONG-TERM PARTNERSHIPS

LEARNING OBJECTIVES How important is service after the sale? How should salespeople stay in contact with customers? Which sales strategies stimulate repeat sales and new business in current accounts? Which techniques are important to use when handling complaints? 14-2

EXHIBIT STAGES OF PARTNERSHIPS 14-3

EXPLORATION Set the right expectations Monitor order processing Electronic data interchange: Automatic placement of orders by having one’s computers talk to customers’ computers Ensure proper initial use of product or service 14-4

FOLLOW UP Call to thank customer and check whether product is working properly Stay in touch to monitor changing needs Can be carried out regularly by: Personal visit - Most productive Telephone - Efficient and real mail Creates a functional relationship 14-5

HANDLING CUSTOMER COMPLAINTS Critical to maintain goodwill Customers can be disappointed due to following Product performs poorly Product is being used improperly Terms of the sales contract were not met Personal visit is an effective method Encourage buyers to state their grievances 14-6

EXHIBIT RESPONDING TO COMPLAINTS 14-7

FIGURE 14.3 – HANDLING RUDE OR IRATE CUSTOMERS 14-8

SETTLEMENT OPTIONS FOR AN UNSATISFACTORY PRODUCT Replace product without cost to customer Replace the product and share costs with customer Instruct customer on how to proceed with a claim against a third party Send product to factory for a decision 14-9

SALESPERSON’S ROLE IN HANDLING CUSTOMER COMPLAINTS Act as a buffer between the customer and company Educate the customer to forestall future claims Aim to achieve customer satisfaction - Continuously monitor customers’ levels of satisfaction 14-10

EXPANSION Generating repeat orders Convincing the customer to use a higher-quality product or newer product Upgrading (upselling) Selling an entire line of associated products Make the buyer realize the synergy of owning all the products in a line Full-line selling Selling additional products that are not directly associated with the initial products Less expensive than acquiring a new client Cross-selling

GENERATING REPEAT ORDERS Be present at buying time Help to service the product Provide expert guidance - Offer customers non-selling- related ideas Provide special assistance Work as consultants Provide free product demonstrations Train reseller’s employees about the products 14-12

TIPS FOR EFFECTIVE CROSS-SELLING Product knowledge and cross selling skills Incentives Reasonable quotas or goals Result tracking Timing Performance appraisals 14-13

COMMITMENT Stage where the buyer and seller decide to continue the relationship Preferred supplier: One who is assured of a large percentage of the buyer’s business Types of relationships with suppliers Transactional Coordinative Selective partnership 14-14

EXAMPLES OF CRITERIA REQUIRED TO GAIN PREFERRED SUPPLIER STATUS Hard savings Payment terms - Cash discounts Improve process - Cycle time reduction (shorter order/delivery cycles) Vendor inventory management Quality and innovation Supply chain management - Optimum packaging that reduces shipping costs 14-15

EXAMPLES OF CRITERIA REQUIRED TO GAIN PREFERRED SUPPLIER STATUS Soft savings Commercial - Minority-owned vendors Global initiatives - Access to new markets Improve process - Safety and environmental procedures Quality and innovation - Training Supply chain management - Bar coding, reduces shipment processing time 14-16

SECURING COMMITMENT TO A PARTNERSHIP Establish open channels of communication Ensure Commitment from the entire supplying organization Ensure that seller is dependable, competent and honest Focus on complete commitment Allocating resources to satisfy needs Anticipating needs 14-17

SECURING COMMITMENT TO A PARTNERSHIP Communication - Direct communication among similar functional areas between buyer and seller’s org Corporate culture: Values and beliefs held by senior management Shapes attitudes and actions of employees Influences the development of policies and programs Culture of the organizations should fit each other 14-18

EXHIBIT 14.6 – DIRECT COMMUNICATION BETWEEN PARTNERS 14-19

EXHIBIT 14.6 – DIRECT COMMUNICATION BETWEEN PARTNERS 14-20

CHANGE AGENT Salesperson seeking change for both organizations to achieve a partnering relationship Rate of change: Refers to how quickly the change is made Scope of change: Degree to which the change affects the organization 14-21

EXHIBIT CHANGE AND RESISTANCE 14-22

SALESPERSON AS A CHANGE AGENT Champions (internal salespeople): Work for the buying firm in areas affected by proposed change Work with the salesperson to make the proposal successful Position the change i.e. examine specific needs and wants Determine resources required to secure the buyer’s commitment Develop a time-based strategy 14-23

EXHIBIT TIME LINE FOR FRAM/CARQUEST 14-24

FACTORS RESPONSIBLE FOR DISSOLUTION Limited personal relationships - Advocate a 3-by-3 strategy Failure to monitor competitor’s actions or the industry Falling into complacency Complacency: Assuming that the business is yours and will always be yours 14-25

PLAN OF ACTION TO AVOID COMPLACENCY Regularly audit customer service Understand each individual’s personal characteristics Keep a record of promises made Follow up on customer requests and deliveries promptly Ensure paperwork is done accurately and in time Constantly try to improvise and be ahead of the competition 14-26

CONFLICT Probable causes Conflicting policies within the customer’s organization Conflict between parts of the organization Steps to avoid trust-destroying conflicts Give a clear product description Define who has authority For both the customer and for the selling organization Recognize complaints as the beginning of major conflict 14-27

REPAIR DAMAGE IN TRUST-DESTROYING CONFLICT Observe and acknowledge Take responsibility of actions Gain support Obtain better perspective by looking at the experience in the larger context Shift focus from assigning blame to problem solving Implement the solution Let go and move on 14-28