CHAPTER 13
BUILDING PARTNERING RELATIONSHIPS
Outline of Chapter
I. The Value of Customers
II. Relationships and Selling
A. Types of Relationships
1. Market Exchanges
a. Solo Exchange
b. Functional Relationships
2. Partnerships
a. Relational Partnerships
b. Strategic Partnerships
III. Managing Relationships and Partnering
A. Choosing the Right Relationship
1. Size
2. Access and Image
3. Access to Technology
B. Using Technology to Increase Efficiency
IV. Phases of Relationship Development
A. Awareness
B. Exploration
C. Expansion
D. Commitment
E. Dissolution
V. Characteristics of Successful Relationships
A. Mutual Trust
1. Dependability
2. Competence
3. Customer Orientation
4. Honesty
5. Likability
B. Open Communications
C. Common Goals
D. Commitment to Mutual Gain
1. Mutual Investment
E. Organizational Support
1. Structure and Culture
2. Training
3. Rewards
VI. Selling Yourself
Teaching Suggestions
1. Throughout this course, you’ve been asking students questions such as why they thought building
partnerships is important in business. You may have already asked them “What do buyers and
sellers have to do to build an effective partnership?” And also, “How will building partnerships
affect the role of salespeople?” We expect to provide answers to these questions in this chapter. As
you’ve established the importance of partnering relationships to business so far, you might begin
the current discussion by talking about the different types of relationships. For example, use the
opening profile of Ashley McNab and ask students what type of relationship she develops. Why is
it important that she develop relationships or that buyers trust her? You may want to emphasize the
increasing levels of trust necessary to achieve each succeeding level of relationship.
2. I often use the Thinking it Through 13.1 as a way to start the conversation about why relationships
are important and how many companies still don’t get it. This becomes a quick lesson in customer
lifetime value, and you can also talk about the fact that a college student’s “lifetime” to a local
retailer is no more than 5 years, or however long the student is in school. “Life” ends when the
customer/student graduates and moves away. What’s fun is to ask the guys how much they think
girls spend on clothes because they usually significantly over-estimate but it makes the point for
CLV. I also find this a good time to contrast a fashion retailer with a gas station. Most of us visit
the same stations, not because we like them but because they are convenient. That’s behavioral
loyalty. Then ask if they have a store or restaurant they really like and if so, describe it. You can
then highlight how their descriptions reflect attitudinal loyalty.
3. Discuss Building Partnerships 13.1, which is about how one salesperson builds trust. Are those
ideas limited to selling medical devices? Why is trust so important in that situation? Could these
ideas have greater potency in selling commodities than in selling highly differentiated goods?
3. Develop the discussion further by talking about the characteristics of successful relationships.
Each succeeding level of relationship is marked by increasing levels of trust and commitment. You
should probably define trust (a belief that the other party will fulfill its obligations) and talk about
how its three aspects, dependability, capability or expertise, and concern for the other party
contribute to a good relationship. You may want to motivate this discussion by asking your
students to think about a close relationship that they have and what role does trust-especially
dependability, capability, and mutual concern-contributes to the relationship. Ask them if they
behave differently in this relationship than they do in relationships with passing acquaintances. Ask
them if they think their close relationships would be possible without trust. (Refer to the first
Thinking It Through. Ask students how they are treated in a clothing store and then walk through
the customer lifetime value of a female college student. Students are often surprised to realize how
much they may be worth to a store.)
Next talk about communication and the role it plays in a successful relationship. Open and honest
communication is essential to developing trust, therefore, it is essential to a successful relationship.
Ask your students to compare the quality of communication, especially how much they know about
those with which they have close relationships, to the communication in those relationships they
have with people they don’t know so well. Also mention that shared goals and commitment to
mutual gain help the relationship grow by giving each party an incentive to sustain the partnership
and not do anything that would damage the relationship. One way to encourage this is through
mutual dependency–both parties share about the same amount of power in the relationship and they
spend their time trying to figure out how they will expand the pie instead of how they will divide
the pie.
As the levels of shared goals and commitment to mutual goals grow, these ideals become codified
into credible commitments, which are tangible investments in the relationship. These investments
signal a partner’s commitment to a long-run relationship.
Finally, you will want to talk about the role of organizational support in fostering partnering
relationships. All of the major organizational systems including its structure, culture, and training
and reward systems must be consistent with and support these long-term relationships.
4. Next, you will want to discuss how these relationships develop. You probably want to return to the
student’s close relationships. Ask them how the relationships began and how they proceeded from
one phase to the next. Talk about how they probably began with an awareness phase-no interaction
takes place, but they may do some information search about their object of interest. Next, if they
don’t discover information to eliminate the person, they will move to the exploration phase where
they make an initial contact and explore the potential benefits and costs to having a relationship.
This is the “getting to know you” phase and in business relationships as is often true in personal
relationships, most people do not put sufficient time into this phase before moving on to the next.
In the expansion phase, both parties investigate the potential benefits of a long-term relationship.
Parties begin to share sensitive information and take some risks. Both attempt to work closely to
achieve mutually beneficial outcomes.
Last, comes the commitment phase which is the most advanced phase in a relationship. The
benefits each party achieves from this stage of the relationship are difficult to achieve with other
parties. With trust and hard work, commitments grow in number and complexity throughout the
relationship.
You should mention that at any one stage, termination of the relationship is always a possibility.
Dissolutions in business are as difficult as they are in personal relationships.
5. An important element for students to recognize is that strategic partnerships are not always the
objective. Use discussion question 5, “What factors should a salesperson consider when deciding
which customers he or she wants to develop a close relationship? How would these factors change
when considering functional relationships versus strategic partnerships?” See how we answered
this question on the next page. Also, consider the “From the Buyer’s Seat” as illustrations of
relationship choices. Shannon Goodson, president of a small publishing company, talks about her
relationship with her printer, as well as with a college professor who provides assistance to the
organization. Ask students what the prof might get out of the relationship. Why provide the help?
Suggested Answers to Ethics Problems
1. If partnerships are win–win, does that mean that market exchanges are win–lose? Is there an
ethical difference between win–win and win–lose? Does the customer’s value equation (recall
from Chapter 1; value=benefits-[selling price+time and effort] have to equal in profit to the
seller’s profit equation for a transaction to be ethical?
In a win-win, both buyer and seller are looking to expand the pie. Both organizations want to do
well in the relationship but they also want their partner to come out well. In a win-lose relationship,
2. A customer wants to buy one of your products but the price is just over the threshold she is
allowed to spend and she knows that if she asks for permission, she’ll be told to buy your
competitor’s product, which is just under the threshold. She asks you to divide the price in two
and present her with two invoices—each under the threshold so she can buy. Is she asking you to
do something unethical?
Yes and no. The challenge with this one is that the customer is the one really engaging in the
unethical behavior, and it is unethical only because her company has a policy against it. If caught,
Suggested Answers to Questions and Problems
1. When might relational partnerships potentially dangerous for selling companies to encourage?
Or should companies encourage salespeople to develop relational partnerships with all
accounts? Why or why not?
In some instances, the relationship takes on a power of its own which can make customers
uncomfortable in raising concerns and other issues. Then, the customers simply leave because the
2. Which is more important to the seller: attitudinal or behavioral loyal? Why? What can a
salesperson do to increase loyalty in buyers? How does loyalty relate to lifetime customer value?
Both are important; behavioral because it reflects actual sales. Attitudinal is probably preferable in
that it should be exhibited in terms of both sales and advocacy for the product to others, as well as
greater tolerance when problems arise (as they always will). But attitudinal loyalty without
purchase is not worth much. Feelings won’t pay the bills! Loyalty should improve CLV through the
following ways:
4. Read From the Buyer’s Seat. What are some of the red flags you consider when you think
someone might not be telling you the truth or may not have your best interests at heart? Can you
recall any such situations involving salespeople? How does this article influence how you will
engage in rapport building with customers?
Students’ answers will, of course, vary about what they consider to be red flags. Ed Braig’s
problem is not with friends but with phony friends. As a professional purchasing agent, he wants to
keep the relationship at arm’s length to keep it professional. If a friendship develops, fine, but he’ll
4. What company does the best job of building a relationship with you? Describe what they do to
strengthen that relationship and why you like them so much. Identify five concepts from the
chapter that are illustrated by your relationship with that company.
5. Which factors should a salesperson consider when deciding whether to develop a close
relationship with a customer?
When choosing a partner to develop a close relationship, the salesperson should choose the firm
that, by working together, could increase benefits to both firms. In other words, the salesperson
could have a critical impact on the other’s.
How would these factors change when considering functional relationships versus strategic
partnerships?
A strategic partnership implies a greater level of commitment by both parties. One factor – does the
buyer have access to technology or information that would benefit the seller? If so, a strategic
partnership may be required so that both parties can jointly use that technology or information to
What factors should the customer consider?
Some of the factors would include a company’s ability to innovate, whether the culture is a good
6. One executive once said that there are two types of people in the world: those who trust each
person until proven untrustworthy, and those who trust no one until trust is earned. Which are
you? How do you protect yourself as a buyer if you trust everyone first, and how do you avoid
losing out on the benefits of relationships if you trust no one at first?
One in-class activity is to first divide the class into two groups – those who trust first and those
7. Ashley McNab, in the opening profile, describes several factors in her business that seem to
make deeper relationships between customers and vendors more important. What are they?
One factor is her sincerity. She doesn’t talk directly about it at the start but you get the sense that
she says sales is rewarding, she means more than just monetarily, especially near the end when she
failure, she learns and tries again.
8. Read Sales Technology 13.1. Why is the software needed, and what other things could be done to
increase sales and strengthen relationships with the information that these salespeople gather
and put into the CRM software system?
Salespeople have so much information that they have to maintain, plus a lot of paperwork that has
to be completed when sales are made. In the example provided, both processes are automated,
9. There are five foundational elements to strategic partnerships. How do these differ for relational
partnerships? Functional relationships? What if four of the five are strong—what type of
relationship is that?
Suggested Answers to Case Problems
Case 13-1: Steve Retired!
Questions
1. Besides lowering price, what actions can Jackie propose to improve contribution margin?
The good thing is that the buyer said contribution margin and not profit margin. If discussing in
class, point out that in the latter case, the buyer would likely be thinking only about retail price
minus purchase price. In this instance, if Jackie can propose actions that lowering operating costs
2. What are some strategies she could take to defend the higher prices? What evidence or
information would you need to support your ideas?
3. What type of relationship did she have with Steve? What did she do or fail to do that may make
the future more difficult with Dollar Express, now that Tom is in charge?
At the very least, she had a strong affiliative relationship; some students will argue that it was a
vendor including one that walks in the door today.
Case 2-2: Empire Safety Rental
Questions
1. What would you do? Assume that Empire has six salespeople calling on geographic territories
and that Mike has responsibility for Apex, Logan, and Eagle. Be specific about the steps you
would take.
The company has a problem – premium quality service and price-based competition. The question
is how to shift from selling on price to selling on value. A first task would be to train the sales force
2. Now assume that another salesperson has responsibility for Logan because it is in his
geographic area. That person just told you he’s going to quit to go to a competitor. What would
you do, assuming that there is no non-compete clause that prevents him from selling to Logan for
the competitor?
If all that person knows how to do is to price a job and take the customer out to lunch or for a cold
beer, this may not be much of a loss, though the answer depends on how strong the relationship is
End Of Chapter Role Play Case
There is no buyer information needed for this role play. The purpose is to lead into a discussion of how to
understand the buyer’s preference for transactional, functional, relational, or strategic partnerships. After
the role play, ask for a show of hands from salespeople who got theirs right. Discuss the clues that they
used to make that decision. Then ask those who got it wrong what threw them off-track. Then discuss how
easy or difficult it may be in real life to determine relationship preference and how that might change
depending on the buyer’s situation.
EXERCISE 13-1 CATEGORIZING YOUR RELATIONSHIPS
Ask the students to list all of the on-going relationships with people they have and classify them as
functional, relational, or strategic. Ask them to explain why they categorized them as they did and ask them
if there are any relationships that they would like to move to the next higher level, that is, are there any
functional relationships that they would like to be relational or relational relationships that they would like
to be strategic. What do they expect would be the advantages to both parties in the relationship? How
would they go about moving these relationships to the next higher level?
EXERCISE 13-2
Ask students to reflect for a moment on the issue of relationships and their university. With whom would
the university build relationships? How would university representatives do that? If you (the student) were
selling the university to a prospective donor for a big scholarship, what type of relationship would you
expect to form with that donor and how? If you (the student) were the donor, what would you expect from
the university?