Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 14
BUILDING LONG-TERM PARTNERSHIPS
Outline of Chapter
I. Exploration
A. Set the Right Expectations
B. Monitor Order Processing
C. Ensure Proper Initial Use of the Product or Service
D. Follow Up
E. Handle Customer Complaints
1. Encourage Buyers to Tell Their Story
2. Determine the Facts
3. Offer a Solution
4. Follow Through with Action
5. Achieve Customer Satisfaction
II. Expansion
A. Generating Repeat Orders
1. Be Present at Buying Time
2. Help to Service the Product
3. Provide Expert Guidance
4. Provide Special Assistance
B. Upgrading
C. Full-Line Selling
D. Cross-Selling
III. Commitment
A. Securing Commitment to a Partnership
1. Commitment Must Be Complete
2. Communication
3. Corporate Culture
B. Salesperson as Change Agent
1. Champions
2. Positioning the Change
3. Determining the Necessary Resources
4. Developing a Time-Based Strategy
IV. Dissolution
A. Limited Personal Relationships
B. Failing to Monitor Competitive Actions
C. Failing to Monitor the Industry
D. Falling into Complacency
E. Conflict
V. Selling Yourself
Teaching Suggestions
1. There are at least two ways to teach this chapter. One way is to focus on customer satisfaction and
customer retention, a strategy that emphasizes such aspects as handling complaints and ensuring
initial proper use. Look at suggestion number 6 if you plan to use this strategy.
The other way is to focus on how to build strategic partnerships and focus on account management
strategies. If you plan to follow this path, start the class by asking students the following
questions:
“Assume for a moment that you are going to enter into a business partnership with the person
sitting next to you. Describe what that means. Why would you become a partner with someone else
in business? What are the benefits of entering into a partnership? What would be your attitude
toward your partner?”
After students have described partnerships in a generic sense you are ready to move into the
material of this chapter. Hopefully, students will have keyed in on the many benefits of partnering
as well as an attitude of win-win with their partner.
Note that the seller can never hope to enter into a partnership with each and every buyer. Generally
partnerships are developed for large and important customers. However, the material described in
this chapter, is also applicable to developing long term mutually rewarding relationships and can
apply to all buyer-seller interactions. A good discussion question is when should a salesperson try
to partner with an account (the account is large, willing to partner, etc.).
2. Overview the various ways to build partnerships and goodwill. Note that in all activities the
customer's interest should guide decisions. A good class discussion is to focus on value. Here you
can integrate many of the skills already taught. For example, ask what part of SPIN deals the most
with value? Implication questions build value by helping the buyer see the total cost of owning a
problem. Then you can talk about how value contributes to the relationship.
3. Discuss the critical importance of building perceptions of trust with the buyer team. An interesting
discussion can start around the topic of trust by asking, “How do you know when you can trust a
girlfriend/boyfriend?” or “What does a trustworthy person look like – do – act?” Again, you could
use personal relationships to kick-start the conversation. Then ask students to identify specific
actions that they could take as salespeople to provide evidence of their expertise, reliability, and
concern for the buyer. Help the class to understand that it is impossible to completely develop trust
perceptions in a single call or over a short period of time. In reality, trust is developed only after a
number of interactions have occurred. Thus, trust is difficult to develop but easy to lose! Be sure to
point out this important truth.
Help students understand that trust also depends upon the knowledge that the customer has about
the salesperson's firm. Thus it becomes imperative that students choose firms which have generated
perceptions of trust among their buyers and prospects. Ask students the following questions:
"Assume that you are interviewing for a sales position, how can you find out if the firm that you
are interviewing with is generally considered trustworthy by buyers and prospects?"
A good source would be buyers of the firm, as well as the usual sources of information (e.g.
professors, former students, noncompeting salespeople).
4. Briefly describe the importance of the salesperson monitoring the relationship and the delivery of
the good or service. Highlight the Building Partnerships about John Tanner’s strategy in turning his
territory around at Concentra, and if you’ve been discussing the Opening Profiles and Building
Partnerships box features all along, ask students if others have similar themes. Of course they do –
such as Taylor Dixon who talks about the quality of relationship.
5. Discuss the "Thinking It Through" that appears in the chapter:
"Some customers take advantage of salespeople by trying to have them perform almost all of the
routine maintenance on a product for free. What can you as a salesperson do to curb such a
request? How do you know where to draw the line?"
Salespeople certainly need to have a spirit of helpfulness and service when a new product is
installed and later when the product is used. However, salespeople cannot become maintenance
technicians. The best way to curb such requests is for the salesperson to clearly delineate the
responsibility of the salesperson's maintenance crew, as well as the responsibilities of the buyer's
maintenance operation. If this is clearly spelled out right after a contract is signed, difficulties and
confusion will be reduced. New salespeople are particularly vulnerable to this problem occurring,
however, because they sincerely want to help their first customers be successful.
6. Then segue into the importance of the salesperson following through on any and everything that he
or she promised to do. This cannot be stressed enough. Too often, salespeople make promises, fail
to keep them, and then don't understand why their customers don't treat them with respect, don't
trust them, or are unwilling to develop partnerships with them. Often, it is a simple as simply
returning phone calls when you say you will, but in other times, it is making sure that the product
performs as promised. Salespeople are responsible for achieving the results that they promised
during their presentations, no matter what it costs them.
Good examples of the importance of following up can be found in Building Partnerships 14.1.
7. Until this chapter, the students' focus may be on customer acquisition, rather than retention. Some
facts are very important to recognize:
Retaining 2 to 5% more customers has the same effect on profits as does cutting costs 10%.
It takes 7 sales calls (on average) to close a new account but only 3 to close a subsequent sale.
Average cost of a field sales call is $259, so over $1000 additional profit (because of lower
costs) is possible when selling current accounts.
65% of the average company's sales come from current customers.
The average cost of acquiring a new customer is 5 times that of serving a current customer.
This figure includes costs of demonstrations, trials, and samples. Use these facts to lead into a
discussion of selling strategies when selling to current accounts.
Review strategies such as cross-selling, full-line selling, and upgrading. You may find this
example helpful. One office equipment rep (now vice-president, Richard Langlotz, Konica-
Minolta) recognized that 25% of his customers buy replacement machines each year,
representing about 75% of his quota if he could sell all of them. He developed a customer
retention strategy involving regular email, regular telephone calls, and regular but infrequent
personal visits. The result was that he spent about 20% of his time (1 day per week) on
customer retention only, yet it yielded sales equal to 80% of his quota (because sometimes they
bought 2 machines). In addition to upgrading, he was able to cross-sell and full-line sell,
leading his district in total line selling. His customer acquisition sales also increased because of
the reputation he created for good service and he regularly finished 200% of quota.
8. Use Exhibit 14-7 to discuss the following: What is the role of the salesperson when you have
achieved a partnership and you have direct communication? The salesperson is the strategist, the
coordinator, and the leader. This means that the salesperson sets the strategy for growing revenue
in the account. To do this, the salesperson needs to communicate well with everyone involved in his
or her company. When implementing the strategy, the salesperson must coordinate the efforts of
those involved. And the salesperson must constantly motivate those involved to deliver beyond the
customer's expectations through effective leadership. All of this is accomplished without any direct
authority—a real challenge!
9. Summarize the points discussed:
Developing partnerships and strong relationships are extremely important in today's economy.
There are many ways to build partnerships and goodwill.
It is important that a salesperson keep the customer's interest paramount.
Salespeople must build perceptions of trust with their buyers.
Trust perceptions depend not only upon knowledge of the salesperson but also upon knowledge
of the salesperson's firm.
Successful salespeople monitor order processing in an effective and efficient manner.
Salespeople should provide special assistance when appropriate.
Customer complaints should be handled carefully.
A salesperson should always follow through completely on what they have promised.
Suggested Answers to Ethics Problems
1. A customer is claiming you misrepresented the product in order to get the sale so the contract
should be voided. You know from other sources that the customer is in dire financial straits. You
did not, at least in your mind, misrepresent the product. If your company agrees to cancel the
contract, it is the same as saying you did misrepresent the product and you could face
termination or lesser negative consequences. What should be done? Based on an actual event.
This question is based on a real situation involving one of the authors. The company’s policy did
not permit accepting the customer’s complaint without also punishing the rep. What happened was
2. The fairest solution to customer’s complaint is one that turns out to be against company policy,
though certainly not against the law or unethical in any way. If you tried to do it, the chances are
you could get away with it, but if caught you’ll be terminated. What would you do? Would it
matter if you knew you’d only get a mild reprimand if you were caught? Or that others had done
it?
Again, this is based on a situation involving one of the authors. Can you get permission first? If so,
that is the best way to do it. Otherwise, you are taking the risk of losing your job. Most people
would say that doing what is right by the customer should take precedence over company policy,
3. Some research suggests that fixing a customer's complaint can lead to an even stronger
relationship. Should a company allow a minor problem with a product to continue, just to give
reps that opportunity to solve the problem? Why or why not?
Some people have speculated that car companies create recalls just to get customers back into the
Suggested Answers to Questions and Problems
1. Your company sells manufacturing equipment and a new machine had a control problem that
affected about 20 percent of customers. The problem was written about in several magazines
before your company fixed it. The problem turned out be a software glitch and could be fixed by
downloading a patch from your company Web site, and could be done by the customer. How
would you deal with this problem if a customer brought it up? How would you respond if a
prospect brought it up? Once the patch was written, what would you do?
If it was a prospect who brought it up, remind them that even Microsoft and Apple have bugs in
new releases and that the issue isn’t whether there are bugs but how the company handles them.
Then show them our web site and how we dealt with it. If it was a customer that brought it up, the
problem is why the customer wasn’t notified of the problem and the fix before bringing it up. For
2. Explain how active listening can be applied to a situation in which a customer makes a
complaint. What can applying this art accomplish? What forms of active listening might actually
cause more problems?
When a salesperson listens to the prospect, pays attention to moods, tunes in on the customer's
wavelength, and calculates the next move by listening and taking the customer's emotional pulse,
the chances of maintaining a good relationship are materially increased. Listening salespeople
3. Read through the From the Buyer's Seat and Building Partnerships. These seem to be advocating
opposite perspectives. How do you reconcile these two seemingly opposite positions?
Buyer’s Seat suggests that companies are creating strategic partnerships in order to maintain
reliable sources of supply, reduce costs jointly, and other benefits. John Tanner’s experience with
discussion around why companies partner and why they don’t.
4. The Miami Heat, like lots of sports teams, has a sales force that sells season tickets. Once
someone is sold a season ticket package, the customer becomes someone else’s responsibility.
Every person in the office, no matter his or her regular job, has responsibility for a group of
current customers; management believes this makes everyone more responsive to customer
needs. But some customers complain; they would rather have the same salesperson who sold the
tickets fix any problems. When should salespeople handle all complaints? When is it better to
have everyone in the company take on some customer responsibility? When is it best to have one
customer service department? Justify each response.
In general, yes, the salesperson should handle all complaints so that the customers are completely
satisfied. There are times, however, when this will not be possible. Some customers, for example,
will never be satisfied because of their personalities. Other customers may not be satisfied because
the solution to the problem is too expensive, or the fault lies with the buyer.
The Miami Heat justifies their choice in two ways. First, having others take care of customer care
frees salespeople up to acquire new accounts, which is important to the company. Second, everyone
5. Re-read Sales Technology 14.1. What role can salespeople play in avoiding the issues Ken
Madrigal is facing?
The key is to create an expectation that the salesperson should be the trusted resource and the first
call a customer makes. Getting the customer the right information is critical to their satisfaction.
6. What is your reaction to the statement "The customer is always right"? Is it a sound basis for
making adjustments and satisfying complaints? Can it be followed literally? Why or why not?
It is an excellent basis for making adjustments. It is an excellent philosophy to follow, but like any
policy it must be interpreted in light of individual circumstances. Pleasing the customer should be
first and foremost in the mind of the salesperson. An occasional adjustment in favor of the
customer even though the customer is at fault is good business.
7. In Building Partnerships 14.1, John Tanner says service was essential to his strategy. Is that just
because he's in a service business? In what types of situations involving products would service
after the sale be a strategic sales factor?
8. How do you know when full-line selling, upgrading, or cross-selling strategies are appropriate?
One way to answer this is to consider the stage of the relationship. How well has the seller proved
the company's reliability to the buyer? Is the buyer satisfied and ready to move to the next stage,
9. What are the various ways that a salesperson can provide a potential champion with knowledge
in order to build confidence? What types of knowledge will the champion need?
The champion may need technical knowledge (how the product or service works), performance
knowledge (how well it will work for the company), and experiential knowledge (experience).
Suggested Answers to Case Problems
Case 14-1: McPherson & Co.
Questions:
1. Assume you are Jasmine. What should you do?
The first thing to do is to find out why these are breaking down so rapidly and frequently. She’s
2. Does the stage of the relationship matter?
Not in this instance. This is a situation where the customer has a right to expect better, not because
of the relationship, but because of the promise made that the product would work.
3. Your first call after hanging up with Eddie is with the senior engineer who gave you the wrong
information. He claims that there is a simple fix, but an engineer will have to make the trip there
to do it and it is about $5000 trip. First, what would you say to your manager who has to sign
off on that expense? Second, how do you handle Eddie?
First, asking McPherson to send an engineer would be wrong. They are the distributor. Barsh,
Case 13-2: Crisp Technology
Questions:
1. Sandra wants an account plan from Rudy that includes a list of the first five sales calls he'll
make, to whom, and the objective. How should Rudy go about putting that plan together?
This case is designed to give students an idea of account management planning. They should
2. Assume its 90 days later. The new design process has been introduced to wide acclaim, both in
the press and on social media. You were at a trade show in New York where you spoke with one of
the design team leaders from instrumentation in the Crisp booth. She indicated that she really
didn't think there was much aptitude for change, though she was impressed with the
demonstration you gave her. "People like things the way they are," she said. You think she might
be a possible advocate, but inertia is hard to overcome. How will you help her convince others
that they need to change how they design new products?
Keep in mind she works for Jenkins and Jenkins likes Primacore. When she says “People”, she may
3. What would you do if you learned that Jenkins doesn't pay anything for his annual fishing trip
with the Primacore rep?
Tough question. Is that in violation of a company policy? Can Rudy really do anything about it?
End o f Chapter Role Play Case
In each situation, the buyer is the CIO and concerned about integration of two companies that
were recently acquired. This is a new scenario and does not rely on previous scenarios from the
earlier chapters.
The first situation involves a problem with the reps not using the software. They are still adjusting
to it, and not using it properly. The rep should coach the buyer on how to get the reps to use it
more effectively, such as by setting expectations of what the buyer wants them to do. In
debriefing, this is a good time to talk about when the customer “isn’t right” or rather, when the
problem is caused by the customer and what you should do.
The second situation involves a technical problem and a legitimate concern; the reps are having
trouble transferring existing data from Outlook to NetSuite The problem is that the seller is
probably unable to resolve the problem. The buyer wants to return the software, or have the rep
make the transfer for everyone. That probably isn’t the best solution. At the minimum, the rep
should arrange a conference call to walk all of the salespeople through the transfer process. Or,
since they should have been trained by the trainer to do it, the rep could have the trainer do it, but
that isn’t the best way to handle it because the customer is likely to get caught between NetSuite
and the trainers.
In the third situation, a simple billing error has occurred and the buyer is blowing it all out of
proportion. Then the buyer compounds the problem by offering to pay the extra amount if the rep
will send back half to the buyer directly. The buyer threatens to send back the software. The rep
shouldn’t give in to the buyer but offer to fix the invoice, and to get a corrected copy to the buyer
quickly such as by fax.
Buyer Version A:
You are the CIO, and you bought several Gartner reports related to the technology of the two
companies that were acquired. You are very disappointed with level of detail in these reports
because you thought you would learn what you need to know to integrate those systems and
migrate those acquisitions to your company’s systems. You think, therefore, the reports aren’t
doing what you wanted and you want to return them. If the rep probes, eventually you can admit
that the problem is you didn’t really know what to expect. But at the beginning, be adamant that
these don’t do what you wanted and you want to return them. The cost you spent was about
$5000.
Buyer Version B:
You are the CIO and you have two companies that were recently acquired. You are trying to
figure out how to integrate their IT people into your department; the problem is that they don’t
know the systems. You suggested Gartner consulting to one of the IT directors who now reports
to you from one of those companies and her response was, “We tried them and the results were
terrible! It was so bad, I can’t believe you’d even consider them!” You want your people happy as
you can’t afford to lose them during this transition. While you’ve been a Gartner customer, you’ve
never used their consulting before, just their research.
Buyer Version C:
You are the CIO and you have some very important integrations coming up for which you will
need some consulting services from someone. But you recently got an invoice from Gartner that is
twice what you expected. You’re very angry about it because you’ve called and you can’t get an
answer from the billing people. Further, you question if they can’t get their billing software to
work, why should you trust their IT consulting to work? After you tell the rep this, say that you
don’t anticipate any further business with them and you won’t be paying the invoice. If the rep
doesn’t agree to that, tell the rep you’ll pay the full amount of the wrong invoice if he’ll send you
half of the extra back to you. But what you really want is the invoice fixed. If the rep agrees to
the unethical request of an under-the-table payment, then say you will definitely cancel it today.
ADDITIONAL EXERCISES AND ANSWERS
EXERCISE 14-1:
A good basis for any business that wishes to build a partnership and goodwill is to do more than is
expected. How can this be done under the following situations?
a. You are a pharmaceutical salesperson calling on doctors.
b. You are a consumer products salesperson calling on grocery store managers.
c. You are telecommunications (internet, etc.) services to large industrial firms.
Answers:
a. You are a pharmaceutical salesperson calling on doctors.
You could arrange a training session with the nursing staff to instruct them about how your
drug works so that if anyone calls in with questions they may be able to offer some assistance
if the doctor is busy.
b. You are a consumer products salesperson calling on grocery store managers.
You could bring more boxes of your products from the stockroom and stock the shelves with
them.
You can volunteer to serve as a bag boy during grand openings or special events. You can
agree to remove the current competitive products or other product classes off the end-of-aisle
display to the stockroom before erecting your own display.
c. You are selling telecommunications services to large industrial firms.
You can conduct periodic audits or question various users of the services to help the industrial
firm determine the usage of services within its own firm.
