Sales Force Activities: Account Relationship Management

Part II

SALES FORCE ACTIVITIES

Account Relationship Management

Account Relationship Management Concepts

Account Purchasing Process

The Buying Center

Building Account Account Relationship Relationships Binders

Recognition Evaluation of Needs of Options

Purchase Decision

Value Added Role of Sales Force:

Implementation and Evaluation

Do you track supplier performance?

Do you single out certain suppliers as “preferred”? 9% N.A.

No 16% Yes 84%

No 36%

Yes 55%

Do you have multiple tiers for ranking suppliers? Yes 51%

No 40%

9% N.A.

Have any suppliers attained and lost top-level status?

No 23% Yes 77%

Traits of Top-Performing Suppliers

<5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% . . Others 7%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . Good

8% Management 12%

. . . . . . . . . . . . . . . . . . . Good

14% Response/Flexibility 28%

. . . . . . . . . . . . . . . . . . . . ISO 9000 Certification

0

5 10 . Service

. . . . . . .20 . . . . . . .25 . . . . . . 30 .... 15 . . . . . . . . . . . . . . . On-Time

Figure 4-3:

Tiering of Suppliers Tier

1

Type of Supplier

Nature of the Relationship

In



2

Preferred



3

Extended



4

Partner



Standard Questions in a Value Analysis Study Value Analysis – Focus: TOTAL COST

Standard Questions in a Value Analysis Study Value Analysis – Focus:

INVOICE COST POSSESSION COSTS

ACQUISITION COSTS

Determine the Decision-Making Process    

Determine the Decision-Making Process    



Buying Center Members MARKETING MANUFACTURIN G RESEARCH AND DEVELOPMENT GENERAL MANAGEMENT PURCHASING

Economic Buying Influence ROLE:

Asks “Why” Gives final approval

CHARACTERISTICS:

Access to money Can release money Veto power

FOCUS:

Total organization Bottom line The Future

User Buying Influence ROLE:

To decide on how a purchase will affect job performance

CHARACTERISTICS:

Implementation oriented Use or supervise use of product or service

FOCUS: Tactical, not strategic The job to be performed

Technical Buying Influence ROLE:

To eliminate alternatives To recommend

CHARACTERISTICS:

Focuses on quantifiable aspects of product and service Gatekeeper Can only say “no,” not “yes”

FOCUS:

Product specifications Asks “What,” not “Why”

Advocate

ROLE:

Helps guide the sale

CHARACTERISTICS: May be inside or outside of the buying organization Furnishes and interprets information FOCUS:

Your success

Advocate: PERSONAL

PROFESSIONAL

RECOGNITION

NEGATIVE

Advocate:     

Relationshi p Stage

Description

Key Selling Objectives  

 

 

  

 

Business Expansion Questions EXISTING USE

   

POSSIBLE NEEDS





POSSIBLE SOLUTION S



POSSIBLE NEW USES



DECISION CRITERIA







Thomas’s A S S E R T I V E N E S S

• Confrontatio n

• Confrontation • Compromise

•

• Accommodatio n

Avoidance

COOPERATION

Dissolution Stage: Warning Signals     

A “Reasonable” Salesperson Fortkamp Construction had a major contract delayed due to equipment failure. With a deadline quickly approaching the company called Rogers, a salesperson for Acme Supply. They requested an immediate delivery of replacement supplies so that Fortkamp could meet its promised deadline. Eager to break into this new account, Rogers agreed to generous credit terms and to absorb air freight charges to get the equipment to the customer as quickly as possible. These concessions, however, reduced his company’s net profit of 20% to below 10%.

A “Reasonable” Salesperson When asked by his sales manager why the sale should be made at such a low profit margin, Rogers explained, “I felt I needed to be reasonable with this account. I wanted their business in the future. I was there when they needed help, the deal was struck quickly, and they’d remember and thank me later with new business. I think the concessions were justified.” How would you respond to Rogers if you were his sales manager?

Account Relationships

Salesforce Market Conditions:     

Which of the following is the best alternative:

Account Relationships Alternative Management Systems  Low Pricing Authority:

 Medium Pricing Authority:

 High Pricing Authority:

Account Relationships LOW AUTHORITY

  

MEDIUM AUTHORITY



HIGH AUTHORITY





 

Considerations When Choosing a Partner 







Account Relationships Relationship Enhancers  Creating Value:  Meeting Expectations:  Building Trust:

Customer Value Creation in the Purchasing Process Customer Value Creation in the Purchasing Process High Custom er Value

Low

Relationships: ___ Enterprise ---- Consultative ..... Transactional

Figure 4-6 Account Intelligence

Figure 4-6 Continued

Figure 4-7: Account Relationship Strategy and Relationship Binders

Create Value Meet expectation s Build Trust

Measures of Performance Levels        

Results     

  

Trust Earning Components

Sample Questions    



Trust Earning Components

Sales People

Buyers

5

5

2

2

1

1

3

3

4

4

Source: Hawes, Mast & Swan (1989) PS&SM: 193 Salespeople; 173 Purchasing Agents

A “Valued” Customer Jacobs is about to close the sale when the buyer mentions, “There’s been $5,500 worth of breakage because of your lousy packaging, but I’m willing to split it with you if you give the word right now. I’ve another appointment beginning in a few minutes.” Jacobs suspects that the breakage was the fault of the buyer’s handling equipment, but cannot prove it. Thinking that splitting the difference is always a reasonable way out, Jacobs decides to agree with the buyer and to get the contract signed. Do you agree with Jacobs’ reasoning? What would you advise Jacobs to have done, if you were her sales manager?