Ch. 12: Business to Business Selling

What is B2B Selling?

Creatively joining your company’s capabilities with your customer’s needs.

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

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

Characteristics of B2B Selling

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

Exhibit 12-1

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

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

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 offeringo Reducing customer’s feeling of risk

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

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 advantageouso Relieve pricing concerns

How to Build Successful Relationships

Successful relationships between customer and seller involve:

Mutual Respect Trust Authenticity

How to Build Successful Relationships

Levels of Relationship and Intricacy:

Discrete Exchange Differentiating an

undifferentiated product Multiple Transactions Collaboration/Partnering

Philosophies of Marketing: Inward, Sales Driven Cultures

Maximizing production/sales is often the goal

Production Era Product Era

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

4 Forms of Seller Roles

Order Taker

Persuader/ Sustainer

Motivator/ Problem Solver

Relationship/ Value Creator

Takes orders, ensures correct and timely delivery of offering. Major effort in the “place” marketing mix variable.

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.

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.

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.

Exhibit 12-6

4 Forms of Seller Roles

Order Taker

Take Orders

Ensure Timely Deliver of Products – major effort in “place” in marketing mix.

4 Forms of Seller Roles

Persuader/Sustainer

Proactive role in relationship Updates customers about

offerings Convinces customers of

offering’s value

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

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

Knowing Your Market

One must understand the Customer’s: Technologies Products Markets and Customers Competitors Channels Buying Center and Buying Patterns Culture

Other Types of Seller Roles

Missionary Sellers—Task oriented

Field-Marketers—Market developers, focus in translation

Post-Sale Customer Service—Reinforce purchase decision

Relationship Between Field Sales & Field Marketing

Vice President of Marketing & Sales

Sales Manager Marketing Manager

Purchasing Influences at

customers who are contract providers

to end users.

Field Marketer

Regional Sales

Manager

Field Seller

s

Programs Manager

Field Manager

Headquarters Segment Specialists

Headquarters Segment Specialists

Field Marketer

Regional Sales Manage

r

Specifying Influences at End User customers

who rely on contract providers

Specifying Influences at End

User customers who have integrated manufacturing

facilities

Purchasing Influences at integrated customer facilities

Field Sales Team

Field Marketing

Team

Specifying Influences at End User customers

who rely on contract providers

Field Marketing

Flow

Outsource/ Contract Provider

Flow

Direct Sales Flow

Exhibit 12-7

Field Seller

s

Field Seller

s

Correlation of Value & Complexity of Relationships

A Generalized Case

Increasing Value

Orientation

Transactional Sales

Relationship Sales

Complexity of Seller

Skills

Order Taker

Motivator/Problem SolverPersuader/Sustainer

Relationship/Value Creator

Degree of shading indicates relative degree of importance.

Increasing complexity of Relationship

Exhibit 12-8

The Mutual Needs of Buyer Seller

Needs of Job Function

Needs of Organization

Individual Needs of Buyer/Seller

The Selling Structures

Direct Sales Force

Manufacturer’s

Representatives

Distributors

Any Combination of The Three

Selling Compensation

Straight Commission

Straight Salary

Combination Plans

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

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

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

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’

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

Appropriate Market Conditions:Direct Sales Force

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

Exhibit 12-11

Appropriate Market Conditions:Manufacturer’s Representative

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

Exhibit 12-11