Managing relationships and critical success factors in sales organizations

Customer Relationships

Managing relationships is one of the critical success factors in managing sales. What form might relationships between selling organisations and customers take?

There are many forms that relationships taken between selling organizations and customers. The most critical determinant of how the relationships and selling organizations is the business model of the company itself. For those companies whose business models are predicated on solving complex, intricate problems for customers, direct selling relationships are the most common. The reliance on a consultative, relationship-based selling strategy is often used by companies whose business models focus on complex, challenging problems other businesses have. This approach to selling often puts the role of being a trusted advisor at the center of the selling relationship strategies (Czerniawska, 2005).

In companies who have products that rely primarily on price and availability, the selling relationship are focused on direct selling, persuasive selling, and price-based selling (Leibowitz, 2010).

The relationships between selling organizations and customers is also predicated on the products and services being sold, how quickly they change or stay the same, and the pricing strategies of companies as well. For those products that change rapidly and have many substitutes, the direct sell, often based on price and availability alone, is the focus (Leibowitz, 2010). For products that have longer lives and often have services bundled in to them, the consultative, more relationship-based sell is relied on, again as trust is so critical in these types of selling efforts (Czerniawska, 2005).

A third factor that defines the form of relationship between selling organizations and customers is the level of expertise needed to ensure the products and services are used as effectively as possible. The sales of jet engines by Rolls Royce and Boeing for example is a very complex, very long-term type of selling strategy that concentrates on technical expertise and guidance. The selling relationship as a result revolves around technical expertise and thought leadership in the areas of aerodynamics, jet engine production, and the development of next-generation plane designs. This is a consultative selling relationship given the need for intensive levels of knowledge transfer and one company becoming nearly synonymous to the other in terms of structure and approach to sharing information.

What factors determine the form of relationship a selling organisation should seek to have with its customers?

The factors that determine the form of relationship a selling organization should seek with its customers include the distribution channels chosen for the product or service, the services also offered, and the need for 3rd party support for the sold product or services. Of all factors that define and determine the form of relationship between a selling organization and customers, the distribution channels that a business chooses to use are the most critical. Each industry has a completely different distribution channel structure and set of customer expectations as a result (Leibowitz, 2010). The focus on how to create trust with the reseller is what businesses concentrate their efforts on in an effort to create customer loyalty over the long-term. A distribution channel strategy effectively executed can be a major catalyst of trust, it can also force companies to completely re-think their business models if they don't work. The distribution channel decisions therefore are the most critical decisions a company can make. It determines the customer relationships they have, the satisfaction of customers with the relationships, and the level of expectations achieved as well. Distribution partners also are critical for positioning products and services to keep them relevant to new prospects and customers as well (Leibowitz, 2010). In short, the distribution channel decisions are the ones that will dictate wither or not a selling relationship to an existing or new target market is going to be successful or not. All of these distribution strategies also revolve around trust, which makes them critical to the success of a business (Czerniawska, 2005).