1 INTRODUCTION.1 I.THE RELATIONSHIP ASPECT IN THE BUSINESS ............................................ 3 1. THE INFLUENCE OF THE CUSTOMER-ORIENTED SELLING ON LONG-TERM SALES RESULTS ... 3 2. THE IMPACT OF THE RELATONSHIP MARKETING ON LONG -TERM SALES RESULTS ............. 5 II.THE CUSTOMER-ORIENTED BEHAVIOR IS WIDELY USED IN AERON AUTICS 8 1. THE LONG-TERM RELATIONSHIPS ARE PARAMOUNT IN THIS SECTOR ............................ 8 2. THE QUALITY OF LONG-TERM SELLING RELATIONSHIPS ARE DETERMINANT IN THE FIERCE COMPETITION CURRENT ....................................................................................... 10 CONCLUSION13 REFERENCES..14
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8/7/2019 selling and sales management - long term relationships in aeronautics
Undeniably, in today¶s competitive market environment, customers in this decade
have more information, demand higher levels of service and have higher expectations.
So, customer satisfaction is more difficult to win, however, it is a crucial determinant of abusiness¶s long-term success.
In Business-to-Business (B2B), transactions between businesses (manufacturer, wholesaler,
retailer), businesses often are powerful buyers who work with objectives and efficient skills to
make an appropriate purchase. Sellers have to understand their needs and convince them that
they are able to satisfy them.
This Buying-selling interface is a self-generating process in which the needs of one (the
buyer) become the purpose of the other (the seller) (Allen, Wootten, 1998)
To integrate customers' needs, sellers are concentrated on customer-oriented behaviour.
According to Williams (1998), these kind of behaviours are directed toward determining and
understanding the need of the target customer and adapting the selling organization¶s response
in order to satisfy those needs better than the completion, thereby creating a competitive
advantage (Williams, 1998).
Many studies emphasize the importance of adopting long-term relational strategies in order to
retain customers. Especially, according to Williams (1998), when we know that the
acquisition of new customers costs as much as five times more than is required to keep and
work with existing customers.
So, an efficient salesperson has to have the customer¶s best interest in mind in order to adopt
the appropriate behaviour and propose the appropriate solutions.
The basic premise of this research is to show that companies recognize the value to develop
the customer¶s satisfaction, and benefits realized by sales force that engages in customer-
oriented behaviour. The purpose of this research is to examine these relationships and
understand why certain behaviours and relationships can influence sales results.
Nowadays, suppliers seek absolutely to invest themselves in long-term relationships with
customers. Sales and marketing teams are especially dedicated to deal with the major
customers. Thereby, customers can easily identify their own advantages to establishing close
relationships with suppliers. Ford seen it! Its number of suppliers had been reduced... From
30,000 to ... 3,000 suppliers! The close relationship and its quality had been privileged. Now,
many have single-supplier status (1st rank) in order to ensure the understanding of customers¶
expectations and the communication with 2nd rank of outsourcing. Car manufacturers haveunderstood this, however several other companies in different sectors, such as our sector,
developed later. The aircraft manufacturers followed this pattern not long ago!
Suppliers! It is time for you to excel yourself with your relational skills to stay on the
marketplace! To show your own added-value, to win your strategic position and your
responsibilities toward its customers or otherwise to choose to be crush by your competitors...
8/7/2019 selling and sales management - long term relationships in aeronautics
Today, sales representatives are the crucial link between customers and the company.
At the customers¶ level, salesperson who adopts customer-orientation behaviour can influence
in two ways: directly on customer satisfaction and indirectly on company satisfaction.According Linda Richardson, 2010, the fit of solutions, sales strategies, speech value, and so
on, impact on customer¶s decision to buy, nonetheless almost nothing has the potential to
increase sales results as much as improving the sales relationship with customers.
Salespeople are located in a "sensitive position": one side the company, the other side
consumers. Consequently, it is essential that salespersons control and supervise their own
behaviours because consumers are able to perceive the conduct of the company through these
salespersons.
Buyers will be sensitive to the verbal and non-verbal cues, as well as, feelings, intentions and
behaviours of salespeople. That is determinant in first impressions and customers¶ opinions
through firm analysis.
It can show to the customer: the level of respect for employees (as well for customers), the
level of involvement concerning customer-oriented relationships, if he can trust in this
company...; without even knowing the company, only the salesperson!
Hence, after bad impressions, the business image and even the brand image are fixed
negatively in customers mind. In that case, it will need very heavy efforts to change customer
opinions which are "locked" in his memory.
Salespeople have to develop an adequate knowledge and understanding of customer¶s needs,
interest to maintain long-term relationships, but also adapt responses, provide post-sale
follow-up. In fact, behaviour and involvement of salesperson are directed by firm¶s influences
and impact firstly on buyer-seller relationship, secondly on customer satisfaction and
customer behaviour which influence finally the future purchase or repurchase (scheme p3).
Therefore, salespeople is able to provide in adding value for customers in helping to identify
new opportunities, in influencing future purchase intentions and in gaining referrals
(Beverland, 2001).
8/7/2019 selling and sales management - long term relationships in aeronautics
Indeed, the positive relationship between customer-orientation behaviour and long-term sales
outcomes is directly linked with the result of buyer /seller relationship. Many studies showed
sellers who have higher customer-orientated behaviour are often more efficient in developing
and maintaining buyer-seller relationships.
It should avoid competitive and command behaviours because it implies a zero-sum or win-
lose orientation with positives profits for only one part, conflicts increase and satisfactiondecreases.
However, coordinative behaviour allows a win-win orientation, which is more efficient and
relevant to develop a positive relationship mutually profitable.
The satisfied customers even may reward the seller by continuing their relationship (keep
regular contacts) and by waiting his advices, his "agreement" before purchase or repurchase
(trust relationship).
In certain cases, satisfaction and trust can even tempt the buyer to recommend this seller to his
colleagues or his family. It represents a major symbol of customer's involvement in this
buyer /seller relationship and the possibility to continue in long-term relationship as loyal
partners.
2. The impact of the relationship marketing on long-term sales
results
The marketing concept holds that the key to successful and profitable business rests with
identifying the needs and wants of customers and providing products and services to satisfy
them (Jobber, Lancaster, 2009).
Relationship marketing implies a long-term commitment between the buyer and the seller who have an interest in providing a satisfying involvement because their collaboration and
their information sharing are profitable for both. This approach attempts to exceed the simple
purchase situation with its basic sales techniques, it involves to make more developed and
solid contact by focusing on personalized purchase.
Williams (1998) characterizes relationship marketing as the process of creating and
maintaining harmonious relationships between suppliers and customers through mutual
cooperation and commitment.
Also, customers must be treating not only as customers but also as partners in manner to
anticipate, integrate their personal needs and provide appropriate advices about a product or a
service.
As a practice, relationship marketing differs from other forms of marketing since it is focused
on the long-term value of customer relationships. It is involved in a specific communication
and in a constant work on methods to improve relationships in a changing society.
Indeed, the overall goals concerning customer-oriented relationship are to understand, attract
and obtain new clients, retain current customers, entice "former clients back into the fold´ and
build stronger ties as long as possible.
8/7/2019 selling and sales management - long term relationships in aeronautics
Marketing research focuses on customer behaviours by analysis of consumers to develop the
marketing strategy and of consumer reaction to the total product to def ine the success or
failure of the strategy.
To survive in this competitive environment, a f irm must provide its customers more value
than is offered to them by competitors by anticipating and reacting to customer needs.
Some time ago, the last step for companies was to look for to close sales, now they
understood that it is paramount to retain customer af ter sale and build a long-term relationship
and they use several tools like databases, customized communications, and salespeople
eff icient.
Also, marketers sometimes use the 80/20 rule. According Keegan, Green (2008), this rule
(law of dispropor tionality or Pareto¶s Law) suggests that 80 percent of a company¶s revenues
or prof its are accounted for by 20 percent of a f irm¶s products or customers.
This rule can cast a doubt concerning relationships marketing strategies to adopt between
focus impor tant accounts (20%) or develop small accounts and new customers (80%).
However, since sales representatives have much inf luence on customers, relationship
marketing is highly dependent of them and it must develop its strategies according sellers'
opinions and exper iences.
As boundary spanners, salespeople of ten are the business-to-business marketer's pr imary
source of communication with customers (Schwepker, 2003).
Indeed, any lack of knowledge concerning customers¶ personal information, their behaviours,their needs and the nature their relationships with their sellers lead researchers in diff icult
situation to develop customer-or iented strategies.
8/7/2019 selling and sales management - long term relationships in aeronautics
II. The customer-or iented behavior is widely used in
aeronautics
1. The long-term relationships are paramount in this sector
The aviation industry is subject to very specif ic constraints and threats, despite the current
growth per iod which tends toward the globalization and the international trade. The
constraints of this industry are linked with the product character istics and the market
conditions.
When an aircraf t is made and delivered, it is an outcome from a hard-work ing of many
different occupations in huge and complex industr ial chain.
It needs a mutual involvement on aircraf t projects in manner to obtainthe best outcomes.
Obviously, we will target relationships between manufacturers and different type of suppliers.
First, according Stéphane Auter, it needs to know that "Supplier Furnished Equipment" (SFE)
suppliers.
The air lines appreciate this concept because equipments are purchased by the airframe
manufacturers and air lines might inf luence the selection process among few suppliers.
In effect, air lines need to sign only a "purchase agreement" with aircraf tmanufacturers and
through this contract, contracts with SFE suppliers are included.The airframers also like this system because it allows them to eliminate the many ³buyer
furnished equipment´ (BFE).
So, we have "Buyer Furnished Equipment" (BFE) supplier who can be chosen by the air line
according to the products or iginally cer tif ied by the airframe manufacturers but it requires a
different contract. Then, there is one type of supplier for "In-f light enter tainment" (IFE, like
Panasonic Avionics Corporation) which refers to the enter tainment available to aircraf t
passengers dur ing a f light.
The advantage with SPE suppliers, it is that they are generally not required to bid for contracts
at each phase of the design and manufactur ing process, but it must be highly responsive totheir needs as par t of a longer-term par tnership. Suppliers feel in a "secure commitment", they
obtain an inf luent position concerning competitors and industry's standards.
So, we can understand the major benef its in obtaining this SFE supplier position for an
aircraf t supplier. That's why, we can advice to be careful and concentrate on establishment of
relationship and their development even if it involves a lot of effor ts and requires energy.
8/7/2019 selling and sales management - long term relationships in aeronautics
Also, according Schwepker (2003), f irst, customer-or iented salespeople in aeronautics must
under line the benef its of their products with related services and demonstrate the benef its
whose will prof it the company.
Secondly, salespeople have to take steps to meet unique customer needs because this is
purchases which require high involvement in term of time, costs, quality.
Third, they must emphasize their ability to continuously serve customers in order to develop along-term trust relationship. They specify to customers they are available whenever needed to
satisfy their needs. Finally, salespeople don't only discuss a product's possibilities, but also
point out its disadvantages and limitations. Doing so builds credibility and demonstrates that
customer needs come f irst.
2. The quality of long-term selling relationships are determinant in
the f ierce competition current
The aeronautics is a sector which requests a high involvement dur ing a long time because
aircraf t is pr imar ily a product whose life cycle is par ticular ly long, around 30 years, which
requires manufacturers def ine appropr iate products to the market and anticipate its
developments throughout the per iod. Then, they must also guarantee the same levels of
service, secur ity, availability (at least one salesperson and one technician to provide a suppor t)
throughout the operational life of the aircraf t.
Today, the aircraf t manufacturer tr ies to refocus on the core business, in this way it
subcontracts massively its non-strategic activities (see rake structure).
These huge programs of ten require to subcontract, share work and costs. Indeed, outsourcingis evaluated around 40% for the A380 of Airbus, 70% for the 787 Dreamliner of Boeing
(appendix 4).
Airbus, like Boeing and others work with the R FP (R equest for Purchasing) based on high
performance cr iter ia (appendix 5) concerning the product (reliability, pr ice, quality, etc.).
Suppliers are rated on cr iter ia to be select and af ter to continue a track ing for 20-30 years.
Sellers must create ties and work hard to obtain sales contracts especially at the launch of an
aircraf t program to ensure this long-term par tnership.
8/7/2019 selling and sales management - long term relationships in aeronautics
However, too many suppliers has created diff iculties to communicate and control the quality,
therefore, manufacturers have decided to reduce the number in changing outsourcing structure
(see rank structure).
Indeed, Airbus is work ing directly with 90 suppliers at the rank 1 against around 200 before.
"This allows us to access the best exper tise at the global level, while benef iting from a more
direct relationship with these strategic suppliers," conf ides Philippe Launay, industr ial manager (Meddah, 2010). The goal is to entrust this reduced number of sub-contractors
"direct" a larger work load and responsibilities.
Never theless, some suppliers think these collaborative relationships are usually based on the
law of the strongest especially in time of f luctuations (pressure of manufacturer on costs,
volumes, time).
The fact is the industr ial selling is complex and requests a relevant professional involvement.
To be competitive, the supplier must offer more than what is wr itten in the contract, it should
stand out, not being a basic supplier but rather become an asset for the customer in improving
his performances.
In a context of changing societies, globalization and increased competition, sellers must meet
many requirements costs reduction and competitiveness, responsiveness and f lexibility, ability
to overall offer and r isk-shar ing or acquisition new technologies and sk ills in adopting many
new paramount sk ills as just-in-time, Electronic Data Interchange (EDI), R&D, green
marketing, customers training to improve customer-or iented relationships and retain them.
Suppliers have to incorporate several dimensions of customer-or ientation that is ability to
fulf ill aircraf t manufacturer needs, to offer assistance to buyers on purchase, to be reactive, to
apply the industr ial aircraf t knowledge, to integrate the environmental factor, to providing
af ter sales service and product quality which are signif icant in increasing customer's
satisfaction.
8/7/2019 selling and sales management - long term relationships in aeronautics
This research shows that suppliers are currently focused on the customer satisfaction in
adopting more and more customer-oriented behaviour, because it is not enough to sell and
find new customers, it should rather to keep customers in its portfolio and to find new future
customers in long-term relationship. This involvement of sales force realizes profits andimproves results, this is often due to faithful partners who don¶t hesitate to conclude deals
with their trusted sellers.
These relationships must be based on human values (trust, honest, reliable, etc.) and high
performance values (able to promote costs, quality, time, innovation, competitive, competent,
adaptable, ect.). By adopting this behaviour close to customers¶ interests and by meeting
customers¶ needs, the sales results will be undoubtedly improved.
When firms accept that the time and money spent with customers represent an investment not
a pure cost, they can begin to adopt a customer-oriented behaviour.
It is true today, salespeople generally have a high level of customer-orientation behaviour.
However, managers should continue to focus on the efforts to educate the agents on how to
serve the customers¶ better, in line with increasingly customers¶ expectations.
This is due to the globalization and the inflow of more foreign companies, salespeople have to
face competition and to stand out to survive. Only those who have the ability to reach and
retain the customers¶ will survive. This implies to follow a continuous training on methods to
build a solid relationship, on current sales techniques, also on arguments of sale (competitive
criteria change frequently, today the innovation classifies in the top).
Azila (2007) adds it appears that sales agents should strive to improve their customer-
orientation behaviour in their efforts to attain higher sales performance.
Thus, managers who want their salespeople to be more customer oriented should provide the
necessary training and share current skills which permit to improve strategies.
However, we can underline that customer-oriented sales techniques are a long-term strategy
that may meet some level of risk. This risk is that salespeople who have integrated a
customer-oriented behaviour are likely to be making short-term sacrifices in their current
sales results. Hence, it needs to choose a motivated salesperson who has the ability to confront
this temporary risk. To exceed these barriers of low and unattractive results at the beginning,
the skill levels of salespeople should be high because without certain skills the long-term
relationship becomes quickly a short-term relationship.
Thus, the firm should attempt to build both sales-force job satisfaction and support for thepractice of customer-oriented selling. Without these two elements, it may be concluded that
only one-half of the puzzle has been completed.
Suppliers! It is not time to rest on your laurels! You should frequently prepare salespeople to
face: what is the behaviour to adopt concerning customers, how to build a long-term
relationship, what are the criteria to promote for which need?
8/7/2019 selling and sales management - long term relationships in aeronautics