Why do many salespeople seem to ignore after sale activities that enhance the relationship?

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journal article

Journal of Marketing Research

Vol. 15, No. 4 (Nov., 1978)

, pp. 501-516 (16 pages)

Published By: Sage Publications, Inc.

https://doi.org/10.2307/3150621

https://www.jstor.org/stable/3150621

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Abstract

A multistage model of the process by which an industrial salesperson influences a customer's preferences is introduced. The relationship between a salesperson's abilities during the two initial stages-impression formation and strategy formulation-and relative sales performance was examined. Industrial salespeople's perceptions of their customers' brand attribute perceptions were matched against the customers' actual perceptions, and a normative change strategy model was matched against the salespeople's reported change strategies. Variations in these abilities accounted for 20% of the variance in actual field sales performance.

Journal Information

JMR publishes articles representing the entire spectrum of research in marketing, ranging from analytical models of marketing phenomena to descriptive and case studies.

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Sara Miller McCune founded SAGE Publishing in 1965 to support the dissemination of usable knowledge and educate a global community. SAGE is a leading international provider of innovative, high-quality content publishing more than 900 journals and over 800 new books each year, spanning a wide range of subject areas. A growing selection of library products includes archives, data, case studies and video. SAGE remains majority owned by our founder and after her lifetime will become owned by a charitable trust that secures the company’s continued independence. Principal offices are located in Los Angeles, London, New Delhi, Singapore, Washington DC and Melbourne. www.sagepublishing.com

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As our economy becomes more service and technology oriented, the dynamics of the sales process will change. The ongoing nature of services and the growing complexity of technology will increasingly necessitate lengthy and involved relationships between buyers and sellers. Thus, the seller’s focus will need to shift from simply landing sales to ensuring buyer satisfaction after the purchase. To keep buyers happy, vendors must maintain constructive interaction with purchasers—which includes keeping up on their complaints and future needs. Repeat orders will go to those sellers who have done the best job of nurturing these relationships, the author argues.

Of course, not all products and services require the same degree of relationship cultivating; the longer the period of time over which the service will be extended or the more complex the product being sold, the more attention the seller must give the relationship. Whatever effort is appropriate, though, must be made in a systematic and regular way, which means that sellers must be alert and sensitive. The author offers suggestions for incorportating these qualities into companies’ business practices.

The relationship between a seller and a buyer seldom ends when a sale is made. Increasingly, the relationship intensifies after the sale and helps determine the buyer’s choice the next time around. Such dynamics are found particularly with services and products dealt in a stream of transactions between seller and buyer—financial services, consulting, general contracting, military and space equipment, and capital goods.

The sale, then, merely consummates the courtship, at which point the marriage begins. How good the marriage is depends on how well the seller manages the relationship. The quality of the marriage determines whether there will be continued or expanded business, or troubles and divorce. In some cases divorce is impossible, as when a major construction or installation project is under way. If the marriage that remains is burdened, it tarnishes the seller’s reputation.

Companies can avoid such troubles by recognizing at the outset the necessity of managing their relationships with customers. This takes special attention to an often ignored aspect of relationships: time.

The theory of supply and demand presumes that the work of the economic system is time-discrete and bare of human interaction—that an instantaneous, disembodied sales transaction clears the market at the intersection of supply and demand. This was never completely accurate and has become less so as product complexity and interdependencies have intensified. Buyers of automated machinery, unlike buyers at a flea market, do not walk home with their purchases and take their chances. They expect installation services, application aids, parts, postpurchase repair and maintenance, retrofitted enhancements, and vendor R&D to keep the products effective and up to date for as long as possible and to help the company stay competitive.

The buyer of a continuous stream of transactions, like a frozen-food manufacturer that buys its cartons from a packaging company and its cash-management services from a bank, is concerned not only with completing transactions but also with maintaining the process. Due to the growing complexity of military equipment, even the Department of Defense makes most of its purchases in units of less than a hundred and therefore has to repeat transactions often.

Because the purchase cycles of products and major components are increasingly stretched, the needs that must be tended to have changed. Consider the purchase cycles and the changing assurances backing purchases (see Exhibit 1). Under these conditions, a purchase decision is not a decision to buy an item (to have a casual affair) but a decision to enter a bonded relationship (to get married). This requires of the would-be seller a new orientation and a new strategy.

Exhibit 1 Purchase Cycles and Assurances

Selling by itself is no longer enough. Consider the compelling differences between the old and the new selling arrangements Exhibit 2 illustrates. In the selling scheme the seller is located at a distance from buyers and reaches out with a sales department to unload products on them. This is the basis for the notion that a salesperson needs charisma, because it is charisma rather than the product’s qualities that makes the sale.

Exhibit 2 The Change from Selling to Marketing

Consider, by contrast, marketing. Here the seller, being physically close to buyers, penetrates their domain to learn about their needs, desires, and fears and then designs and supplies the product with those considerations in mind. Instead of trying to get buyers to want what the seller has, the seller tries to have what they want. The “product” is no longer merely an item but a whole bundle of values that satisfy buyers—an “augmented” product.1

Thanks to increasing interdependence, more and more of the world’s economic work gets done through long-term relationships between sellers and buyers. It is not a matter of just getting and then holding on to customers. It is more a matter of giving the buyers what they want. Buyers want vendors who keep promises, who’ll keep supplying and standing behind what they promised. The era of the one-night stand is gone. Marriage is both necessary and more convenient. Products are too complicated, repeat negotiations too much of a hassle and too costly. Under these conditions, success in marketing is transformed into the inescapability of a relationship. Interface becomes interdependence.

Under these circumstances, being a good marketer in the conventional sense is not enough. When it takes five years of intensive work between seller and buyer to “deliver” an operating chemical plant or a telecommunications system, much more is required than the kind of marketing that simply lands the contract. The buyer needs assurance at the outset that the two parties can work well together during the long period in which the purchase gets transformed into delivery.

The seller and the buyer have different capital structures, competitive conditions, costs, and incentives driving the commitments they make to each other. The seller has made a sale that is expected to yield a profit. The buyer has bought a tool with which to produce things to yield a profit. For the seller it is the end of the process; for the buyer, only the beginning. Yet their interdependence is inescapable and profound. To make these differently motivated dependencies work, the selling company must understand the relationship and plan its management in advance of the wedding. It can’t get out the marriage manual only after trouble has begun.

The Product’s Changing Nature

The future will be marked by intense business relationships in all areas of marketing, including frequently purchased consumer goods. Procter & Gamble, copying General Mills’s Betty Crocker advisory service, has found that the installation of a consumer hot line to give advice on its products and their uses has cemented customer brand loyalty.

In the industrial setting we have only to review changing perceptions of various aspects of product characteristics to appreciate the new emphasis on relationships (see Exhibit 3). The common characteristic of the terms in the “future” column of this exhibit is time. What is labeled “item” in the first column was in the past simply a product, something that was bought for its own value. More recently that simple product has not been enough. Instead, buyers have bought augmented products.

Exhibit 3 Perceptions of Product Values

During the era we are entering the emphasis will be on systems contracts, and buyer-seller relationships will be characterized by continuous contact and evolving relationships to effect the systems. The “sale” will be not just a system but a system over time. The value at stake will be the advantages of that total system over time. As the customer gains experience, the technology will decline in importance relative to the system that enables the buyer to realize the benefits of the technology. Services, delivery, reliability, responsiveness, and the quality of the human and organizational interactions between seller and buyer will be more important than the technology itself.

The more complex the system and the more “software” (including operating procedures and protocols, management routines, and service components) it requires, the greater the customer’s anxieties and expectations. People buy expectations, not things. They buy the expectations of benefits promised by the vendor. When it takes a long time to fulfill the promise (to deliver a new custom-made automated workstation, for example) or when fulfillment is continual over a long period (as it is in banking services, fuel deliveries, or shipments of components for assembly operations), the buyer’s anxieties build up after the purchase decision is made. Will the delivery be prompt? Will it be smooth and regular? Did we select the best vendor?

Differing Expectations

When downstream realities loom larger than up-front promises, what do you do before, during, and after the sale? Who should be responsible for what?

To answer these questions it helps to understand how the promises and behavior of the vendor, before the sale is made, shape the customer’s expectations. It is reasonable for a customer who has been promised the moon to expect it to be delivered. But if those who make the promises are paid commissions before the customer gets everything he or she bargained for, they’re not likely to feel compelled to ensure that the customer gets fully satisfied later. After the sale, they’ll rush off to pursue other prey. If marketing plans the sale, sales makes it, manufacturing fulfills it, and service services it, who’s in charge and who takes responsibility for the whole process?

Problems arise not only because those who do the selling, the marketing, the manufacturing, and the servicing have varying incentives and views of the customer but also because organizations are one-dimensional. With the exception of those who work in sales or marketing, people seldom see beyond their company’s walls. For those inside those walls, inside is where the work gets done, where the penalties and incentives are doled out, where the budgets and plans get made, where engineering and manufacturing are done, where performance is measured, where one’s friends and associates gather, where things are managed and manageable. Outside “has nothing to do with me” and is where “you can’t change things.”

Many disjunctions exist between seller and buyer at various stages of the sales process. These may be simply illustrated, as in Exhibit 4.

Exhibit 4 Varying Reactions and Perceptions Before and During Sale Process

After the Fact

The fact of buying changes the dynamics of the relationship. The buyer expects the seller to remember the purchase as having been a favor bestowed, not as something earned by the seller. Hence it is wrong to assume that getting an account gives you an advantage because you’ve got a foot in the door. The opposite is more often the case. The buyer who views the sale as a favor conferred on the seller in effect debits the seller’s account. The seller owes the buyer one and is in the position of having to rebuild the relationship from a deficit stance.

In the absence of good management, the relationship deteriorates because both organizations tend naturally to face inward rather than outward toward each other. The natural tendency of relationships, whether in marriage or in business, is toward erosion of sensitivity and attentiveness. Inward orientation by the selling organization leads to insensitivity and unresponsiveness in customer relations. At best the company substitutes bureaucratic formalities for authentic interaction.

A healthy relationship maintains, and preferably expands, the equity and the possibilities that were created during courtship. A healthy relationship requires a conscious and constant fight against the forces of decline. It becomes important for sellers regularly and seriously to consider whether the relationship is improving or deteriorating, whether their promises are being completely fulfilled, whether they are neglecting anything, and how they stand vis-à-vis their competitors. Exhibit 5 compares actions that affect—for better or worse—relationships with buyers.

Exhibit 5 Actions That Affect Relationships

Building Dependencies

One of the surest signs of a bad or declining relationship is the absence of complaints from the customer. Nobody is ever that satisfied, especially not over an extended period of time. The customer is either not being candid or not being contacted—probably both. The absence of candor reflects the decline of trust and the deterioration of the relationship. Bad things accumulate. Impaired communication is both a symptom and a cause of trouble. Things fester inside. When they finally erupt, it’s usually too late or too costly to correct the situation.

We can invest in relationships, and we can borrow from them. We all do both, but we seldom account for our actions and almost never manage them. Yet a company’s most precious asset is its relationships with its customers. What matters is not whom you know but how you are known to them.

Not all relationships can or need be of the same duration or at the same level of intimacy. These factors depend on the extent of the actual or felt dependency between the buyer and the seller. And of course those dependencies can be extended or contracted through various direct links that can be established between the two parties. Thus, when Bergen Brunswig, the booming drug and health care products distributor, puts computer terminals in its customers’ offices to enable them to order directly and get instant feedback regarding their sales and inventory, it creates a new link that helps tie the customer to the vendor.

At the same time, however, the seller can become dependent on the buyer in important ways. Most obvious is vendor reliance on the buyer for a certain percentage of its sales. More subtle is reliance on the buyer for important information, including how the buyer’s business will change, how changes will affect future purchases, and what competitors are offering in the way of substitute products or materials, at what prices, and including which services. The buyer can also answer questions like these for the vendor: How well is the vendor fulfilling the customer’s needs? Is performance up to promises from headquarters? To what new uses is the customer putting the product?

The seller’s ability to forecast the buyer’s intentions rests on the quality of the overall relationship. In a good relationship the buyer shares plans and expectations with the vendor, or at least makes available relevant information. With that information the vendor can better serve the buyer. Surprises and bad forecasts are symptoms of bad relationships. In such instances, everybody—even the buyer—loses.

Thus, a system of reciprocal dependencies develops. It is up to the seller to nurture the relationship beyond its simple dollar value. In a proper relationship both the buyer and the seller will benefit or the relationship will not last.

Moreover, both parties should understand that the seller’s expenses rarely end with acquisition costs. This means that the vendor should work at convincing the customer of the importance of maintaining the vendor’s long-term profitability at a comfortable level instead of squeezing to get rock-bottom delivered prices. Unless the costs of the expected postpurchase services are reflected in the price, the buyer will end up paying extra in money, in delays, and in aggravation. The smart relationship manager in the selling company will help the buyer do long-term life-cycle costing to assess the vendor’s offering.

Bonds That Last

Professional partnerships in law, medicine, architecture, consulting, investment banking, and advertising rate and reward associates by their client relationships. Like any other assets, these relationships can appreciate or depreciate. Their maintenance and enhancement depend not so much on good manners, public relations, tact, charm, window dressing, or manipulation as they do on management. Relationship management requires companywide maintenance, investment, improvement, and even replacement programs. The results can be spectacular.

Examine the case of the North Sea oil and gas fields. Norway and Britain urged and facilitated exploration and development of those resources. They were eager and even generous hosts to the oil companies. The companies, though they spent hundreds of millions of dollars to do the work, didn’t fully nurture their relationships. When oil and gas suddenly started to flow, the host countries levied taxes exceeding 90% of the market prices. No one was more surprised than the companies. Why should they have been surprised? Had they built sound relationships with the governments, the politicians, and the voters—by whatever means—so as to have created a sense of mutuality and partnership, they might have moderated the size of the taxes. What would it have been worth?

This is not an isolated occurrence. The same problem crops up in similar circumstances where vendors are required to make heavy expenditures to get accounts and develop products. Exhibit 6 depicts cash flows to a vendor of this type during the life of the account. During the customer-getting and development period, cash flows are negative and the customer eagerly encourages the expenditures. When the product is delivered or the joint venture becomes operative, cumulative cash flows turn up and finally become positive. In the case of the North Sea, the surprising new high taxes represent the difference between what revenues to the oil companies might have been (the upper level of potential revenue) and what they actually became. With worse relationships they might, of course, have fallen to an even lower level of potential revenue.

Exhibit 6 Cumulative Cash Flow History of an Account

Consider also the case of Gillette North America. It has four separate sales forces and special programs for major accounts to ensure Gillette’s rapid and smooth response to customers’ requirements. Gillette also has a vice president of business relations who counts among his major duties cultivation of relationships with major retailers and distributors. This VP carries out that responsibility via a vast array of ceremonial activities ranging from entertainment at trade association conventions to organization of special events for major accounts in connection with the annual All-Star baseball game, the World Series, the Superbowl, and the NCAA playoffs. These activities establish bonds and affirm reciprocal obligations and benefits.

Some companies now require engineering and manufacturing people to spend time with customers and users in the field—not just to get product and design ideas or feedback regarding present products but also to get to know and to respond to customers in deep and abiding ways so as to build relationships and bonds that last. The Sperry Corporation’s much-advertised “listening” campaign has included training employees to listen and communicate effectively with each other and with customers.

All too often company officials take action instead of spending time. It is all too easy to act first and later try to fix the relationship, instead of the other way around. It is all too simple to say, “We’ll look into it and call you back” or “Let’s get together for lunch sometime.” These are tactics of diversion and delay, not of relationship building.

When a purchase cycle is long—as when a beer-making plant contracts with a can-making vendor to build a factory next door, or when the U.S. Air Force commits itself to buying a jet engine with a life of 20 to 30 years—the people in the vendor organization who did the selling and those in the customer organization who did the buying will be replaced over the course of those relationships. So, in all likelihood, will the entire upper levels of management on both sides. What must the seller do to ensure continuity of good relations? What is expected of the customer when people who did the buying are changed and gone? Clearly the idea is to build bonds that last no matter who comes and goes.

Making It Happen

To effectively manage relationships, managers must meet four requirements:

1. Awareness. Understand both the problem and the opportunity areas.

2. Assessment. Determine where the company now stands, especially in terms of what’s necessary to achieve the desired results.

3. Accountability. Establish regular reporting on individual relationships, and then on group relationships, so that these can be weighed against other measures of performance.

4. Actions. Make decisions and allocations and establish routines and communications on the basis of their impact on the targeted relationships. Constantly reinforce awareness and actions.

Relationship management can be institutionalized, but in the process it must also be humanized. One company has regular sensitivity sessions and role-playing seminars in which sales officials assume the buyer role. It also conducts debriefings on meetings with customers. And it requires its customer-contact people (including those who make deliveries and handle receivables) to regularly ask of various accounts the seminal questions: How are we doing in the relationship? Is it going up or down? Are we talking with the right people about the right issues? What have we not done lately?

The emphasis on “lately” is not incidental. It reflects the recognition that relationships naturally degrade and have to be reinvigorated. If I owe you a favor, I forget—but you don’t. And when I’ve done you a favor, you feel obligated—but not for long. You ask, “What have you done for me lately?” A relationship credit must be cashed in or it expires, and it must be used soon or it depreciates.

Another way companies can institutionalize relationship management is by establishing routines that ensure the right kinds of customer contacts. A well-known Wall Street investment firm requires its security analysts and salespeople to make regular constructive contacts with their institutional customers. Constructive is defined as conveying useful information to them. The firm has set up a regular Monday-morning investment strategy “commentary” that analysts and salespeople can convey by telephone to their customers. In addition, each analyst must develop periodic industry commentaries and updates, to be mailed or telephoned to customers. Analysts and salespeople are required to keep logs of these contacts, which are compiled, counted, and communicated to all in a weekly companywide report. Those salespeople and analysts making the fewest contacts have to explain their inaction to supervisors.

The firm allocates end-of-year bonuses on the basis of not only commissions earned from the various institutions but also the number and types of contacts initiated and maintained. Meanwhile, the firm conducts regular sensitivity-training sessions to enhance the contacts and the quality of the relationships. The results, which show that the efforts have been highly successful, are analyzed and made known to all, thus reinforcing the importance of the process.

Relationship management is a special field all its own, and is as important to preserving and enhancing the intangible asset commonly known as “goodwill” as is the management of hard assets. The fact that it is probably more difficult makes hard work at it that much more important.

1. See Theodore Levitt, “Marketing Success Through Differentiation—of Anything,” Harvard Business Review (January–February 1980): 83.

A version of this article appeared in the September 1983 issue of Harvard Business Review.

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