selling and sales management - long term relationships in aeronautics

8/7/2019 selling and sales management - long term relationships in aeronautics

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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 AERONAUTICS 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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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...



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I. The relationship aspect in the business

1. The influence of the customer-oriented selling on long-term

sales results

In contrast with transaction-based selling approaches, relationship selling is more

customer-oriented, focusing on building trust between the buyer and seller, creating and

building customer value, and providing goods and services that are highly congruent with the

customer's strategic priorities (Ingram, Thomas, 2005).

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).



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Never t eless, sales representatives must face t fast changing and intense of competitive

marketplace. It is necessary to remember that salesperson must analyze precisely customer¶s

needs to satisfy them more successfully than the competition.

That s why, they have to be involved, give satisfaction, build a mutual trust, have common

goals, be honest, build a mutual interdependence, provide postsale follow-up and obtain

commitments which are essential in the process of buyer-seller relationship development.

Moreover, according Williams (1998) a relevant buyer-seller dialogue is paramount because it

provides crucial information (appendi 1) that each par ty needs in order to learn for each

another, form expectations, understand needs/expectations, build a trusting relationship, share

goals, coordinate plans, and resolve conf licts.

So, when salespeople had integrated and understood the customer¶ needs and hierarchy needs,

they are able to provide adapted responses with customer's expectations since theyadopt

customer-or iented behaviour. It is not easy to acquire this strong advantage, it needs to invest

lot of time and effor ts in analysis, be listening, be understanding, br ing problem solving

assistance in order to build a positive association strengthen buyer-seller long-term

relationship development.

This development gradually implies the interdependence between the par ties, r isk tak ing and

they should fulf ill exchange obligations to obtain relevant relationships and satisfactions.

We can talk about ³team or ientation´, this theory win its spurs, when the customer-or iented

behaviour is pr ivileged: both par ties are work ing toward mutual benef its and develop the

buyer-seller relationships (quality-duration).

Linda Richardson (2010) even under lines that these relationships between the customer and

the salesperson is the No. 1 reason the customer buys from that salesperson.



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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.



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With the growth of new technologies, relationship marketing evolves within collaborative and

social communication channels. This includes tools for managing relationships with

customers that go beyond simple database, it is an information centers which can have a huge

value for marketers concerning long-term relationships development (e.g. the database can

permit the salesperson to remember the day of birth of a customer, and so the salesperson can

show him a positive sign which influences considerably on their relationship).

Also, the marketing noticed that strong relationships with customers developed positive

effects on customers' behaviour, on their expectations, on their satisfaction, on future

exchanges and "cancel" the conflicting role between buyer and seller (appendix 2).

Also, marketing research underlines positive outcomes from customer-oriented relationships

like increased profitability, gains market share, improved salesperson performance, high job

satisfaction.

That's why, the relationship marketing focuses on long-term customer satisfaction, value-

added that sellers can generate and how to nurture customer relationships through the

implementation of strategies based on current customers behaviours.

To achieve these objectives, relationship marketing uses four behavioural keys: satisfaction,

trust, commitment, involvement and avoid deceptive, manipulative, high pressure tactics.

It also has to follow five keys to develop relationships with customers:

Develop around a target product or service

Improve benefits

Price in a manner to encourage loyalty

Customize to the individual customer

Train employees for more efficiency

Customer care became a priority for improve satisfaction by ensuring the availability of all

products or services and all after-care even if it often exceeds expectations.

For example, Nissan has concentrated on what customers wanted and their satisfaction when

it was in decline... it won a more stable position. Microsoft Corporation developed

understandable icons to simplify the use. Microsoft is now the largest software company in

the world.

It is evidence that customer-oriented behaviour plays a paramount role in our current society

and it will be a huge error to denigrate this key. It could even be a suicide for a company.

According Hawkins (2010), customer value is the difference between all the benefits derived

from a total product and all the costs acquiring those benefits (e.g. own a car gives benefits:

flexible transportation, pleasure and required paying not only for the car but also for gasoline,

insurance...).



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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.



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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.



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The technical needs of the aircraf t industry involve a cer tain dependency concerning the

innovative sk ills and product development of those industr ies. It needs to be at the top of the

technology in this area and the outsourcing must follow to survive.

Seller in aircraf t industry is a stressful work because this industr ial selling is a complex

process, of ten involving many different people with different job, including, engineers,

designers, marketers, works managers (see exchange processes).

It is of ten necessary to work as selling down the line, implying the need to sell to many people

in different positions in the organization therefore, it needs to adapt his behaviour and his

arguments for each occupation.According Stéphanie¶s interview (appendix 3) the behaviour to build a long-term relationship

in aeronautics sector (B2B) must follow this values: trust, transparency, value for money,

customer service, be sensitive at customer's needs, optimize relationships, be very innovative,

strength propositions in new saving methods concerning purchases, be attentive, patient,

available, credible, reliable. Also, it needs to be motivated and very competent in all areas to

develop strong relationships then improve sales results.

But also, salespeople must determine and focus on the explicit expectations of aircraf t

manufacturer as product quality, delivery time, services related to product, pr ice and the

implicit expectations as reputation, geographic location, char isma, sk ills, relationships of

reciprocity and adapt their behaviours.

In appointment, salesperson must adopt a custom behaviour and a relevant speech according

to each key account. He should behave close to current needs, develop targeted arguments,

attract with demonstrations, convince that his product is the best for X reasons with using

appropr iate vocabulary and interesting suppor ts (understandable by different occupations) and

adapting strategies.



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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.



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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.



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On the other side, manufacturers try to help their suppliers improve in areas such as process

efficiency by regularly visiting their plants and working closely with managers and engineers

and they can even sign development agreements in terms of cost, quality, time or

responsiveness.

Seller and buyer have to keep in touch, be collaborative and proceed like a whole for more

efficiency even if according St phanie Rezzonico, aeronautics met a significant decrease of activities after the last financial crisis.

Anyway, according Stephane Autrer, nowadays the main skills to ³sell´ is the innovation, e.g.

the seller promotes an engine on the lowest fuel consumption, level of noises and emission ...

but also on the weight, reliability, the lowest maintenance cost with using marketing statistics

to demonstrate that the engine is the best.



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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?



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Many sales techniques or tactics can permit to win a sale but a customer-oriented behaviour

merged with a long-term relationship can permit to win a partner for a long time and also win

many sales. What do you prefer?

Book:

o Williams, 1998, ³The influence of salespersons¶ customer orientation on buyer-seller

relationship development´, Journal of Business Industrial Marketing, vol 13 (3), pp.

271-287

o Morris, Pitt, Honeycutt, 2001, ³Business-to-business Marketing: a strategic approach´

Sage publications, 3rd

ed, pp. 97-123

o Jobber, Lancaster, 2009, ³Selling and sales Management´, Financial Time

Management, 8th

ed, p17o Hawkins, Motherbaugh, 2010, ³Consumer behavior: Building marketing strategy´,

McGraw-Hill Irwin, 11th

ed, pp.9-16; 644-647

o K eegan, Green, 2008, ³Global marketing´, Pearson Education, 6th

ed, p247

o Allen, Wootten, 1998, ³Selling´, Pitman publishing, 5th ed, pp.99-108; 135-137

Report:

o Igalens, Vicens, 2006, " les mutations dans le secteur a ronautique: le cas d'airbus en

midi Pyr n es ", Etude r alis e pour le compte de l¶UET, Monitoring Innovative

Restructuring in Europe

o Azila Mohd Noor , 2007, ³Customer-orientation behaviour: to what extent it influencesperformance?´, Jurnal Manajemen Bisnis Sriwijaya Vol. 5, No 9

Electronic journal f rom a database:

o Beverland, 2001 ³Contextual Influences and the Adoption and Practice of

Relationship Selling in a Business-to-business´, Journal of Personal Selling Sales

Management

o Schwepker, Charles H., Jr , 2003, ³Customer-oriented selling: a review, extension, and

directions for future research´, Journal of Personal Selling Sales Management

o Frankwick, Gary L., 2001, ³Dynamics of Relationship Selling: A Longitudinal

Examination of Changes in Salesperson-customer Relationship Status.´, Journal of

Personal Selling Sales Management

o Badrinarayanan, Vishag, 2005, ³Enhancing customer-needs--driven CRM strategies:

core selling teams, knowledge management competence, and relationship marketing

competence´,Journal of Personal Selling Sales Management



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selling and sales management - long term relationships in aeronautics