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Value Creation in Value Creation in Buyer-Seller Buyer-Seller

RelationshipsRelationships

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Learning Objectives

• Understand the concept of perceived value and its importance in relationship selling

• Explain the relationship of the roles of selling and marketing within a firm

• Explain why customer loyalty is so critical to business success

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Learning Objectives

• Recognize and discuss the value chain

• Identify and give examples for each category of communicating value in the sales message

• Understand how to manage customer expectations

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Value is Related to Customer Benefits

• Utility – the want-satisfying power of a good or service

• Types of Utility• Form• Place• Time• Ownership

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Increasing the Value to the Customer• Raise benefits

• Reduce costs

• Raise benefits and reduce costs

• Raise benefits by more than the increase in costs

• Lower benefits by less than the reduction in costs

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Lifetime Value of a Customer

• Lifetime value of a customer – present value of the stream of future profits expected over a customer’s lifetime of purchases

• Firing a customer – encouraging a customer to find alternative sources from which to purchase

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Communicating Value in the Sales Message

• Product quality

• Channel deliverables (supply chain)

• Integrated marketing communications (IMC)

• Synergy between sales and marketing

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Communicating Value in the Sales Message

• Execution of marketing mix programs

• Quality of the buyer-seller relationship (trust)

• Service quality

• Salesperson professionalism

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Communicating Value in the Sales Message

• Brand equity

• Corporate image/reputation

• Application of technology

• Price

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Product Quality

•Performance

•Features

•Reliability

•Conformance

•Durability

•Serviceability

•Aesthetics

•Perceived quality

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Integrated Marketing Communications

• Solid IMC allows salespeople to solidify their client relationships by referring to a well-known, consistent corporate message

• Clients expect and deserve consistency in the way a firm’s value-added message is put forth

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

IMC – Communicating the MessageFirm’s employees and other internal stakeholders

Firm’s employees and other internal stakeholders

Firm’s internal value chain

Firm’s internal value chain

Customers and other external stakeholders

Customers and other external stakeholders

message

message

message

message

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Synergy Between Sales and Marketing

• Seamless organizational processes focused on managing customer relationships strengthen the value proposition

• When sales and marketing are not synergistic, the customer is marginalized

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Execution of Marketing Mix Programs

• Product

• Place - for distribution, or getting the product into the hands of the customer

• Price

• Promotion - marketing communications

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VALUE CREATION IN BUYER-SELLER RELATIONSHIPS

Quality of the Buyer-Seller Relationship

• The quality of the buyer-seller relationship is measured by trust

• Trust - a belief by one party that the other party will fulfill its obligations

• Trust is essential to successful relationship selling

• Trust signifies that a salesperson has the customer’s long-term interests at heart