"So you get in, and then if you do things right, what happens for the business? The customer calls you and wants to place an order. ... If you do it right, you also increase the scope of the relationship.""This is how you can think about evolving a relationship. But does it work all the time? The answer is no," he said.Sometimes the all-at-once approach is the only way to jump-start from zero, he observed. "I think the most underestimated factor in industrial or business marketing is buyer behavior," said Narayandas.From transaction to commitmentTo explain how he has come to answer question threehow to convert a customer from a transactional to a relationship orientationNarayandas answered with a case and a research project.The Wesco case is about a company whose business was very transaction-orienteddealing in bulbs, wires, and connectors for contractors and industrial customers. Yet it managed to shepherd about a third of its customers into a relationship."The process always has to be initiated by supplier," Narayandas emphasized. As he learned in the Wesco experience, the road is bumpy at first. The distributor tells the customer, "I want to give you lower prices, which will come at the expense of my markets. What I want you to do is give me higher volumes." The customer, typically, does not offer higher volumes but instead begins to cherry-pick. The suppliers' costs, meanwhile, just go up. While the customer is getting more value, only one partythe distributoris actually working at the relationship."But if you do things the right way, then there comes a day when the customer begins to see benefits," said Narayandas. "More importantly, the customer now begins to realize that taking a hands-off approach in the relationship is actually detrimental. Even the slightest effort they put in will lead to much more value for themselves."That's when they begin to invest. At some point, the customers begin to give more volumes." Wesco's costs began to go down, not just due to volumes but also efficiency. For the customers, value increased, thanks to price reduction and the fact that the customers began to see the value of collaboration. Trust forms between people, between individuals. But commitment forms between firms. Narakesari Narayandas"It doesn't happen from day one, much as you want it to," he said. "A lot of work and planning need to go into it. So make sure you get through the investment phase at the beginninginvesting in skills and systemsand figure out how long to invest and pull out [if necessary]. In Wesco's case, about a third of relationships migrated through; two-thirds fell in the trap.""The Wesco case shows that it's not just about the product. You also need to have an understanding of the pattern of investments, and more important, an understanding of the process of how relationships evolve over time," he said.Buyer-seller evolutionTo study how relationships evolve in mature industrial markets, Narayandas and HBS professor V. Kasturi Rangan took an in-depth look over time at three buyer-seller relationships, all in commodity markets. The three pairs represented different parts of the value chain: supplier-manufacturer, manufacturer-distributor, and manufacturer-customer."People have always argued that depending on where you are in the demand chain, the dynamics might be different. What we found is that there are many commonalities," he said.Together they developed a process model of relationship development, described in their working paper, "Building and Sustaining Buyer-Seller Relationships in Mature Industrial Markets".Previous work by other scholars had focused on two paths: competition, the study of how each actor leverages its own position ("with the obvious answer," according to Narayandas: "the more powerful you are, the more you're able to improve things for yourself in any contract"), and collaboration, the study of trust and commitment.None of this work could explain how relationships that began as unbalanced, with one player holding most of the cardsas is typical in industrial marketscould evolve from adversarial to collaborative."In any relationship, the dependence that each side has defines the initial balance of power in the relationship," he said.In their paper, they developed nine propositions and identified five processes. They found that the contract stage in industrial markets leads to a performance evaluation stage. Performance evaluation affects two elements: trust and commitment.