The Importance of Relationship Management for B2B & B2C Sales Organizations

relationship management

SALES EXCELLENCE / by Inna Hüessmanns

10. November, 2020

Strategic relationship management can help companies to obtain and sustain a significant competitive advantage – some features of its relationships that other firms cannot easily replicate.

One of the major reasons why many sales organizations do not perform well, lose their customers to competition or underperform in new business development is poor customer relationship management.

Many firms know that they are serving unprofitable customers or losing their customers to competition, but very few analyse their customer relationships on a case-by-case basis or make sufficient investments in their customer relationships on whose future they depend.

Many companies focus on developing and maintaining strong relationships with tactical customer employees, such as purchasing managers. While it is important to develop such relationships, the strategic customer relationship management approach should consider firmwide relationships – parallel linkages between functional and management areas of the company and its customers.

Successful customer relationships are crucial to the firm’s performance.

Without relationships neither companies nor their customers can continue to trade. The question which companies should answer is how to manage their customer relationships to retain competitive advantage and maintain business growth in times of COVID-19, digitalization, globalization and an uncertain business environment.

Any company has a variety of business relationships. A company’s relationship with its bank is different to that which it has with its customers. Relationships with large strategic customers will differ from those with small ones.

A good sales experience starts by getting the basics right.

Companies should examine how they are performing by asking the basic questions:

  • What are our critical business relationships?
  • Who are our strategic accounts?
  • What things are our sales people doing that could damage our critical customer relationships?
  • Do we have companywide relationships with our critical customers? Do we have a deep understanding of customers’ buying centers?

The development of successful customer relationships is vital for each company. To manage this process effectively, it is important to implement a strategic customer relationship management approach. This approach should start by identifying the strategically important relationships. The wider and deeper the company’s effectively managed customer relationships, the higher the customers’ emotional costs of switching to the firm’s competitors.

In other words, companies should begin to manage their customers as a portfolio of relationship assets.

Many companies understand that change is needed, but they do not understand how to bring about change. Sales effectiveness means performing sales activities better than competitors can perform them.

Strategic relationship management approach and a relationship management portfolio can help companies to obtain and sustain a significant competitive advantage – some features of its relationships that other firms cannot easily replicate.

Some companies have obtained a competitive advantage by developing distinctive relationships in the areas of the world that others have found difficult to penetrate. Companies must shift their focus from transactional to strategic relationship management approach to maximize customer lifetime value. The key distinction between a traditional and a strategic relationship management company is that one is organized to push products whereas the other is designed to serve customers. The traditional sales organization must be reconfigured as a strategic customer relationship management organization that puts building customer relationships ahead of pushing products and their technical features.

Organizations that have successfully implemented change management initiatives have something in common. They continuously and thoroughly assess their situations. Customers are continuously changing the way they buy and the ways in which they want to conduct business. Globalization has also lead to more complex customer relationships.

It is, therefore, necessary for companies to reexamine their sales organizations to find out what is happening there today and to be better equipped for the future.

The customer relationship management assessment tools and metrics developed by us assess the quality of company’s customer relationship management according to different criteria.

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