B2B- Session3-Prof.

Subhashish Ray

How B2C try to establish relationships with end customers? How is it different for B2B?

B2C use branding, campaigns, digital media, social media to build relationships. Whereas, in B2B, it is personal
selling. Most of the CRM in B2C is software driven while that in B2B it is personal visits, regular visits to
customers.
For B2B, the personal relationship is most important for any org to start building a relationship.
Exhibitions, trade fairs, LinkedIn posts are done but it’s the personal relationship which drives the value.

What is the motivation of purchase for a B2B customer?

The way the product is used, the importance of the place for the customer is highly critical. That criticality
makes it a highly valued product.

What is the connect between relationships and purchases based on criticality of the product to the business?

You should not love all your customers equally. Its wastage of resources to love all your customers. Do not
spend too much time and effort on customers for one-time purchases.

Transactional exchnges: Reckitt supplying a cleaner, the volume is important, the price range is important

VAS: If I am looking for a product which is needed in ICU, I need to be very careful about the vendor. Can he
live up to the promises? Can he hold some inventory for me? In a hospital scenario the timing is critical, the
value added purchase is more about the quality, people working for the org, experience rather than price.

Collaborative :Reckitt created a product for fortis. Reckitt scientist, doctors may formulate the product
specially for the partner, high end of customization.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

You cannot love every customer equally, whom should we love more and whom should we less?

Sselling plastics to colleges, selling switches to schools, very standardized products, customer is only interested
in price. No point to build a long term relationship. But you should also understand not everybody cam provide
value and service every time and perfectly. So its better to love more of the VAS and Collaborative customers
to concentrate there to build a relationship for better margins. The incetive or bonus as a sales manager is a
top line target and bottom line target. If you join as a manager in the sales team, you have two types of
targets, you not only have to sell but sell profitably.

In a transactional exchange, you are basically doing order processing rather manage the process, I will have
Large no. of channel members like distributors and I will manage the channel mainly. The more commoditized
the product, sales is outsourced to retailers and distributors but I will have managers to keep a check on that.

For Value added/collaborative I need to have a control on the seller. More qualified/technical expertise and
literally zero or thin channel members.

Companies spread the relationship & love equally and that is why it is inefficient. Most of the companies
would go about prices. The customers can be very big but they are always buying on price. Should I not reduce
my resource? This resources are travelling, hotels… these can be excluded to drive better margins.

In transactional exchanges, margin tends to be less for each product. But, what if the market is huge and
economies of scale coming into place, we can do better with collaborative exchanges. How do we prioritize
our customer then?

If we are making money by just producing products and low cost and selling it at decent margin, there is no
problem at all. Only very few will be able to sustain that margin. Because, this margin comes from operational
excellence which can be copied. That’s why most companies want to get into branding and marketing.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

If you are making 100 ruppees profit, 20% actually drive the Rs 80 profit, 10% customers give you most losses
and the rest 70% just break even. (Paretto Principle)

Your biggest customer can be also a loss making customer. If you look at top line you would think he is the best
customer, but you need to take decision by seeing the bottom line.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

To get the order, we say yes to everything, it would not very suprising to see that the product is not creating
any profit with the customer deal. Every company will hold you responsible for top line as well as
bottomline.

Pricing of Japanese restaurant: japanese food are expensive, the point is if you are japanese restaurant, it is
perfectly fine if you find customers who are ready to pay more. You cannot operate with customers who want
to have japanese food with a chinese benchmark in mind

If you are a sundaram fastener supplying to tesla, its most possibly not a problem

The bigger customer not paying in time is a major problem because the block a large amount of money and
very often they are unpredictable. Very reputable companies may not pay in time or ask for credit extention. If
you don’t have a window to balance this problem. It is not possible to factor this.

The simplest and worst thing as a sales man is something tangible, easiest and sometimes the worst way.

Social relationship building

Structural Rms:

You try to convince the customer that it is not just profits, deals and other things. The research says that
companies like cisco/caterpillar have these things, but they focus more on increasing efficiency of your
employees. Can I tell the customer how their competitors are getting better? Training on resources,
technology can be availed by smart customers to get ahead than their competitors. So B2B firms like
cisco/caterpillar help on knowledge, trainings. But one thing to keep in mind is that they need to be seen as
technology companies who can bring in advanced knowledge and expertise to work in such situations.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)