Business-to-Business (B2B) and

Customer Relationship
Management

Concept
The business market comprises of all the
organisations that buy goods and services for
use in the production of other products and
services that are sold, rented or supplied to
others. It also includes retailing and other
wholesale firms that acquire end goods for the
purpose of reselling or renting them to others at
a profit. In the business buying process,
business buyers determine which products and
services their organisations need to purchase
and then find, evaluate and choose among
alternative suppliers and brands.

B2B Customer Relationship

Management (CRM)
Customer Relationship Management

Identifying and grouping customers in

order to develop an appropriate
relationship strategy
So the organization can acquire, retain,
and grow the business

Understanding B2B Purchasing

Decisions
Personal relationship skills
Highly skilled sales force
Constant support from

other functional groups,

especially sales managers
Information technology
system thats easy to use
and gives accurate and
near-real-time information

Characteristics
Market structure and demand
Nature of the buying unit
Types of decisions and the decision process
Major types of buying situations in B2B

contexts
Participants in the business-buying process
The business buying process

Organizational Buying
Situations
New Buy

Occurs when a complex or expensive product is

purchased for the first time

Purchase of a product or service that is currently

Modified Re-Buy
being bought, but buyer is considering different
vendors or product changes
Straight Re-Buy

Buying firm moves directly from need recognition

(Step 1) to ordering (Step 5)

Buying Center, or Group,

Purchases:
Influencers: individuals
Initiator: starts the
Roles
of
the
Decision-Making
who affect the decision
purchase process by
makers final choice
recognizing a need
Unit
through recommendations
Decision maker:

person/committee that
makes the final decision
Purchaser: any person
who actually buys the
product
Controller may
approve or set budget
for purchase

about which vendors to

include or which products
will best meet needs
Users: their jobs require
that they implement and
evaluate what was
purchased
Gatekeepers: control
information
Screens and filters

Buyer Discovers The Needs

Gap
State of Hope

Produce 1,250 Units Per Day

Needs Gap
250 Units Per Day

Current State

Produce 1,000 Units Per Day

Business buying process

Problem recognition
General ned description
Product specification
Supplier search
Proposal solicitation
Suppler selection
Order-routine specification
Performance review

Importance of CRM in B2B

Markets

Instant information on demand and supply situations

from the website.

Proliferation of web-based industrial service providers
such as vendor comparison on various parameters.
Access to various vendor management strategies to cut
costs, enhance product quality and responsiveness from
their vendors.
Thus, fierce competition for the top customers, rising
customer acquisition costs, maturing markets,
commoditization of many products and services through
e-commerce and lower vendor switching costs have
forced vendors to focus on building loyalty with the
customers.

5-10

Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall.

Strategies adopted in B2B

markets place
1. Focusing on key customers and building strong
2.

3.

4.
5.

relationships with them

Proactively generate high levels of customer
satisfaction with every interaction with the
customer
Anticipate customers need by careful study of
the environment, customer processes and their
behaviour.
Building closer ties with the customer
Creating a value perception for the customer.
The customer must see the relationship with
the vendor as something that brings value and
adds to their competitive advantage.

KAM?
KAM can be defined as the performance of
additional activities and or/designation of
special personnel directed at an
organizations most important customers.

KEY ACCOUNT MANAGEMENT

(KAM)
A key account can be defined as a customer in a B2B

market identified by a selling firm as of strategic

importance. It may also be indicated as national accounts
and major accounts.
KAM is a popular and successful approaches used for
customer retention and development.
KAM is an organisational process that assumes relationships
are not static, and they evolve over a period of time.
Each interaction is a consequence of the relationship that
exists between the customer and the supplier.
The interaction, in turn, influences the relationship and its
growth.

KAM cont..
Key Account Management is an important

area of sales management, particularly in

B2B environments. Its used when a large
part of the revenue comes from a small
number of the customer base.

KAM cont
In this case, its important to assign

resources around these customers to grow

the revenue. This involves identifying the
Key accounts and then building plans for
each of them.

KAM as a Growth and Development

Strategy
The six stages of KAM Model are:Pre-KAM
Early KAM: decision making process, nature of decision making
unit and buyers business & problems.
Mid-KAM:
Partnership KAM
Synergistic KAM
Uncoupling KAM
KAM helps sellers to attain deeper understanding of their
customers and the strategies to be adopted at different stages of
their relationship with the customers. Thus, it is an important
strategy towards developing long-term mutually beneficial
relationships with customers.

The Stages of B2B Customer

Relationship Management
1

Up-sell / cross-sell to existing

customers

Manage customer relationships

to earn higher profits

Offer customized solutions to

most profitable buyers

Why Business Relationships

End
Partner is too complacent
Goals no longer a match
Cultures have diverged
1 or both parties have

behaved irresponsibly

Discussion