Academic journal article Academy of Entrepreneurship Journal

Larger Customers, Larger Orders: Implications for Smaller Sales Departments

Academic journal article Academy of Entrepreneurship Journal

Larger Customers, Larger Orders: Implications for Smaller Sales Departments

Article excerpt

INTRODUCTION

A common benchmark in the evolution of many smaller firms is the successful attraction of larger accounts. Successful recruitment of the first large order is very frequently the turning point for a smaller business. The principal thesis of this article is that the solicitation of larger customers by smaller companies has dramatic impact on the small firm's selling operations and upon sales management practice within the small company. In general, three major changes are expected. The firm's selling process, that is, the manner in which the affected sales people conduct their activities, will change. The buying process, that is, the way in which the customer interfaces the selling organization, will also change. And finally, the combined impact of these two changes will necessitate significant alterations in selected sales management activities.

A REVISED SELLING PROCESS

When pursuing the larger buyer, the sales person may, for the first time in the selling organization's history encounter a customer buying-center (Hunt & Spea, 1995). The new sales person must now interact with a group of people, each with a unique role in the buying organization, but all influencing vendor selection. Buying centers in larger organizations demand more systematic selling procedures (Wotruba & Simpson, 1992). As the seller approaches larger customers, increasingly formal and sophisticated buying centers become the norm.

The need to deal effectively with sophisticated buying centers will require adjustments in the selling process, as least as that process applies to larger accounts. Hanks and McCarrey (1993) argue that as an organization experiences increasing market acceptance it must scale up by hiring additional sales people, and this growth will involve increased formalization of organizational processes. Sales people will be called upon to make presentations to buying center members, utilize team selling approaches to successfully interact with different members of customer buying groups, and develop more systematic procedures for use with each step of the selling process.

Other researchers have uncovered the link between sales growth and formalization of the selling process. Increased formalization may manifest itself in greater emphasis on written proposals and/or oral presentations (Roebuck, Sightler & Brush, 1995). Wotruba and Simpson (1992) describe the need for a special sales organization to accommodate large accounts.

Team selling is also a characteristic of the selling process directed at larger customers. Sales teams are needed to address the different specialties within the customer's buying center, as well as to reflect different organizational levels of participants in the purchasing process. Research suggests that larger buyers expect increasing levels of service, and the sales team is the vehicle for meeting those service demands (Moon & Armstrong, 1995).

That the selling process becomes more systematic when larger buyers are the focus is evidenced by considerable contemporary investigation. Dion, Easterling and Miller (1995), studying large purchasing organizations, concluded that sales person personality type does not significantly contribute to performance with larger buyers. And earlier (1986), Avila and Fern found larger buyers demanding more predictability and control in the vendor selection procedure.

The need for sales presentations, team selling and systematic selling procedures derive from the presence of buying-centers within larger customers. Smaller buyers do not have elaborate or sophisticated buying-centers. Vendor selection among small accounts is less formal and involves fewer people; perhaps only one person. However, as the smaller sales organization seeks growth by selling to larger accounts these new sales process factors become significant. Three hypotheses impacting upon the small organization's selling process appear relevant:

H1: As smaller organizations pursue larger customers and larger order sizes, sales person contacts with buyers will include formal sales presentations. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.