Businesses produce goods and services to sell to consumers. Businesses are also consumers of goods and services. According to a new study by UAB’s School of Business in the Journal of Marketing Research, in business-to-business sales, a customer-salesperson relationship complements online channels, generating greater sales and net profits.
The University of Alabama at Birmingham study showed that multichannel activities can enhance customer satisfaction and purchase behavior.
“Salespeople who interact with customers who heavily engage in online activities provide companies with the biggest bang for their buck,” said UAB assistant professor Andrew Crecelius. “The information from a diverse set of channels allows more insight into customer needs and behaviors, ultimately increasing sales and net profit for the company.”
The study shows that sellers must reconsider the fundamental elements of business-to-business exchange. As e-commerce grows, businesses should consider both strategic investments in salespeople and targeted discounts. Businesses should encourage their customers to search and purchase online, while using salespeople to complement the information gathered from online behaviors to better serve customers. Online channels should provide easy access to salespeople when needed.
The study evaluated the effects of three key variables on customer-level financial outcomes. The categories are online catalog search, online purchasing and customer-salesperson interaction. The authors examine how each piece of communication played a role in enhancing the customer-level sales and net profits. This was accomplished in part by increasing the efficacy of targeted customer discounts.
The study showed that customers who engaged in online catalog search obtained 12 percent more customer-specific discounts than those with low online search. Customers who purchase a greater share online obtain 32 percent more customer-specific discounts than those with low online purchasing. Discounts to these customers, in turn, positively affected sales and net profits. According to the authors this showing that sellers can more effectively target discounts.
By combining salesperson interaction with online search, customer satisfaction increases.
“Customers receive unique benefits by using a combined online and in-person approach,” Crecelius said. “The seller is able to better understand their customer’s needs and ultimately generate more favorable seller financial outcomes.”
The research shows that sellers benefit from a multichannel approach by being able to better target customer-specific discounts. This is a critical tool in business-to-business sales that helps sustain and increase customer purchasing. With online channel interaction, a seller receives timely data on a customer’s needs based on their search and purchasing history. The researchers claim that this increases the seller’s confidence in targeting customer-specific discounts to appropriate products.
The University of Alabama at Birmingham is an internationally renowned research university and academic medical center. UAB is also Alabama’s largest employer, with some 23,000 employees and an annual economic impact exceeding $7 billion to the state. The five pillars of UAB’s mission include education, research, patient care, community service and economic development.