14.1 Digital Test & Equipment (DTE) is a distributor of test equipment used in mining and oil applications. When Mark Polonsky, of Albany Manufacturing, got the call from Amy Sheppard at DTE, he was excited. For over a year he worked to get DTE to carry Albany’s geothermal test equipment, but there was no progress— until today, when Amy asked if the Albany Geo-Core Xcel would handle conditions in the North Sea oil fields. “I don’t know,” Mark replied. “I’ve personally not had any customers drilling in that area, but I will ask our senior engineer and find out. What’s the situation?” “We’ve got a really good shot at landing some business from British Petroleum, but we’ve got some holes in our product line,” she replied. “I’m really thinking of making this an all-Albany pitch, which would be about a $400,000 contract. Or I may give them two solutions, one all Albany and one a mix of other products.” She went on into detail about the conditions in which the Geo-Core would have to work so Mark would know what questions to ask. After the call, Mark called the senior engineer and asked if the product would work. Assured that it would, he went to work on a great proposal. Not only would a $400,000 sale represent a month’s quota, he knew that DTE was good for five times that in its other accounts. This opportunity was huge! Amy called Mark immediately when she got his e-mail with the proposal attached. “This looks great, Mark! I think the all-Albany approach is best, so that’s what we’ll go with. I’ll submit this to BP tomorrow.” Two months later the first Geo-Cores were installed and operational. But within a week it was obvious that they weren’t up to the demanding weather conditions of the North Sea. The machines were breaking down on average about every four hours. Allison called Mark, quite upset with the results, particularly because BP now wanted to cancel the entire agreement. Questions 1. Assume you are Mark. What should you do? 2. Does the stage of the buyer–seller relationship matter? Which buyer is most important, British Petroleum or DTE? 3. Your first call after hanging up with Allison is with the senior engineer who gave you the wrong information. He claims there is a simple fix, but a DTE engineer will have to make the trip there to do it, and that will be about a $5,000 trip. First, what would you say to your manager who has to sign off on that expense? Second, how do you handle Allison?

14.1 Customer Relationships

Acting as Mark, I would, first of all, acknowledge the failure of our equipment to meet the proposal’s demands. Then I would speak to the senior engineer to find out exactly the cause of the equipment breakdown. After apologizing to Amy and DTE, I would also assure them that a solution was being implemented as we speak. The assurance would prompt a meeting with the senior engineer where we would then come up with a temporary solution and also evaluate whether all the equipment needed replacing.

Every stage in the buyer-seller relationships matters. Albany’s relationship with DTE is already in the early stages since this is the first time they were doing business together. Furthermore, DTE introduced Albany to a new business venture with British Petroleum. So overall Albany’s relationship with both companies was in the early stages. All stages of the buyer-seller relationships matter. The first two stages are especially delicate since this is where one reviews whether the relationship is worth it or now.

I would explain to the manager that this is a new venture with a lucrative opportunity. I would also remind him of the length of time it took for me to get a project with DTE. The manager would be most interested in knowing whether the venture is worth the 5000 dollar trip and other expenses that would be involved. On the line with Allison, I would explain to her what the simple fix to the equipment would be and then emphasize that Albany would handle it and finally assure her that everything would be fine.

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