1-1

1

Introduction to Relationship Selling

1-2 INTRODUCTION TO RELATIONSHIP SELLING

Learning Objectives

• Identify and define the concept of relationship selling • Understand the importance of a customer-centric organization • Explain why value is a central theme in relationship selling • Identify the processes involved in relationship selling • Identify the elements in managing relationship selling • Discuss and give examples of the elements of the external and internal environment for relationship selling

1-3 INTRODUCTION TO RELATIONSHIP SELLING A Model for Relationship Selling and Sales Management -

Overview

Firms successful at relationship selling and sales management: • Are customer-centric • Are highly customer oriented • Exhibit a customer mindset

1-4 INTRODUCTION TO RELATIONSHIP SELLING

Customer Orientation

Firms that have a high level of customer orientation: • Focus on understanding customers’ requirements • Generate an organization-wide understanding of the marketplace • Respond effectively with innovative products and services

INTRODUCTION TO RELATIONSHIP SELLING

EXHIBIT 1.1

Test Your Customer Mindset

External Customer Mindset I must understand the needs of my company's customers It is critical to provide value to my company's customers I am primarily interested in satisfying my company's customers I must understand who buys my company's products/services I can perform my job better if I understand the needs of my company's customer Understanding my company's customers will help me do my job better Source: Karen Norman Kennedy, Felicia G. Lassk, and Jerry R. Goolsby, “Customer Mind-Set of Employees Throughout the Organization,” Journal of the Academy of Marketing Science 30 (Spring 2002), pp. 159-71.

1-5

INTRODUCTION TO RELATIONSHIP SELLING

EXHIBIT 1.1

Test Your Customer Mindset

Internal Customer Mindset Employees who receive my work are my customers Meeting the needs of employees who receive my work is critical to doing a good job It is important to receive feedback from employees who receive my work I focus on the requirements of the person who receives my work

TOTAL

(Higher total suggests greater customer mindset)

Source: Karen Norman Kennedy, Felicia G. Lassk, and Jerry R. Goolsby, “Customer Mind-Set of Employees Throughout the Organization,” Journal of the Academy of Marketing Science 30 (Spring 2002), pp. 159-71.

1-6

1-7 INTRODUCTION TO RELATIONSHIP SELLING A Model for Relationship Selling and Sales Management -

The Customer

• The customer is at the center of the model • Return on customer investment • Lifetime value of a customer

INTRODUCTION TO RELATIONSHIP SELLING

INNOVATION 1.1

Want to Think Like a Customer? Mistakes to Avoid

Always

1. Doing it

your

way, not the customer’s way 2. Focusing on

your

objectives, not the customer’s 3. Pushing for a client meeting as though it is the end game 4. Pushing the customer 5. Failing to

listen

1-8 Source: John R. Graham, “Think Like a Customer – Or Lose the Sale, “

American Salesman

(January 2002), p.3.

McGraw Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

INTRODUCTION TO RELATIONSHIP SELLING

INNOVATION 1.1

• • • • Want to Think Like a Customer? Mistakes to Avoid

Always

Keeping your sales strategy

secret

Making the

sale

the goal Giving too many or too few options Writing off the customer too soon 1-9 Source: John R. Graham, “Think Like a Customer – Or Lose the Sale, “

American Salesman

(January 2002), p.3.

McGraw Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

1-10 INTRODUCTION TO RELATIONSHIP SELLING A Model for Relationship Selling and Sales Management –

Value Creation

•

Value

is the bundle of benefits the customer derives from a purchase • Give-get ratio •

Value creation

- adding value for a customer beyond an isolated transaction

INTRODUCTION TO RELATIONSHIP SELLING

EXHIBIT 1.3

Time Investment in Each Stage of the Sale

Developing an understanding of the buyer’s needs

Value-added selling

Presenting your solution Closing the sale

Traditional selling

1-11

1-12 INTRODUCTION TO RELATIONSHIP SELLING A Model for Relationship Selling and Sales Management –

Relationship Selling

Process elements of relationship selling: • Using information • Communicating the sales message • Negotiating for win-win solutions • Closing the sale and follow up • Self-management

INTRODUCTION TO RELATIONSHIP SELLING

INNOVATION 1.3

The Importance of Follow-up • Attrition for first-year accounts is more than • • • twice that of long term accounts due to: Early problems that sour the relationship No formal servicing system Communication breakdowns 1-13 • Avoid the early break-up by: • Saying thank-you • • Seeking feedback early Responding quickly Source: Erin Strout and Michael Weinreb, “Please Come Again,”

Sales and Marketing Management

(February 2003), pp. 47-48.

McGraw Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

INTRODUCTION TO RELATIONSHIP SELLING

EXHIBIT 1.4

Components of the Internal Environment

Goals, objectives, culture R&D and technological capabilities The Firm Personnel The Custome r Service capabilities Financial resources Production and supply chain capabilities 1-14

1-15 INTRODUCTION TO RELATIONSHIP SELLING

Internal Environment

Southwest Airlines' corporate environment • Places the employee at the center of its business model • Promotes fun • Hires people by “tryouts” • Lends itself to a favorable service culture

INTRODUCTION TO RELATIONSHIP SELLING

EXHIBIT 1.5

Components of the External Environment

Economic Legal and political The Firm The Custome r Natural Technological Social and cultural 1-16