Introduction to Relationship Selling

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Introduction to Relationship Selling

• 1

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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

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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

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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

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Test Your Customer Mindset
1.1

• External Customer Mindset

1Strongly Disagree 2 3 4 5 6Strongly Agree
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.
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Test Your Customer Mindset
1.1
1Strongly Disagree 2 3 4 5 6Strongly Agree

• 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.
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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

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1.1
Want to Think Like a Customer? Mistakes to Avoid
Always

1. Doing it your way, not the customers way
2. Focusing on your objectives, not the customers
3. Pushing for a client meeting as though it is the
   end game
4. Pushing the customer
5. Failing to listen

Source John R. Graham, Think Like a Customer
Or Lose the Sale, American Salesman (January
2002), p.3.
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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

Source John R. Graham, Think Like a Customer
Or Lose the Sale, American Salesman (January
2002), p.3.
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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

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Time Investment in Each Stage of the Sale
1.3
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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

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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
• 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.
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Components of the Internal Environment
1.4
Goals, objectives, culture
The Firm
RD and technological capabilities
Personnel
The Customer
Service capabilities
Financial resources
Production and supply-chain capabilities
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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

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Components of the External Environment
1.5
Legal and political
Economic
The Firm
The Customer
Natural
Technological
Social and cultural