chapter 2 - relationship selling 1-29-13

Chapter 2Relationship Selling

MKTG. 377January 29, 2013

What’s YOUR Ice Breaker?

1. What was your goal for using your “ice breaker” approach?

2. How did you “break the ice”?3. How did your “prospect”

respond?4. Through its use, did your

approach achieve the objective that you were seeking?

Relationship Selling What you’ll learn about today:

CHAPTER 2

1. Understand the role of relationship selling in today’s market and how it differs from past stereotypes of selling.

2. Learn the steps in relationship selling and the purpose of each step.

3. Compare and contrast relationship selling and the traditional sales model.

4. Examine the usefulness of continuous quality improvement in a sales organization.

5. Recognize how to build relationships through team selling.

A-L-2-MChris Brown

Value Creation Through Relationship Selling

• The trend in professional selling today is toward relationship, problem-solving selling

• Customer Satisfaction: is the ultimate goal of the relationship salesperson throughout the selling process

• Relationship Management:• Managing the account

relationship• Ensuring that your clients

receive the proper service during and after the sale

Only 20% of Companies have Embraced Relationship Selling

By positioning yourself as a Partner or a Consultant, you are creating a more equal relationship with your prospects and clients

Value Creation Through Relationship Selling

The decision to buy often represents the start of a long-term relationship

Ideally, built upon TRUST, MUTUAL REWARD & BENEFITS

You are looking out for each others’ needs and interests

Almost like a marriage, it’s a “Business Marriage”

1.Meet the Salesperson’s support team2.Meet the Client’s support team3.Both Buyer & Seller’s teams are cooperating wonderfully4.Meet the top Salesperson5. Meet his “beautiful” Client6.Another Highly Successful RELATIONSHIP SALE is completed

Position Yourself as a Consultant, NOT a Salesperson

They are your “Clients” not Customers

Key personal characteristics of relationship selling

1. Discover and understand your Client’s problems and needs

2. Partner with your Client & become a valuable resource

3. Demonstrate to your Client how they can achieve their goals with your product or service

4. Believe in your company and its products & services

5. BELIEVE IN YOURSELF! a positive attitude is critical

YOU ARE SPECIAL!!!!

8 Relationship Builders

1. Treat customers like life-long partners2. Become a solutions provider3. Deliver more service than you promise4. Schedule regular service calls5. Develop open and honest

communication6. Use the “we can” approach7. Take responsibility for mistakes made8. Be an ally for the customers’ business

YOU WANT YOUR CLIENTS TO LOVE YOU!!!

Regarding Relationship Selling, Salespeople can learn a lot from

Barney the purple dinosaur

8 Relationship Breakers

1. Simply wait for the problem to develop

2. Focus only on making the sale3. Over-promise and under-deliver 4. Wait for your customers to call you 5. Lie or make exaggerated claims6. Use the “us versus them” approach7. Blame someone else; Knock a

competitor8. Focus on your own personal gain

& sadly, all “Business Marriages” don’t last

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When one of the parties in a business relationship fails to deliver on their promises…

suspension, separation or contract termination is imminent

In short… the HONEYMOON IS OVER!!!

Relationship Selling Versus Traditional Selling

• The face-to-face steps of the Relationship Model:

1. The Approach2. Identifying Needs3. Making the Presentation4. Handling Objections and Gaining Commitment

Time: 40 percent spent on gaining rapport and trust

Empathy: Think the way your customer thinks.

Standards: Customer expectations, higher than ever

Relationship Selling Versus Traditional Selling

Phases

Approach

Identifying Needs

Making the Presentation

Resistance and Gaining Commitment

Relationship Model of Selling

Traditional Model of Selling

TellingBuilding Trust (Rapport)

Probe, Ask Questions, and Listen

Sell Benefits

Reassure and

Close

% time spent

Qualifying

Presenting Features

Closing Long and Hard

40%

30%

20%

10%

10%

20%

30%

40%

% time spent

Sales Cycle Framework for Relationship Selling

2PRE-

APPROACH & TELEPHONE TECHNIQUES

4 NEEDS

DISCOVERY

7CLOSING THE

SALE

6HANDLING

OBJECTIONS

5MAKING THE

PRESENTATION

1PROSPECTING

8SERVICE

AFTER THE SALE

3THE

APPROACH

The 8 Step Process For Successful Relationship Selling

The Sales Cycle Framework for Relationship Selling

•There are three phases in the Sales Cycle, which are presented on the next three slides.

• The steps are presented in a logical sequence, but are NOT necessarily in chronological order!

Phase One• Identifying Qualified Prospects• Qualified prospects must have:

• Need• Money• Authority

• Planning Pre-approach Activities• Telephone Activities

1PROSPECTING

2PRE-APPROACH &

TELEPHONE TECHNIQUES

Phase Two

Approaching the ProspectDiscovering Needs

• Success of the process depends on this• Requires questioning and creative listening

skillsMaking the Presentation

• Takes planningHandling Objections and Gaining Commitment

• It is up to the seller to qualify the buyer• Resistance happens because an atmosphere

of mutual trust was never fully developed • There may be problems beyond your control• The closing stage is often the longest and most

tedious stage

4 NEEDS

DISCOVERY

6HANDLING

OBJECTIONS

5MAKING THE

PRESENTATION

3THE

APPROACH

Quotable Quotes

“ Creative wins them and Client Service loses them. ”

- Ad Agency axiom

Phase Three

Service After the Sale• Good relationships keep

satisfied customers coming back

• Customer satisfaction is an asset to you and your company

• The relationship REALLY BEGINS when the Buyer says YES

7CLOSING THE

SALE

8SERVICE AFTER

THE SALE

Phase Three

Cognitive Dissonance (BUYERS REMORSE) must be reduced

7CLOSING THE

SALE

8SERVICE AFTER

THE SALE

Wouldn’t it be great if there were a pill to eliminate Buyer’s Remorse?NOT!!! It’s called being a great

Relationship Salesperson

So Where Did All These Ideas Originate From?

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TOTAL QUALITY MANAGEMENT In many ways, not just the founder of Total Quality

Management, but also the founder of Relationship Selling

Deming’s TQM in a NutshellA Process for Sales...

3 KEY FACTORS 1. - Developing a System to Measure Quality2. - Process for Continuous Improvement3. - Development of the Staff Involved

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Deming’s “85-15 Rule” When things go wrong, 85% of the time, it is the process or system that is at fault and only 15% of the time at most, is it the fault of the employee or salesperson.

TQM - Continuous Quality Improvement

Total Quality Management• Listen and learn from customers AND employees• Continuously improve the partnership• Teamwork through mutual trust and respect• Do it right the first time• Get your whole company involved

Service Quality• There is a process and an outcome. Both are

necessary for customer satisfaction.

Deming Made Easy...The Service Quality Interaction

Service QualityInfluences… Leads To…

Perception of Service Quality

Received

The Process

The Actual Outcome

Overall Customer

Satisfaction

1.Focus on service2.Customer knows best3.Relationships4.Team Performance5.Continuous improvement6.Support/reward7.Long-term (years)8.Allows mistakes9.Participative Relationship10.Entrepreneurial11.Outward (customer) focused

1.Focus on product2.Company knows best3.Transactions4.Individual Performance5. Management by Crisis6.Blame / Punishment7.Short-term (year or less)8.Intolerant of Errors9.Autocratic Leadership10.Bureaucratic11.Top-Down Decisions

TRADITIONAL MGT. TQM

Traditional Management Versus TQM

Deming’s TQM “Done Right!”Carl Sewell’s $332,000 Customer

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•Believes that a loyal customer will spend at least that amount with him over their lifetime by buying several Cadillac cars

•Sewell believes that the actual value of a loyal customer may exceed $1.5 Million since they will refer 4 or 5 other lifetime customers to him

Deming’s Fears about US business in 1984 sound just as real today…

29 years later

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A very bizarre interview

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The Growth of Team Selling

It has grown to take advantage of diverse skills and personalities needed to sell complex products

The selling steps are the same, but rules are needed Usually at least one salesperson and some technical

specialists The buyer may also have a team

Risks of Team Selling

1. Requires special planning2. Requires a Team Leader3. All must agree on objectives4. Must be well-rehearsed

Prospects have less fear of their key point of contact being hit by that

proverbial “BUS”

Benefits of Team Selling

1. Customer gets involved with more than one person

2. More accurate needs definition

3. Very useful if the product is technical

4. Different individuals bring more selling skills

5. Gives the Client added confidence that they are not dependent on a single contact

Team Selling: Combinations That Work

Opener and Closer Just as in Baseball (starting

pitcher and the relief pitcher / closer)

Some salespeople are good at opening the sales relationship while others are masters at closing the sale

Both are very important-- a symbiotic relationship

For Thursday, January 31st

• Chapter 3 • Please make sure that you have read Chapter

3 - ETHICAL & LEGAL ISSUES IN SELLING in your textbook prior to coming to class

• Homework • In your professional or academic career, have you ever

been caught in the middle of an issue that required you to make some ethical decisions? - How did you handle it? Were you pleased with the outcome of your efforts? - What did you learn from this experience?