Relationship Selling

OBJECTIVES
 Relate to the ideas put forward by the early quality practitioners
 See that quality now embraces the organization as a whole rather than
being the sole concern of manufacturing
 Understand how freer world trade is driving companies towards
accepting the need for quality in terms of their relationships with their
customers and suppliers
 Appreciate the role that is being played by just-in-time manufacturing in
bringing about these changes
 Understand the notion of reverse marketing and the change it is bringing
about in the traditionally accepted roles of the field salesperson
 Understand the notion of relationship selling as being the tactical
marketing and sales key stemming from the adoption of reverse
marketing 1st October 2013Sales Management - Relationship Selling

FROM TOTAL QUALITY
MANAGEMENT TO CUSTOMER
CARE
When the
buyer moves
on does the
relationship
end?
1st October 2013Sales Management - Relationship Selling

Peter Drucker
 There is only one valid
definition of business: to
create customers.
 It is the customer who
determines the nature of the
business.
 Consequently, any business
has two basic functions:
o marketing (customer
orientation) 1st October 2013Sales Management - Relationship Selling

Gummesson
 ‘Customer focus’ not only
‘compels management to
realize the firm’s primary
responsibility – to serve the
customer’, but also ‘to
recognize that customer
knowledge is paramount
to achieving market
orientation’. 1st October 2013Sales Management - Relationship Selling

Zineldin
 The customer, individual or
organization alike, is at the
center of the activities of the
organization
 The implication of being
‘customer oriented’ as the
most important part component
of relationship marketing and
relationship selling.

Edwards Deming
 Credited with guiding the Ford Motor Company (USA)
towards a sharp focus on quality, not just in
manufacturing but in all of its operations, including
selling
 Henry Ford - ‘You can have any color that you like as long
as it is black’
 In the 1970s Deming formulated a mature theory of quality
based upon his observations of Japanese manufacturing.
 His theory revolved around 14 points of philosophical thinking
and he is widely regarded as being the modern quality guru.

 This tactical thinking has now been
replaced by the more mature and
strategic view of total quality management
(TQM) that dominates present-day thinking,
not just in manufacturing, but in all areas of
company activity.

General Motors - Saturn
Corporation
 The Saturn project was pursued at a time
when the general feeling was that US
manufacturers lacked the ability to make
world-class compact cars
 Yet after four years on the market, Saturn had
succeeded in building from scratch one of
the strongest brands from the United
States. 1st October 2013Sales Management - Relationship Selling

Aaker
 The success of Saturn was
not due to any key program
but due to the decision made
creating a relationship
between Saturn and the
customer and the adoption
of team approach for the
manufacturing of the
product. 1st October 2013Sales Management - Relationship Selling

Taeger
 Early ideas of quality still tend to trigger mental
pictures more related to manufacturing than to
the business of selling
 The difficulty in measuring the success of the
quality process in sales is that, even when the
initial phase has passed, there are rarely any
positive pointers that can be identified as
having been improved as a result of the
introduction of TQM as part of the philosophy of
selling.

Gronroos and Gummesson
 The traditional marketing mix approach is inadequate
for operating in line with the marketing concept
appears to be based on the four Ps approach
constituting a production-orientated definition of
marketing and a reliance, at best, on mass marketing.
 Gummesson argues that the marketing mix
approach is supplier orientated as opposed to
customer orientated he advocates that the 4Ps
approach is narrowly limited to functions and is
not an integral part of the total management process

Harwood
 In order to succeed in
their search for new ways
of gaining competitive
advantage over rivals,
sellers must now
engage in building and
maintaining long-
lasting relationships
with their customers. 1st October 2013Sales Management - Relationship Selling

 Companies are seeking to differentiate their
products not only via the actual product by styling,
packaging, brand image, quality and price
benefits, but more at the level of the
augmented product.
 Added benefits such as sales support, guarantees
and after-sales care that support purchase and
consumption experiences are increasingly being
provided. 1st October 2013Sales Management - Relationship Selling

Stalk, Evans and Schulman
 Cite the case of Honda’s original
success in motorcycles resulting
from the company’s
distinctive capability in dealer
management.
 It trained all its dealers and
their staff in these new
management systems and
supported them with a
computerized dealer
management information system.

Walters and Lancaster
 Offer an alternative view: traditional value
chains begin with the company’s core
competencies, whereas evidence suggests
that modern value chain analysis
reverses this approach and uses
customers as its starting point.

Zineldin
 IT tools should be used not only ‘to provide
relationship building credibility and
opportunities’ but also ‘to enable marketers
to keep their fingers on the customers
pulse and respond to changing needs’.

 Nissan, the Japanese car
manufacturer, saw that its
market share was in
decline.
 It changed its
organizational structure
and company philosophy
to reflect, as its first
priority, the concept of
customer satisfaction.

 Microsoft realized that the
average person had little
training or knowledge of
computer software or
programming.
 It replaced technical jargon
with easily understandable
icons and graphical
representations of the tasks to
be done.

 Quality-led manufacturing is relevant to
companies adopting a market-driven approach
to TQM.
 This leads to market-led quality that
ensures customers perceive quality being
built into both the product and the service
component of the total product offering

 Market-driven TQM and the development of a total
product quality for manufacturing and service
companies are concepts upon which companies
should focus.
 As product parity is reached between different product
offerings, so companies can gain a competitive
advantage by increasing the total service component
of their market offerings.
 This is more than simply offering an after-sales
service – it is a program of total customer care.1st October 2013Sales Management - Relationship Selling

From JIT to Relationship
marketing
 Relationship marketing absorb the TQM ideas of bringing together
quality,marketing and customer service
 Marketing activities that are aimed
at developing and managing trusting and long-
term relationships with larger customers.
 A marketing strategy in which a company seeks to build long-term
relationships with its customers by providing consistent satisfaction
 For example: Starbucks

Business Process Reengineering
 Thorough rethinking of
all business processes, job definitions, management
systems, organizational structure, work flow, and
underlying assumptions and beliefs
 JIT technique used for business process reengineering
 For example: TOYOTA

Relationship Marketing
 Relationship marketing focuses on the long
term contacts rather than a single transaction
 TQM has become the integration of marketing
orientation and production orientation

Continued…
 Traditional marketing structures cannot
respond quickly enough to new segments
within a market
 Developing high-quality products should be a
priority to enable companies to remain
competitive

Best Practice Benchmarking
 Aimed at achieving world class performance
 Formation of project team from multifunctional
areas such as marketing, production, quality and
purchasing
 Includes task of obtaining information about the
products or companies
 Team needs to be given the facility for research
on product development and quality.1st October 2013Sales Management - Relationship Selling

Reverse Marketing
 Occurs where buyers take the initiative and
they source suppliers
 Example: Wal-Mart's
 Buyers source suppliers whom they can retain
for a long period of time
 Criteria looked after are: quality of goods and
reliability of their suppliers

From Relationship Marketing to Relationship
Selling
 Selling, tactical arm of marketing.
 Roles of marketing are changing, so are the roles
of selling.
 Penetration of worldwide market is becoming
increasing difficult.
 Dispersion of potential customers due to
abundance of channels

 Methods other than mass advertising ought to
be given prominence.
 Massive increase in competition and
increasing choice.
 Customers have become more sophisticated
and demanding.
 Brand loyalty difficult to maintain.

 Effectiveness of ATL media diminishing so
moving towards BTL media.
 “Push” rather than “pull” becoming popular.
 Customer retention is the major objective.
 Businesses ought to stay adjacent to their
customers.
 Very important to know the consumer`s entire
value chain.

 One of the tactics – Open Accounting
• Complete open access is afforded
• Buyer`s and sellers have access to each
other`s accounts.
• Mutually agreed upon profit margins can be
set.
• Only possible when long-term relationship
exists.

Tactics of Relationship Selling
 Customer retention can be achieved by:
1. Having full regards to customer needs
2. Working to form long and trustworthy
relationship

According to Berry:
 The means of applying the philosophy &
practice of marketing to people who serve
external customers so that
1. The best possible people can be employed
and retained
2. They will do the best possible work

1. Traditionally:
 Buyers stay twice as long in their post when
compared to their seller counterparts.
2. Strong new opinion:
 Under relationship selling circumstances the
time individual salesperson spend in a
particular post will move towards that of their
purchasing counterparts. 1st October 2013Sales Management - Relationship Selling

Buyer Seller
More ‘Sedate’ lifestyle ‘on the road’ lifestyle
Settled Quite hectic
Difficult life if reverse marketing is
undertaken
Comparatively simpler life incase of
reverse marketing(focus on long-term
goal of customer retention)
Pressure of effective purchase Pressure to sell in terms of reaching
sales targets and quotas in a given
period1st October 2013Sales Management - Relationship Selling

According to Reichheld and
Schefter
 Virtuous circle:
 This approach is placed on the mechanisms
which motivates employees as highly as
possible
 Training programs enables employees to do
their jobs to the best of their abilities

Qualities of normal salesperson Qualities of relationship salesperson
Communication skills
Personality
Determination
Determination
Self-motivation
Resilience & tenacity
Intelligence
Motivation/ self-motivation
Product knowledge
Whilst still important when establishing long-term
relationships
Educational background
Confidence
Appearance &self discipline
Resilience & tenacity
Acceptability
Attention to details
General ability to get along with people in long-
term basis
Business sense
Integrity
Ambition
Able to work together in a team with members of
both buyers and sellers team
Acceptability
Empathy
Initiative
Liking a particular salesperson will positively
affect a buyer’s attitude towards the products he
suggests
Experience
Adaptability
Persuasiveness
PG: 314, Research by Kinniard

Two Important Aspects of Selling
 Information gathering
 Servicing

Information Gathering
Company’s
Marketing
Information
System
(MkIS)
Market
Research
Strategic
Marketing
Plans
Company
Internal
Accounting
System
Market
Intelligence

Benefits of Information Gathering
for Relationship Selling
1. Reducing selling costs achieved through
using information derived from the MkIS. New
business response provides information to
improve future targeting and, through
experience of what works and what does not,
improves the productivity of subsequent
advertising and sales promotion.

Contd:
2. More sales per customer, achieved through using
customer case histories leading to:
 Better identification and categorization of customers
 Better segmentation and targeting
 Better presentation and relevant offers
3. Superior business forecasting achieved by:
 Using past performance as a guide to future performance
 Because the errors in past activities need not be repeated,
efficiency should be subject to continuous improvement
(control)

Servicing
 Area in which the role of salesperson will become
invaluable
 Serving customers on a highly individualistic basis
 Employee retention is essential for profitability
(Reichheld, Mirkey & Hopton)
 Personal values of ‘achievement’, ‘self-direction’, ‘self-
respect’, & ‘self-accomplishment’ were the key factors
of successful salespeople. These social values could
enhance the requirement and selection of
salespeople. (Swenson & Herche)

Conclusion
 Comparison of current trends and future
changes within the selling function.
 Movement towards relationship selling from
TQM
 JIT
 Reverse marketing
 Sales tactics delivers relationship marketing
strategy to the company and to the customers

Thank You

Relationship Selling

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