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Relationship Selling

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Relationship Selling

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Relationship Selling

  1. 1. RELATIONSHIP SELLING Group 7
  2. 2. 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
  3. 3. FROM TOTAL QUALITY MANAGEMENT TO CUSTOMER CARE When the buyer moves on does the relationship end? 1st October 2013Sales Management - Relationship Selling
  4. 4. 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
  5. 5. 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
  6. 6. 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. 1st October 2013Sales Management - Relationship Selling
  7. 7. 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. 1st October 2013Sales Management - Relationship Selling
  8. 8.  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. 1st October 2013Sales Management - Relationship Selling
  9. 9. 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
  10. 10. 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
  11. 11. 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. 1st October 2013Sales Management - Relationship Selling
  12. 12. 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 1st October 2013Sales Management - Relationship Selling
  13. 13. 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
  14. 14.  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
  15. 15. 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. 1st October 2013Sales Management - Relationship Selling
  16. 16. 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. 1st October 2013Sales Management - Relationship Selling
  17. 17. 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’. 1st October 2013Sales Management - Relationship Selling
  18. 18.  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. 1st October 2013Sales Management - Relationship Selling
  19. 19.  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. 1st October 2013Sales Management - Relationship Selling
  20. 20.  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 1st October 2013Sales Management - Relationship Selling
  21. 21. 1st October 2013Sales Management - Relationship Selling
  22. 22.  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
  23. 23. 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 1st October 2013Sales Management - Relationship Selling
  24. 24. 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 1st October 2013Sales Management - Relationship Selling
  25. 25. 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 1st October 2013Sales Management - Relationship Selling
  26. 26. 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 1st October 2013Sales Management - Relationship Selling
  27. 27. 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
  28. 28. 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 1st October 2013Sales Management - Relationship Selling
  29. 29. 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 1st October 2013Sales Management - Relationship Selling
  30. 30.  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. 1st October 2013Sales Management - Relationship Selling
  31. 31.  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. 1st October 2013Sales Management - Relationship Selling
  32. 32.  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. 1st October 2013Sales Management - Relationship Selling
  33. 33. 1st October 2013Sales Management - Relationship Selling
  34. 34. 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 1st October 2013Sales Management - Relationship Selling
  35. 35. 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 1st October 2013Sales Management - Relationship Selling
  36. 36. 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
  37. 37. 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
  38. 38. 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 1st October 2013Sales Management - Relationship Selling
  39. 39. 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 1st October 2013Sales Management - Relationship Selling
  40. 40. Two Important Aspects of Selling  Information gathering  Servicing 1st October 2013Sales Management - Relationship Selling
  41. 41. Information Gathering Company’s Marketing Information System (MkIS) Market Research Strategic Marketing Plans Company Internal Accounting System Market Intelligence 1st October 2013Sales Management - Relationship Selling
  42. 42. 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. 1st October 2013Sales Management - Relationship Selling
  43. 43. 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) 1st October 2013Sales Management - Relationship Selling
  44. 44. 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) 1st October 2013Sales Management - Relationship Selling
  45. 45. 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 1st October 2013Sales Management - Relationship Selling
  46. 46. Thank You 1st October 2013Sales Management - Relationship Selling

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