Personal Selling: Chapter 13


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Personal Selling: Chapter 13

  1. 1. After the SaleBuilding Long Term Partnerships Chapter 13
  2. 2. Important Questions Answered How important is service after the sale? How should salespeople stay in contact with customers? Which sales strategies stimulate repeat sales and new business in current accounts? Which techniques are important to use when handling complaints? 2
  3. 3. THE VALUE OF CUSTOMERSMany people believe the emphasis in selling is on gettingthe initial sale. For most salespeople, however, salesincreases from one year to the next are due to increasing therevenue from existing accounts, not from getting newaccounts. Salespeople gain a competitive advantage bymaintaining strong relationships with their customers.Eventually, when buying decisions need to be made, thosecustomers look to people they know. Customers are, ofcourse, the primary revenue source for companies. Manypeople do not fully understand the value of a customer.Customers are also worth more in terms of revenue thansome salespeople recognize. (contd.) 3
  4. 4. THE VALUE OF CUSTOMERSSuccessfully retaining customers is important to all companies. One study reported that 65 percent of the average companys business comes from current, satisfied customers. Another study found the cost of acquiring a new customer to be five times the cost of properly servicing a current customer and retaining that customers business. Ye another study indicated that overall, customers are less satisfied than ever, so apparently many companies have failed to recognize the importance of customer satisfaction. Those industries that are losing customers as rapidly as they are finding new ones, now recognize the value of retaining customers. 4
  5. 5. Stages of Partnerships Commitment Dissolution •Limited Relationships •Failure to monitor Competitors or industry •Complacency 5
  6. 6. EXPLORATIONIn the exploration stage, the relationship is defined through the development of expectations for each party. The buyer tests the sellers product, how the seller responds to requests, and other similar actions after the initial sale is made. A small percentage of the buyers business is given to minimize the risk in case the vendor cannot perform. When the vendor performs well, trust is developed, as is a personal relationship. An unfavorable initial experience with the product or with the company may be extremely difficult to overcome. 6
  8. 8. SET THE RIGHT EXPECTATIONSThe best way to begin a relationship is for each party to be aware of what the other expects. To a large degree, customers base their expectations on sales presentations. Salespeople should make sure customers have reasonable expectations of product performance. If the salesperson exaggerates the capabilities of the product or the company, the customer will be disappointed. Avoiding complaints by setting proper expectations is best. Long- term relationships are begun by making an honest presentation of the products capabilities and eliminating any misconceptions before the order is placed. 8
  9. 9. MONITOR ORDER PROCESSINGAlthough many people may work on an order before it isshipped, the salesperson is ultimately responsible, at least inthe eyes of the customer, for seeing that the product isshipped when promised. Salespeople should keep track ofimpending orders and inform buyers when the paperwork isdelayed in the customers plant. Orders placed directly witha salesperson should be transmitted to the factoryimmediately. Also, progress on orders in process should beclosely monitored. If problems arise in filling the order, thecustomer should be informed promptly; on the other hand, ifthe order can be filled sooner than promised. Monitoringorder processing is critical to developing a partnership 9
  10. 10. ENSURE PROPER INITIAL USEOF THE PRODUCT OR SERVICECustomer dissatisfaction can occur just after deliveryof a new product, especially, if the product istechnical or requires special installation. Customersunfamiliar with the product may have problemsinstalling or using it. They may even damage theproduct through improper use. Many salespeoplevisit new customers right after initial deliveries toensure the correct use of the product. In this waythey can also help the customer realize the fullpotential benefits of the product. It is still thesalespersons responsibility, however, to make surethat the customer service department takes propercare of each new customer. 10
  11. 11. FOLLOW UPThe first follow up a salesperson should do after the sale is a call to say thank you and to check to see that the product is working appropriately. Some salespeople use specialty advertising, or gifts imprinted with their companys name, to say thanks. But salespeople should also follow up regularly with their accounts to stay in touch with any changing needs or possible problems. In fact, failing to follow up is a major complaint that buyers have about salespeople. Regular follow up can be accomplished via► Make personal visit► Telephone► Mail 11
  12. 12. MAKE PERSONAL VISITSPersonal visits can be the most expensive form of follow-up because of the time it takes to travel and because thesales call will last longer than one conducted throughother means. A personal visit, though, can be extremelyproductive because the salesperson can check oninventories or the performance of the machine or otheraspects that can be accomplished only at the customerssite. Plus, a customer may be more likely to disclosemore information, such as a minor complaint orcompliment, in a personal setting than over the phone.Regular personal visits can also build trust, a keycomponent needed to move the relationship forward. 12
  13. 13. TELEPHONEBetween personal visits, it is often a good idea tomake contact via telephone. A salesperson can make12 or more such calls within an hour, efficientlychecking on his or her clients. Telephone calls aretwo-way communication, giving the customer anopportunity to voice any concerns. 13
  14. 14. MAILMany companies provide form letters or thank-you cardsto encourage their salespeople to follow up on new sales.E-mail is also becoming a common form of customercontact, with customers appreciating the opportunity tochoose when to read and respond to the salespersonscontact. Although the objective may be to create afunctional relation­ship rather than a strategicpartnership, such follow-up is still necessary to remindthe customer that you are the salesperson with whomthey want to do business. 14
  15. 15. HANDLE CUSTOMER COMPLAINTSHandling complaints is critical to developing goodwill and maintaining partnerships. Complaints can occur at any time in the partnering process, not just during the exploration stage. Handling complaints properly is always important, but perhaps even more so in the early stages of a partnership. Attempts to establish partnerships often collapse because of shortsightedness in handling customer complaints. Some firms spend thousands of dollars on advertising but make the mistake of insulting customers who attempt to secure a satisfactory adjustment. 15
  16. 16. Reasons For Dissatisfaction Customers can be disappointed for any of the following reasons► The producer performs poorly► It is being used improperly► The terms of the sales contract were not met.Although salespeople usually cannot change the product or terms, they can affect these sources of complaints. 16
  18. 18. ENCOURAGE BUYERES TO TELL THEIR STORYCustomers need to tell their stories without interruption. Customers want a sympathetic reaction to their problems, whether real or imagined. They want their feelings to be acknowledged, their business to be recognized as important, and their grievances handled in a friendly manner. Good salespeople show they are happy the grievance has been brought to their attention. The salesperson may express regret for any inconvenience. Agreeing with the customer as far as possible gets the process off to the right start. 18
  19. 19. DETERMINE THE FACTSWhenever possible, the salesperson should examine, in the presence of the customer, the product claimed to be defective. Encouraging the customer to pinpoint the exact problem is a good idea. The purpose of getting the facts is to determine the cause of the problem so that the proper solution can be provided. Experienced salespeople soon learn that products may appear defective when actually nothing is wrong with them. On the other hand, salespeople should not assume product or service failure is always the users fault. They need an open mind to search for the facts in each case. 19
  20. 20. OFFER A SOLUTION The next step is to offer a solution. At this time the company representative describes the process by which the company will resolve the complaint, and the rep should then gain agreement that the proposed solution is satisfactory. Company policies vary, but many assign the responsibility for settling claims to the salesperson. Other companies require the salesperson to investigate claims recommend a settlement to the home office. Whatever the company policy, the customer desires quick action and fair treatment and wants to know the reasons for the action.. 20
  21. 21. Possible Settlements► Replace the product without cost to the customer.► Replace the product and charge the customer for labor or transportation costs only.► Replace the product and share all costs with the customer.► Replace the product but require the customer to pay part of the cost of the new product.► Instruct the customer on how to proceed with a claim against a third party.► Send the product to the factory for a decision. 21
  22. 22. FOLLOW THROUGH WITH ACTIONThe salesperson who has authority only to recommend anadjustment must take care to report the facts of the casepromptly and accurately to the home or branch office. Thesalesperson has the responsibility to act as a buffer betweenthe customer and the company. After the claim is filed,contact must be maintained with the customer to see thatthe customer secures the promised settlement. Thesalesperson also has a responsibility to educate thecustomer to forestall future claims. After a settlement to thecustomers satisfaction is a fine time to make somesuggestions. 22
  23. 23. ACHIEVE CUSTOMER SATISFACTIONSalespeople should continuously monitor customers levels of satisfaction and perceptions of product performance because customer satisfaction is the most important reason for reordering at this stage in the relationship. When the customer is satisfied, an opportunity for further business exists. Complaints and dissatisfaction can occur at any time during the relationship, but handling complaints well during the exploration stage is one way to prove that the salesperson is committed to keeping the customers business 23
  24. 24. EXPANSIONThe next phase of the buyer-seller relationship is expansion. When a salesperson does a good job of identifying and satisfying needs and the beginnings of a partnership are in place, the opportunity is ripe for additional sales. 24
  25. 25. Activities of Exploration Stage The ways to maximize the selling opportunity are► generating repeat orders► Upgrading► Full-line selling► Cross selling 25
  26. 26. GENERATING REPEAT ORDERS In some situations the most appropriate strategy is to generate repeat orders Several methods can be used to improve the likelihood of reorders.► BE PRESENT AT BUYING TIME► HELP TO SERVICE THE PRODUCT► PROVIDE EXPERT GUIDANCE► PROVIDE SPECIAL ASSISTANCE 26
  27. 27. BE PRESENT AT BUYING TIMEOne important method of ensuring reorders is toknow how often and when the company makesdecisions. Buyers do not always have regularbuying cycles, which can make it difficult forsalespeople to be present at buying time. In thesesituations the seller still wants to be present in thebuyers mind. Two items that can help keep theseller present are catalogs and specialty advertisingitems. 27
  28. 28. HELP TO SERVICE THE PRODUCTMost products need periodic maintenance and repair, andsome mechanical and electronic products require routineadjustments. Such service requirements offer salespeoplea chance to show buyers that the sellers interest did notend with the delivery of the product. Salespeople shouldbe able to make minor adjustments or take care of minorrepairs. If they cannot put the product back into workingorder, they must notify the proper companyrepresentative. They should then check to see that therepairs have been completed in a timely manner and tothe customers complete satisfaction. 28
  29. 29. PROVIDE EXPERT GUIDANCEAn industrial buyer or purchasing agent may need help in choosing a proper grade of oil or in selecting a suitable floor cleaner. A buyer for a retail store may want help developing sales promotion ideas. Whether the buyer needs help in advertising, selling, or managing, good salespeople are prepared to offer worth­while suggestions or services. When you use your industry expertise to solve problems or develop opportunities for your clients that do not involve the sale of your product, you add value to the relationship, which can ultimately help you expand your business within the account. 29
  30. 30. PROVIDE SPECIAL ASSISTANCE Salespeople are in a unique position to offer many types of assistance to the buyer. Providing special assistance is one hallmark of excellence in selling. Good relationships are built faster and made more solid by the sales­person who does a little something extra for a customer, performing services over and above his or her normal responsibilities 30
  31. 31. UPGRADINGUpgrading, also called up-selling, is convincing the customer to use a higher quality product or a newer product. The salesperson seeks the upgrade because the new or better product serves the needs of the buyer more effectively than the old product did. Upgrading is crucial to companies. When upgrading, it is a good idea to emphasize during the needs identification phase that the initial decision was a good one. Now, however, needs or technology have changed, and the newer product fits the customers requirements better. Otherwise, the buyer may believe that the seller is trying to take advantage of the relationship to foist off a higher-priced product. 31
  32. 32. FULL-LINE SELLINGFull-line selling is selling the entire line of associated products. The emphasis in full-line selling is on helping the buyer realize the synergy of owning or carrying all of the products in that line. 32
  33. 33. CROSS-SELLINGCross-selling is similar to full-line selling except theadditional products sold are not directly associatedwith the initial products. Cross-selling involvesleveraging the relationship with a buyer to identifyneeds for additional products. Again, trust in theselling organization and the salesper­son alreadyexist; therefore, the sale should not be as difficult asit would be with a new customer, provided the needsexist. 33
  34. 34. Tips for Effective Cross-Selling 34
  35. 35. COMMITMENTWhen the buyer-seller relationship has reached thecommitment stage, there is a stated or impliedpledge to continue the relationship. Formally, thispledge may begin with the seller becoming apreferred supplier, which is a greater level ofcommitment. Although preferred-supplier status maymean different things in different companies, ingeneral it means that the supplier is assured of alarge percentage of the buyers business and will getthe first opportunity to earn new business. 35
  36. 36. SECURING COMMITMENT TO A PARTNERSHIPWhen firms reach the commitment stage, elements inaddition to trust become important. Trust may beoperationalzed in the form of shared risk. Along withthe dimensions of trust such as competence anddependability and honesty (or ethics), there must becommitment to the partnership from the entiresupplying organization, a culture that fits with thebuyers organizational culture, and channels ofcommunication so open that the seller and buyerappear to be part of the same company. 36
  37. 37. COMMITMENT MUST BE COMPLETECommitment to the relationship should permeate bothorganizations, from top management to the secretary whoanswers the phone. This level of commitment meansdevoting the resources necessary to satisfy the customersneeds, even anticipating needs before the buyer does.Senior management must be convinced of the benefits ofpartnering with a specific account and be willing to allowthe salesperson to direct the resources necessary to sustainthe partnership Commitment also requires that allemployees be empowered to handle the needs of thecustomer. 37
  38. 38. COMMUNICATIONIn the commitment phase of a partnership, the seller must take a proactive communication stance. This approach means actively seeking opportunities to communicate at times other than when the salesperson has something to sell or the customer has a problem to resolve. Partners are usually the first to learn of each others new products, many times even co-developing those products. Salespeople should also encourage direct communication among similar functional areas. 38
  39. 39. CORPORATE CULTURECorporate culture is the values and beliefs held by seniormanagement. A companys culture shapes the attitudes andactions of employees and influences the development ofpolicies and programs. A single salesperson will nor changea companys corporate culture to secure a partnership witha buyer, but the salesperson must identify the type ofculture both organizations hold and make an assessment offit. Although a perfect match is not necessary, the sales­person must be ready to demonstrate that there is a fit.Though not attempting to change a companys culture, thesalesperson who seeks a partnering relationship seekschange for both. 39
  40. 40. THE SALES­PERSON AS CHANGE AGENTTo achieve increasing revenue in an account over time, the salesperson acts as a change agent, or a cause of change in the organization. Each sale may involve some type of change, perhaps a change from a competitive product or simply a new version of the old one. Partnering, though, often requires changes in both the buying and selling organizations. Change is not easy, even when it is obviously beneficial. 40
  41. 41. Change and Resistance 41
  42. 42. CHAMPIONSChampions, also called advocates or internalsalespeople, work for the buying firm in the areas mostaffected by the proposed change and work with thesalesperson to make the proposal successful. Thesechampions can build momentum for the proposal byselling in arenas or during times that are off limits tothe salesperson. It is also important to recognize thatone change is the change in status from preferredsupplier to strategic partner. Salespeople can helppotential champions by providing them with all of theknowledge they will need. 42
  43. 43. POSITIONING THE CHANGEPositioning the change is similar to positioning a product in mass marketing. In this case, the salesperson examines the specific needs and wants of the various constituencies in the account to position the change for the greatest likelihood of success. Because salespeople are highly proactive in finding areas for improvement (or change) in their partners organizations, positioning a change may determine who is involved in the decision. 43
  44. 44. DETERMINING THE NECESSARY RESOURCESThe customers needs may be beyond the salespersons expertise. The salesperson must assess the situation and determine what resources are needed to secure the buyers commitment. Not only allocation of personnel is enough, salespeople must manage other resources as well, such as travel and entertainment budgets or sample supplies. 44
  45. 45. DEVELOPING A TIME-BASED STRATEGYThe salesperson must determine a strategy for theThe salesperson must determine a strategy for theproposed change and set that strategy against a time line.This action accomplishes several objectives. First, thestrategy is an outline of planned sales calls, with primaryand minimum call objectives determined for each call.Second, the time line provides the salesperson withestimates of when each call should occur. Of course,objectives and planned times will change depending onthe results of each call, but this type of planning isnecessary to provide the salesperson with guidance foreach call, determine when resources are to be used, andmake sure each call contributes to the visionary objective. 45
  46. 46. Time Line for Strategy 46
  47. 47. CAUSES OF DISSOLUTIONToo often salespeople believe that once a customer hascommitted to a partnership less work is needed tomaintain that relationship. That belief, however, isuntrue. One study found that 55 percent of all strategicpartnerships dissolve within 3 to 5 years, and the resthave a further life expectancy of only 3.5 years.Salespeople who subscribe to the belief that partnershipsrequire less work fall victim to one or more commonproblems. The final stage for partnerships is dissolution,or breakup, but this stage can occur at any point, not justafter commitment. Several potential problems, includingmain­taining few personal relationships, failing tomonitor competitor actions or the industry, and fallinginto complacency, can lead to dissolution. 47
  48. 48. LIMITED PERSONAL RELATIONSHIPSSalespeople tend to call on buyers they like; it is natural to want to spend time with friends. The result is that relationships are cultivated with only a few individuals in the account. Unfortunately for such salespeople, buyers may leave the organization, transfer to an unrelated area, or simply not participate in some decisions. Truly effective salespeople attempt to develop multiple relationships within an account. One benefit of multiple relationships is that different champions can be selected for each proposal. 48
  49. 49. FAILING TO MONITOR COMPETITOR ACTIONSNo matter how strong the partnership is, competition will want a piece of the business. Accounts are most vulnerable when a personnel change occurs, when technology changes, or when major directional changes occur, such as a company starting a new division or entering a new market. Monitoring competitor action can be as simple as checking the visitors log to see who has dropped by or keeping up with competitor actions and asking buyers for their opinions. Monitoring competition also means thinking about the benefits competitors offer, what their products do, and what their selling strategies are? 49
  50. 50. FAILING TO MONITOR THE INDUSTRYSimilar to failing to monitor competition is a failure to monitor the industry in which either the salesperson or the customer operates. Salespeople often assume that the responsibility of monitoring the industry lies with someone else, either higher-ups in their own company or with the customer. But salespeople who fail to monitor both industries stand to miss opportunities that change creates. How does the professional salesperson monitor the industry? By reading trade magazines and by attending trade shows and conferences. 50
  51. 51. FALLING INTO COMPLACENCYPerhaps the most common thief of good accounts is complacency. In sales terms, complacency is assuming that the business is yours and will always be yours. It is failing to continue to work as hard to keep the business as you did initially to earn the business. 51
  52. 52. How To avoid complacency► Do I understand each individuals personal characteristics? Do I have these characteristics in my computer file on each account?► Do I maintain a written or computerized record of promises made?► Do I follow up on every customer request promptly, no matter how insignificant it may seem?► Do I follow up on deliveries, make sure initial experiences are positive, and ensure that all paperwork is done correctly and quickly?► . Have I recently found something new that I can do better than the competition? 52
  53. 53. End of Chapter 13
  54. 54. Thank you