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Personal Selling: Chapter 2


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Personal Selling: Chapter 2

  1. 1. Building Partnering Relationships Chapter 2
  2. 2. Important Questions Answered What different types of relationships exist between buyers and sellers? When is each type of relationship appropriate? What are the characteristics of successful partnerships? What are the benefits and risks in partnering relationships? How do relationships develop over time? What are the responsibilities of salespeople in partnerships? 2
  3. 3. “Your challenge as a professional will be to understand the different types of relationships and how those relationships can impact you and your company, whether positive or negative.” ~Steve Reel
  4. 4. Evolution of Personal Selling Past To sell what company produced even if it was not what people needed at very high prices Present (Partnering-oriented) To find solutions and develop a partnership  Buyers have needs that are met by:  The product  The selling process  Buyers buy to also make a profit 4
  5. 5. The Evolution of Personal Selling
  6. 6. Relationships and SellingRelationship marketing Behavioral loyalty refers to the purchase of Loyalty the same product from the same vendor over  Behavioral time.  Attitudinal Lifetime customer value Attitudinal loyalty is an emotional attachment to a brand, company, or salesperson.
  7. 7. Relationship Marketing Companies’ attempts to develop stronger relationships with their customers Relationship marketing is the creation of customer loyalty Targets a major customer that it wants to sell to now and in the future Establishes a long-term collaborative relationship 7
  8. 8. Relationship Marketing and the Sales Force 4 basic questions used to define the role of the sales force  How much selling effort is necessary to gain and hold customers  Is the sales force the best marketing tool?  What type of sales activity will be necessary?  Can the firm gain strength relative to its competition with sales force? Personal selling builds relationships! Two main functions of personal selling are to  Generate revenue  Provide services to satisfy customers Flexible in operation Focused on prospective customers Results in actual sales Salespeople implement relationship marketing 8
  9. 9. Levels of Relationship Marketing Transaction selling: customers are sold to and not contacted again Relationship selling: the seller contacts customers after the purchase to determine if they are satisfied and have future needs Partnering: the seller works continually to improve its customers’ operations, sales, and profits 9
  10. 10. Dependence Increases as Relationships become Important p hi High rse rtn Pa p hi ns Relationships io at el R l na io ct sa an Low Tr Low Dependence High 10
  11. 11. Partnering with Customers Encourages both the buyer and seller to share information Two companies work toward the same objective Components of partnering include:  Individual excellence  Importance  Interdependence  Investment  Information  Integration  Institutionalization  Integrity 11
  12. 12. Partnering with Customers 12
  13. 13. Building Customer Relationships Through Service Service-oriented salespeople can do Two things to add value to their product offerings and to enhance buyer-seller relationships 13
  14. 14. Value-Added Activities Salespeople can do a number of things to add value to their product offerings and to enhance buyer-seller relationships such as  seek to simplify order processing  help customers become operationally efficient  assist customers in producing, marketing, and distributing their products to their customers 14
  15. 15. Service Differentiation Show how you differ by providing a higher level of service that other salespeople by going over and above the “call of duty” to help customers like Rolls Royce and Mercedes-Benz do 15
  16. 16. How Do You Spell Service? S= Satisfaction...make sure that customer are satisfied. E= Expectations...fulfill customer expectations for service. R= Responsiveness...solve customer problems promptly. V= Value...make sure customers perceive that the service benefits they receive exceed the price they pay. I= ways to provide extra services to customers. C= customers that you care about them. E= Enthusiasm...provide customer services eagerly and with a smile. 16
  17. 17. Relationship Builders Treat customers like life-long partners Become a solutions provider Deliver more service than you promise Schedule regular service calls Develop open and honest communication Use the ‘we can’ approach Take responsibility for mistakes made Be an ally for the customers’ business 17
  18. 18. Relationship Breakers Simply wait for the problem to develop Focus only on making the sale Over-promise and under-deliver Wait for your customers to call you Lie or make exaggerated claims Use the “us versus them” approach Blame somebody else Knock a competitor Focus on your own personal gain 18
  19. 19. Market Exchanges A transaction between a buyer and a seller in which each party is concerned only about that party’s benefit. The seller is concerned only with making the sale; the buyer with getting the product at the lowest possible price. Most business transactions are market exchanges, and there are two types:  Solo Market Exchanges  Functional Relationships 19
  20. 20. Solo Market Exchanges Parties in the transaction do not plan on doing business together again, both the buyer and the seller pursue their own self-interests. 20
  21. 21. Functional Relationships These are long-term market exchanges in which the buyer purchases out of habit or routine; they tend to have the same orientation as they do in solo market exchanges, but the previous purchase does influence the next purchase. 21
  22. 22. PartnershipsHere both parties are concerned about each other’swelfare and in developing win-win relationships.There are two types of partnerships:  Relational partnership  Strategic partnership 22
  23. 23. Relational partnership Both seller and the buyer trust one another and have a close personal relationship, thus they do not go into minor details 23
  24. 24. Strategic partnership In this type of partnership both parties work and develop a long-tem relationship and make significant investment to improve profitability of both 24
  25. 25. Types of Relationships Between Buyers and Sellers
  26. 26. Main issue Most salespeople are involved in either market exchanges or functional relationships. Strategic partnerships are rare. 26
  27. 27. Foundations of Successful Relationships
  28. 28. Characteristics of Successful Relationships Mutual trust: A belief by both the parties that the other one will fulfil its obligations in a relationship.  Dependability: The buyer’s perception that the salesperson, and the product and company he or she represents, will live up to promises made, is not something a salesperson can demonstrate immediately  Competence: To know what they are talking about  Customer orientation: the degree to which the salesperson puts the customer’s needs first  Honesty: truthfulness and sincerity  Likeability: behaving in a friendly manner and finding a common ground 28
  29. 29. Open communication Open and honest communication is a key building block for developing successful relationships 29
  30. 30. Common goals Both parties should have common, preferably shared, goals to be able to develop a successful relationship 30
  31. 31. Commitment to mutual gain Both parties to work to have a win-win relationship Credible commitments: Both parties make credible commitments to, which are tangible investments in the relationship 31
  32. 32. Organisational support Structure and culture Organizational structure & management provide necessary support for the salespeople & buyers in a partnering relationship Training Special training is required to sell effectively in a relationship-building environment Rewards Reward systems on both sides of the relationship be coordinated to encourage supportive behaviours 32
  33. 33. Phases of Relationship Development Although not all relationships should become partnerships, strategic partnerships do tend to go through several phases  Awareness: salespeople locate & qualify prospects, while buyers identify various sources of supply  Exploration: both buyer & seller search and try out; they may explore the potential benefits and costs.  Expansion: supplier has passed enough tests to be considered for additional business  Commitment: investments are made in the relationship, especially in the form of sharing proprietary information, plans, goals, and the like  Dissolution: it can occur any-time because of poor performance, clash in culture, change in needs, and other factors 33
  34. 34. Managing Relationships and Partnering Choosing the right relationship  Size to make a relationship with the right type of customer (big/small depending upon the pros and cons)  Access to technology some companies often develop innovations, either in the way they use a product or by altering a product, that the supplier can copy. Astute salespeople can identify such companies and develop strategic partnerships that lead to joint development of new products or technologies, important outcomes regardless of the size of the account 34
  35. 35. Using Technology to Increase Efficiency Partnering relationships are built on effective communications. To improve communications with customers, salespeople are using computers, telecommunications, and videos. Companies are also creating direct links with customers via technology. Supplier relationship management (SRM) is the use of technology and statistics to identify important suppliers and opportunities for cost reduction, greater efficiency, and other benefits. 35
  36. 36. Summary Businesses are moving toward partnering strategies. Functional relationships and strategic partnerships are characterized by a mutual concern of each party for the long-run welfare of the other party. Mutual trust, open communication, common goals, a commitment to mutual gain, and organizational support are key ingredients in successful relationships. Customers trust salespeople who are dependable, capable, and concerned about the customer’s welfare.
  37. 37. End of Chapter 2
  38. 38. Thank you