1-1 Introduction to Relationship Selling 1

INTRODUCTION TO RELATIONSHIP SELLING 1-2 Learning Objectives Identify and define the concept of relationship selling Understand the importance of a customer-centric organization Explain why value is a central theme in relationship selling Identify the processes involved in relationship selling Identify the elements in managing relationship selling Discuss and give examples of the elements of the external and internal environment for relationship selling

INTRODUCTION TO RELATIONSHIP SELLING 1-3 A Model for Relationship Selling and Sales Management - Overview Are customer-centric Are highly customer- oriented Exhibit a customer mindset Firms successful at relationship selling and sales management:

INTRODUCTION TO RELATIONSHIP SELLING 1-4 Customer Orientation Focus on understanding customers’ requirements Generate an organization-wide understanding of the marketplace Respond effectively with innovative products and services Firms that have a high level of customer orientation:

INTRODUCTION TO RELATIONSHIP SELLING EXHIBIT 1-5 Test Your Customer Mindset 1.1 1=Strongly Disagree =Strongly Agree I must understand the needs of my company's customers It is critical to provide value to my company's customers I am primarily interested in satisfying my company's customers I must understand who buys my company's products/services I can perform my job better if I understand the needs of my company's customer Understanding my company's customers will help me do my job better Source: Karen Norman Kennedy, Felicia G. Lassk, and Jerry R. Goolsby, “Customer Mind-Set of Employees Throughout the Organization,” Journal of the Academy of Marketing Science 30 (Spring 2002), pp External Customer Mindset

INTRODUCTION TO RELATIONSHIP SELLING EXHIBIT 1-6 Test Your Customer Mindset 1=Strongly Disagree =Strongly Agree Source: Karen Norman Kennedy, Felicia G. Lassk, and Jerry R. Goolsby, “Customer Mind-Set of Employees Throughout the Organization,” Journal of the Academy of Marketing Science 30 (Spring 2002), pp TOTAL (Higher total suggests greater customer mindset) 1.1 Employees who receive my work are my customers Meeting the needs of employees who receive my work is critical to doing a good job It is important to receive feedback from employees who receive my work I focus on the requirements of the person who receives my work Internal Customer Mindset

INTRODUCTION TO RELATIONSHIP SELLING 1-7 A Model for Relationship Selling and Sales Management - The Customer The customer is at the center of the model Return on customer investment Lifetime value of a customer

INTRODUCTION TO RELATIONSHIP SELLING McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. INNOVATION Doing it your way, not the customer’s way 2.Focusing on your objectives, not the customer’s 3.Pushing for a client meeting as though it is the end game 4.Pushing the customer 5.Failing to listen Source: John R. Graham, “Think Like a Customer – Or Lose the Sale, “American Salesman (January 2002), p.3. Want to Think Like a Customer? Mistakes to Avoid Always

INTRODUCTION TO RELATIONSHIP SELLING McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. INNOVATION Keeping your sales strategy secret Making the sale the goal Giving too many or too few options Writing off the customer too soon Source: John R. Graham, “Think Like a Customer – Or Lose the Sale, “American Salesman (January 2002), p.3. Want to Think Like a Customer? Mistakes to Avoid Always

INTRODUCTION TO RELATIONSHIP SELLING 1-10 A Model for Relationship Selling and Sales Management – Value Creation Value is the bundle of benefits the customer derives from a purchase Give-get ratio Value creation - adding value for a customer beyond an isolated transaction

INTRODUCTION TO RELATIONSHIP SELLING EXHIBIT 1-11 Time Investment in Each Stage of the Sale 1.3 Traditional selling Value-added selling Developing an understanding of the buyer’s needs Closing the sale Presenting your solution

INTRODUCTION TO RELATIONSHIP SELLING 1-12 A Model for Relationship Selling and Sales Management – Relationship Selling Process elements of relationship selling: Using information Communicating the sales message Negotiating for win-win solutions Closing the sale and follow- up Self-management

INTRODUCTION TO RELATIONSHIP SELLING McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. INNOVATION Attrition for first-year accounts is more than twice that of long term accounts due to: Early problems that sour the relationship No formal servicing system Communication breakdowns Avoid the early break-up by: Saying thank-you Seeking feedback early Responding quickly Source: Erin Strout and Michael Weinreb, “Please Come Again,” Sales and Marketing Management (February 2003), pp The Importance of Follow-up

INTRODUCTION TO RELATIONSHIP SELLING EXHIBIT 1-14 The Firm Components of the Internal Environment 1.4 The Custome r Goals, objectives, culture Personnel Financial resources Production and supply- chain capabilities R&D and technological capabilities Service capabilities

INTRODUCTION TO RELATIONSHIP SELLING 1-15 Internal Environment Places the employee at the center of its business model Promotes fun Hires people by “tryouts” Lends itself to a favorable service culture Southwest Airlines' corporate environment

INTRODUCTION TO RELATIONSHIP SELLING EXHIBIT 1-16 The Firm Components of the External Environment 1.5 The Custome r Legal and political Technological Social and cultural Economic Natural