Answer & Explanation:Read the Best Value Computers case at the end of Chapter 3. Each question should be discussed thoroughly in 200-225 words and also at least 4 sources for each question.1.Provide a summary of the case including an analysis of the key facts and potential dilemma. 2. Identify and describe the categories of value creation on which Best Value currently relies most.2.How can Best Value utilize the service quality dimensions to make sure it is communicating a consistent message of high-quality service and value every time someone from the company interacts with a customer?4. Assume you are one of the new sales reps hired to expand into the Memphis area. What is your role in managing customer expectations? How can you ensure new Memphis customers are delighted with their purchase? Be specific.
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1
chap te r
Learning Objectives
G
O
R
D
O
N
,
Selling has changed. The focus of much selling today is
J
on securing, building, and maintaining long-term relationships with profitable customers. To accomplish this,E
salespeople have to be able to communicate a value S
proposition that represents the bundle of benefits theirS
customers derive from the product being sold. This I
value-driven approach to selling will result in customC
ers who are loyal and who want to develop long-term
A
relationships with a salesperson and his or her firm. This
chapter provides an overview of the book by way of
an integrative model for Relationship Selling and Sales L
Introduction to
Relationship Selling
Management. After reading the chapter, you should be
able to
• Identify and define the concept of relationship selling.
• Understand the importance of a firm being
customer-centric.
• 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 components of the
external and internal environment for relationship selling.
E
I
G
H
1
8
7
1
B
U
3
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e x p e r t advice
Expert:
Company:
Business:
Michael T. Bosworth
Cofounder, CustomerCentric Systems, L.L.C.
Mike is one of the top consultants and authors globally in the field of
selling. His best-selling
book, Solution Selling, literally created the
G
modern genre of consultative selling that pervades today’s organizations.
His new bookO
Customer-Centric Selling, written with John R. Holland,
breaks exciting
Rnew ground by establishing a dynamic process for
effective buyer–seller relationship building. (Visit Mike at www
D
.customercentricsystems.com.)
The idea of being customer-centric is very much at the
core of both your new book and your approach to working with firms. What’s the essence of what it means to be
customer-centric?
Customer-centric means you think about your customer’s
use of your products or services to achieve their goals and
solve their problems when you design and market your
offerings. It also means allowing your customers to buy
from you the way they want to as opposed to being subjected to your presentation, your proposal, your cost justification, and so on. People love to buy and hate to feel “sold.”
Customer-centric selling empowers buyers to achieve their
goals, solve their problems, and satisfy their needs.
The notion of selling solutions, not products, has always
been important to you. Why does a student in a selling
class need to understand this distinction?
The new paradigm of selling—employing a consultative
approach to the job—is helping customers achieve goals
and solve problems through the use of what you are offering. When you present product information, you are requiring that the customer be smart enough to figure out how
they would use your product in their environment. Some
can, but at best this group makes up 20 percent of your
market. For the other 80 percent you have to build a case
for how your product or service will solve a customer’s
4
O
N This approach fundamentally changes the way
problem.
we, sell, as well as the buyer/seller relationship overall.
Students of selling today need to be prepared for more
than simply walking through the traditional steps of a sales
call—they
must be able to act as valued consultants to
J
their clients and work toward achieving win–win solutions.
E
Where do you see the relationship between sales and
S
marketing headed over the next several years in most
S
businesses?
I that customers are able to gain so much knowledge
Now
about
C companies and their offerings before they ever contact the company, marketing and sales need to be in sync
onA
what product information they are making available to
the Web surfer. Marketing needs to feature product usage
information rather than product features and salespeople
need
L to extensively prepare themselves in advance of a
sales call so they can jump right into a discussion about
E the buyer is trying to accomplish when they first
what
arrive
I at the client’s office. Unfortunately, most salespeople today are prepared only to talk about the product itself
Gare not especially adept at discussing how the product
and
would be used by individuals in the client firm across many
H
job titles to achieve each user’s specific goals or solve his
or her specific problems. Marketing has an obligation to
enable the sales force so they can accomplish this task.
1value proposition needs to be very clear.
The
8
7
1
B
U
CHAPTER ONE
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Introduction to Relationship Selling
Mike Bosworth’s Expert Advice calls attention to several important lessons in
today’s selling environment. First, no matter what you sell, selling primarily based
on having the best price is no way to build long-term clients. Low prices are very
easy for competitors to match, and fickle buyers who are focused only on price will
drop you as soon as a competitor beats your price. Second, the concept of creating
value for your customers is an important way to get around the problems associated with price selling. Value represents the net bundle of benefits the customer
derives from the productGyou are selling. Often this is referred to as your value
proposition. Certainly low
O price may enhance value, but so do your expertise,
your quality, and your service. Value creation in buyer–seller relationships is the
R
subject of Chapter 3. Finally, firms must focus on keeping customers coming back
again and again. This idea
D of building customer loyalty, giving your customers
many reasons not to switch to competitors, is central to successful selling today.
O
This book is not about just selling—it is about relationship selling, whose
central goal is securing, N
building, and maintaining long-term relationships with
profitable customers. Relationship
selling is oriented toward the long term. The
,
salesperson seeks to keep his or her customers so satisfied with the product,
the selling firm, and the salesperson’s own level of client service that they will
not switch to other sources
J for the same products. The book is also about sales
management, meaning the way the various aspects of relationship selling are
E firm.
managed by the salesperson’s
In modern organizations,
S relationship selling and sales management is quite
an integrated process.1 The managers in the sales organization have taken time
S efficient and effective way to manage the customer
to think through the most
side of the business. ThisI might include using all sorts of technologies, gathering
information to make decisions on customer strategies, employing different sellC kinds of customers, and having a system in place
ing approaches for different
that connects all this together.
Such a system is often called customer relationA
ship management (CRM), which refers to an organizationwide customer focus
that uses advanced technology to maximize the firm’s ability to add value to cusL relationships. The role of CRM, and information in
tomers and develop long-term
general, in relationship selling will be discussed in Chapter 2.
A Model
E
for RelationshipI Selling and Sales Management
G
A firm that is customer-centric
puts the customer at the center of everything that
H
happens both inside and outside the firm. Customers are the lifeblood of any business! They are the center of your business universe. Without them you have no
sales, no profits, ultimately
1 no business. The starting point for learning about relationship selling, and ultimately sales management, is the customer. The model for
Relationship Selling and8Sales Management serves as a road map for this book
and for your course. Like
7 customer-centric firms, the model places the customer
firmly in the center of everything you will read about in this book.
1
Firms that are customer-centric
have a high level of customer orientation. That
is, they
B
1. Instill an organizationwide
U focus on understanding customers’ requirements.
I N T RO D U C T I O N TO R E L AT I O N S H I P S E L L I N G
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E X H I B I T 1.1
Test Your Customer Mindset
External Customer Mindset
lnternal Customer Mindset
I believe that . . .
I believe that . . .
•
•
•
•
•
•
•
I must understand the needs of my
company’s customers.
It is critical to provide value to my
company’s customers.
Gmy
I am primarily interested in satisfying
company’s customers.
O
I must understand who buys my comR
pany’s products/services.
I can perform my job better if I understand
D
the needs of my company’s customers.
O
Understanding my company’s customers
will help me do my job better.
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.
N
Score yourself from 1 to 6 on each item. 1 ⫽ strongly disagree and 6 ⫽ strongly agree. The
,
higher your total score, the more of a customer
mindset you’ve achieved.
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. 159–71.
Reprinted by permission.
2.
3.
Sales
per
so
nM
Customer
Relationships
Recruiting
&
Sel
ect
ion
Self-Mana
gem
-up
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Ethic
s
p
&
Pros
Call Planning Co
ales
nt S
Info
r
n
tio
iva
Closi
for
ng
ing tions
&
F
iat Solu
in
e Creation
alu
tion
ensa
ce
ationship Selling
Rel
ecting
ting the
nica
e W Neg
in- ot
mu essag
W
m les M
Sa
tion
V
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Co
P
Tra
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ot
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alu
at
anagemen
t
Sales M
o
erf
J
E
Sthe marketplace and disseminate that
Generate an understanding of
knowledge to everyone in the firm.
S
Align system capabilities internally so that the organization responds effecI
tively with innovative, competitively
differentiated, satisfaction-generating
2
products and services.
C
What does customer orientation
A mean to the individual salesperson? One way
to exhibit a customer orientation is through a customer mindset, which may be
defined as a salesperson’s belief that understanding and satisfying customers,
L organization, is central to doing his or her job
whether internal or external to the
well. It is through this customer mindset that a customer orientation comes alive
E
within a sales force. Exhibit 1.1 provides example descriptors of a customer mindI sell to (external customers) and people inside
set both in the context of people you
your own firm you need to dealGwith to get the job done (internal customers).
Score yourself to see how much of a customer mindset you have.
H again we will come back to this notion of the
Throughout this book, time and
customer at the center of the business universe. The concentric circular style of
the model for Relationship Selling and Sales Management was created to visually
1 selling and sales management, everything
portray the notion that in relationship
builds outward from a customer8focus. The next sections describe the rest of the
model from the inside out and lay the groundwork for future chapters, which
7 of the model.
focus in detail on each component
D ev el o p m
ining &
ent
1
The Customer
B
As mentioned, the customer is inUthe center of the model to connote a customercentric organization. The idea of a customer mindset is at the heart of this circle.
6
CHAPTER ONE
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What kinds of behaviors comprise a customer mindset? One way to address this
is to learn what behaviors are not customer friendly. Innovation 1.1 provides
some excellent examples of behaviors salespeople should avoid, as they all tell
a buyer that you are not engaged in a long-term relationship building form of
selling.
The four key relationship selling mistakes in Innovation 1.1 provide great insight
into many of the things we will be learning throughout this book. Fundamentally,
the onus is on the salesperson to ensure that each sales call results in a meaningful, relationship-building exchange. When problems occur—and they are bound
to occur—in things like shipping, billing, out-of-stocks, after-sale service, or anyGmust stand ready (and must be personally empowered)
thing else, the salesperson
to work with the buyer to
Osolve the problem. In fact, as Mike Bosworth mentions
in the Expert Advice feature that opens the chapter, the crux of relationship selling
R
is taking a consultative approach with buyers—working together to develop solutions to their business problems.
D
On the buyer’s side, sales organizations must calculate how much time, money,
O
and other resources should be invested in a particular customer versus the anticiN
pated return on that investment.
This ratio, often called the return on customer
investment, is central to,our discussion of value creation in Chapter 3 and is also
relevant to the information used in prospecting and planning (Chapter 5). More
broadly, the customer’s long-term value to the sales organization is referred to as
the lifetime value of a customer.
J
To summarize, the customer is at the core of today’s organizations and therefore
E for Relationship Selling and Sales Management, and
is at the center of our model
the topic of customers permeates
all the chapters in the book. We will now touch
S
on the other elements of the model: using information, value creation, ethics,
relationship selling, and S
sales management. These topics comprise the remaining
chapters in the book.
I
Information
C
A
Think of information as the engine that drives a salesperson’s success in securing,
building, and maintaining long-term relationships with profitable customers.
L role in using information to manage customer relaTechnology plays a major
tionships. The term customer relationship management has come to signify a
E
technology-driven organizationwide focus on customer. CRM began primarily
I
as a software package designed
to collect and mine data. But it has evolved into
an overarching organizational
philosophy
of doing business. (Good places to go
G
to learn more about CRM are the Web sites of leading CRM providers such as
H Teradata.com, and the highly informative forum for
Salesforce.com, Siebel.com,
CRM, Customerthink.com.) Chapter 2 provides insights on the use of information and technology in relationship selling and introduces the roles of sellers and
1 market place.
buyers in the organizational
8
Value Creation
7
Value creation is the second
1 major topic within the customer core circle of the
model for Relationship Selling and Sales Management. Earlier we described
B
value as the net bundle of benefits the customer derives from the product you are
selling. A more direct way
Uto explain value is as a “give–get” ratio. What does each
party “get out of a sale” compared to what they invest? This investment might
I N T RO D U C T I O N TO R E L AT I O N S H I P S E L L I N G
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I N N O V A T I O N
Want to Think Like a Customer?
Mistakes to Avoid Always
1. Don’t waste their time. If there was one theme that pops
up over and over it is this: We have less time to do our job
than ever before. So, you better not waste any part of it. In
other words, don’t come into a customer’s business unprepared. Have something of value to share or don’t come.
Buyers need to see some value in the time they share
with salespeople, every time they see them, or they won’t
see them. Don’t waste their time with idle chitchat, don’t
take longer to do something than you need to, don’t be
unprepared, and don’t waste the time of the buyer’s staff,
either. If a salesperson doesn’t have something important to
do or something valuable to bring, don’t visit.
And when they do visit a buyer, the salesperson must
make sure he or she has all the answers. Know what the
product does or doesn’t do, know what the pricing and
terms are, and be prepared to answer all their questions.
2. Lack of empowerment to handle things now. Customers
don’t appreciate the “salesperson as a victim.” This refers
to the salesperson that spends time explaining how the
truck broke down, or the manufacturer back-ordered the
product, or it was recalled, or whatever. All of these were
seen as the salesperson saying, “It wasn’t our fault. We’re
the victims of someone else’s mistakes.” Customers aren’t
concerned with whose fault something was, nor are they
concerned with the reasons why something wasn’t as it
was supposed to be.
Ultimately, buyers only want solutions. The Ritz Carlton
hotel authorizes its room staff to spend up to $2,000 to make
a customer happy; a salesperson calling on an organizational buyer should be able to resolve a problem over a
$50-can of paint without several phone calls and days of
approvals.
Bottom line, good service means that the salesperson
could solve the problem immediately, on the spot.
3. Not knowing the buyer’s business. Don’t waste the
time or insult the intelligence of a buyer by presenting
1.1
products or services he or she can’t use. It is reasonable
to expect salespeople to know what their customers’ processes are, what their goals and strategies are, and the
limitations of their facilities, budgets, and timetables, and
then take all of that information into consideration before
presenting some product or program. The best salespeople
areG
like extensions of a buyer’s own business.
4. OBringing problems, not solutions. Customers do not
want to discover after the fact that a purchase will be backR
ordered or shipped incomplete. Find the problems before
theDbuyer experiences them, and then bring solutions in
advance. Telling what the options are let the buyer decid …
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