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Module 3: Relationship Selling

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Building Relationships

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Building Relationships
Personal Selling

It was 4:00 p.m. on Christmas Eve and Ray Rizzo’s father, in town for the annual family get-together, had forgotten to bring his suit. What made the situation even more challenging was that Ray’s father is rather portly with a forty-eight-inch waist and even broader shoulders.

Ray and his father rushed to Mitchells, a local clothing store in the US state of Connecticut, and asked Jack Mitchell, the owner, for his help. The store would be closing in an hour, however Jack didn’t hesitate and immediately enlisted Dominic, the head tailor, and before 6 o’clock that evening, the largest pair of pants and jacket in the store were tailored to fit Ray’s father perfectly. Needless to say, Ray is a customer for life. [1]

This situation is what Jack Mitchell calls a hug. If you go shopping for clothes at Mitchells or Richards in the US state of Connecticut, you will get hugged. Maybe not literally, but you will most definitely get “hugged” figuratively.

Jack Mitchell, the CEO of Mitchells/Richards and author of Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results, says, “Hugging is a way of thinking about customers. To us, hugging is a softer word for passion and relationships. It’s a way of getting close to your customers and truly understanding them.” [2]

To be successful in selling, you have to make selling personal. People do business with people, not with companies.

Even in the business-to-business (B2B) selling channel, it is people who are making decisions on behalf of the company. Every sale starts with a relationship. You have to get to know your customer to understand what he wants, what he needs, and what resources he has. This concept is called relationship selling (or consultative selling). [3] It is defined by working personally with your customer to understand his needs.

You might be thinking that selling is about the product or service, not about relationships. But that’s not true. The fact is that selling has evolved dramatically over the past thirty years. Business is more competitive. The use of technology and the expanded number of product and service offerings have developed a need for consultative selling in more industries than ever before.

It used to be that salespeople wanted to simply make a sale, which meant that the sale began and ended with the transaction. But now, it’s not enough to just make the sale. In today’s world, it’s how you think about the customer that matters. [4] It’s the difference between giving the customer what she needs rather than what you want to sell her. [5] The fact is that the sale is just one small part of the relationship. The real essence of selling is in the relationship. [6]

The salesperson has a new role in most companies. The days of the salesperson as product pusher are gone. Customers in B2B and business-to-consumer (B2C) environments want and demand more. Consider the evolution of some major industries.

Many of the leading hotel chains keep your preferences in a database so that their front desk sales team can recognize you personally at check-in and provide the queen-sized bed in a nonsmoking room on the quiet side of the property that you prefer. Restaurants work hard to learn, remember, and greet you by your name, maintain your favorite table, wine, and entrée, and prepare to anticipate your every need. Airlines have tools to recognize you and the fact that you like an aisle seat as far forward as possible in the plane. [7]

All these tactics are steeped in the theory that customers make choices on the relationship they have with brands. In each one of these situations, the salesperson is the difference that sets a brand apart at the moment of truth, the moment the customer comes in contact with the brand. [8]

Some brands understand how important each moment of truth is when creating relationships with customers. For example, Southwest Airlines makes their Web site easy to use, has humans answer the phone, and has flight and ground attendants that make it a pleasure to travel with them.

Power Selling
Johnson Controls, manufacturer of heating and air conditioning systems, thinks that consultative selling is so important that it holds a Basic Boot Camp for the company’s territory managers that focuses on leveraging relationships in selling.

The classroom-style boot camp includes interactive exercises, product training, and business support training. Participants who score at least an 85 percent on their final grade for the Basic Boot Camp and spend six months out in the field can qualify to attend the elite Special Operations Training, which is by invitation only. [9]

Relationships are so important in selling that one study surveyed one hundred top B2B salespeople and found that they attribute 79 percent of their success to their relationships with customers. [10]

It is the relationship with a customer that allows you to bridge the gap between a customer’s problem and the solution. The relationship is the framework for consultative selling; it’s what allows you to have an open, honest dialogue, ask the right questions, understand your customer’s needs, and go beyond advising to helping your customer make the decision that’s right for her. [11]

Common Ground
Selling relationships start as personal relationships. Making a personal connection is vital in the two to ten minutes of a customer encounter or meeting. [12]

But consultative selling is more than simply building rapport. In fact, consultative selling goes beyond the product or service you are selling; it even goes beyond the selling process.

It is the X factor, the intangible element that makes a customer choose your product or service even when the competition is priced lower. Consultative selling is about your personal involvement and sincere focus on problem solving that goes beyond selling to true partnership with the customer.

Think about the last time you bought a new cell phone. Chances are, if the person didn’t establish rapport with you from the start, you probably walked away and bought the phone from a different salesperson, maybe at a different store.

The relationship includes a sincere bond that goes beyond business and includes common interests and goals. [13]

If you are selling medical imaging equipment to hospitals, you want to build relationships with the administrators, doctors, and nurses who will be using your equipment in each hospital.

When you build a relationship starting with what’s important to each person individually, it’s easier to expand that relationship to sharing information and problem solving from a business perspective.

As Bob Fitta, a manufacturer’s rep for several tool companies said about Paul Robichaud, owner of Robi Tools, “I got to know him as a business person and a real person, and that relationship has endured.” [14]

Consultative selling doesn’t start and stop at specific times during the relationship. In fact, it defines the relationship before the sale, during the sale, and after the sale. [15] The concept of building professional relationships is apparent in this example:

If you are selling insurance, your customer may eventually buy a home, have a family, or purchase a second property. So the relationship you develop when you sell him car insurance as a young man should be nurtured and developed over time to provide solutions as his lifestyle changes. Having this long-term view of customer relationships is called focusing on lifetime value.

Customer lifetime value formula.

dollar value of purchase × gross profit percent × number of purchases

If a customer shopped at a retailer and spent $75 on one purchase with a gross profit of 30 percent, the lifetime value is calculated as: $75 × 30% × 1 = $22.50.

If the customer made five purchases for $75 each over the course of the time she shopped with the retailer (5 years), at a gross profit of 30 percent, the lifetime value is calculated as:
$75 × 30% × 5 = $112.50. [16]

CRM Tools
Sometimes it’s easy to lose track of some customers and not follow up, which means that you may only be developing short-term relationships.

Or worse, you may open the door to a competitor because you weren’t bringing new and relevant ideas to your customer [17] Many companies use customer relationship management (CRM) tools, which are technology solutions that organize all of a customer’s interactions with a company, CRM is a database that holds all the information regarding a transaction.

In addition to dates; products purchased; salesperson; and name, address, and contact information of the customer, CRM tools capture all communication the customer has had with the company, including calls made to the company call center, posts and reviews made to the company Web site, and the details of each sales call.

Some CRM tools are extremely sophisticated and help the salesperson and the company to manage relationships with prospects and customers. Other CRM tools are simpler and are focused on helping the salesperson manage her relationship with prospects and customers.[18]

A construction contractor calls a toll-free number for a plumbing supply company after seeing an ad in a trade journal. The inquiry is sent via e-mail to the appropriate salesperson. The salesperson reviews the CRM system to see if there have been any previous contacts with the customer and if there is any information about the customer and his business. Then he returns the phone call and sets up a date to meet him to learn more about his business needs. The salesperson makes a note in the CRM system about the phone call and the date of the meeting.

When the salesperson meets with the customer, he learns that he has five developments that he manages. The salesperson makes a note in the CRM system so everyone from the company who comes in contact with the customer know the information.

CRM tools can be extremely helpful in managing customer relationships, especially where there are multiple people in the company who come in contact with prospects and customers. CRM tools also make it easier to understand the lifetime value of a customer since all purchases, inquiries, and other contacts are included in the system.

It is the information that is gathered in a CRM system that helps a salesperson better understand customer behavior, communication patterns, and short- as well as long-term needs. Many companies offer loyalty programs as a tactic to increase sales but also to gather information about customer preferences to offer more relevant messages and offers. CRM tools are used to manage these loyalty programs.

Face Time
You might think that customer relationships are easy to maintain with text messaging, e-mail, and other technology-based methods of communication.

But while technology can enhance an established relationship because it allows you to provide information and insight at a moment’s notice, the fact is that most significant customer relationships, especially in B2B selling, require face-to-face communication. [19]

It helps to know customers in an environment outside the office, in a casual or social place such as a restaurant or sporting event, because those are the activities that build relationships. In fact, according to one study, 71 percent of top-achieving salespeople use entertainment as a way to get closer to their customers. [20]

A good example is golf. During eighteen holes of golf, the typical golfer actually hits the ball for only two and a half minutes during a four hour round of golf. [21]

Terry L. Brock, an international marketing coach, says salespeople have the opportunity to make the difference in their relationships with the little things. Sending a thank-you note after a meeting, forwarding an article or video on a topic you discussed, remembering the names of your customer’s children, even providing a personal suggestion for a vacation spot are all examples of little things that can set you apart from every other salesperson.

You might think that these “little things” aren’t important when you get into the big world of business. But Harvey Mackay, renowned author, speaker, and business owner, says it best: “Little things mean a lot? Not true. Little things mean everything.” [22]

Trust Me
Trust is about building partnerships. Salespeople build trust by following up on their promises and they work to help their customers succeed.

Customers trust you when they believe you have their best interest at heart, not your personal motivation. Trust is what gives a relationship value. In fact, one B2B customer described his salesperson by saying he was like an employee of the company. Another described her salesperson by saying, “When we have a problem, he has a problem.” [24]

Trust is equally important in B2C selling. For example, at Zen Lifestyle, a salon in Edinburgh, United Kingdom, the approach to customers is described as soft sell with a focus on educating customers and providing information.

Customers are encouraged to try products in the smallest size to determine whether they like the product. It is only after they have liked it that larger and more economical sizes are suggested. “This helps develop a relationship between customers and therapist built on trust, which in turn will generate future sales from recommendations,” according to salon owner Fiona Macarthur. [25]

Susan Marcus Beohm, suggests. “I don’t go in as a salesperson-I go in looking to see how I can help them. When salespeople are too eager to talk about features and benefits before they listen to the customer, they make it difficult to establish trust. [26]

People buy from people they trust. Consider the fact that customers put their trust in salespeople with their money and, in the case of business-to-business selling, with their business and their reputation. [27]

It is said that you can give a customer the option to buy a product from a salesperson she knows or buy the same product for 10 percent less from someone she doesn’t know, and in almost every case she will buy from the salesperson she knows. [28]

Win-Win-Win
Although the win-win-win is a simple concept, it is a critical one to keep in mind in any business position, especially in selling. This art of collaboration actually results in more business with your existing customers because you have become a partner in solving their problems, and it brings you new business in the form of referrals. The win-win-win also plays a significant role in the negotiating process. The best business relationships and negotiations are based on the win-win-win model, not the win-lose model in which one party loses so that the other can win. [29]

If you do volunteer work for an organization such as Autism Speaks, you get involved because you believe in raising awareness of autism. Those who have autism and their families benefit from your involvement. This is win #1.

You also benefit because you gain the satisfaction of helping people. This is win #2.

You help build the strength of the organization. The more people that are involved, the more people they can reach with their message, and the more money they can raise to reach their goal of curing autism. This is win #3.

The seat at the table is given to those salespeople who deliver value, not sell products or services. They develop the relationship to assist customers in implementing their business strategies. [30]

That allows you to deliver your core products or services and be a part of developing the new opportunities. It helps cement the relationship and establishes a partnership that delivers value for all involved. [31]

When you are a true partner with your customers, you will be given a seat at the table when direction-setting issues are discussed. This allows you to participate fully as a trusted advisor and asset to the customer and to help shape the strategy of the company. [32]

Networking: Relationships
Networking is all about relationships and exchange. It is the art of building alliances or mutually beneficial relationships. [33] What makes the network function is the fact that people in the network at some point have a need and at some point may be able to help someone else with his need. Said another way, networking is based on mutual generosity. [34]

Networking is an important part of the business world and an even more vital part of sales. It’s no longer a question of “if” you should network; it’s a requirement to stay competitive because it’s virtually impossible to do your job alone. Building strong relationships with customers is an excellent way to build a network. Satisfied customers will refer you to people who may become potential customers.

Start with People You Know

Make a list of all the people you know, starting with your current customers, family, friends, friends’ family, and others. Include people such as your hair stylist, car mechanic, and others. Get to know everyone in your extended network as each can be a lead for a potential sale or even a job. [35]

Get Involved

If you want to meet people who are in the same business or profession as you, professional organizations are the best places to be. Joining is good, but getting involved in one of the committees is even better. It helps demonstrate your skills and knowledge to the other people in the organization. Since most professional organizations are made up of volunteers, it’s usually easy to be invited to participate on a committee. [36]

Make an Effort

Make an effort to attend industry or other professional events. And always have your business cards handy.

Give out your business card to those you talk to, and don’t forget to get their business cards, too. [37]

Network

Online professional social networking can be an equally powerful tool to build your contacts. Consider a situation that Austin Hill, Internet entrepreneur, encountered when his firm was trying to get access to someone in a specific department at a vendor.

It was a large company, and he kept getting the runaround. But after going onto LinkedIn and getting introductions to the right people, within two days they were able to start doing business with the company. [39]

Online Profile
Today, networking can be done in person as well as online. Don’t limit yourself to just one method. Networking is best done both in person and online to be truly effective.

Create a Profile on the Major Professional Social Networks, such as, LinkedIn, Ryze, ZoomInfo, that have a substantial number of members.

You can also use Facebook and Twitter to create profiles, peruse job boards, and join the conversation.

The number of connections you have is not a badge of honor. Take the time to connect to all the people you know. If you only add people for the sake of having a lot of connections, you won’t know who can really help you in your network.

When you do make a connection, make it personal; don’t just send a group invitation to join your network. It’s always best to keep in mind that the foundation of your network is relationships. [40]

Ask for introductions to people with whom you want to network and ask your boss, colleagues, and customers to write recommendations for you.

It’s a good idea to use the features included on the professional social networking sites such as groups, discussions, and “Answers” on LinkedIn, which allows you to ask questions of your network. [41]

KEY TAKEAWAYS

Personal selling is a powerful part of everyday life. The selling process can help you get what you want both personally and professionally.
You are always selling your ideas, your point of view, and yourself in virtually every situation, from class participation to going out with friends.
In order to understand the selling process, you have to understand brands. A brand can be a product, service, concept, cause, location, or even a person. A brand consistently offers value to a customer with something that is unique, consistent, and relevant and creates an emotional connection.
Brands are important in selling because customers trust brands. The brand doesn’t end with the product, service, or concept; the salesperson is also a brand.

Exercises

Identify a situation in which you were the customer in a personal selling situation. Think about your impressions of the salesperson and the selling process.


Think about the following brands: Xbox, Victoria’s Secret, and BMW. Discuss how each brand forms an emotional connection with its customers. Why is it important in selling?

Bibliography

[1] Jack Mitchell, Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results (New York: Hyperion, 2003), 22.

[2] Jack Mitchell, Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results (New York: Hyperion, 2003), 28.

[3] Claire Sykes, “Relationship Selling,” Surface Fabrication 12, no. 1 (January-February 2006): 58.

[4] Jack Mitchell, Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results (New York: Hyperion, 2003), 16.

[5] Jack Mitchell, Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results (New York: Hyperion, 2003), 20.

[6] Jeffrey Gitomer, “The Difference between an Account and a Relationship,” Long Island Business News, August 3, 2007, http://libn.com/blog/2007/08/03/the-difference-between-an-account-and-a-relationship/ (accessed June 29, 2009). [7] Jim Sullivan and Phil Roberts, Service That Sells! The Art of Profitable Hospitality(Denver: Pencom Press, 1991), 151.
[8] Howard Lax, “Fun, Fun, Fun in a Customer Experience Way,” Banking Strategies 84, no. 6 (November–December 2008): 64.
[9] “Johnson Controls Runs Boot Camp,” Heating & Refrigeration News 233, no. 6 (April 14, 2008).
[10] Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29.
[11] Demmie Hicks, “The Power of Consultative Selling,” Rough Notes 151, no. 7 (July 2008): 701.
[12] Cathy Berch, “Consultative Selling: Ask, Don’t Tell,” Community Banker 18, no. 4 (April 2009): 261.
[13] Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29.
[14] Brad Perriello, “Relationship—Selling at its Best,” Industrial Distribution 97, no. 9 (September 2008): 34. [15] Cathy Berch, “Don’t Wing It,” Community Banker 18, no. 2 (February 2009): 18.
[16] Michael Gray, “How Do You Determine Customer Lifetime Value?” Profit Advisors, May 20, 1999, http://www.profitadvisors.com/busfaq/lifetime.shtml (accessed November 30, 2009).
[17] Claire Sykes, “Relationship Selling,” Surface Fabrication 12, no. 1 (January–February 2006): 58.
[18] SearchCRM.com, “CRM (Customer Relationship Management),”http://searchcrm.techtarget.com/definition/CRM (accessed November 30, 2009).
[19] Susi Geiger and Darach Turley, “The Perceived Impact of Information Technology on Salespeople’s Relational Competencies,” Journal of Marketing Management 22, no. 7 (August 2006): 827.
[20] Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29. [20] Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29.
[21] “How to Use Golf as a Business Tool,” video, BNET, http://www.bnet.com/2422-13722_23-323018.html (accessed July 27, 2009).

[22] Terry L. Brock, “Relationship-Building Skills Pay Off for Your Bottom Line,”Philadelphia Business Journal, June 12-18, 2009, 25.

[23] Andrea Nierenberg, “Eight Ways to Say ‘Thank You’ to Customers,” Manage Smarter, February 6, 2009, http://www.crystal-d.com/eight-key-ways-to-say-thank-you-to-customers (accessed July 3, 2009).

[24] Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29.

[25] Annette Hanford, “Best Sellers Tell All,” Health & Beauty Salon 25, no. 12 (December 2003): 50.

[26] “A Foundation Built on Trust,” Selling Power Sales Management eNewsletter, August 8, 2001, http://www.sellingpower.com/content/newsletter/issue.php?pc=146 (accessed March 16, 2010).
[26] “A Foundation Built on Trust,” Selling Power Sales Management eNewsletter, August 8, 2001, http://www.sellingpower.com/content/newsletter/issue.php?pc=146 (accessed March 16, 2010).

[27] Brian Tracy, “Teaming Up with Your Customers,” Agency Sales 34, no. 2 (February 2004): 59.

[28] “Building Trust,” Selling Power Presentations Newsletter, February 25, 2002,http://www.sellingpower.com/content/newsletter/issue.php?pc=186 (accessed March 16, 2010).

[29] Stephen R. Covey, “Win-Win Strategies,” Training 45, no. 1 (January 2008): 56.

[30] J. D. Williams, Robert Everett, and Elizabeth Rogol, “Will the Human Factors of Relationship Selling Survive in the Twenty-First Century?” International Journal of Commerce & Management 19, no. 2 (2009): 158.

[31] Marc Miller, “A Seat at the Table,” American Salesman 54, no. 5 (May 2009): 9.
[32] Tim Conner, “Sales Strategies of Six-Figure Salespeople,” TimConnor.com,http://www.timconnor.com/articles_sales.html (accessed June 29, 2009).

[33] “What Is Networking?” The Riley Guide,http://www.rileyguide.com/network.html#netprep (accessed July 3, 2009).

[34] Meredith Levinson, “How to Network: 12 Tips for Shy People,” CIO, December 11, 2007, http://www.cio.com/article/164300/How_to_Network_Tips_for_Shy_People?page=1(accessed July 3, 2009).

[35] Meredith Levinson, “How to Network: 12 Tips for Shy People,” CIO, December 11, 2007, http://www.cio.com/article/164300/How_to_Network_Tips_for_Shy_People?page=1(accessed July 3, 2009).

[36] Kim Richmond, Brand You, 3rd ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2008), 176.
[37] Meredith Levinson, “How to Network: 12 Tips for Shy People,” CIO, December 11, 2007, http://www.cio.com/article/164300/How_to_Network_Tips_for_Shy_People?page=1(accessed July 3, 2009).

[38] Donna Rosato, “Networking for People Who Hate to Network,” CNNMoney.com, April 3, 2009,http://money.cnn.com/2009/04/02/news/economy/networking_jobs.moneymag/index.htm (accessed July 3, 2009).

[39] Lisa LaMotta, “How to Network Like a Pro Online,” Forbes, August 9, 2007,http://www.forbes.com/2007/08/09/google-microsoft-walmart-ent-tech-cx_ll_0809networking.html (accessed July 3, 2009).

[40] Clare Dight, “How to Network Online,” Times Online, February 21, 2008,http://business.timesonline.co.uk/tol/business/career_and_jobs/graduate_management/article3402745.ece (accessed July 3, 2009).