Relationship Selling Exam Review PDF

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Relationship selling exam review chapters 1-3....

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Relationship Selling Exam review Chapter 1: Relationship selling, what is it? Human-driven interaction between and within individuals or organizations 2 important advantages of personal selling compared to other IMC’s. You can receive feedback and then you can personalize your approach

How does it fit within IMC Relationship selling has compelling advantages over other promotional marketing mix

Advantages/disadvantages of personal sales Advantages: - Salespeople offer 2 way communication - The ability to listen to a prospect - The opportunity to identify buyer needs - The power to tailor message to meet buyer needs Disadvantages: - Investing in salespeople is expensive - Reach is limited

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For these reasons professional selling is typically not appropriate for B2C

Outbound/inbound sales In-bound sales are sales that come to you, ie someone buying something from you; outbound is sales you seek out, ie telemarketing

Sales Reps different then account managers Selling Steps 1. 2. 3. 4. 5. 6. 7.

Prospecting – making a list of potential customers Planning – research, qualifying them Sales call Presentation Objections Close Follow up

Contrasting B2B marketing compared to B2C (6 Distinctions) 1. Price (higher) - Expensive products and services generate more profit than inexpensive consumer products 2. Negotiable price - Products and services with unpublished, negotiable prices require salespeople to ensure that buyer understands the benefits prior to price discussions 3. Large buying group - As buying groups become larger, they become more difficult to manage 4. Sales process is long - The longer the sales process, the greater the risk that it stalls and buyers lose interest 5. Complexity of product - Complex, highly technical products require salespeople to explain and train so that the buyer feels comfortable that they can successfully, use, install, and implement or resell. 6 . The buyer feels risk - When stakes are high for the buyer, and the downside to selecting the wrong supplier feels catastrophic, only a person, using relationship selling and providing reassurance and evidence, can move that buyer to make a purchase.

Chapter 2: Sales ethics and the law Conventional, pre conventional and principal Levels of personal ethical behaviour Level 1: Preconventional - Acts in own best interest - Willing to break rules or laws for self gain Level 2: Conventional - Upholds moral and legal laws, does what is expected - Most employees operate at this level Level 3: Principled - Lives by an internal set of moral codes, values and ethics - These are upheld regardless of consequences - Only 20% operate here

Competition act Antitrust (Competition) Law - The Competition Act in Canada applies to all businesses, and ensures fair and equal opportunity for businesses by ensuring adherence to core antitrust laws - Antitrust law restricts how companies (and Salespeople) work with their competitors, customers and supplier - Protects against Monopolies (consumer price protection, encourages competition, level playing field). - Regulates how we work with: Customers and Competitors.

10 Sales Laws Customer Laws Price Discrimination (1) - Charging different customers different prices for identical products and services purchased in the same volume. - Charging different prices to different customers is common and legal But if it intentionally disadvantaged a customer it’s illegal Predatory Pricing (2) When a dominant industry player (greater than 35% market share) sells below cost with intent to eliminate competition.

Resale Price Maintenance (3) Manufactures cannot set retail prices - MRSP (operative word, “suggested”! Promotes retailer competition Good for consumer Refusal to Deal (4) Imagine a ‘parent’ company owns: 1) The only electric utility in town and 2) The only bowling alley in town Now imagine a competitive bowling alley opens in town … - If the parent company refuses to sell electricity to the new bowling alley, it may be illegal … - Generally, companies can pick their customers Tied Selling (5a) In order to use one service by a company, you need to buy another one of their services or products you may not want - Tied selling is okay when the two products are dependent on each other (e.g. printers and ink) and when the company offers multi-product discounts but doesn’t insist customers take advantage. Exclusive Dealing (5b) In exclusive dealing, the supplier says to the customer “I will sell you my widgets only if you will buy all of your widgets from me” In tied selling, the supplier says “I will sell you my widgets only if you buy my gidgets.” Bribery, Kickbacks, and Gifts (6) It is normal practice for salespeople to give gifts Legal gifts are: Nominal in value and infrequent ($20) Not cash or cash equivalent Ideally, relevant to the business relationship E.g. A promotional item company gives a promotion mug as a gift Bribe: money or favor given to influence the judgment or conduct of a person in a position of trust Generally offered by the seller Kickback: a form of negotiated bribery in which a commission is paid to the bribe-taker Generally solicited by the buyer Not sure whether your gesture is appropriate? Ask yourself: What is my intention?

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What is the value of the good ($20 rule) Does the good relate to my offering? What is my company policy?

Be aware that some buyers can’t take anything Proceed with caution Misrepresentation (7) Sales “representatives” The competition Act “prohibits knowingly or recklessly making…a representation, in any form whatever, what is false or misleading in a material respect.” This includes literal meaning and general impressions False representation Exaggerated features and benefits Impossible promises (delivery, installation) Claims without knowledge Misleading or untrue 3rd party testimonials Exaggerated claims of benefit – e.g. 3% cost reduction Bait and Switch Selling Inaccurate price recommendations

Competitor Laws Price Fixing (8) Colluding with competitors to maintain a market price. Market Sharing (9) Dividing up markets or customers Agreeing not to solicit each other’s customers Imagine two paving companies in Hamilton Geographical division: you do East, we’ll do West Segmentation division: you do Residential, we’ll do commercial Reduces competition Bid Rigging (10) Arranging with competitors not to bid on business – or to bid in a cooperative manner In the purchase process, companies issue RFPs “Request for Proposal” Supplier “bid” for the work Submit confidential, independently written proposals Suppliers cannot coordinate their efforts!

Chapter 3: Organizational Buyer Behaviour 3 buying situations 1. New Task 2. Straight Rebuy 3. Modified Rebuy

3 types of organizational buyers 1. Users - uses product 2. Resellers - resells the product 3. OEMs - manufactures product

6 buying center roles 1. Initiator: - the person who identifies the need/want 2. Buyer: - Has formal authority to evaluate and select suppliers and negotiate 3. Decider: - The “true” decision-maker; often the Buyer but can be less visible individuals such as senior executives 4. Influencer: - Other organizational stakeholders who weigh in on supplier selection 5. User: - Implement and literally ‘use’ the product or service; crucial to get requirements and buyin from this group 6. Gatekeeper: - Those who manage the flow of information and control access to other members of the buying centre

Difference between decider and buyer The buyer has formal authority to evaluate and select suppliers and negotiate The decider is the “true” decision-maker; often the Buyer but can be less visible individuals such as senior executives

8 buying steps 1. Need recognition - Company recognizes a problem or need that can be satisfied via purchase

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Stimulus can be internal or external.

2. General need description - Company defines general characteristics of desired solution as well as timing, budget. 3. Product specification - Company defines the specific product characteristics needed - Specifications described in RFP–Request for Proposal 4. Supplier Search - Company identifies best-suited suppliers. 5. Proposal dissemination - Invitation extended to qualified suppliers to bid on the opportunity. 6. Supplier selection - Company examines proposals and meets/negotiates with potential suppliers - Company selects its preferred supplier. 7. Order routine (purchase order) - Documentation/final paperwork listing all purchase details (supplier, quantity, specs, delivery, terms, etc.) 8. Performance evaluation/post-purchase experience - Buyer experiences satisfaction or cognitive dissonance - Determines re-purchase likelihood

Social Style Amiables - Friendly, trusting, optimistic, supportive, prefer win-win - People oriented; don’t like conflict - They take things personally - Easy to make appointment with - Difficult to close the sale - Basic need: to support others How to approach - Build trust and relationship first; then initiate business discussion - Use testimonials, stories, case studies to illustrate - Conflict avoiders; can disappear if process becomes contentious Drivers - Results and action oriented, pragmatic - Can be ruthless in pursuing goals

- Winning is all important - It is never personal – it’s just business - Basic need: to control and achieve How to approach - Be prepared, know your bottom line - Be direct and efficient - Focus on economic drivers Analyticals - Strong need for facts, figures, details - Methodically explore all options - May appear cautious and reserved - Basic need: to be right How to approach - Approach negotiation one step at a time - Always present both the pros and cons - Test to see if they’re open to emotional connection - Be patient, respect their need to analyze - Be prepared for multiple ‘trial closes’ Expressives - Visionary, transformative thinkers - People-oriented also; highly engaging - Prestige buyers - Need approval and status - Basic need: recognition How to approach - Appeal to both organizational and personal buyer benefits - Sale will often depend on showing prospect how your product will make them look good - Present a vision, not the details - Build the relationship by being an audience...