Contemporary Selling

Building Relationships, Creating Value

Mark W. Johnston, Greg W. Marshall

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317360827
• Topic: Business
• Subtopic: Sales
• Edition: 5

Contemporary Selling is the only book on the market that combines full coverage of 21 st century personal selling processes with a basic look at sales management practices in a way that students want to learn and instructors want to teach. The overarching theme of the book is enabling salespeople to build relationships successfully and to create value with customers.

Johnston and Marshall have created a comprehensive, holistic source of information about the selling function in modern organizations that links the process of selling (what salespeople do) with the process of managing salespeople (what sales managers do). A strong focus on the modern tools of selling, such as customer relationship management (CRM), social media and technology-enabled selling, and sales analytics, means the book continues to set the standard for the most up-to-date and student-friendly selling book on the market today.

Pedagogical features include:

• Mini-cases to help students understand and apply the principles they have learned in the classroom

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• Ethical Dilemma and Global Connection boxes that simulate real-world challenges faced by salespeople and their managers

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• Role Plays that enable students to learn by doing

A companion websiteincludes an instructor's manual, PowerPoints, and other tools to provide additional support for students and instructors.

Part One
What is Contemporary Selling?

CHAPTER 1 Introduction to Contemporary Selling

CHAPTER 2 Understanding Sellers and Buyers

CHAPTER 3 Value Creation in Buyer–Seller Relationships

CHAPTER 4 Ethical and Legal Issues in Contemporary Selling

CHAPTER 5 CRM, Sales Technologies, and Sales Analytics

1

Introduction to Contemporary Selling

Learning Objectives

Selling has changed. The focus of much selling today is on securing, building, and maintaining long-term relationships with profitable customers. To accomplish this, salespeople have to be able to communicate a value proposition that represents the bundle of benefits their customers derive from the product being sold. This value-driven approach to selling will result in customers who are loyal and who want to develop long-term relationships with a salesperson and his or her firm. This chapter provides an overview of the book by way of an integrative Model for Contemporary Selling.

After reading the chapter, you should be able to:

• • Appreciate key aspects of contemporary selling.
• • Understand the importance of a firm being customer-centric.
• • Explain why value is a central theme in contemporary selling.
• • Identify the processes involved in selling.
• • Recognize the key elements in sales management.
• • Discuss and give examples of the components of the external and internal environment for contemporary selling.

Introduction to Contemporary Selling

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 product you are selling. Often this is referred to as your value proposition. Certainly low price may enhance value, but so do your expertise, your quality, and your service. Value creation in buyer–seller relationships is the subject of chapter 3. Finally, firms must focus on keeping customers coming back again and again. This idea of building customer loyalty, giving your customers many reasons not to switch to competitors, is central to successful selling today.

This book does not use the title “Contemporary Selling” lightly. That is because, in this day and age, the whole field of selling is much more sophisticated than in days past. Old-fashioned and traditional approaches to customers simply are insufficient in today’s dynamic, global, technology-driven business environment. In the 21^st Century world of business, it is critical to think in terms of relationship selling, whose central goal is securing, 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 for the same products. The book is also about sales management, meaning the way the various aspects of selling are managed by the salesperson’s firm.

In modern organizations, the process of selling and sales management is quite integrated.¹ The managers in the sales organization have taken time to think through the most efficient and effective way to manage the overall customer side of the business. This might include using all sorts of technologies, gathering information to make decisions on customer strategies, employing different selling approaches for different kinds of customers, and having a system in place that connects all this together through information management. Such a system is often called customer relationship management (CRM), which refers to an organizationwide customer focus that uses advanced technology to maximize the firm’s ability to add value to customers and develop long-term relationships. The role of CRM, technology in general, and data analytics in contemporary selling will be discussed in chapter 5.

A Model for Contemporary Selling

A firm that is customer-centric puts the customer at the center of everything that occurs, 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 no business. The starting point for learning about selling, and ultimately sales management, is the customer. The model for Contemporary Selling that you saw at the beginning of this chapter serves as a pictorial road map for the content in your book and your course. The sections throughout the remainder of this chapter provide an overview of each element in the model and you may wish to refer back to the picture as you continue your reading. Like customer-centric firms, the model places the customer firmly in the center of everything you will read about in this book.

Firms that are customer-centric have a high level of customer orientation. That is, they:

1. Instill an organizationwide focus on understanding customers’ requirements.
2. Generate an understanding of the marketplace and disseminate that knowledge to everyone in the firm.
3. Align system capabilities internally so that the organization responds effectively with innovative, competitively differentiated, satisfaction-generating products and services.²

What does customer orientation 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, whether internal or external to the organization, is central to doing his or her job well. It is through this customer mindset that a customer orientation comes alive within a sales force. Exhibit 1.1 provides example descriptors of a customer mindset both in the context of people you sell to (external customers) and people inside your own firm you need to deal with to get the job done (internal customers). Score yourself to see how much of a customer mindset you have.

Exhibit 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.	• Employees who receive my work are my customers.
• It is critical to provide value to my company’s customers.	• Meeting the needs of employees who receive my work is critical to doing a good job.
• I am primarily interested in satisfying my company’s customers.	• It is important to receive feedback from employees who receive my work.
• I must understand who buys my company’s products/services.	• I focus on the requirements of the person who receives my work.
• I can perform my job better if I understand the needs of my company’s customers.
• Understanding my company’s customers will help me do my job better.

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.

Throughout this book, time and again we will come back to this notion of the customer at the center of the business universe. The concentric circular style of the Model for Contemporary Selling was created to visually portray the notion that everything builds outward from a customer focus. The next sections describe the rest of the model from the inside out and lay the groundwork for future chapters, which focus in detail on each component of the model. The remainder chapters in the book follow the flow of the model. The most fundamental issues related to building relationships and creating value with customers are the focus of Part One of the book, comprised of chapters 1–5.

Building relationships, creating value

As mentioned, building relationships and creating value with the customer is in the center of the model to connote a customer-centric organization, and the idea of a customer mindset is at the heart of this circle. Fundamentally, the onus is on the salesperson to ensure that each sales call results in a meaningful, relationship-building exchange that creates value. When problems occur—and they are bound to occur—in things like shipping, billing, out-of-stocks, after-sale service, or anything else, the salesperson must stand ready (and must be personally empowered) to work with the buyer to solve the problem. On the buyer’s side, sales organizations must calculate how much time, money, and other resources should be invested in a particular customer versus the anticipated return on that investment. This ratio, often called the return on customer investment, is central to our discussion of value creation in chapter 3. More broadly, the customer’s long-term value to the sales organization is referred to as the lifetime value of a customer.

Earlier we described value as the net bundle of benefits the customer derives from the product you are selling. A more direct way to 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 be money, time, labor, production, or any other resources used up in moving the sale forward. For many years, organizations gave little consideration to using value creation to build relationships with customers. Instead, they were content to simply conduct business as a series of discrete transactions. This approach to selling has come to be called transactional selling.

Exhibit 1.2 portrays a convenient way of distinguishing between transactional approaches to selling and those more focused on developing long-term relationships.³ The relationship-oriented approaches are referred to as consultative selling and enterprise selling. The basis of the approach is segmenting the sales effort by the type and amount of value different customers seek to derive from the sales process.

Exhibit 1.2 Transactional Selling Versus Relationship Selling

Transactional Selling

Transactional selling is the set of skills, strategies, and sales processes that meets the needs of buyers who treat suppliers as a commodity and who are mainly or exclusively interested in price and convenie...