UCSI UNIVERSITY

SALES MANAGEMENT 12 final chapter

SERVICE AND FOLLOW-UP FOR CUSTOMER RETENTION

 The importance of service and follow-up

A salesperson helps customers through follow-up by maintaining contact with a

customer to evaluate the effectiveness of the product and the satisfaction of the
customer.

1. What is customer service and satisfaction?

A product (good or service) is a bundle of tangible and intangible attributes, including

packaging, colour, and brand, plus the services and even the reputation of the seller.
Please note the phrase plus the services. Buyers usually believe an organisation ought
to deliver a certain level of service to customers when they purchase something.
Several expected services:

 Product – the product purchased has no defects.

 Price - fair value for the price.
 Place – the product is available when and where needed and promised.
 Promotion – correct, honest information in advertisements, from salespeople,
and on product labels.
 Exchange transaction – handled correctly, quickly, and professionally the first
time.
 After the sale – warranty honoured, repairs or exchanges made cheerfully;
written information or company representative available to discuss how to put
together, hook up, or use the product.

Did the customer receive what was expected? The answer to this question determines
the level of service quality perceived by the buyer. Customer service refers to the
activities and programs provided by the seller to make the relationship satisfying for
the customer.

The activities and programs add value to the customer’s relationship with the seller.
Warranties, credit, speedy delivery, invoices, financial statements, computer-to-
computer ordering, and not being out of stock are services designed to satisfy
customers.

2. Expectations determine service quality

The quality of services provided by an organisation and its salespeople must be based
on its customers’ expectations. Their expectations frequently are based on information
provided by the salesperson, past experiences, word of mouth, and personal needs.

When buyers perceive the service received as what they expected, they are satisfied.
Thus, service quality must match customers’ perception of how well the service
provided meets their expectation.

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  Building a long-term business friendship

1. What is a Business friendship?

The relationship formed between a salesperson and a client that revolves around
business-related issues is referred to as a business friendship.

2. How to Build a Business Friendship

Just like friendships outside of work, business relationships do not just happen, they
take time to develop.

 Level 1. Acquaintances are people whose names you know, you see
occasionally, and of whom you know little about.
 Level 2. Friends are people whom we spend more time with and with whom
we share common interests and hobbies.
 Level 3. Intimate friends, often called “best friends,” these are the people we
know on a deeper level.

Usually, several things happen between people before they become friends.

 Self-disclosure – sharing a few things about yourself and allowing your client
to share a few things about him or herself.
 Acknowledgement – everyone has a desire to be heard, acknowledged, and
understood; take time to listen to your client.

(1) Step 1 – Repeat back--repeat what your client tells you in summarized fashion.
(2) Step 2 – Do not invalidate--avoid telling or making your client feel that they are
wrong.
(3) Step 3 – Do not try to change--do not attempt to change your client’s mind on an
issue; simply listen to what is said and formulate a solution based on their perceived
problems.

 Attending – pay attention, or attend to your client, use body language to show
you are paying attention.
 Talking – the foundation of any good relationship is good communication; be
a great listener, share information, and allow information to be shared.

a. Structure for survival

A good relationship needs structure to survive; this structure must be established at

the beginning and reaffirmed to avoid confusion.

b. Avoid control and one-upmanship

Do not try to control your client, and do not allow yourself to be controlled. Allow
your client his own point of view and listen to it.

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 c. Do you pressure a true friend?

Yet to maintain a healthy and lasting business relationship, the needs of the people
you serve should come before your own self-interest.

3. What is most important?

If you make decisions based on your own needs, at times you will take advantage of
your “friends.” True friendship is based upon how you can help the other person.

4. How many friends?

A wise old proverb says a person with too many friends comes to ruin. If you have
many friends, your friendships become broad but not deep.

 Relationship marketing and customer retention

Three levels of customer relationship marketing:

 Transaction selling – a customer is sold and not contacted again.

 Relationship selling – after the purchase, the seller finds out if the customer is
satisfied and has future needs.
 Partnering – the seller works continually to improve the customer’s
operations, sales, and profits.

Let us take a moment to review relationship marketing to better understand the

importance of follow-up and service, ways of keeping customers, methods of helping
customers increase sales, and how to handle customer complaints.

1. Relationship marketing builds friendships

Relationship marketing is the creation of customer loyalty and retention. An

organization using relationship marketing is not seeking a sale or a transaction; the
goal is to retain customers. The company would like to demonstrate to the customer
that it has the capabilities to serve the account’s needs in a superior way, particularly
if a committed relationship can be formed.

 Customer satisfaction and retention

Customer satisfaction refers to feelings toward the purchase. As illustrated in exhibit

below, perceived purchase satisfaction is the customer’s feelings about any
differences between what is an expected and actual experience with the purchase.

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If the customer is satisfied, chances of selling to the customer in the future increase. If
satisfied with repeat purchases, customers tend to continue to buy from the
salesperson. Satisfaction can result in a customer so loyal that it is very difficult for
another seller to get the business. Thus, customer retention is critical to a
salesperson’s long-run success.

 So, how does service increase your sales?

Customers provide referrals when they are satisfied with the salesperson. Salespeople
are continually planning, implementing, and evaluating their purpose, plans, and
success for contacting each customer. Thus, salesperson is involved in the ongoing
process of finding new customers and taking care of present customers.

 Account penetration is a secret to success

The ability to work and contact people throughout the account, discussing your
products, is referred to as account penetration. Successful penetration of an account
allows you to properly service that account by uncovering its needs and problems.

By knowing your buyers and other key personnel, you uncover their needs and
problems, develop a presentation that fulfils the needs or problems, and develop a
presentation that fulfils the needs or solves the problems. Account penetration is
determined by:

 Your total and major sales growth in account.

 Distribution of the number of products in a product line, including sizes used
or merchandised by an account.
 Level of cooperation obtained, such as reduced resale prices, shelf space, etc.
 Your reputation as the authority on your type of merchandise for the buyer.

 Service can keep your customers

How does this keep ?built in to the structure of the business to the customers
What can you do to ensure that they buy from you in the future? After landing a major
account, consider these six factors:

a. Concentrate on improving your account penetration. Account penetration is

critical in uncovering prospect needs or problems and consistently
recommending effective solutions through purchasing your products.

b. Contact new accounts frequently on a regular schedule. In determining the

frequency of calls, consider:
Establishing the trust to the new customers
 Present sales and/or potential future sales to the account.
 Number of orders expected in a year.
 Number of product lines sold to the account.
 Complexity, servicing, redesign requirements of products purchased by the
account.

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The most productive number of calls is reached at the point at which additional calls
do not increase sales to the customer. This relationship of sales volume to sales calls
is referred to as the response function of the customer to the salesperson’s calls.

c. Handle customers’ complaints promptly. This is an excellent opportunity to

prove to customers that they and their businesses are important and that you
sincerely care about them. The speed with which you handle even the most
trivial complaint shows the value you place on that customer.
Handle customers’ complain, customers will feel like you want to Bukit long
term relationship, you are serious in doing business with me. Giving
confidence to customers and your company
d. Always do what you say you will do. Nothing destroys a relationship with a
customer faster than not following through on promises. Professional buyers
do not tolerate promises made and subsequently broken.
Showing any message deliver to customers, you are fulfilling the promise.
e. Provide service as you would to royalty. By providing your client with money-
saving products and problem-solving ideas, you can become almost
indispensable. You are an advisor to listen to rather than an adversary to
haggle with.
Give special treatment, you are treating them with different way compare with
others salesperson

f. Show your appreciation. Customers contribute to your success, and in return,

you must show appreciation. Thank them for their business and do them
favours. Here are several suggestions:

 Although you may be hundreds of miles away, phone immediately whenever

you have thought of something or seen something that may solve a customer’s
problems.
 Mail clippings that may interest your customers even if the material has no
bearing on what you are selling.
 Write congratulatory notes to customers who have been elected to office,
promoted to higher positions, given awards, and so on.
 Send newspapers clippings about your customers’ families such as marriages,
births, and activities.
 Send holiday or special occasion cards.
 Send annual birthday cards.
 Prepare and mail a brief newsletter, perhaps quarterly, that keep customers
informed on important matters.
 Fax and / or e-mail information to prospects and buyers.

 Handle complaints fairly

Customers may be dissatisfied with products for any number of reasons:

a) The product delivered is a different size, colour, or model than the one
ordered.
b) The quantity delivered is less than the quantity ordered – the balance is back-
ordered (to be delivered when available).
c) The product does not arrive by the specified date.

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 d) The manufacturer does not render discounts agreed on.
e) The product does not have a feature or perform a function that the customer
believed it would.
f) The product is not of the specified grade or quality.

Whenever you determine that the customer’s complaint is honest, make a settlement
that is fair to the customer.

 You lose a customer – keep on tracking.

Four things can be done to win back a customer:

 Visit and investigate. Find out the real reason.

 Be professional. Let the customer know you have appreciated past business,
that you still value the customer’s friendship, that you are still friendly.
 Never criticize a competing product your customer has purchased.
 Keep calling. Continue to make calls normally; present your product’s benefits
without directly comparing them to the competition.
 Is the customer, always right?

Some academics believe the answer is “yes,” but what if the customer asks you to do
something unethical or illegal.

1. This customer is not in the right!

Occasionally a dishonest customer may require you and your company not to honour
a request. Always have a plan for problem solving. Some procedures you can use
include:

 Obtain as much relevant information from your customer as possible.

 Express sincere regret for the problem.
 Display a service attitude (a true desire to help).
 Review your sales records to make sure the customer purchased the
merchandise.
 If the customer is right, quickly, and cheerfully handle the complaint.
 Follow-up to make sure the customer is satisfied.

2. Dress in your armour

Each day before leaving for work, the salesperson should prepare to meet a few
unethical and dishonest people. Being prepared to do what is right, readiness to
discuss what is the ethical action, and trust that you are doing right. The salesperson’
attitudes and actions should exemplify the proper way to do business.

 The path to sales success seeks, focus, ask, serve

In any types of sales, please remember to:

a. Seek customers to serve and you will find them

b. Become focused on assisting others and people will open their doors.

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 c. Ask how you may assist others and people will buy.
d. Provide service after the sale and customers will buy again.

1. Developing service recovery skills

A service recovery focuses on resolving customer problems when a mistake happens

or when a breakdown in sales execution occurs. Understanding the service recovery
process is important because the world of sales and business are not perfect. The
following service recovery process helps us focus on the action steps to take:

 First research, isolate, and describe the problem in the customer’s terms. The
problem is what the customer perceives it to be.
 Second, try to understand what the customer perceives is triggering the service
failure. When you meet with your customer, ask them to describe to you how
the problem began, how it evolved, and how it impacts them.
 Third, prepare a range of action options and develop an action plan that allow
you to respond to your customer. These include: (a) compensating the
customer in some way, (b) allowing the product to be returned or replaced, (c)
reimbursing the customer, and (d) expressing apologies.
 Fourth, discuss the alternatives with your customer and implement the
mutually agreed-upon recovery plan. One key to any service recovery process
lies in consistent follow-up and excellent execution.
 Try not to let it happen again. This includes sharing best practices with your
colleagues, making sure processes are followed, and creating monitoring
systems to ensure the problem does not happen again.

2. Words of sales wisdom

 Sales proverbs

A proverb is a short, wise, easy-to-learn saying that calls a person to think and act.
The following are a few proverbs of sales wisdom:

a. Customer choice between suppliers has never been greater. What’s your ups to
let the customers choose you
b. You lose “X” percent of sales or customers per year.
c. You do business with the one you trust, and you trust the one you know.
d. Eighty percent of your profits come from about 20 percent of your customers.
e. Obtaining new customers and selling more products to current customers are
the ways to increase sales.
f. Having a satisfied customer tell a prospect how great a product is, and that the
salesperson can be trusted is a wonderful way to obtain new customers.
g. It is always easier to sell a satisfied customer or prospect than an unsatisfied
one.
h. Cost of acquiring a new customer is much higher than keeping a current
customer.

 Knowledge versus wisdom

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This knowledge is good but there is a vast difference between knowledge (having
these facts) and wisdom (applying these facts to taking care of customers). We may
amass knowledge, but without wisdom, our knowledge is useless. In this age of
information, knowledge is plentiful, but wisdom is scarce.

 Wisdom is learned

In sales, one gains wisdom through a constant process of growing. 1) We must trust
and honour people. 2) We must realize that our purpose is to help people. 3) We must
make a life-long series of right choices and avoid moral pitfalls. 4) We must learn
from our errors and recover.

3. True caring builds relationships and sales

Once the sales prospect feels salesperson understands needs, confidence improves in
what the salesperson recommends. People like to buy and be remembered, not sold,
and forgotten. Today’s salespeople need personal characteristics allowing them to

i. Care for the customer, take joy in work, and find harmony in the relationship.
ii. Have patience in closing the sale, kindness to all people, and moral ethics.
iii. Be faithful to one’s word, fair in the sale, and self-controlled in emotions.

 Caring is seen!

Caring about the customer is more than just warm feelings, it is an attitude that
reveals itself in action.

 Caring is Hard to Do

Since it is hard to do, people notice when the seller does it, and how customers know
the seller can be trusted. Through caring comes exceptional service to the customer,
which in turn brings peace to the relationship.