1 Service and Follow-up for Customer Retention

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Service and Follow-up for Customer Retention Mc. Graw-Hill/Irwin Chapter 14 Copyright © 2006 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Chapter 14 14 -3

Main Topics The Business Tree of Life: Service The Importance of Service and Follow-Up Building a Long-Term Business Friendship Relationship Marketing and Customer Retention The Product and Its Service Component Customer Satisfaction and Retention Chapter 14 14 -4

Main Topics Excellent Customer Service and Satisfaction Require Technology So, How Does Service Increase Your Sales? Turn Follow-up and Service into a Sale Account Penetration Is a Secret to Success Service Can Keep Your Customers You Lose a Customer—Keep on Trucking Chapter 14 14 -5

Main Topics Increasing your Customer’s Sales Returned Goods Make You a Hero Handle Complaints Fairly Is the Customer Always Right? Build a Professional Reputation Chapter 14 14 -6

The Tree of Business Life: Service Guided by The Golden Rule: Rule ù Prove you truly care with royal ice Et hi rv ca l Se T T TT T T Builds ù True ù Relationships T ù ù I ù C 7 service Prove what you said in your presentation was the truth Take your time to build long-term business friendships Realize that customer satisfaction leads to customer retention Place the customer’s interest before your own You can see that ethical service builds true relationships

Exhibit 14 -1: Only Through Truth Can Trust Be Supported to Bridge the Gap between People 8

TR TH Only Through Truth Can Trust Be Supported to Bridge the Gap between People TRUST SELLER 9 BUYER

Service–What Is It? ù Which of the following is the meaning of customer service as discussed in the “Service and Follow-Up for Customer Retention” chapter? ù Service is part of a product, such as insurance or advertising? ù Service makes a contribution to others? 10

Correct! Service Refers To: ù Making a contribution to others such as our customers 11

What Is the Difference between Service and Follow-Up? ù Follow-up refers to maintaining contact with a customer in order to evaluate the effectiveness of the product and the satisfaction of the customer 12

Words of Sales Wisdom and Proverbs ù Sales Proverbs! Examples are: ù You do business with the one you trust and you trust the one you know ù Obtaining new customers and selling more products to present customers are the ways to increase sales ù It is always easier to sell a satisfied customer than to an unsatisfied one or a prospect ù The cost of acquiring a new customer is more costly than keeping a present customer 13

What Do These Sales Proverbs Mean to a Salesperson ù Take excellent care of your current customers 14

When Does the Business Relationship Begin? ù After you first sell someone and they become a customer 15

Which of the Following Is the Purpose of the Sales Call? Is it: ù Solely to make a sale? ù To help someone? 16

Now You Have it! The Purpose Is to: ù Help someone by: ù Solving a problem ù Fulfilling a need 17

Is Being More Concerned For Helping Someone than Making the Sale Hard for Most People? ù Yes it is! ù Motivation needs to come from the heart, not from the bank account 18

Exhibit 14 -2: If Customers are Truly Important, Their Needs Come First 19

Putting the Customer First Requires Salespeople to Have Personal Characteristics That Allow Them to: ù Care for the customer ù Take joy in their work ù Find harmony in the sales relationship ù Have patience in closing the sale ù Be kind to all people ù Have high moral ethics ù Be faithful to their word ù Be fair in the sale ù Be self-controlled in emotions 20

How Would You Answer these Questions? ù Do these success characteristics describe you? ù Do you have all, or part of them? ù Can you develop the missing ones? 21

Once Again, Are You: ù Caring? ù Joyful? ù Able to get along with others? ù Patient? ù Kind? ù Ethical? ù Honest? ù Fair? ù Self-controlled? 22

These Personal Characteristics Are Important if You Want to: ù Have personal friends ù Have business relationships 23

What Is A Business Relationship? ù A relationship revolving around business issues ù A business relationship much like a personal friendship 24

ie nd Exhibit 14 -3: Trust and Wisdom in a Relationship Grow Over Time Low Ac qu a in ta nc e Fr ie nd Trust In tim at e Fr High Low Wisdom 25 High

The Three Levels of Friends ù Level 1 – Acquaintance ù Level 2 – Friend ù Level 3 – Intimate Friend 26

To Move up in Levels of Friendship Requires: ù T-I-M-E ù Truly caring for the other people ù Placing their interests before yours 27

Relationship Marketing and Customer Retention ù Transaction selling – sells once ù Relationship selling – periodically stays in touch ù Partnering – continually works with customers 28

How Does Relationship Marketing Build Friendships? ù Creates customer loyalty ù Results in retention 29

The Product and Its Service Component ù Customer service ù Product ù Promotion ù Price ù Exchange transaction ù Place ù After the sale ù Expectations determine service quality 30

People Buy the Product Plus What? ù A product is a bundle of tangible and intangible attributes, including packaging, color, and brand, plus the services and even the reputation of the seller. 31

So What Would Be Meant by the Term “Product Plus? ”* ù The product is a good or service ù “Plus” refers to the other attributes of the product as described in the definition 32

“Plus” Also Refers to Such Things As: ù Product has no defects ù Price is fair ù Product is available when needed ù Correct, honest advertising ù Warranty honored 33

In a Business Friendship, How Can You: ù Mistreat a person you consider a friend? ù Be uncaring, sad, pushy, impatient, rude, unethical, untruthful, self-centered, and/or emotional? 34

Customer Satisfaction and Retention ù Customer satisfaction ù Feelings towards purchase ù Customer retention – if satisfied, they will buy again 35

Exhibit 14 -4: Customer Retention: When the Buyer is Satisfied with Purchases Over Time 36

Excellent Customer Service and Satisfaction Require Technology ù Technology and automation is often required to provide excellent service 37

So, How Does Service Increase Your Sales? ù You increase sales by obtaining new customers and selling more to present customers ù Satisfied customers will provide customer referrals ù Thus very important to service for ù Future sales ù Referrals 38

Exhibit 14 -5: Sales Come From Present and New Customers Salespeople are constantly involved in follow-up and service in addition to planning their next sales call on the customer; they also spend time prospecting 39

Turn Follow-up and Service Into a Sale ù Convert follow-up and service situations into sales ù Follow-up and service help satisfy the needs of customers 40

The Circular Relationship in Managing a Sales Call 41

Account Penetration is a Secret to Success ù Account penetration ù Determined by: ù Total and major-brand sales growth in an account ù Distribution of the number of products in a product line ù Level of cooperation obtained ù Your reputation as the authority on your type of merchandise for the buyer 42

Service Can Help You Keep Your Customers ù Concentrate on improving your account penetration ù Contact new accounts frequently on a regular schedule ù Handle customer’s complaints promptly ù Always do what you say you will do ù Provide service as you would to royalty ù Show your appreciation 43

You Lose a Customer–Keep on Trucking ù To win back a customer: ù Visit and investigate ù Be professional ù Don’t be unfriendly ù Keep calling 44

Increasing Your Customer’s Sales ù Develop a customer benefit program ù Have present customers buy more of a product than they currently use ù Have present customers buy the same products to use for different purposes 45

Increasing Your Customer’s Sales, cont… ù To increase sales with a customer: ù Develop an account penetration program ù Examine your distribution ù Keep merchandise in the warehouse and on the shelf ù Fight for shelf space and shelf positioning ù Assist the product’s users ù Assist the reseller's salespeople ù Demonstrate your willingness to help ù Obtain customer support 46

Exhibit 14 -9: A Super Sales Success Secret 47

Returned Goods Make You a Hero ù Cheerfully return merchandise following the ù company’s returned goods policies It is in your best interest to return faulty merchandise 48

Handle Complaints Fairly ù Customers may be dissatisfied with products ù ù for any number of reasons “The customer is always right” Occasionally a dishonest customer may require you and your company not to honor a request Customers should get the benefit of the doubt Take care of your customers 49

Is the Customer Always Right? ù “Always” is the key word in the phrase 50

The Author of Your Textbook Feels The Customer is Not Always Right ù Is he correct? 51

How Does One Know What is Right or Wrong in a Business Setting? ù What can you use to make a morally ethical decision when dealing with a customer? ù Company guidelines ù Legal laws ù What the boss says ù What else? 52

Dress in Your Armor ù You need to be prepared to meet a few unethical and dishonest people ù They may ask you to do something unethical and/or dishonest 53

What is Meant by “Dress in Your Armor”? ù Armor is something that will protect you, but from what? ù You need protection from a person who is unethical and/or dishonest with you such as: ù A customer or prospect ù A competitor ù A co-worker ù Your boss 54

Your Armor Consists of: ù Speaking the truth ù Doing what is right ù Readiness to discuss what is ethical ù Trusting you know what is right, honest and ethical 55

Build a Professional Reputation ù Be truthful and follow through on what you ù ù ù tell the customer Maintain an intimate knowledge of your firm, its products, and your industry Speak well of others Keep customer information confidential 56

Build a Professional Reputation, cont… ù Never take advantage of a customer by using unfair, high-pressure techniques ù Be active in community affairs – make your community a better place ù Think of yourself as a professional and always act accordingly ù Provide service “above and beyond the call of duty” 57

Do’s and Don’ts for Business Salespeople ù A survey of purchasing agents showed the most important traits that purchasing agents found in their top business sales people: ù Willingness to go to bat for the buyer ù Thoroughness and follow-through ù Knowledge of the firm’s product line ù Market knowledge and willingness to “keep the buyer posted” ù Imagination in applying their products to the buyer’s needs ù Knowledge of the buyer’s product line ù Preparation for sales calls ù Regularity of sales calls ù Diplomacy in dealing with operating departments ù Technical knowledge of specifications and applications 58

Do’s and Don’ts for Business Salespeople, cont… ù Seven deadly sins of business selling ù B. J. Hughes’ checklists of do’s and don’ts 59

Exhibit 14 -10: The Seven Deadly Sins of Business Selling 60

Exhibit 14 -11: B. J. Hughes’ Checklist of Do’s and Don’ts Help It to be a Customer-Oriented Company 61

Summary of Major Selling Issues ù Salespeople increase sales by obtaining new customers and selling more product to present customers ù Customer referrals are the best way to find new prospects ù By building a relationship and partnership, you can provide a high level of customer service ù Customers expect service ù To serve customers best, improve account penetration 62

Summary of Major Selling Issues, cont… ù Always strive to help your customers get the best use from products you have sold them or to increase the resale of these products ù Today’s professional salesperson is oriented toward service 63