Relationship Selling

1
Relationship Selling

• Keith Matson
• Mindshop Coaching Weekend
• 11 12 October 2003

2
Operational Definitions

• What do we mean by a Market?
• A group of people who have enough in common with
  each other that I can establish a reputation
  among them.
• What is the goal of Marketing?
• To identify a large number of people who are
  willing and eager to see me.

3
Operational Definitions

• What is Transactional Selling?
• A one off sale where the outcome is the
  driving motivator.
• What do we mean by Relationship Selling?
• Making Sales through cultivation of
  relationships.
• Generates profitability for your firm and
  profitability for the market that does business
  with you.
• They profit from the value you bring
• You profit from the Revenue they provide.
• Maximising the Lifetime Value of the Customer

4
Classical Marketing

• Dr. Michael Porter
• 3 Generic competitive strategies
• Product differentiation
• Price leadership
• Focus

• The 4 Ps of Marketing
• Product
• Price
• Place
• Promotion

When you dont have an edge with price or
product, then you must have an edge in the way
you connect with People 5th P
Cultivating relationships while gaining sales not
only creates todays revenue, it gives your firm
the future value of tomorrows transactions
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Why use Relationship Selling?

• Raises the level of Exchange
• Builds a Brand Reputation in the market
• what are you known for?
• Creates a Competitive Advantage
• Creates a Barrier to Entry into your market
• Raises Switching Costs within your market
• Constant source of new business referrals
• More pleasant way to do business
• Reduces Collection costs and issues

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Relationship Selling Competencies

• Competency
• Prepare
• Target
• Connect
• Assess
• Solve
• Commit
• Assure
• Manage

Description Planning
Preparation Prospecting Connect with all
client types Interviewing fact finding
skills How you can solve the problem Confirm /
Close the sale After sale communication Manage
your own processes
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Competency 1 - Prepare

• Professional Equity
• Reputational
• Organisational
• Frequency
• Intellectual
• Technological

Stocktake of Assets
P R O F I T
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What makes You an attractive supplier in a
crowded Market?

• Professional Equity
• Your credentials
• Your reputation
• Your relationships or connections
• Your education
• Your depth of knowledge
• Your professional background experience
• Your level of skill knowledge across industries
• How you conduct yourself

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Reputational Assets

• How are you currently known?
• How do you want to be known?
• Your friends
• Your family members
• Your colleagues
• Your co-workers
• Your profession
• Your clients
• Your competitors
• Your community

One or two sentences - what would you like
members of these categories to say about you in 3
to 5 years from now e.g. He or she is a person
who.. or The way I feel toward him or her
is
Reduce these sentences to one specific paragraph
This is your Reputation Statement
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Reputation Management
Who we appear to be may not be who we actually
are, but who we appear to be is definitely an
important part of who we actually are William
Gaylin, Psychologist

• The Daily Question
• How would the person Id like to be,
• do the things I am about to do?

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Organisational Assets

• How you do what you do.
• Administrative structure process
• Culture
• Management style
• Core capabilities as to utilisation of firm
  resources
• Core competencies in achieving firm objectives
• Planning, controlling co-ordinating systems

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Frequency

• Frequency of Interaction with clients
• What message are you broadcasting?
• What bandwidth are you using can they hear
  you?
• Is there static on the line?

13
Intellectual Assets

• Problem solving skill ability to address client
  issues beyond daily mundane requirements
• Development of new product offerings
• Research Development capabilities
• Degree to which in-house efficiencies are
  sought
• Professional Personal Training Development
• Skill enhancement more skilled training less
  skilled

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Technological Assets

• Degree to which you use technology
• Communicate information to clients paper Vs
  email - Website
• Client Relationship Management systems
• Speed to Market getting your product to the
  client
• Technology drives down average costs - creation
  of efficiencies

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Competency 2 Targeting - Prospecting

• Definition of Market
• A group of people who have enough in common with
  each other that I can establish a reputation
  among them.
• Goal of Marketing
• To identify a large number of people who are
  willing and eager to see me

• Where is my Market?
• Natural Market
• Chosen Market

• How do I Profile my Market?
• Key People
• Demographics
• Psychographics
• Major events

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Competency 2 Targeting - Prospecting

• Identifying Ideal Customers
• List 5 of your best customers AND
• Describe as many characteristics of each as you
  can as to why you see them as one of your 5 best
• Where did they come from referral, advertising
  etc?
• List 5 of your worst clients
• Describe as many characteristics of each as you
  can as to why you see them as one of your 5 worst
  hard to work with, tough to please, least
  profitability versus time
• Where did these clients come from?
• Think about the two groups which do you prefer
  to work with?
• The Money question .. Why do I still have the
  worst as a client?
• Describe in detail your ideal client what
  criteria do you have?
• How can you prospect for this type of client?

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Competency 3 - Connect

• Keys to creating relationships
• Trust
• Honesty
• Integrity
• Sincerity
• Communication
• Agreement
• Needs
• Results
• Understanding
• Negotiation

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Competency 3 Connect
Trust
Tension
Vs

• Victim
• Persecutor
• Rescuer

Relationship
DRAMA

• Affinity
• Reality
• Communication

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Reaching Agreement - what are the TERMS
Time Emotion Risks Money Situation

• Commercial Basis of Agreement

T E R M S
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Time

• Deadlines/ window of opportunity
• Ongoing performance/stakes
• Referrals
• Reputation
• After the fact.

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Emotion
Risk 25 - 75

• Move toward
• Move away
• Cognitive dissonance
• Tension
• Trust

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Risks in Trust

• Types
• Subsequent Variation
• Performance risk
• Unforeseen changes
• Hold Up Risks
• Moral hazard risk
• Adverse selection

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Money

• Perception of Value
• Expanding the pie
• Liquidated damages

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Meta Strategy

• List our TERMs
• Learn their TERMs
• Link together
• Look for leverage
• Last the distance

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Link Together
Them
Them
Us
Us
Them
Us
Time Emotion Risks Money
Time Emotion Risks Money
Time Emotion Risks Money
Time Emotion Risks Money

• Identify US vs THEM ,0,-
• Link ALL the same TERMs first
• Then try with different TERMs
• Which matters most to Them?
• Which matters least to Them?

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Competency 3 Connect In Summary

• 3 Essentials for a Healthy, Rewarding
  Relationship
• A mutual commitment to making the relationship
  work
• Trust
• Integrity
• Open frequent communication between the parties
• Keep your word
• Knowing what you expect from each other
• TERMs

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Competency 4 Assess Understand their
situation

• Step 1.
• Identify Personality Style D.I.S.C.
• Trust or Tension
• TERMS
• Use appropriate rapport building based on DISC
• Understand Personal Velocity
• High velocity genuinely self motivated toward
  goals, thrive on challenge
• Moderate velocity prefer standard work day,
  have mild expectations
• Low velocity motivated by need rather than
  desire, dont expect much from themselves

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Competency 4 Assess Understand their
situation

• Step 2
• Frame questions appropriately

Source Alessandra, T, Dr., The Platinum Rule.
1996, Warner Books
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Competency 4 Assess Understand their
situation

• Step 3
• Decide whether you want this client(referral)
• Fits desired client profile? ( What is it?)
• Fits area of expertise? (What is it?)
• Current resources can cope? (What are they?)
• Nature of the business appeals to you?
• Intuitive response?

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Competency 5 - How you can solve the problem

• How do you present your product/service as a
  solution?
• Why choose you in a crowded market?
• What is your USP?
• Can you construct a client unique benefit
  statement?
• What are your competitive advantages?
• Does the client have significant switching
  costs?
• What is your Generic Strategy Price,
  Differentiation, Focus?
• How does this work for the client?
• How will you Add Value to this Relationship?

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Competency 5 - How you can solve the problem

• Rescuing Customers from Competitors
• Think Long Term
• Develop a non-client relationship first
• Study their needs
• Sell Yourself
• Add value YOU the point of differentiation
• Ask for a no-risk trial run on a specific issue
• Ask for a portion of their business
• Be persistent
• Be respectful

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Competency 6 Commit Confirm the sale

• Why customers resist
• No Need
• No Trust
• No Authority
• No Ability
• Cognitive dissonance
• Objections
• Insufficient pacing your style process needs
  refining (practice)
• Handle the issues during the process of building
  the relationship
• Objections provide the opportunity to improve
  your style
• - practice, practice, practice.

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Competency 7 Assure Keep them satisfied

• 10 ways to stay close to your customers

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Competency 7 Assure Keep them satisfied

• The pH balance
• Profits High
• People Happy
• Customers for Life
• Service is not a competitive edge it is the
  competitive edge.
• People do not buy things they buy expectations.
  One expectation is that is that the item they buy
  will produce the benefits the seller promised.
  Another one is that if it doesnt, the seller
  will make good on the promise
• Karl Albrecht Ron Zemke. Doing Business in the
  New Economy
• What is a client worth to you?

Profit
People
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Competency 7 Assure Keep them satisfied

• The pH balance
• Profits High
• People Happy
• Customers for Life
• Service is not a competitive edge it is the
  competitive edge.
• People do not buy things they buy expectations.
  One expectation is that is that the item they buy
  will produce the benefits the seller promised.
  Another one is that if it doesnt, the seller
  will make good on the promise
• Karl Albrecht Ron Zemke. Doing Business in the
  New Economy
• What is a client worth to you?

Profit
People
36
Competency 7 Assure Keep them satisfied

• Ways to stay close to Customers
• Show them you think about them
• Be personal
• Accept returns unconditionally
• Give feedback on referrals
• Make customers famous
• Annual reviews
• Compensate customers for lost time or money

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Competency 7 Assure Keep them satisfied

• When to fire a client
• ..
• ..
• ..
• ..
• Rude or Abusive
• Escalating demands
• Critical of work performed
• Slow payer nibbler

High Need
Low Power
Under what circumstances will you pay someone to
make your life unpleasant?
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Competency 8 Manage Lead, motivate Grow
yourself

• How would the person I would like to be..
• do the things I am about to do?
• Do you make a habit of professional
  development?
• Do you make a habit of personal development?

• What are your driving values
• Business?
• Family?
• Self?

Are these aligned -a source of Power for
you? Are these in conflict - a source of Stress?
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Competency 8 Manage Lead, motivate Grow
yourself

• Time
• What went on today why? What successes did I
  celebrate?
• What went wrong today why? Identify where your
  personal system fails you.
• What time today did I start work on my top
  priority task? Earlier?
• What patterns do I see in my time sheets? What
  regular patterns are obvious?
• What part of the day was most productive? Least
  productive? Why?
• What were the biggest time wasters today?
• Which of my activities need more time? Which need
  less?
• Beginning tomorrow, what will I do DifFerenTly ?

40
Competency 8 Manage Lead, motivate Grow
yourself

• How would the person I would like to be..
• do the things I am about to do?

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High Probability Selling

• Positioning
• What is it?
• Starts with a product even you !!
• It is not what you do with the product
• Positioning is what you do to the mind of the
  prospect you position the product in the mind
  of the prospect
• Positioning is getting heard in an over-
  communicated (noisy) market
• Al Ries Jack Trout. Positioning, The Battle for
  Your Mind.
• What is your positioning strategy?

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High Probability Selling Client Assessment

• Using Pareto - the 80/20 Rule?
• Note Not empirically perfect statistical
  approximation across range
• Essentially 80 of return comes from 20 of the
  effort
• 80 of Revenue comes from 20 of Clients
• Disturbing because..?
• Which 20?
• Also means 20 of return is coming from 80 of
  effort

43
High Probability Selling
Is Every Customer Precious?
Determining the cost of (effort) servicing Clients
Customer Profitability Analysis
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Brand

• Brand is a Marketing Message tells your
  market something
• What is your current message?
• Write it down
• Market Research
• Test it
• Does it actively transfer specific information?
• Is it immediately obviously beneficial?
• Is it self explanatory ultra simple
• Is it easy to replicate in someones mind?

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The Question

• Q What do you do?
• A ..
• 4 ways to talk about what you do 2 dont work,
  one does to a degree
• Your label but not necessarily understood by
  your listener eg Accountant
• Your process tend to be boring We run
  training programs that
• Your solution a benefit statement often works
  I work with .. to ..
• Their Problem their stuff is more
  interesting/important to them.
• Your solution is designed to solve their
  problem so why not talk about their problem
  first?
• Write a statement using the problem format.
  Simply say who you help what problem you help
  them with.

46
Audio Logo

• Biggest mistakes
• Trying to hit a six rather than take a single
  motivated by concern to say so much of the
  right thing
• Focus on you not on the client.
• Your Audio Logo is the key to all your marketing.
  By expressing it as a problem, it really
  demonstrates that you know
• who your clients are
• What they need

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Audio Logo

• 3 versions
• One line one sentence
• 30 second or elevator
• In depth explanation include stories of client
  success
• What the situation was before you worked with the
  client
• What you did for them without too much detail
• What happened as a result of your work
• Design them.

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The Question

• What makes you different than others who do
  this?
• Or.
• Why choose you in a crowded market?
• Your answer list your reasons
• ___________________________________
• ___________________________________
• ___________________________________
• ___________________________________
• ___________________________________
• ___________________________________

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The Question

• What makes you different than others who do
  this?
• Or.
• Why choose you in a crowded market?
• Your answer list your reasons
• Your track record list of clients
• Your unique approach that gets better results
• The targeted market you serve
• Your guarantee of satisfaction
• The extra value you provide
• Specific deliverables in the area of quality,
  price, service

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Relationship Selling summary

• Know yourself
• Know your Market
• Know your 8 competencies
• Know your PROFIT
• Know your TERMS
• Know your 80/20
• Know your Measure
• Know your Audio Logo

51
Classical Marketing

• The 4 Ps of Marketing
• Product
• Price
• Place
• Promotion

• Dr. Michael Porter
• 3 Generic competitive strategies
• Product differentiation
• Price leadership
• Focus

When you dont have an edge with price or
product, then you must have an edge in the way
you connect with People 5th P
Cultivating relationships while gaining sales not
only creates todays revenue, it gives your firm
the future value of tomorrows transactions
52
Trust

• Trust is a Magic word.
• It means people believe what you say about
  yourself
• It means you have an obligation to those who gave
  you their trust
• Make small agreements
• Keep them