HA405 : The Class : After-Sale : Implementation : Online Lesson

By: Richard G. McNeill, 11/23/99

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TABLE OF CONTENTS

A. INTRODUCTION

B. DISCUSSION

First, in Exhibits 1a and 1b, the Models of a Complex Sale and Traditional sale will be presented. Their major characteristics will be discussed following the "Two-Phase" format discussed above.

Second, in Exhibit 2, the Complex Sale Model will be DETAILED

Third, in Exhibit 3, we will look at the "After-Sale Service" from two perspectives: (a) the Seller's and (b) the Buyer's.

Finally, in Exhibit 4, a "Capstone" example of the Complex Sale as practiced by a Hotel selling to a meeting planner will be illustrated.

C. REFERENCES

D. CONTINUATION

Part II of this Article offers specific strategies for implementing "After-Sale Service."

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INTRODUCTION

So, you think that you can relax after the contract is signed? This is one of most common strategic errors in selling, especially to major accounts and complex sales. It's tempting for a salesperson to think that he or she can put less effort into the account now that the sale has been made, but a good sales strategist know that immediately after the sale more effort, not less, is the best move.

Question: Why do salespeople commonly make this error? Answer: complex sales accomplished through the buying process are one of persistence followed by elation at a successful conclusion. The lengthy multiple sales call of relationship building, needs assessment, presentation, and resolution of concerns (meeting buyer resistance and closing resistance) is difficult and draining. A successful close or buyer commitment leads to a sense of relief…and a natural human tendency to "take a brief vacation" and celebrate (mentally if not actually) the final closing of the sale. A danger in reducing involvement in an account immediately after a sale is made can jeopardize all of the hard work that has been done.

ACQUIRING AND MAINTAINING CUSTOMERS

Consultative salespeople as "micro-marketers" focus on two primary goals: (a) Acquiring customers and (b) Maintaining and developing customers. The purpose of these goals is to create and keep a core of customers who are loyal to the selling organization and its products/services. These loyal customers are expected to refer other potential customers to the organization and to repeatedly buy from the organization over a lifetime. A focus on the dual goals of acquisition and maintenance recognizes the potential of customers as "assets" to the company. These are assets that must be nurtured over their projected lifetimes.

Traditional Selling has always focused on the first goal, acquiring customers. At an earlier time and less competitive environment, there were more than enough potential customers to go around, thus, sellers spent most of their efforts on the sales process itself. The main concern was how to perfect the selling process methodology and techniques. Less time was spent of keeping customers after they were first acquired. The goal was to generate large numbers of sales contracts by continuously researching new prospects and by closing the sale, converting them into customers. The competitive selling world has significantly changed. Increasingly most products are becoming commoditized; they and their competitive products all look alike. Additionally, customers are attempting to reduce the numbers of seller with whom they do business. These changes have mandated a different approach.

Consultative Selling, the new method of selling, adds the second goal to traditional selling, maintaining and developing customers. This goal has led to new variations of selling sometimes referred to as "relationship selling" and "partnership selling" to name a few. Essentially, the new method of selling recognizes that the salesperson is an integral part of the product/service itself. The salesperson, as a representative of the business or organization standing behind the product/service, creates the perceptions and differentiations necessary for competitive advantage over "look-alike" and commoditized competitive offerings. The manner in which a salesperson executes two phases of a complex sale (Pre-Sale Phase and Post-Sale Phase) is a major determinate of the customers' perception of the product/service's value.

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TWO PHASES OF A COMPLEX SALE

What is a Complex Sale?

A "complex" sale is one in which any of the following conditions exist:

(a) the product/service is multifaceted and contains many components which can be customized to the specific customer,

(b) the customer is relatively unsophisticated regarding how to use the product/service,

(c) implementation of the product/service depends on coordinated and specialized performance by staff of both buying and selling organizations,

(d) the outcomes expected from the purchase of the product/service are considered crucial to the well-being of the buying organization - perceived "risks" are high, and

(e) the price of the product/service is high (relative to other purchases within the product/service category).

Two Major Phases

A complex sale goes through two major phases:

(a) Pre-Sale Phase - "Customer Acquisition Process;" access to the potential customer and acquisition (obtaining a sale or contract) of the customer and

(b) Post-Sale Phase - "Servicing the Sale Process," implementation of the product/service and maintenance and development of the customer (See Exhibit 1 below).

Properly executed, these two phases will increase the probability of an organization's long-term relationships with their customers. This long-term relationship has the potential to generate repeat business and referrals from these customers. A successful major account salesperson ensures successful and long-term relationships by thorough methods of acquiring the customer and implementation of the product/service with follow-through maintenance and development of the customer.

The next discussion will compare and contrast complex Consultative Selling with traditional and simpler Transactional Selling. We will illustrate each of these as they relate to the two phases of selling: Pre & Post-Sale Phases.

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PRE-SALE PHASE: "Customer Acquisition Process"

Step One: Access to Customers

Traditional selling relies on:

1. Prospecting
2. Cold-calling

Step Two: Acquisition of Customers

Traditional selling usually "acquires" in a single-sales call using a relatively strict sequence of steps:.

1. Meeting with Decision-Makers
2. Presentation

a. Needs discovery to understand what the customer wants.
b. Matching product/service features and benefits to customer needs to create "solutions."
c. Handling objections to the matching process above to persuade the buyer. This concept is often coupled with the words, "overcome objections" which adds an adversarial dimension.
d. Close the sale to ask for the buyer to take action. Action is intended to be favorable to the seller. Here the salespersons handlesclosing resistance a second time "overcome objections" to the salespersons attempt to close the sale.

3. Demonstration and/or Site-visits
4. Contracts

POST-SALE PHASE: "After-Sale Service Process"

Step One: Implementation of Product/Service

1. Limited involvement by salesperson, as this step is not formally seen as essential.
2. Salesperson focuses on next sale in order to achieve quotas.
3. The most successful salespeople have done this in the past.

Step Two: Maintenance and Development of Customers

1. Wide variation among salespeople.
2. Not a formal requirement of the traditional "selling process."

 

COMMENTS ON THE TRADITIONAL SALE MODEL

The "Buying Process." As mentioned in an earlier article(Revisit the Buying Process) the "buying process combined with the traditional "selling process" evolves into what this author calls, the "Customer Acquisition Process." Buyers generally go through a "buying process" in an attempt to satisfy the needs. Of course, buyers almost always attempt to maximize the "value" received in an exchange for the "costs" that they incur.

"Value" is found not only in the product/service being offered, but also in the method by which a salesperson sells. The salesperson is in a position to "add-value" by: (a) assisting in understanding the complex product/service and/or its comparative relationship to competitive offerings, (b) suggesting new uses or maximizing existing uses of the product/service, (c) easing the delivery and implementation of the product/service.

The "Customer Acquisition Process" (Exhibit: 3) shows the "buying process" combined with elements of the traditional "selling process" and demonstrates where the consultative sales person can add-value.

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EXHIBIT 2- DETAILS OF THE COMPLEX SALE MODEL

(Specific Actions taken in this type of selling process)

 

Today's buyers are sophisticated and look to maximize value received. If the salesperson does not add value, they are not needed. The consultative salesperson is able to add value throughout the Pre-Sale Phase, "Customer Acquisition Process". Additionally, the consultative salesperson adds value in the Post-Sale Phase, "After-Sale Service Process."

PRE-SALE PHASE: "Customer Acquisition Process"

Step One: Access to Customers

1. Value Identification - Salesperson looks for potential areas where he/she can create value for the potential customer.

2. Steps of Value Identification

a. Segmentation - what are the various industries and types of customers where the selling organization's products/services could add the most value? Salesperson has clear idea or hypothesis of how to add value.
b. Value Targeting - Select the potential customers from within the segment with the highest probability realizing "hypothesis" value.
c. Value Actioning - tailor the hypothesis value adding idea to the targeted customer and/or group of decision-makers.

Step Two: Acquisition of Customers

1. Understand the Buying Process

Successful consultative sellers in complex sales create value for the customer by addressing their buying process (Revisit the Buying Process):

a. Recognition of Needs

b. Evaluation of Options (search for alternative products/services)

c. Resolution of Concerns (Getting all questions answered about seller's product/service and competitor's).

d. Purchase (Customer signs contract and makes the commitment).

2. Comments on the Necessity of the Seller Adding Value to Acquire the Customer:

a. Consultative seller can create the most value early in the process by helping customers define needs and solutions.
b. Consultative seller can design customized solutions and help customers make informed choices.
c. Consultative seller can counsel customers and help resolve concerns.
d. Consultative seller can help make purchase painless, convenient, and hassle-free.

POST-SALE PHASE: "After-Sale Service Process"

Step One -Implementation of Product/Service

1. Consultative seller can advise and problem solve implementation issues.

Step Two -Maintenance and Development of Customers

1. Consultative seller can stay in contact with the buyer, keep them updated, and educate regarding better uses of the purchased product/service.

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EXHIBIT 3: PERSPECTIVES OF POST-SALE (AFTER SALES) SERVICE

(From the Perspective of: (a) Seller and (b) Buyer)

As a reminder, the Post-Sale Phase is composed of two primary steps: (a) Step One - Implementation and (b) Step Two - Account Maintenance and Development. Most successful complex product/service sales pass through these steps. Both seller and buyer view both of these steps with perspectives that sometimes differ. Successful salespeople must see the process through the customer's eyes so that the seller can CREATE VALUE in the after-sale service process (Post-Sale Phase).

Step One: Implementation of Product/Service

Implementation can be viewed both through the eyes of the product/service seller and through the eyes of the product/service customer.

1. Seller's Perspective of Implementation.

Implementation is concerned with the installation of the product/service in two distinct stages:(a) Planning for Installation Stage and (b) Installation Stage, characterized by initial use, testing, and initial evaluation.

a. Planning for Installation Stage. This stage, in the case of a hotel service such as a large and complex meeting (See example below, Exhibit 4), begins immediately after the contract is signed and is related to the planning time between contract signing and the start date of the meeting. In the case of association business, this period can be several years. In the case of corporate business meetings, this period can range from several months to one year. How the salesperson and hotel service personnel relate to the customer during this period is crucial.

b. Installation Stage. This stage, in the case of a hotel meeting, begins with the meeting planner's arrival for a pre-convention ("pre-con") meeting immediately followed by the attendees' day of arrival and ends with the post-convention ("post-con") meeting with the meeting planner after meeting attendees have departed. After the conclusion of the meeting, the "service" has been installed and consumed. Obviously, customer satisfaction or dissatisfaction with service will result if product/service performance does not meet customer expectations.

 

2. Customer's Perspective of Implementation.

From the customer's point of view, implementation goes through three distinct stages: (a) The Novelty Stage, (b) The Learning Stage, and (c) The Effectiveness Stage.

a. The Novelty Stage. In the case of a corporate, association, or other type of organizational meeting and immediately after the sale, customers are usually excited and interested because something new is happening. There seems to be a superficial exploration of the product/service caused by the lack of immediate demands for results from the purchase.

If the organization is relatively unsophisticated at holding meetings, they may be unrealistic in their concerns about the difficulty of holding a complex meeting. Sophisticated meeting planners, on the other hand, recognize the many problems that are associated with implementing a successful meeting and will be fully aware of the necessity of using the "planning window" to start the implementation phase. In both situations, the seller has an opportunity to build confidence in the correctness of the buying decision. For example, a hotel can immediately assign a convention services manager (CSM) to the account. The CSM immediately communicates important timelines and procedures to the customer while both the CSM and the salesperson maintain periodic contact and communications.

In the "novelty stage" the customer's confidence is usually the highest. This confidence may be a result of lack of focus on the meeting. This stage usually lasts until the meeting begins to draw near and deadlines approach. At this time, changes and glitches seem to appear as the meeting date approaches and focus intensifies.

b. The Learning Stage. This is usually the most difficult stage of the implementation process. Here the customer's confidence may fall to crisis levels as concerns about the meeting intensifies and the stakes appear to loom larger on the horizon as the meeting dates approach. After the more superficial exploration of the "novelty stage," the customer has to begin the more difficult process of learning how to achieve full potential from the product/service. The learning process begins toward the end of the novelty stage and continues through the period within which the meeting is held.

In the case of a complex organizational meeting, this learning process continues through the meeting itself since a "service" such as a meeting changes and evolves around the initial meeting plan. In the delivery of services, especially complex services that are delivered by a large number of coordinated people, even the "best laid plans go astray." What customers expect of the Learning Stage and how the service provider and the customer interact to rectify evolving meeting problems will determine the perception of successful customer service.

In the Learning Stage, the customer has to produce greater effort. This effort comes from increased focus and attention on the performance of the product/service as well as becoming familiar with operations. Generally, unsophisticated customers will underestimate the effort and difficulty of the learning stage. These unrealistic expectations may lead them to expect instant results and they may feel cheated if they don't get them. On the other hand, more sophisticated customers normally have less trouble in the Learning Stage. Strategies for handling both unsophisticated and sophisticated buyers will be discussed later.

c. The Effectiveness Stage. As the customer gains a full understanding of the product/service, the effort which must be put into learning is dramatically reduced. Results increase at the same time and, thus, the customer has a positive feeling that things are getting easier. The meeting planner knows the hotels operational staff and how they work. The meeting has commenced and therefore, the "show has opened" and the initial "butterflies" have dissipated. Additionally, the daily routine and flow of the meeting is established. The meeting planner and the hotel service personnel are familiar with each other. The more smoothly that a salesperson and CSM can help the meeting planner reach the Effectiveness Stage, the more successful is the implementation.

Step Two: Maintenance and Development of Customers

The "After-Sale Service Process (Post-Sale Phase)" continues after the salesperson has guided the customer through Step One, Implementation of the product/service.

Step two, maintenance and development of customers, has several distinct objectives:

(a) to retain existing customers,

(b) to extend and develop more internal business from the existing customer account,

(c) to obtain referral business from existing customers which is external to the existing customers, and

(d) build a competitive strategy of "added-value" differentiation that will distinguish the seller's company and commoditized offerings from the competitors.

The word "maintenance" sounds passive and upholding of the status quo while the word "development" is active and dynamic. Maintenance is used to retain the customers that are acquired and achieve repeat business from this core group. Development is used to leverage and penetrate the existing core customers for additional business from other divisions or areas within the same corporate or organizational umbrella, which houses the existing customer. Additionally, development encourages the customer to give referral business from firms external to the existing customer.

You will learn more about specific strategies in both: (a) Step One - Implementation and (b) Step Two - Maintenance and Development in

Part II of this Article.

 

The following is an ILLUSTRATION of all of the concepts discussed above. An example of a consultative sale by a Hotel selling to a Meeting Planner is discussed through both the PRE-SALE PHASE and the POST-SALE PHASE.

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EXHIBIT 4: CAPSTONE ILLUSTRATION

(Acquisition and After-Sales Service Processes For a Meeting Held at a Hotel )

 

PRE-SALE PHASE: "Customer Acquisition Process"

The People Involved

1. The Hotel Consultative Salesperson is the primary person responsible to acquire the customer.

2. The Hotel Convention Services Manager or Conference Coordinator (CSM) plays a secondary and background role on a "team-selling" effort and provides technical support. Other team members include most hotel department heads.

3. The Meeting Planner Customer in the illustration below, a Meeting Planner who is responsible for bringing a group of attendees to a hotel for a business meeting; for example a large "National Sales Meeting" of 250 attendees for a Fortune 500 corporation.

Transition Phase From Salesperson to CSM Technical Support:

1. Salesperson steps to the background in his/her relationship with the customer. Throughout the After-Sale Phase, the salesperson periodically contacts the customer to keep in contact and assure that all is proceeding as promised.

2. CSM is assigned to the customer account and helps the customer plan for the meeting and later helps coordinate the meeting during the dates when it is held.

 

POST-SALE PHASE: "After-Sale Service Process"

Step One - Implementation

1. Planning for Installation Stage

This is the period of time immediately after the contract is signed and the start of the meeting.

a. CSM Reviews Customer File - Once the meeting is booked (contracted) the CSM reviews the file to find out what information has been documented and what information is still required.

b. CSM Contacts the Customer - The CSM personally introduces themselves and timelines of planning items that must be accomplished before the beginning of the meeting. The CSM blocks all sleeping
and meeting accommodation space and then begins to get answers to the three meeting basics: (a) Reservations, (b) Program Planning, and (d) Billing.

c. CSM Continuously Updates the Customer - The time between the signing of the contract and the actual start date of a meeting will range from months to one year for corporate meetings and for association meetings, several years. During this time, the CSM sends follow-up letters, telephone calls, and personal contacts are made with the customer. This contact builds a relationship between the CSM and the Customer (a strong relationship is important when the actual meeting is underway). Simultaneously, although in a "background" role, the Salesperson makes periodic contact with the customer; they "check-in" periodically.

d. Pre-Convention Meeting ("Pre-Con Meeting") - One to two days before the actual meeting begins, meeting planner for the customer (the buying organization) arrives at the hotel to meet with the CSM and major hotel department heads to do a last minute check-off of "everything ready to go."

2. Installation Stage

a. Meeting Attendees Arrive - This initiates the installation. The salesperson is visible and periodically "visits" and "checks-in" but the CSM is at their most busy time. The CSM works long hours and checks up on each "function" ahead of time to view the setup, check the audiovisual equipment, exhibit setup and check security.

b. CSM and Meeting Planner Work as Team - The CSM is the main point of contact for all issues concerning the hotel. The Meeting Planner is the main point of contact for the organization that is holding the meeting. Both diligently work together to solve any problems.

c. Meeting Attendees Depart - This concludes the main part of the installation.

d. Post-Convention Meeting ("Post-Con Meeting") - The meeting planner is the last person from the customer's side to leave. The CSM and the Meeting Planner have a "post-con meeting" to verify all charges to the customer's master billing account. Also at this meeting are the major department heads from the hotel that are there to review and evaluate success of the meeting.

3. Transition Back to Salesperson Stage

The purpose of this stage is to obtain repeat business. After the details of the Post-Con Meeting have been completed, the salesperson meets one-on-one with the Meeting Planner (customer) and attempts to obtain preliminary agreement to sell the customer on a repeat convention or conference. NOTE: Since the salesperson has been in periodic contact with the customer throughout the entire process (both acquisition and installation stages, the salesperson is no stranger to the customer and (hopefully) has a good relationship established.

 

Step Two - Maintenance and Development of Customers

1. Maintenance of Customer

a. Customer may not immediately agree to a repeat conference so the salesperson periodically contacts the customer in an attempt to obtain future repeat business.

b. Salesperson maintains an ongoing database of all significant information about the customer.

2. Development of Customers

a. Salesperson updates and educates customer on new developments.

b. Salesperson attempts to gain referral for other business from the customer.

c. Salesperson attempts to develop the customer by "penetrating" the customer account in more depth. For example, Marriott has many product lines (hotel types), thus, a large customer like Microsoft may need the services of a range of hotel types such as an Airport property for training meetings or Resorts for national sales meetings. This is called "cross-selling" and is an important part of all sales jobs today.

d. Long-term Relationship Building with a customer results in repeat business and referrals. Then the cycle begins again. However, with repeat business, the cost of the "Customer Acquisition Process" drastically reduced.

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REFERENCES

Astroff, M.T. and Abbey, J.R. (1998). Convention Sales and Services (5th Ed.). Cranbury, NJ: Waterbury Press.

Rackham, Neil. (1989). Major Account Sales Strategy. New York: McGraw Hill.

 

Part II of this article discusses "After-Sale Service Strategies."