CONTENTS
JSMAM VOLUME 8, SPRING 2008
From the Editor
7
by Dan C. Weilbaker, Ph.D.
ACADEMIC ARTICLES
Impact of Purchase Importance and Salesperson Behaviors on
Relationship Loyalty
8
By Richard E. Plank, Joseph J. Belonax, Jr., and Stephen J. Newell
The Idea Generation Stage of the New Product Development Process:
Can Key Account Management Systems Help?
26
By Geoffrey L. Gordon, Dan C. Weilbaker, Rick E. Ridnour and Kimberly Judson
APPLICATION ARTICLES
Set Goals to Accomplish the Extraordinary
By Jerry Acuff
What is the Difference Between Selling in a Robust Economy and
Selling in a Failing Economy?
43
47
By Sharon Drew Morgan
Are You Ready for a Sales Makeover?
Managing the Shift from Product Seller to Problem Solver
49
By Walt Zeglinski
Mission Statement
The main objective of the journal is to provide a focus for collaboration
between practitioners and academics for the advancement of application,
education, and research in the areas of selling and major account management.
Our audience is comprised of both practitioners in industry and academics
researching in sales.
©2008 By Northern Illinois University. All Rights Reserved. ISSN: 1463-1431
Journal of Selling & Major Account Management
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Spring 2008
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1. Articles for consideration should be sent to Editor: Dan C. Weilbaker, Department of Marketing Northern Illinois University,
DeKalb, IL 60115 USA or by fax: 001 815-753-6014 or by email to dweilbak@niu.edu
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EDITORIAL AND ADMINISTRATIVE STAFF
EDITOR—Dan C. Weilbaker, Ph.D.
McKesson Pharmaceutical Group
Professor of Sales
Department of Marketing
Northern Illinois University
dweilbak@niu.edu
EUROPEAN EDITOR—Kevin Wilson
Sales Research Trust
Peyrenegre
47350 Labretonie
France
Kevin@sales-research-trust.org
ASSISTANT—Candace Gardner
Administrative Assistant
Professional Sales Program
Department of Marketing
Northern Illinois University
ccgardner@niu.edu
Vol. 8, No. 2
Journal of Selling & Major Account Management
EDITORIAL BOARD
Rolph E. Anderson
Drexel University
Ramon A. Avila
Ball State University
Terri Barr
Miami University—Ohio
Jim W. Blythe
University of Glamorgan
Pascal Brassier
ESC Clermont - Graduate School of Management
Richard E. Buehrer
University of Toledo
Steven Castleberry
University of Minnesota—Duluth
William L. Cron
Texas Christian University
Laura Cuddihy
Dublin Institute of Technology
René Y. Darmon
ESSEC Business School
Dawn R. Deeter-Schmelz
Ohio University
Bill Donaldson
Aberdeen Business School
Sean Dwyer
Louisiana Tech University
Paolo Guenzi
SDA Bocconi
John Hansen
Northern Illinois University
Jon M. Hawes
University of Akron
Earl D. Honeycutt
Elon University
Thomas N. Ingram
Colorado State University
Mark C. Johlke
Bradley University
Northern Illinois University
Buddy LaForge
University of Louisville
Terry W. Loe
Kennesaw State University
Daniel H. McQuiston
Butler University
Pete Naude
Manchester Business School
Stephen Newell
Western Michigan University
Nikolaos Panagopoulos, Ph.D.
Athens University of Economics & Business
Nigel F. Piercy
University of Warwick
Richard E. Plank
University of South Florida, Lakeland
Chris R. Plouffe, PhD
Washington State University
Ellen Bolman Pullins, PhD
University of Toledo
David Reid
Bowling Green State University
Gregory A. Rich
Bowling Green State University
Rick Ridnour
Northern Illinois University
Elizabeth Rogers
Portsmouth Business School
Jeffrey K. Sager
University of North Texas
Charles Schwepker, Jr.
Central Missouri State University
C. David Shepherd
Georgia Southern University
William A. Weeks
Baylor University
Michael R. Williams
Illinois State University
Spring 2008
From the Editor
This is the second issue of our third year of publishing the Journal of Selling
& Major Account Management. I am really excited about this issue and I
hope you find as many interesting and useful items as I did.
We continue to work hard to obtain quality academic articles as well as
articles from practitioners that are relevant and timely. We will continue to
need both academic contributions as well as practitioner articles to fill the
demand for four issues per year.
Though it is not something we do on a regular basis, I would like to make a correction to
our last issue. Even though we made every effort we were not notified in time that Deborah
D. Whitten was also an author of “Customers’ Proneness to Relationship Selling”.
Now we turn our attention to the topics of the day. In this issue we provide two academic
articles and three practitioner articles.
The first article deals with purchasing importance, sales person behavior and relationship
loyalty. As we go through these tough times, it will be important to leverage our
relationships to sell and I think the authors have some good points to help.
The second academic article deals with key account management practices as applied to early
phases of new product development. This is an exploratory study of the use of key account
managers in new product development process.
The first application article by Jerry Acuff offers some interesting issues related to the
importance of setting goals.
As we all know, goal setting is an important aspect of being a great salesperson.
The second Application article offers a new way to go about selling in tough economic times
and it also introduces a potential new selling paradigm.
The final article provides more insight into how to become a solution seller verses a product
seller.
Our continued thanks go to the University Sales Center Alliance for their financial support
to help the journal while we build our subscriber base. Our thanks also go to the dedicated
members of the Editorial Review Board and our ad hoc reviewers.
Dan C. Weilbaker, Ph.D.
Editor, The Journal of Selling & Major Account Management,
McKesson Pharmaceutical Group Professor of Sales,
Northern Illinois University
Vol. 8, No. 2
8
Journal of Selling & Major Account Management
Impact of Purchase Importance and Salesperson
Behaviors on Relationship Loyalty
By Richard E. Plank, Joseph J. Belonax, Jr., and Stephen J. Newell
The exchange processes in buyer-seller relationships continue to focus the attention of marketing
managers and scholars. However, the role played by salesperson relational and task behaviors in
buyer-seller relationships, which consider the importance of the purchase, has received limited
attention from an empirical research perspective. This study investigates buyer perceptions of salesperson
relational and task behaviors and how they impact buyer evaluation of relationship loyalty with the
supplier under different levels of purchase importance. The results indicate that buyer
perceptions of relationship loyalty are linked to relationship and task behavior, but it appears that
purchase importance has limited or no effect.
Introduction
Salespeople play a vital role in creating and
maintaining buyer-seller relationships
(Shepherd 1999). Salespeople are
responsible for making initial contact,
determining client needs, and identifying
products or services to satisfy needs as well
as providing follow-up support services
(Pelham 2002). To make this happen,
salespeople engage in certain behaviors to
develop and nurture long term relationships
with representatives of buying firms. These
behaviors, which are categorized as
relational and task, are especially vital in
accounts that are very large, or for other
reasons, considered important. These
"major" accounts are often handled under a
key account or global account framework
(Wilson and Weilbaker 2004; Jones,
Dixon, Chonko, and Cannon 2005).
Unfortunately, salesperson relational and
task behavior's has received very limited
attention in the sales literature (Guenzi,
Pardo, and Georges 2006).Specifically, the
relationship between purchase
importance, salesperson relational and
task behaviors and relationship loyalty has
not been explored. Accordingly, the
purpose of this study is to contribute to the
business marketing, sales management, and
Northern Illinois University
procurement literature by providing new
insights regarding the influence of
salesperson relational and task behaviors
and their impact on perceptions of
relationship loyalty. In addition, the
issue of importance of the purchase will
also be examined. Finally a short reflective
scale defining both relational and task
behaviors was developed and tested for this
paper and is an additional contribution.
Thus, the study primarily makes a
contribution by explicitly examining
the impact of salesperson relational and
task behaviors on perceived
relationship loyalty and how the buyer's
perceived purchase importance impacts on
this relationship.
But, it also adds
additional value by providing a measure
that may be usable for future research.
Following a review of the literature on key
account selling, purchase importance,
salesperson relational and task behaviors, and
relationship loyalty, we then discuss findings
and implications of our empirical study,
future research directions, and
limitations of the study.
Key Account Selling
Over the past 20 or more years there has
been increasing evidence that organizations
Academic Article
are spending more time and effort aimed at
developing, maintaining, and growing large
accounts that are considered important
to management. These have been
referred to as major accounts, key
accounts and even global accounts,
depending on the frame of reference being
used by the organization. The fundamental
idea behind all of these efforts is that
these accounts are of major importance
to the seller, and therefore should be
handled somewhat differently than smaller
accounts. While most of the research
examining this issue has been from the
perspective of the seller, other researchers
have initiated research from the perspective
of the buyer (Burt 1989; Pardo 1997;
Kumar, Bragg and Creinin 2003).
Research has been broad in scope and is
well documented. Recent empirical work
has expanded the view and approach to
understanding the processes of major
account management by focusing on the
individual salespeople themselves. For
example, Schultz and Evans (2002)
examined collaborative communication by
account representatives, and linkages to
perceived trust, role performance, and
synergistic solutions between buyer and
seller. Their study was one of the first to
examine
the
linkage
between
communication behaviors and important
outcomes. While these authors could not
attribute
cause
and
effect,
they
demonstrated strong relationships between
salesperson communication behaviors and
key
account
management
success.
Sengupta, Krapfel, and Pusateri (2000)
took a broader view and examine
determinants
of
key
account
salesperson
effectiveness.
They
pointed out that strategic ability and
intrapreneurial ability were important
determinants of success in major account
selling. An earlier work by Millman and
Wilson (1996) conceptually defined key
Spring 2008
9
account competencies that resulted in
explicit competencies for key account
selling.
Of interest to our study is the recent work by
Guenzi, Pardo, and Goerges (2006) that
explicitly looked at salespersons relational
behaviors. They defined four categories of
key account managers' relational
behaviors and linked relational selling
strategy to the use of these behaviors which
were broadly defined as customer oriented
selling, adaptive selling, organizational
citizenship behaviors, and team selling.
Their findings suggest that even when a
firm adopts a relational strategy it does not
always mean that behaviors of salespeople
are perceived as such by the buyer. Clearly,
one interpretation is that salespeople don't
always implement very well the strategy
dictated by management. There are many
other studies and other
conceptualizations as the literature
continues to grow. To date, however, there
has been no work examining the notion of
relational and task behaviors performed by
salespeople and their impact on relationship
success. While it is often noted that key or
major accounts are important to the seller,
there has been no examination of the
perceived importance of the purchase to the
buyer and the impact it may have on buyerseller interfaces.
Purchase Importance
The organizational buying process is often
viewed as dynamic and complicated. To
capture these complexities scholars
developed classification schemes or
taxonomies of purchase decisions that
vary from the simple to the complex
(Robinson, Faris and Wind 1967: Corey
1978; McQuiston 1989; Bunn 1993).
Despite differences in the criteria used to
establish these schemes and the number of
resulting classifications, they all consider
purchase importance as a determinant
Vol. 8, No. 2
10
Journal of Selling & Major Account Management
classification criterion. Moreover, empirical
evidence has indicated that purchase
importance influences many aspects of
the purchase decision process, such as the
size and structure of the buying center
(Johnston and Bonoma 1981: Moriarty and
Bateson 1982), perceived influence on the
decision participants (McQuiston 1989),
nature of buying activities (Lau et. al.,
1999) information source usage (Bunn and
Clopton 1993) and as a moderator variable
in the link between satisfaction and loyalty
(Wangenheim 2003).
Purchase importance as a situational
characteristic has also been shown to
differentiate distant arms-length
transactional from close collaborative
exchanges (Bunn 1993; Cannon and
Perreault 1999; Oliver 1990; Day 2000 Hutt
and Speh 2004). Finally, Bunn (1993)
differentiated the simple "straight rebuy”
buying approaches (casual, low routine
priority) from the complex “new task "
buying approaches (judgmental,
strategic).
In summary, the literature on exchange
processes suggests that purchase
importance influences the nature and
the extensiveness of buyer decisionmaking. With the exception of
Wangenheim (2003), this research, however,
has not generally examined the impact of
purchase importance within buyer-supplier
relationships.
Relational Behaviors
Crosby, Evans, and Cowles (1990)
referred to relational behavior as a
"salesperson's behavioral tendency to
develop, maintain and grow the buyerseller relationship." They found relational
salespeople made frequent contact with buyers,
solicit buyer disclosure of personal and
needs related information, and express to
buyers their cooperative intentions. This
Northern Illinois University
constellation of behaviors was found to
significantly influence the quality of the
buyer-seller relationship, as did the
salesperson's attributes of similarity,
expertise and trust. Although not
explicitly identified as relational
behaviors, the research that characterizes
buyer-seller relationships identifies
salespersons' relational behaviors that lead
to particular outcomes. Morgan and Hunt
(1994) found that a buyer's perceived trust in
the salesperson was positively influenced
when the salesperson and buyer shared
common beliefs about which behaviors,
goals and policies were important and
when they shared meaningful and timely
information. These relational behaviors,
being antecedents of trust, led to increased
cooperation and a reduction in both
functional conflict and decision-making
uncertainty. Doney and Cannon (1997)
found that relational behaviors
influence buyers perceptions the
expertise, likeability and similarity of
the salespeople that they interacted with.
In turn, these behaviors seemed to
positively impact buyers’ perception of
salesperson trust and their ultimate
choice of suppliers. Gao, Sirgy and Bird
(2005) found that relational behaviors
influence perceptions of supplier trust,
dependence
and
commitment.
Consequently, this created less uncertainty
when making buying decisions. Dwyer,
Schurr and Oh (1987) suggested that buyerseller relationships evolve through a
five-step process. The steps include:
awareness, exploration, expansion,
commitment and dissatisfaction. A
salesperson's relational behavior, helps
to move (or hinder) the relationship to the
final commitment phase. Belonax, Newell
and Plank (2006) found that relational
behaviors influence buyer perceptions of
salesperson expertise and trust as well as
perceptions of corporate expertise and
Academic Article
trust. More favorable buyer perceptions
were found when product support services
were more important.
In his study of selling, Valentino (2000)
using his neurolinguistic programming
(NLP) paradigm, uncovered specific
relational behaviors that underlie six
structural components that allow
salespeople to develop rapport. First,
the salesperson creates a neutral
environment by projecting an open
mindedness in his interactions with the
buyer. Second, the salesperson creates
harmony by mirroring the buyer's speech
tempo, mode of perception, energy or
emotional state and communication style.
Third, the salesperson gains and keeps the
buyer attentive by repeating key words,
phases and criteria put forth by the
buyer. Next, the salesperson creates a
feeling of empathy to the buyers’ needs and
concerns. Fifth, the salesperson draws out
positive responses to questions. Finally, a
buyer's receptiveness to the relationship is
favorably enhanced when the attention of
the salesperson is focused on outcomes that
are in the best interest of the buyer. It
should be noted that rapport plays a
fundamental role in establishing good
communications. The ability to establish
rapport depends on the salesperson's
movements and body language, dress and
or attire, as well as the use of sensory
based language and pace of approach
(Valentino 2000; Wood 2006).
Overall, a salesperson's relational
behaviors play a key role when establishing
buyer seller relationships. Thus we would
expect that relational behavior would impact
key aspects of relationships between buyers
and sellers. For this study relational
behaviors were defined as those behaviors
executed by the salesperson whose primary,
although not only, objective is to improve
Spring 2008
11
the personal relationship of the salesperson
with significant others in the buying group.
Task Behaviors
Within the context of buyer-seller
relationships, salespeople are
responsible for performing a number of
sales focused tasks, particular importance
are those tasks that must be performed to
achieve sales call objectives (Moncrief,
Marshall and Laask 2006). Though in some
cases, the objective may be to make a sale, in
other instances, the call objective may be
simply to move toward the sale
(Rackham 1996).Salespeople are
encouraged to develop skills that help them
to prospect and qualify buyers, secure sales
calls, determine needs, present product or
service solutions, overcome buyer
objections, obtain agreements to
purchase and perform follow-up sale
tasks (Futrell 2006; Manning and Reece
2006; Rackham and DeVincentis 1999).
The empirical research on tasks behaviors
approaches sales skills as a holistic construct
that includes not only those behaviors
relevant to the stages of the sales process
but also the relational behaviors
mentioned previously. Moncrief (1986)
developed a six category classification
of sales positions by analyzing 121 sales
activities. Marshall, Moncrief and Lassk
(1999) created taxonomy of sales positions
through factoring and clustering 105 sales
activities. To create taxonomy of sales
positions that reflect changing
environmental forces Moncrief, Marshall
and Lassk (2006) factored analyzed their
earlier identified 105 sales activities into 12
dimensions (factors) of selling and clustered
them into six categories of sales positions.
Rentz et al (2002) developed a scale to
measure selling skills and grouped them into
the three main skills conceptualized by
Walker, Churchill and Ford (1997):
Vol. 8, No. 2
12
Journal of Selling & Major Account Management
interpersonal, salesmanship, and technical.
These skills represent an individual's
"learned proficiency" at performing the
necessary tasks for the sales position (Ford,
Walker, Churchill and Hartley 1987).
Because of the fast-paced changes that
occur in today's business environment,
buyers place an even greater value on the
advice and guidance provided by
salespeople.
Consequently, salesperson tasks
behaviors are empirically examined
now, by some researchers, from a
consultative selling perspective. Liu and
Leach (2001) defined consultative selling as
"the process of professionally providing
information for helping customers achieves
their business objectives." Their study
found that consultative service tasks
influenced buyer perceptions of salesperson
trust, expertise and overall satisfaction with
the seller. Pettijohn, Pettijohn and Taylor
(1995) examined the relationship between
sales performance and consultative skills
and showed that a salesperson's
congruent skill (i.e., directness, honesty,
and sincerity in what is overtly
communicated to the buyer) was positively
related to effective sales performance.
Pelham (2002) found that the consultative
skills of problem solving and adaptive
selling positively influenced a firm's sales
growth. Experimental studies conducted by
DeCormier and Jobber (1993) focused on
the similarities between selling and
counseling. The results of their experiments
showed that sales performance can be
enhanced by providing training in adaptive
selling skills, micro-skills used extensively in
counseling, and the counselor selling process
adapted from the meta-model of clinical
interviewing developed by Ivey and
Matthews (1984).
To summarize, within the context of buyerseller relationships, salespeople are
Northern Illinois University
responsible for achieving call objectives. To
do this they must perform a number of
sales related tasks as they work toward
this end. While there has been a great
deal of work on defining sales
behaviors and tasks, the related
literature shows only limited work on
linking sales behaviors to performance.
However, the literature does suggest that
task behaviors play an important role in this
process. For this study task behaviors were
defined as those behaviors executed by
the salesperson whose primary,
although not only, objective is to achieve
the sales goals with respect to the person or
persons and organization these behaviors
are directed at.
Relationship Loyalty
Relationship loyalty is a term that is
related to relationship commitment and
is utilized here as it reflects a slightly
different, less abstract perspective.
Empirically, only Plank and Newell (2007)
examined and measured the construct. They
developed the construct from the source
loyalty definitions in Wind (1970) and
Morris and Holman (1988). They defined
the term as customer perceptions of
whether they will continue to use and
remain committed to the supplier (Plank
and Newell p62). Commitment is a more
abstract term that suggests there will be
a continuance of the relationship.
Loyalty, on the other hand, is more
specific in meaning and a more specific
behavioral intention. One can be
committed to a relationship, but not loyal
to that relationship. In a buyer-seller
relationship, loyalty means that the buyer will
simply keep buying from the seller by choice.
While they may do other things such as
tell their colleagues in other companies
about the seller, the fundamental
essence of loyalty is that they will keep
buying out of choice. As Palmer (1995)
Academic Article
Spring 2008
noted it is possible for a company to be
committed in a buyer-seller relationship as
they have no choice, but they may not be
satisfied with the relationship and would
report they would leave the relationship if
the opportunity was available. But if no
opportunity exists, they remain
committed, but not loyal. Overall,
commitment is a necessary, but not a
sufficient condition, for relationship loyalty.
13
Research Questions
The literature reviewed linked behaviors
to performance and it is clear that how
the salesperson behaves, whether in front of
the buyer or at other times (Plank and Reid
1994), will impact on their success. What is
less clear is what impact purchase
importance has on the relationship between
these behaviors and relationship loyalty.
Previous empirical research and the typical
theoretical perspectives that have been
taken in this research provide limited
guidance at best.
The fundamental questions this research
examines are:
Figure 1 illustrates the relationships stated in
the research questions.
FIGURE 1 Research Model
HIGH OR LOW
IMPORTANCE
PURCHASE
RELATIONSHIP
BEHAVIORS
RELATIONSHIP
LOYALTY
TASK
BEHAVIORS
• Does purchase importance as perceived
by the buyer impact on the relationship
between the relational and task behaviors
performed by the salesperson and the
relationship loyalty the buyer expresses.
• How strong is the relationship between
task and relational behaviors and perceived
relationship loyalty?
Method
The research data was collected using a
single wave mail survey from a total of 1400
purchasing managers who were members of
the Institute for Supply Management. There
were no return deliveries. After 6 weeks, a
total of 269 completed usable responses
were received for a return rate of
approximately nineteen percent. The
Vol. 8, No. 2
14
Journal of Selling & Major Account Management
distributed questionnaires were identical
except that each survey asked the individual
answering the questionnaire to evaluate a
current supplier relationship that was either
"extremely important," or "minimally
important" to their business. Of the 269
usable questionnaires returned, 126 were
surveys that asked for the respondent to
evaluate "extremely important" purchases
and 143 were for purchases that were
reported to be "minimally important."
Relational and task behavior scales were
constructed specifically for this study.
While most new multiple item scales are
developed following a process first outlined
by Churchill (1979).
This involves item
generation and then empirical pre-tests of
those items using statistical rules of thumb
to include or exclude items to provide a
final multiple item scale. However we
chose to approximate the methodology
suggested by Rossiter (2002) who, among
other things, provides a suggested
qualitative methodology to develop a multi
item scale.
Specifically we examined the literature as
noted above in each area, and from that
three researchers created a series of
behavioral questions. We began with
four relationship indicator behaviors and
seven task indicator behaviors which were
reduced to three each during the analysis.
The analysis was qualitative in nature and
asked a group of experts (5) to evaluate
each indicator based on the theoretical
definition supplied and to rate it is
terms of its congruence with the
theoretical definition. As will be noted
further on, quantitative analysis of the
scales indicated this approach was
successful, although clearly it does not
capture every possible facet of what we
mean by relational and task behaviors. The
final scale is shown in the appendix.
Northern Illinois University
An additional question in each survey
asked respondents to rate the importance
of the purchase on a 1-7 scale, low to
high importance as a manipulation
check. Using ANOVA, the means were
assessed and found to be significantly
different as predicted thus providing
evidence that significant differences in
importance exist between the buyers that
rated their purchases as "extremely
important" and the buyers that rated their
purchases as "minimally important."
Relationship loyalty was assessed using a
four-item single factor scale, following
(Plank and Newell 2007). This scale has
previously shown good internal consistency
and has significant face validity. This
scale is also shown in the appendix.
Non-respondent bias was assessed by
analyzing first quartile verses last quartile
responses. Comparison between the two
subsets revealed no significant differences
in the demographics of the sample,
indicating no response bias (Armstrong and
Overton1977). As noted below, the
demographics of the respondents were
similar to the sample frame which provides
further evidence of limited or no
non-respondent bias.
Table 1 provides a demographic analysis of
the respondents who rated their purchases
as extremely important and those who
rated their purchases as minimally
important. Both groups are experienced
and work for a wide number of companies
as indicated by department size and
employment. The gender ratio is typical
for ISM membership (ISM Membership
Needs Survey 2006).
Also reported are situational factors
that were measured in addition to the
demographics.
These particular
variables were chosen because they
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Spring 2008
15
TABLE 1 Demographics
Variable
Buyer
Years
Gender
Purchasing
Department
Employment
Size
Experience
Extremely Important (n=126)
Mean
N/A
14.66
N/A
1274
Std Deviation
N/A
8.50
N/A
2238
Median
N/A
13.0
N/A
400
Frequencies
Male 70
N/A
(1)
12
(2-3)
35
Female 56
N/A
24
15
(>10)
40
Minimally Important (n=143)
Mean
N/A
15.07
N/A
1551
Std Deviation
N/A
8.34
N/A
2462
Median
N/A
15.0
N/A
500
Frequencies
Male 92
N/A
(1)
17
(2-3)
26
Female 51
N/A
44
13
(>10)
44
Situational Characteristics
Part or all of the business to one supplier
Approved vendor list
Part
All
Yes
No
Extremely important
87
50
111
31
Minimally important
81
45
74
51
have been subjected to previous
research and were thought to be
important descriptors of the purchase
decision process.
Both purchase
situations in terms of whether or not
the business is given to one or multiple
Vol. 8, No. 2
16
Journal of Selling & Major Account Management
suppliers and the use of a formal approved
vendor list are reported. As can be seen
both categories have a mix of both
situations. Table 2 provides an analysis of
the measures used to statistically test the
research questions.
Both task and relational behaviors were
measured on a seven point scale anchored
by strongly agree (7) and strongly
disagree (1). Thus, higher scores
indicate higher evaluation of behavior.
TABLE 2 Confirmatory Factor Analysis Behavior and Relationship Loyalty Measures
Item
Mean
Standard Deviation
Parameter Estimate
(Standardized)
Relationship Behaviors
RB1
4.58
1.411
0.7342
RB2
4.85
1.304
0.8833
RB3
4.52
1.505
0.7492
Composite Reliability
.833
Variance Extracted
.789
Item
Mean
Standard Deviation
Parameter Estimate
(Standardized)
Task Behaviors
TB1
4.99
1.259
0.6581
TB2
4.94
1.601
0.8737
TB3
4.56
1.634
0.8140
Composite Reliability
.828
Variance Extracted
.782
All Estimates Significant p<.01 AGFI =.9680; CFI = .9975; NNFI =.9953; RMR =
.0446; Chi-Square = 9.8575; DF= 8; pr> Chi-Square.2752; No significant residuals > 2 standard deviations.
Factors are correlated @ .719
Correlation Matrix
Behaviors
REB 1 REB2 REB3 TAB I TAB2 TAB3
REB1
1.000
REB2
652
1.000
REB3
.544
.661
1.000
TAB1
349
.476
.452
1.000
TAB2
.469
548
.450
555
1.000
TAB3
.405
.491
.467
.523
.720
Northern Illinois University
1.000
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Spring 2008
17
TABLE 2 Continued
Item
Mean
Standard Deviation
Parameter Estimate
(Standardized)
Relationship Loyalty
Reloy 1
4.28
1.356
.7781
Reloy 2
4.51
1.423
.8389
Reloy 3
4.59
1.442
.8375
Reloy 4
5.10
1.138
.7890
Composite Reliability
Variance Extracted
.845
.715
All Estimates Significant p<.01 AGFI = .9478; CFI = .9921; NNFI = .9899; RMR = .0276; Chi-Square = 8.9976;
DF= 2; pr> Chi-Square.0111; No significant residuals > 3 standard deviations.
Correlation Matrix
Reloy 1
Reloy 2 Reloy 3 Reloy 4
Reloy 1
1.000
Reloy 2
.673
1.000
Reloy 3
.646
.672
1.000
Reloy 4
.552
.604
.631
Perceived relationship loyalty was
measured on the same scale as the
behaviors.
In order to assess the measurement quality,
the sets of behaviors were subjected to a
structural equation modeling program Proc
Calls in SAS. Given that task and
relationship behaviors were each measured
by three indicators a two-factor
confirmatory factor analysis was conducted.
As noted in Table 2, the measures are very
strong in terms of the assessments used.
Strong discriminant validity is indicated
by the fit statistics for the two-factor
model indicating that task and
relationship behaviors are different
constructs. The composite reliability
and variance extracted for each
1.000
individual construct suggests strong
reliability of each construct. Given the
four indicators used for relationship loyalty,
a single factor model was run. Also as
shown in Table 2 this was a strong scale.
The fit statistics are all strong and the
composite reliability and variance extracted
both indicate a reliable indicator. Thus we
can conclude that the measures subjected
to the statistical testing indicated solid
reliability and validity given the testing
methods utilized.
Findings of the Study
In order to examine the research question,
summed scales were created for each of the
behaviors and each score was divided
by the number of indicators; three in
Vol. 8, No. 2
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Journal of Selling & Major Account Management
the case of relationship behaviors and task
behaviors, four in the case of relationship
loyalty. The statistical test utilized was two
regression equations, one for the very
important purchases and one for the
minimally important purchases. Table 3
reports those results.
As can be seen, regardless of purchase
importance, both task and relational
behaviors are strongly linked to relationship
loyalty and both models explain over 50%
of the variation in relationship loyalty. In
both cases relational behaviors are more
strongly related than task behaviors. In the
TABLE 3 Regression Analysis, Behaviors against Relationship Loyalty For
High and Low Purchase Importance
MODEL SUMMARY (High Importance)
R
.721
RSQUARE
.520
ANOVA
ADJ RSQUARE
.512
SUM OF SQUARES
DF
MEAN
SQUARE
81.476
2
40.738
75.301
156.777
133
135
Regression
Residual
Total
STD ERROR ESTIMATE
.75245
DURBIN W
1.889
F
SIG.
71.953 .000
.566
COEFFICIENTS
STD COEFFICENT
T
SIG
Constant
RBI
.436
3.514
5.976
001
.000
TSB
.378
5.178
.000
MODEL SUMMARY (Low Importance)
R
.751
RSQUARE
.549
ANOVA
SUM OF SQUARES
STD ERROR ESTIMATE
.75607
DF
MEAN
SQUARE
82.109
2
41.054
67.453
159.562
118
120
Regression
Residual
Total
ADJ RSQUARE
.541
DURBIN W
2.016
F
71.819 .000
.566
COEFFICIENTS
STD COEFFICENT
T
SIG
Constant
RBI
.430
3.023
5.741
003
.000
TSB
.348
4.240
.000
Northern Illinois University
SIG.
Academic Article
more
important
purchases,
these
differences are somewhat less apparent with
the relational behavior coefficient being
lower and the task coefficient being higher
than in low importance situations. Post hoc
this probably makes sense as the risk to the
buyer is likely to be much greater in more
important decisions so that they would be
more concerned with the actual task getting
done. But relational behaviors are still more
important as indicated by the higher beta
coefficient. It appears that purchase
importance to the buyer has minimal
effect on the relationship which would
lead one to believe that it also has minimal
effect on relationship loyalty in general.
Post hoc, using the manipulation check
measure of purchase importance and
regressing that against relationship loyalty
produced a significant model, but with an
R2 of only .036, there is clearly little real
impact.
Managerial Implications
With regard to our first research question, the
buyer’s perception of purchase importance
has minimal impact. The beta coefficients for
relational and task behaviors in both high and
low importance models differ insignificantly.
Regarding our second research question, both
relational and task behaviors are significantly
linked to relationship loyalty and in both the
high and low importance models explain over
50% of the variation in relationship loyalty.
While in both models relational behaviors are
more strongly related to relationship loyalty
than task behaviors, the relational behavior
coefficient is smaller and the task coefficient is
larger in the high importance model than they
are in the low importance model. The larger
task coefficient in the high importance model
may reflect the uncertainty when making high
importance decisions. Thus, buyers might, in
general, focus on the task behaviors of
salespersons to ensure that correct decisions
are made. The larger relational coefficient in
Spring 2008
19
the low importance model may be a reflection
of the frequent buyer-seller contact in the
routine, repetitive nature of low importance
decision making. In this case buyers are more
likely to rely on criteria, such as the relational
behaviors of salespeople, which enable them
to make quick and effortless decisions.
The findings that the relational and task
behaviors of salespeople influence the buyer’s
loyalty to the buyer-seller relationship have
several implications for sales training
programs: to induce changes in salesperson
relational and task behaviors that promote
relationship loyalty.
With regard to salesperson task behaviors,
sales trainers have long recognized that sales
training must provide the salesperson with
requisite knowledge (e.g., product knowledge,
market and competitive information, company
policies and procedures) and selling skills
(i.e., how to sell). Selling skills essentially
consist of knowing how to do certain things,
often referred to as procedural knowledge.
Because purchases made by major account
buyers are sometimes of low importance and
at other times of high importance, salespeople
must be taught procedures consistent with
short-cycle selling (low importance purchase)
and long-cycle selling (high importance
purchase). While both procedures emphasize
the task behaviors, beginning with prospecting
for customers and ending with closing and
servicing customers, long-cycle selling requires
additional task behaviors. Long-cycle selling
follows a sequential pathway to a sale. That is,
certain intermediate objections must be
achieved so as to “advance” toward a sale.
Obviously these “advances” are unique to the
product/services being sold. Therefore, it is
important for trainers to ask themselves the
requisite questions relating to their industry
and determine the specifics that best relate.
The real challenge in sales training is
developing salesperson relational behaviors
Vol. 8, No. 2
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Journal of Selling & Major Account Management
that develop, maintain and grow the buyerseller relationship. In this context relational
behavior may be viewed as rapport building
behaviors and thus the emphasis on sales
training should focus on instructing the
salesperson on how to manage rapport driving
the sales process.
Sales training can be done in a number of
ways to develop rapport skills, however, a
fruitful approach sales trainers may use is
neurolinguistic programming. This six stage
approach considers relational behaviors that
allow salespeople to develop and manage
rapport (Valentino 2000).
First, the salesperson must create a neutral
nonjudgmental environment by projecting an
open mindedness to the buyer. Second, the
salesperson can create harmony by mirroring
the buyer’s speech tempo, mode of
perception, energy or emotional state and
communication style. Third, the salesperson
can gain and keep the buyer attentive by
repeating key words, phrases and criteria put
forth by the buyer. Next, the salesperson
must create a feeling of empathy to the
buyers’ needs and concerns.
Fifth, the
salesperson should draw out positive
responses to questions to make the buyer feel
good. Finally, the attention of the salesperson
should focus on outcomes that are in the best
interest of the buyer so as to favorably
enhance the buyer’s receptiveness to the
relationship. It should be noted that the
ability to establish rapport depends also on the
salesperson’s movements and body language,
dress and attire, as well as the use of sensory
based language and pace of approach.
Following Gremler and Gwinner (2008) we
can further examine rapport as a set of
behavior types that they identify as attentive
behavior, grounding behavior, courteous
behavior,
connecting
behavior,
and
information sharing behavior. Each one of
these types of behaviors can be examined for
salesperson competency and both long term
Northern Illinois University
and short term training programs can be built
to improve these as they are deemed
appropriate for the organization. Both the
NLP and Gremler and Gwinner models for
rapport building can be used to effectively
improve salesperson relational behaviors.
Limitations
This study has many of the same
limitations of most survey research: it is
based on recall. The sample while a good
sampling frame does not represent all
purchasing personnel. The response rate of
just over 19% raises the question of
nonresponse bias as the test used to
ascertain this issue is weak at best. The
independent and the dependent responses
were provided by the same subject,
suggesting possible source bias. As always
these findings need to be interpreted with
caution, however, the measures were very solid
and the basis for the sample frame has been
utilized many times in previous research.
Care was also taken to minimize
common method response bias in the
development of the questionnaires
(Podsakoff et al 2003).
Future Research Directions
Clearly, this exploratory research is the first
effort at comparing the impact of relational
and task behaviors on relationship loyalty.
Further delineation of both relational and
task behaviors needs to be undertaken and
an effort made to measure a more complete
set of behaviors. This would lead the way to
determine, within each set of behaviors,
whether one or more behaviors seem to
be more powerful in their impact on
sales performance.
The framework for developing buyer-seller
relationships has been hypothesized to
consist of five general phases of
development (Ford 1980). Research effort
Academic Article
should be made to operationalize the
relational and task behaviors within each of
the five phases of the relationship
process. Then, a study could be
undertaken to answer the question
"How do relational and task behaviors
impact on the relationship development
process?" It is critical to take a more
process framework to the general research
question examined here as relationships
among and within variables are likely to be
different at different stages in the
development.
On a broader level there is a stream of
research that has been utilized by for
profit organizations to a great extent, but
is less developed as an area of academic
study. This area is the notion of job
competencies and what kinds of
competencies are necessary for specific
jobs (Montebello 2001; Bartram 2004).
With the recent exception of several
small studies e.g., Ricks, Williams, and
Weeks 2008, this framework has been
little used in the area of selling.
Currently ASTD is involved in a major
project which seeks to develop a global
model of competencies relating to the
sales function (Lambert 2008).
The
research outlined here fits into that
framework as it seeks to understand
which behavioral components have
impact on the development and
maintenance
of
buyer-seller
relationships. The authors suspect that
this competency framework will drive
much academic research in the future.
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New York, is Associate Professor of
Marketing at the University of South
Florida Polytechnic. Prior to academia he
spent 10 years in business sales and
marketing and has research interests in
business buying and selling.
Joseph Belonax Jr., Ph.D., University of
Nebraska is Professor of Marketing at
Western Michigan University. Prior to
academia he spent five years in business
sales and marketing and has research
interests in consumer and organizational
buying behavior.
Stephen J. Newell, Ph.D. Florida State
University, is Professor and Chair of
Marketing at Western Michigan
University. Prior to academia he spent
five years in business sales and marketing
and has research interests in sales,
advertising and green marketing.
Academic Article
Spring 2008
25
Appendix
BEHAVIORAL INDICATORS*
Relationship Behaviors
RB 1
The sales person tries to get to know me on a personal level.
RB2
The sales person is good at building rapport with me.
RB3
The sales person and I exchange views on a variety of topics.
Task Behaviors
TAB 1 The sales person presents facts explaining how his/her product/service benefited my
company.
TAB2 The sales person acts like a consultant to me and my company.
TAB3 The sales person gives strategic business advice to help my company.
Relationship Loyalty
Reloy 1 I feel loyalty to the salesperson and his/her company
Reloy 2 I have a strong relationship with the salesperson and his/her company
Reloy 3 I am committed to working with this salesperson and his/her company
Reloy 4 I am willing to maintain my relationship with the salesperson and his/her
company
*Given the small numbers of indicators used for each construct, reverse coding was not utilized. For
each indicator the direction is the same, with the higher number (7 maximum) indicating the most
agreement with the statement.
Vol. 8, No. 2
26
Journal of Selling & Major Account Management
The Idea Generation Stage of the
New Product Development Process:
Can Key Account Management Systems Help?
By Geoffrey L. Gordon, Dan C. Weilbaker, Rick E. Ridnour, and Kimberly Judson
The failure rate of new products continues to be high; yet, those developed with some customer input
have a greater probability of commercial success. Industrial (B-to-B) salespeople, employed by organizations utilizing key account management (KAM) systems, should be well suited to serve as a conduit between customers and employees who hold primary responsibility for new product development (NPD)
efforts. The current exploratory, descriptive study targeting sales managers examines the role the sales
force employed by organizations utilizing KAM systems plays in the idea generation stage of the NPD
process. Managerial implications and recommendations as to how to improve processes are provided.
Introduction
The failure rate of all new products continues
to be in the range of 40-to-90 percent
(Cannon 2005; Clancy and Stone 2005;
Stevens and Burley 2003). As the business
environment gets increasingly competitive,
companies are faced with the challenge to
improve new products(s)/service(s)
development (hereafter referred to as
products(s)) success rates while simultaneously
guiding their products to market at an
ever-faster pace (Strategic Direction 2003).
Numerous authors claim that new product
development (NPD) holds the key to
competitive success (Song and Parry 1997;
and Lynn, Abel, Valentine, and Wright 1999).
In a study of executives, ‘bringing new
products to market’ was named as the second
most critical activity by their organization
(ranking first was ‘acquiring new customers in
existing markets’) (Maddox 2005). More
recently, the Conference Board, in a 2007
study, found stimulating innovation and
improving customer relationships among the
top challenges facing CEOs around the world
(Lake and Lunde 2008).
New products developed with some customer
input tend to have a greater probability of
Northern Illinois University
commercial success (Ciappei and Simoni
2005). Savvy companies understand that they
should be proactive in developing long-term
relationships with customers, engaging them
in ongoing interactive and relational activities
as it relates to NPD (Alam and Perry 2002;
Yakhief 2005). Millson and Wileman (2006)
conclude that integrative efforts undertaken
with customers and suppliers proved critical
to new product success. Customer input
should be incorporated in the NPD process as
early as possible to avoid costly mistakes later
on (Koufteros, Vonderembse, and Jayaram
2005). Unfortunately, it appears that the level
of commitment management puts toward
communicating with customers and gathering
information early on (e.g., doing the vital
up-front homework) in the NPD process is
lacking (Cooper 2003). Results of a study
conducted by Industry Week (Osborne 2002)
revealed that poorly defined customer needs
were the most frequent reason given for
product development delays or failure.
Organizational managers must commit to the
notion that the process of becoming more
customer-oriented must begin with actually
undertaking activities involving the customer.
It should no longer be a question of creating
value for the customer; rather, it should be
Academic Article
about involving and creating value with the
customer (Akamavi 2005).
Since the
collection of market information and
customer involvement is critical to the NPD
process, organizations should be utilizing all
resources at their disposal to actively solicit
the ‘voice of the customer.’ One functional
area that should be well suited for this
purpose is the sales force. Industrial (B-to-B)
salespeople, in their boundary spanning role,
are usually the primary source of information
about customers and competition for the rest
of the organization (Pelham and Lieb 2004).
Foster and Cadogan (2000) find that the
quality of the relationships customers build
with their salespeople positively influences the
propensity to conduct additional business.
Piercy and Lane (2005) report that achieving
strategic differentiation with key customers
requires a strong buyer-seller relationship that
focuses on the sales force. KAM (key account
management) sales people have strong
relationships with their customer
organizations and have access to information
regarding new product needs.
The current study begins with a review of the
findings from previous studies that investigate
the role the sales force may play in the idea
generation (hereafter referred to as early stages
of the NPD process). The objective of the
review is to present arguments as to why key
account management (KAM) systems should
prove advantageous to organizations seeking
to utilize the sales force in the early stages of
the NPD process.
Second, the study
investigates: (1) the extent to which KAM
salespeople are involved in the early stages of
the NPD process, (2) the outcomes of such
involvement, and, (3) barriers to successful
use of KAM salespeople to gather information
and market intelligence. Finally managerial
implications, limitations of the current study,
and directions for future research are given.
Background
A scarcity of studies on specific aspects of the
Spring 2008
27
Marketing-Sales relationship (Guenzi and
Troilo 2007) continues with many researchers
identifying the need for additional efforts in
this area (Williams and Plouffe 2007; Guenzi
and Troilo 2006). Taking it a step further,
there has been very little formalized research
conducted on the specific role that KAM
salespeople play or could play in the early
stages of the NPD process, the degree to
which organizations utilize this potentially
valuable resource in the early stages of the
NPD process. Anderson, Mehta, and Strong
(1997) in their investigation of sales
management training programs make no
reference of tasks related to the NPD process.
Gordon, Schoenbachler, Kaminski, and
Brouchous (1997) conclude that the sales
force cannot be counted on as a reliable and
valuable source of customer information in
the NPD process because few structured
systems exist for gathering and reporting this
information back to the appropriate area(s)
within the organization. Pelham (2006) found
that the impact of consulting oriented sales
management programs indirectly enhanced
customer value through involvement in
product design.
Leigh and Marshall (2001) in their study on
research priorities in sales strategy and
performance allude to sales involvement in the
NPD process as part of: (1) establishing a
customer-centric culture, (2) developing
information systems, and (3) establishing
customer feedback and satisfaction loops.
Piercy and Lane (2005) note that the
importance of strategic customer relationships
necessitates a more strategic focus on the part
of sales and account management. Arnett and
Badrinarayanan (2005) advocate utilizing
customer needs-driven core selling teams to
derive competitive advantage.
Zahay, Griffin, and Fredericks (2004) find that
relevant customer information (as it relates to
the NPD process) collected by the sales force
may formally reside in CRM systems, the
Vol. 8, No. 2
28
Journal of Selling & Major Account Management
individual files of salespeople, or simply as
mental notations; however, Liu and Comer
(2007) state that no known studies exist which
look at salespeople’s role in retrieving information for these type systems. Sanghani
(2005) determines that greater involvement of
the sales force in the NPD process can help
companies capture useful customer data and
Ulaga (2001) advocates using multiple sources
of customer value information. In a study
conducted by Best Practices, LLC (2005),
employees from the areas of sales, marketing,
R&D, customer service, and vendors are a
main source of ideas for the product
development organization.
An examination of the leading textbooks on
sales and new product development reveals
that while they all acknowledge the
importance of the sales force collecting
customer information; none specifically focus
on this topic. On the product management
side, Crawford and Di Benedetto (2003)
examine points in time when salespeople
should be involved in the NPD process but
do not reach a conclusion as to the optimal
time. Likewise, the sales literature largely
investigates NPD during the later stages, such
as how a salesperson can utilize CRM systems
to retrieve new product information and
match this information up with customers
who may have an interest in the related new
product (Manning and Reece 2004). This
study addresses the need to examine the role
played by the salesforce utilizing KAM
systems in the idea generation stage of the
NPD process.
Involving Salespeople in the Idea Generation Stage
of the NPD Process
Empirical evidence supports the notion that a
participative approach to NPD improves the
process (Tracey 2004). Providing a clear
strategic direction to the NPD process and
effectively managing ideation activities is as
important today as it was when originally
advocated (Kahn, Franzak, Griffin, Kohn, and
Northern Illinois University
Miller 2003).
For example, upfront,
pre-development activities including market
intelligence and analysis are the most critical
skills needed because the insight and
information gained from these activities may
reduce costs and problems in the later and
riskier stages (Cooper and Kleinschmidt 2000;
Wren, Souder, and Berkowitz 2000).
Three facets of the above-mentioned activities
provide a strong argument for involving the
salesperson in the early stages of the NPD
process.
First, close ties between an
organization and its external partners (e.g.,
customers) can facilitate the exchange of
information critical to successful NPD
activities (Bonner and Walker, Jr. 2004).
Second, new information technology (such as
CRM) further increases the possibility for
information sharing and co-development with
key customers and lead users (Langerak,
Peelen, and Commandeur 1997).
Third,
teamwork and collaboration is requisite for
success (Lynn and Akgun 2003).
In most companies, the salesperson does not
become involved in the NPD process until the
later stages. The sales force plays an important
role in testing customer reaction to and use of
new products prior to launch and in
influencing targeted customers to purchase
new products after launch (Rochford and
Wotruba 1993; Michael, Rochford, and
Wotruba 2003). However, these efforts come
after the bulk of development efforts have
been concluded.
In defense of the sales organization, few R&D
organizations have the proper systems in place
to solicit ideas from entities such as sales
(Prather and Turrell 2002). If a firm believes
that the sales force should play an integral role
in the information gathering and market
intelligence stages of the NPD process, then
attention must be focused on hiring
individuals who possess the necessary skills
(Atuahene-Gima 1997) and the training of
new and existing salespeople to perform such
Academic Article
tasks becomes critical (Cross, Hartley,
Rudelius, and Vassey 2001). For example,
Ritrama, Inc., a manufacturer of
pressure-sensitive films and specialty paper,
trains each salesperson to identify future
customer needs and market trends (Boyle
2004). As a result, the sales teams routinely
offer the development teams insight into
trends in the marketplace.
Having a
knowledgeable and highly motivated front line
can yield a meaningful competitive advantage
(De Brentani 2001).
Further, if organizations want to encourage
proactive behavior on the part of the sales
force, they must reward those who assist in
the NPD process. Kleinschmidt and Cooper
(2004) found that 44.8 percent of the best
performing companies in terms of NPD
efforts, provided rewards or recognition to
those who submitted new product ideas while
all of the worst performing companies
provided no rewards. Overall, only 23.1
percent of all businesses provide such
rewards.
While there is no one-size-fits-all solution to
sales compensation (Fine 2007), current
compensation and incentive schemes tend to
mainly reward sales of existing products,
creating little incentive or motivation for the
sales force to spend time with the NPD team,
learn about user developments that might
have the potential for commercially useful
products, or buy into product development
strategies as a whole (Withers 2002). The
acquiring of customer/market information
related to potential new products may take too
much sales time (Caruth and HandlogtenCaruth 2004). As a result, these activities are
not typically pursued by the sales force
because the time required to succeed is too
much for the reward received.
KAM: Systems and Stages of the NPD Process
Intensely competitive markets, accompanied
by escalating customer demands, necessitate a
Spring 2008
29
changing role for the sales force (Lane and
Piercy 2004). Toward this end, the sales
function can become a meaningful contributor
to value creation and innovation efforts within
firms. To do so, it would be helpful if top
management would acknowledge and support
the premise that: (1) innovation is a major
responsibility of those in sales, (2) the sales
function is a source of competitive advantage
in companies, and (3) much of that advantage
can come from further sales involvement in
the NPD process (Ingram 2004). Given that
management acknowledges the above, then
the subsequent issue needing addressed relates
to whether there is an optimum form of sales
organization that promotes and supports sales
involvement in the idea generation and
opportunity identification process of the NPD
process.
Napolitano (1997) was one of the first to
outline the responsibilities of the KAM
organization, citing the (1) choosing of value
drivers, (2) maintaining comprehensive
profiles of customer needs and wants, and (3)
focusing on mutually beneficial growth
opportunities as means to develop a win-win
situation for both vendor and customer.
Honeycutt (2002) reports that firms in the
global marketplace which modify their
approach toward key customers from a
one-time transaction to a longer term view
tend to enjoy more success. Homburg,
Workman, Jr., and Jensen (2002) recognize
that the increasing role of KAM is one of the
most profound changes in sales, yet research
on the topic still remains limited (Hughes,
Foss, Stone, and Cheverton 2004).
Schultz and Evans (2002) examine
communication aspects of KAM, finding that
more successful relationships were built on
those stressing strategic (e.g., new product)
content. In fact, key account managers are
supposed to enhance the level of
communication between the supplying and
the buying firm (Schultz and Evans 2002).
Vol. 8, No. 2
30
Journal of Selling & Major Account Management
Key account managers are responsible for
communicating the customers’ issues within
the sellers’ organization to foster innovative
solutions to customer problems, support
customer orientation, and ultimately increase
the fit between their organization's value offer
and customer's needs (Georges 2006).
The key account management process is
superior to alternative sales processes when it
comes to the early stages of the NPD process.
This type of sales organization, regardless of
whether it is labeled a major account, key
account, global account, or national account
management organization, is one that has its
primary focus on the importance of
customers. Key account management (KAM)
organizations are created under the premise
that customer’s with more current and
potential sales over time are of significant
importance and, as a result, merit special
attention (Ingram, LaForge, Avila, Schwepker,
and Williams 2004). Weitz and Bradford
(1999) state that the primary goal of key
account managers is to optimize the fit
between the supplier's value offer and
customer's needs.
Methodology
The focus of the current study is to investigate
key account management (KAM) sales
processes and organizations relative to their
involvement of salespeople during the early
stages of the new product development
process. To examine this involvement within
KAM sales organizations, a survey instrument
was developed and pre-tested among 30
members of a professional selling advisory
board. Their feedback was incorporated into
the final instrument. The survey was mailed
to sales managers (or sales directors)
employed by firms across the United States
whose contact information was obtained from
a list broker. All participating respondents
indicated that they operate in industries that
are primarily business-to-business. Surveys
were received back from 243 organizations of
Northern Illinois University
which 66 indicated they were either sales
managers or directors of organizations
utilizing key account management processes.
This reflects a usable response rate of 27%.
While the number of usable responses may
seem low, the exploratory nature of the study
must be emphasized. Total responses and
response rates are in line with other recent
studies examining KAM systems (Wengler,
Ehret, and Saab 2006); the use of salespeople
as information gatherers (Liu and Comer
2007); and surveys of sales and other
managers involved in B-to-B markets (Nevins
and Money 2008; Schwepker and Good 2007;
Carr and Lopez 2007; Green Jr., Inman, and
Brown 2006; Ozer and Chen 2006).
Results
Demographics of the Sample
Collectively, the survey examined the number
of employees in the organization. The largest
percentage of respondents (47 percent)
indicated that their organization employed
over 5,000 individuals. The sample reflected
7.6 percent of the respondents were from
organizations with 1000-4,999 employees, 10.5
percent with 500-9999 employees, 25.8
percent with 100-499 employees, and 9.1
percent with 1-99 employees. In addition, the
sales volume for the sample ranged from 6.3%
of respondent organizations having less than
$10 million in sales to 51.6 % with over $1
billion in sales.
Salesperson Responsibilities and Types of Information
Collected
A key component of the product development
process lies in an organization’s success in
gathering information related to ideas for new
products. Respondents were asked to indicate
the degree of responsibility field salespeople
have for gathering information related to new
product ideas generated by customers.
Fifty-seven-plus (57.6) percent of the
respondents categorized as “extensive“ the
responsibility accorded to salespeople and
Academic Article
Spring 2008
59.1 percent of the respondents categorized as
“extensive” the level of responsibility
accorded to sales managers. These results
strongly suggest the importance of the KAM
sales staff in being the “voice of the
customer.” While the current study focuses
on the role of the salesperson, future studies
should explore the role of the sales manager as
well. Sales managers (or sales directors) were
then asked several questions about the types
of information collected.
31
competitive products/services (69.7 percent)
ranking second. Information related to
provider’s products/ services the customer is
currently using (65.2 percent) was ranked
third, followed by product/service features
utilized by the customer (57.6 percent),
customer’s ideal product/services according
to customer selection criteria (56.9 percent),
and customer criteria for rating competitive
products/services (56 percent).
Respondents were next given a list of reasons
customers might have for suggesting new
product ideas to salespeople. Sales managers
were asked to evaluate how frequently
customers use these reasons to suggest new
products. Table 2 shows the result of these
evaluations. Most frequently mentioned were
unmet needs or wishes of the customer (67.7
p er c en t ), p r o b l e m s w i t h cu r r en t
First, they identified categories of information
collected by field salespeople and reported
back to those holding responsibility for new
product development. As seen in Table 1,
information related to customer’s level of
satisfaction with products/services currently
being used (81.8 percent) was ranked first with
customer’s order of preference for
Table 1
How often categories of information are collected by salespeople from customers
(n=66)
Percentage
Information category
a. Product/service features
utilized by customer
b. Provider’s products/services
customer is using
c. Customer’s level of satisfaction
Never Almost Occasionally Usually Almost
Never
Always
1.5
9.1
31.8
30.3
1.5
7.6
25.8
27.3
3.0
0
15.2
30.3
d. Customer’s order of preference
for competitive products/services
1.5
10.6
18.2
37.9
e. Customer’s criteria for rating
competitive products/services
3.0
15.2
25.8
21.2
f. Customer’s ideal product/service
1.5
15.4
26.2
20.0
Always
21.2
6.1
(higher freq = 57.6%)
25.8
12
(higher freq = 65.2%)
37.9
13.6
(higher freq = 81.8%)
27.3
4.5
(higher freq = 69.7%)
24.2
10.6
(higher freq = 56.0%)
29.2
7.7
(higher freq = 56.9%)
Vol. 8, No. 2
32
Journal of Selling & Major Account Management
products/services (60 percent), cost
reductions (58.8 percent), and changes in
technology (52.4 percent). Follow up to these
reasons obviously allows savvy suppliers to
provide themselves with a large source of new
product ideas. As important, these same
suppliers are able to portray themselves to
customers as caring and interested, leading to
improved customer satisfaction and
potentially long-term competitive advantage.
most frequently were adding features to a
current product (55.6 percent), improving the
tangible quality of an existing product (55.6
percent), and extensions of an existing
product (51.4 percent). In a second tier (in
order of frequency of response) were adding
services associated with a current product
(43.8 percent), finding new uses/market for a
current product (26.9 percent), and a totally
new product (18.4 percent).
Sales managers were asked which type of new
product forms were the outcome of ideas
gathered from customers by salespeople.
Results are shown in Table 3. Mentioned
In viewing the above results, several
inferences can be made. First, while a good
percentage of KAM salespeople and sales
managers hold extensive responsibility for
Table 2
How often the reason is the primary reason for communicating new product/service ideas
by customers to salespeople
(n=66)
Percentage
Information category
a. Problems with product/service
Never Almost Occasionally Usually Almost Always
Never
Always
1.5
0
38.5
35.4
15.4
9.2
b. Superiority of competitor product/service 3.1
7.7
40.0
(higher freq = 60.0%)
18.5
27.7
3
(higher freq = 49.2%)
c. Unmet needs or wishes of customer
0
13.8
18.5
43.1
21.5
3.1
(higher freq = 67.7%)
d. Changes in regulatory requirements
7.8
35.9
26.6
12.5
9.4
7.8
(higher freq = 29.7%)
e. Changes in industry standards
7.8
25.0
32.8
17.2
9.4
7.8
(higher freq = 34.4%)
f. Changes in technology
6.3
14.3
27.0
27.0
22.2
3.2
(higher freq = 52.4%)
g. Cost reduction
1.6
6.3
33.3
31.7
17.5
9.6
(higher freq = 58.8%)
Northern Illinois University
Academic Article
Spring 2008
33
Table 3
How often the outcome is a result of ideas collected by salespeople from customers
(n=66)
Percentage
Information category
Never Almost Occasionally Usually Almost Always
Never
Always
a. A totally new product
6.2
18.5
56.9
b. Extension of an existing product line
1.6
7.8
39.1
c. Improving tangible quality
of product/service
0
7.9
36.5
47.6
d. Adding features to product/service
0
9.5
34.9
e. Adding services to product/service
3.1
17.2
35.9
36.5
15.9
3.2
(higher freq = 55.6%)
26.6
17.2
0
(higher freq = 43.8%)
f. Finding new use/market
for product/service
4.8
25.4
42.9
gathering customer information related to new
product development, there appears to be
room for improvement as over a third do not.
Second, KAM salespeople tend to gather
information which could be categorized as
being of greater use in the short-term versus
the more strategic long-term. Information
that can be utilized to gain short-term
advantage seems to encompass the primary
thrust of efforts while the means by which
ideal products could be developed and
in-depth information on overall customer
ranking criteria were given lower priority.
These results strongly support other research
on product development which advocates that
there must be both a focus on customer and
internal R&D as sources of new product ideas.
Over-reliance on the customer (especially
through use of salespeople as collectors of
12.3
6.1
0
(higher freq = 18.4%)
43.8
7.7
0
(higher freq = 51.4%)
7.9
0
(higher freq = 55.6%)
19.0
6.3
1.6
(higher freq = 26.9%)
information) could lead to situations where
product improvements and extensions will be
emphasized over truly “innovative” products.
In other words, varied means of collecting
information are preferred.
Reporting of Customer Information
The previously reported information provides
evidence that the majority of salespeople and
sales managers associated with KAM systems
collect a great amount of useful customer
information related to new product
development. As important is the ability of
salespeople in these systems to convey the
collected information to the parties most
responsible for product development efforts
in a timely and effective manner. Sales
managers were asked to identify to which
entities in their organization and how often
salespeople communicated new product
Vol. 8, No. 2
34
Journal of Selling & Major Account Management
information to. The results shown in Table 4
show salespeople report this information most
frequently to their sales managers
(84.4 percent), followed by sales team
(70.9 percent), marketing/marketing research
(56.3 percent), new product/service
development groups (46 percent), application
engineers (27.4 percent), and operations/
manufacturing (26.6 percent).
Respondents were then asked in what form
their salespeople communicate new product
information and ideas. While 60-plus percent
report that information is communicated both
in a written (65 percent) and oral (63.3
percent) format, less than a quarter (23.3
percent) report salespeople communicating
ideas into a formalized CRM or other
database. While the above results paint an
encouraging picture of KAM systems ability
to have salespeople report new product ideas/
information upward in the organization, one
has to wonder if reporting this type
information to sales managers versus other
more appropriate entities just adds an
unnecessary step to the process. With speed
to market given such importance, having sales
managers serve as the primary clearinghouse
of information may not be optimum. Second,
in the age of high technology, why aren’t
direct inputs into CRM systems more
prevalent?
Table 4
How often salespeople communicate new product/service ideas to internal groups
(n=66)
Percentage
Information category
Never Almost Occasionally Usually Almost Always N/A
Never
Always
a. New product/service
development
4.8
15.9
27.0
14.3
19.0
12.7
(higher freq = 46.0%)
6.3
b. Sales manager
0
4.7
10.9
20.3
31.3
32.8
(higher freq = 84.4%)
0
c. Marketing/market research
1.6
4.7
34.4
18.8
29.7
7.8
(higher freq = 56.3%)
3.0
d. Application engineer
22.6
24.2
16.1
9.7
12.9
4.8
(higher freq = 27.4%)
9.7
e. Operations/manufacturing
20.3
25.0
25.0
10.9
14.1
1.6
(higher freq = 26.6%)
3.1
f. Sales team
0
9.1
20.0
23.6
0
23.6
23.7
(higher freq = 70.9%)
Northern Illinois University
Academic Article
Spring 2008
35
Table 5
Incentives given to salespeople for gathering new product/service ideas from customers
(n=66)
Percentage
Information category
Yes
No
a. Feedback on performance evaluation
64.6
35.4
b. Company praise (i.e., through newsletter)
43.1
56.9
c. Compensation increase
30.8
69.2
d. Profit sharing
18.5
81.5
e. Bonus (i.e., cash, merchandise, or travel)
33.8
66.2
Training and Incentives Provided
Even assuming the best and brightest
salespeople are being hired, training in the
gathering of customer information is a
requisite for all firms wanting to show
continued improvement in this area. Sales
managers were asked about the training
provided to the KAM salespeople they
employed.
A first question asked if
salespeople understood how the product
development process works in their
organization. Of interest was the fact that
36.9 percent answered that this was not the
case. A follow-up question asked respondents
if their organization undertook formal efforts
to increase salesperson understanding of the
product development process.
Again,
somewhat surprisingly, 41.5 percent said no.
Sales managers were then asked if KAM
salespeople received training in methods used
to collect information regarding new product
ideas from customers. To this question, 36.9
percent of sales managers said no. These
results give a somewhat negative view of the
priority KAM organizations place on
equipping salespeople with the knowledge and
skills requisite to become productive
contributors to the product development
process. Given the vast training provided to
salespeople in most KAM organizations, it
comes as a surprise that almost 4 out of 10
organizations surveyed did not provide
in-depth, formal training in this area. If a high
priority is to be given to the gathering and
sharing of information about customer
requirements and shifting product
preferences, then a similar degree of priority
must be given to providing salespeople with
requisite knowledge and skills.
An additional issue of interest pertains to
incentives given to salespeople for gathering
new product/service ideas from customers.
To be effective, organizations must provide
motivation to salespeople. Respondents were
asked what type(s) of incentives were
provided to salespeople for collecting and
disseminating new product information/ideas
from customers. As shown in Table 5, listed
most often were two, non-financial,
short-term incentives—positive feedback on
sales performance evaluations (64.6 percent)
and some form of company praise such as
through a newsletter (43.1 percent). Listed
less frequently were more immediate financial
incentives such as bonuses (33.8 percent),
salary increases (30.8 percent), and profit
Vol. 8, No. 2
36
Journal of Selling & Major Account Management
sharing (18.5 percent). A conclusion can be
reached that a low priority is placed on
providing financial incentives to the sales
force to encourage active participation in
gathering customer information related to the
early stages of the NPD process. Coupled
with the lack of training provided by many
firms, it is a wonder that much valuable
information is being collected at all.
ideas generated (or collected from customers and
reported) by salespeople over the past five years?
The results paint a somewhat gloomy
picture—52.3 percent of managers surveyed
answered that the percentage of new product
ideas that came from customers and were
reported by salespeople accounted for 20
percent or less of the new product ideas
evaluated by their firm. Further, in terms of
the totality of new products launched by their
organization, 60.6 percent of respondents said
that customer ideas reported by salespeople
accounted for 20 percent or less of the new
products launched by their organization.
More alarming is the fact that in over one
quarter (27.3 percent) of the responding KAM
organizations, the sales force has been
responsible for five percent or less of the ideas
leading to new product launches.
Tangible Outputs Associated with KAM Salespeople
Efforts
While the results presented in the previous
section strongly suggest the need for
improvement on the part of KAM
organizations in effectively utilizing their
salespeople into the early stages of the NPD
process, skeptics will point to the fact that the
above results only measure inputs to the
process. And, as astute managers know, it is
the outputs that truly should be evaluated. To
address this argument, sales managers were
asked two final questions. The first was:
Managerial Implications
The results of the current study highlight
several areas where improvements could be
made as it relates to effective utilization of the
sales force as a source of customer
information in the early stages of the NPD
process. Many sales manager comments
revolved around the fact that the challenge to
support NPD initiatives gets overshadowed by
the pressure to grow short-term market share
and revenues. The traditional thinking (these
Approximately what percent of new product ideas
(those that have been formally evaluated by your
organization) have come from salespeople over the past
five years?
The second was:
Approximately what percent of the new products
launched by your organization have come as a result of
Table 6
Tangible outputs associated with salespeople efforts the last five years
(n=66)
Percentage
Information category
a. New product/service ideas generated
from salespeople
b. New product/services launched
from salespeople ideas
Northern Illinois University
0-5%
6-10%
11-20%
21-50%
>50%
N/A
20.0 20.0
12.3
(lower percentage = 52.3%)
18.5
23.1
6.1
19.7
28.8
12.1
(lower percentage = 60.6%)
10.6
21.2
7.6
Academic Article
managers report) has been that involvement in
NPD activities distracts salespeople from their
primary functions. Further, the results of the
present study confirm what previous
conceptual and empirical research found—
while salespeople are able to collect and report
back customer information, to count on them
as a reliable source of such information may
be a mistake.
It is not enough to just give salespeople the
responsibility to collect relevant information;
they also need to be trained. What is
surprising is that a large amount of KAM
organizations provide their salespeople with
little or no formal training or even
rudimentary training on how to collect the
information. A large percentage of the sales
managers surveyed recommended the
establishment of formalized training programs
to educate their salespeople on the following
issues:
•
The structure of the organization’s NPD
process
•
Means by which customer information
can be communicated via CRM systems
•
The importance of gathering customer
information during the initial stages of the
NPD process
•
Effective communication techniques:
initiating productive conversations with
customers, asking the right questions, and
actively listening to customers.
In essence, it appears that companies often
give salespeople responsibility without the
support. If companies want salespeople to
provide valuable information in the NPD
process (and they clearly do) then they need to
provide training to help them perform more
efficiently and effectively in their positions.
This study seeks to address another critical
issue: with whom do salespeople
communicate new product information
Spring 2008
37
(see Table 4). Salespeople need to be
equipped with the proper tools to link their
information with a centralized product
development database. Whether to a CRM
system or other database, information needs
to be shared quickly across all functional areas.
KAM processes are likely to interact with
marketing but more emphasis needs to be
placed on interactions with R&D, engineering,
and operations staff. The authors are not
advocating that salespeople not communicate
customer information to the sales manager;
rather, the sales manager should be
communicated with in addition to the other
parties.
The role of incentives can also be an issue as
to why more salespeople do not actively
engage in the early stages of the NPD process.
Many managers spoke about the problems
they incur in motivating salespeople to take
time away from selling to undertake activities
that do not have an immediate financial
impact on them or the company. It is clear
that companies have tried to use intrinsic
factors (praise and feed back) more than
extrinsic issues (bonus, pay increase, profit
sharing, etc.) It would only make sense for
companies that know money motivates most
salespeople (to do things they normally would
prefer not to do) to implement some type of
financial incentives. The collection of
information on NPD is clearly one type of
activity that most salespeople would not do
voluntarily. Companies should look at the
impact that the lack of new products would
have on the company and decide whether it’s
cost effective to earmark some development
money for the sales organization (both in the
form of incentives as well as training).
Given that training and NPD processes are in
place, KAM organizations are able to focus on
customer input and while collecting and
disseminating this input on new product
development. Then the other two critical tasks
of market analysis and stable definition of the
Vol. 8, No. 2
38
Journal of Selling & Major Account Management
product would be accomplished by others
involved in NPD. A simple frequency of new
product ideas and the source could be tracked
via the CRM system and each KAM would be
provided monetary incentive (amount
determined by management) for each new
idea. Then as the idea moves through the
NPD process and passes critical decisions, the
KAM would receive additional (residual)
money for each stage passed successfully.
Thus in this way the KAM receives more
compensation for an idea that makes it to
commercialization than one that just made it
to the market analysis stage. Thus, both input
(quantity of new product ideas captured and
communicated)
and
output
(quality-commercialized new products) are
rewarded.
Conclusions, Limitations, and Directions
for Future Research
Results of this study, one of the first in this
area, indicate that KAM organizations are, in
some cases, providing valuable input into the
early stages of the NPD process. The fact
that KAM salespeople are more engrained in
customer organizations means they have more
relationships and more access to key
information about new product needs. A
majority of the surveyed organizations
eported that field salespeople collected and
reported back varied forms of information
requisite to NPD success. This is consistent
with previous research that stresses the
importance of NPD in corporate survival.
If companies are serious about the NPD
process, they need to do several things to
ensure positive results. First, they need to
provide training and support for salespeople
to collect and disseminate the information to
the appropriate people within the
organization. Second, companies need to use
their resources more efficiently.
More
specifically, KAM salespeople should be more
responsible for involvement in the early stages
of the NPD process because they are more
Northern Illinois University
likely to have well developed relationships
with existing customers. Third, companies
need to develop monetary incentives for
salespeople if they ever hope to get their buy
in. It is clear that praise and recognition are
not sufficient enough incentives and that
some of the resources invested in NPD
should be shared with the sales force.
There are several limitations associated with
the current study. First, the study is
exploratory and encompasses a small sample
size which could serve as a warning of
non-response bias. While the results appear
consistent with prior research on the use of
salespeople as information gatherers (Judson,
Schoenbachler, Gordon, Ridnour, and
Weilbaker 2006), a replication of the study
with a larger sample would help confirm
results. Second, the sample includes only
firms based in the United States. Third, sales
managers of KAM organizations served as
providers of the information driving the
current research. These individuals could tend
to be positively biased in their views of the
magnitude of efforts undertaken and success
associated with salespeople in collecting and
disseminating customer information in the
early stages of the NPD process.
Along with the above, future research could
also focus on customers’ or other internal
entities’ (such as marketing, R&D,
engineering, or operations) perceptions of the
issues covered in the current study versus
those of sales managers. Comparative studies
evaluating the success of organizations
utilizing KAM systems against those who
could also be undertaken.
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Geoffrey L. Gordon, Ph.D.
OTA/Off the Record Research Professor of
Investment Research ggordon@niu.edu
Dan C. Weilbaker, Ph.D.
McKesson Pharmaceutical Group Professor of
Sales dweilbak@niu.edu
Rick E. Ridnour, Ph.D.
Enterprise Rent-a-Car Professor of Sales
ridnour@niu.edu
Kimberly Judson, Ph.D. Associate Professor
kjudson@niu.edu
All of Northern Illinois University
DeKalb, IL 60115
Application Article
Spring 2008
43
Set goals to accomplish the extraordinary
By Jerry Acuff
Few people have clearly defined and articulate
goals, exact statements of desired end results.
Most have never said, “I will achieve this,”
whether “this” is a personal or a business
result. Most have never thought through what
they truly want to achieve, nor do they realize
what they could realize if they were to have
clear, written goals, which are not simply “To
Do”
items
but
are
significant
accomplishments.
A 1952 survey of graduating Yale seniors
found only 4 percent had clearly-defined,
written goals. Twenty years later, a survey of
the same group found that the 4 percent with
goals had a greater net worth than the other
96 percent combined. To learn if this were a
fluke, a duplicate study was conducted in 1971
of Harvard graduating seniors. Again, 4
percent had goals, 96 percent didn’t. Ten
years later, the 4 percent who had goals were
on average earning ten times more a year than
the 96 percent who did not have goals. While
money is not the only (or best) test of
accomplishment, it is relatively easy to
measure. But whatever your measure, you
can’t hit a target you don’t have; you can’t
reach a goal you haven’t set.
I, and the people I’ve counseled, have found
that you can achieve dramatically more in life
with goals than without. Goals provide focus
and direction to your life so that, rather than
drifting rudderless through the days, you are
steering deliberately toward the future you
want.
It’s important not only to set goals, but to
understand what you must do to achieve
them. Anybody can set goals, but if you don’t
have some guidelines to reach them you’re not
likely to achieve them. Ron Willingham, in his
excellent book When Good Isn’t Good writes:
“In the late 1920s after years of practical
research with the most successful people in
our country, Napoleon Hill produced his first
great work, The Law of Success. In it he wrote
this about the power of goal setting: ‘Any
definite chief aim that is deliberately fixed in
the mind and held there with determination to
realize it finally saturates the entire
subconscious mind until it automatically
influences the body toward the attainment of
that purpose.’” So goal-setting – having a
chief aim and fixing in our minds- is an
important part of being successful.
I believe that each of us has a built-in
goal-seeking mechanism. Dr. Maxwell Maltz
in his book Psycho-Cybernetics points out that
every creature on the planet has a goal-seeking
mechanism.
In plants and animals, the
mechanism focuses on two things only:
survival and procreation. But in humans it’s
focused on more: How do we achieve those
things that within our limits and capabilities?
How do we achieve those things are within
our gifts and talents?
This goal-seeking mechanism, says Maltz, is
like a heat-seeking missile. But it has to be
activated. If we know how to worry, we know
how to activate the goal – seeking mechanism.
Worry is the goal-seeking mechanism. Worry
is the goal-seeking mechanism gone bad.
Worry is the visualization or thought of
something negative. The positive goal-seeking
mechanism visualizes something constructive
happening. I believe that we all do have this
goal-seeking mechanism, and if we do two
things – (1) learn that we have it and activate it
Vol. 8, No. 2
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Journal of Selling & Major Account Management
and (2) develop a process to reach goals-there
are virtually no limits to what we can achieve.
To achieve your goals, I’ve identified five
rules:
Goals should be SMART – Specific,
Measurable, Achievable, Realistic, and
Time-sensitive.
1. Have goals and be clear about what you
truly want and believe what you can
achieve.
Specific means your goal is not something
like “I want to earn more” or “I want a better
job.” These are too vague, too nebulous. How
much more? Better in what way? A specific
goal is something like, “I want to earn $75,000
this year,” “I want to be a branch manager in
two years,” or “I want to live in a
three-bedroom house in the mid-South, no
more than 30 minutes from the ocean within
five years.”
2. Write down your goals.
Rule 1: Be absolutely clear about what you truly want
to achieve.
Measurable means you can tell when you are
making progress. You can look at your
cumulative pay stubs to see how you’re doing
toward an earnings goal. If you get promoted
to assistant branch manager, you’re on your
way to branch manager.
Remember a goal is a statement of a desired
end result. To have clarity we need to believe
that our goals are attainable. Napoleon Hill
wrote, “Anything the mind of man can
conceive and believe it can achieve.” Ron
Willingham writes, “What you believe you
should have and can have is what you will have.”
Achievable means the goals are challenging
but attainable. Reaching the goal may take
many preliminary steps, but you are able to
take them.
Don’t set too many goals. Focus on the three
or four things you feel compelled to
accomplish and develop a plan to start moving
you in their direction…and do it today!
Again, make your goals specific and have
target dates. Doing so, you will know exactly
what to visualize to achieve the goals as a part
of your goal-seeking mechanism.
Realistic means you can reach the goal within
the time frame you decide and with the skills
and resources you have or can obtain. True,
many goals require hope to override
skepticism.
By their nature, goals are
subjective. Nevertheless, too many people
settle for much less than what they are capable
of accomplishing.
Time-sensitive means there’s an end point –
$75,000 this year…branch manager in two
years…new house in four years. One might
argue there are no unrealistic goals, only
unrealistic time frames. If you are 44, have no
savings, retiring at age 45 is unrealistic, retiring
at age 50 may be a stretch, and retiring
comfortably at age 55 be realistic.
Northern Illinois University
3. Set goals in line with your gifts and talents.
4. Don’t let others talk you out of your goals.
5. Let your goal-seeking mechanism do the
work and take the pressure off yourself.
Let me talk about each of these five in detail.
Rule 2: Write them down.
The experts say you increase the likelihood
you will achieve your goals by 90 percent if
you will simply write them down. Putting
them on paper gives them a reality, a solidity;
they become more than nebulous hopes. Put
the paper in your pocket, your purse, or your
day planner, but write down your goals and
look at them at least once a week. Mine are in
my pocket at all times. I write them once a
month. I read them once a week. And when
I write them, I will sometimes change them
because circumstances change.
Application Article
Rule 3: Ensure your goals are in line with your gifts
and talents.
In truth, your ability to achieve expands by
setting goals beyond your current level of
achievement. But we need to be aware of just
what we can accomplish realistically. For
example, if you’re in sales, your goals should
be bigger than your forecast. Forecasts are for
the average person and I don’t know anybody
who wants to do great things who is average.
Surround yourself with people who bring out
your best and who help you stay in touch with
your capabilities.
A personal story: A boss name Don Cutcliff
changed my life. Don and I had been
colleagues for a long time, had been successful
in sales, and then Don was promoted to
become my boss – when I thought I would be
the one promoted. The night that he sat
down to talk to me as my boss when I
thought I would be his, he said, “Jerry, this
job of regional manager isn’t big enough for
you. You need to be running this company.”
At the age of 39, I’d never thought of running
the company. My whole focus was on being
regional manager. But at that moment Don
Cutcliff helped me see that my capabilities, my
gifts and talents were greater than I’d thought.
Because I had such faith in Don, it was easy
for me to see that might be right. But the
point is that your gifts and talents may not be
as obvious to you as they are to others, so
surround yourself with people who can help
you understand what you have to offer.
One of the ways to expand your gifts and
talents is to read books like Psycho-Cybernetics
(Pocket Books, 1989) by Dr. Maxwell Maltz,
Think and Grow Rich (Aventine Press, 2004) by
Napoloen Hill, and When Good Isn’t Good
Enough (Doubleday, 1988) by Ron Willingham.
These will feed your mind and help you begin
to understand just what greatness is in you –
and never forget that greatness is in you.
Spring 2008
45
At the same time, of course, you have to be
realistic. I might set a goal of becoming Pope,
a rock star, or an Olympic skier but given my
religion, musical ability, and physical
condition, none of these are realistic. Still,
most of us can accomplish far more than we
might believe possible.
Rule 4: Don’t let other talk you out of your goals
The first person you have to worry about is
yourself. You will think about things you
would like to accomplish, and then you’ll start
asking yourself, “Can I really do that?” if you
can’t convince yourself you can do something,
it’s not going to happen. Don’t let yourself
talk yourself out of attempting things that are
within your capabilities.
The next hurdle is that when you begin to talk
about significant things you want to
accomplish, that stretch you, you’ll start
playing mental tapes of what other people
will/may say. You may not talk yourself out of
it, but you’ll allow your thoughts of other’s
reactions talk you out of it: “My mother will
think that’s crazy.” “My father would think
that’s stupid.” These imaginary conversations
can stop you.
Finally, there will be the actual nay-sayers, the
people you share ideas and your goals with
who tell you that you can’t succeed. They will
tell you these are beyond your capabilities.
They do that not because they don’t believe in
you but because in many cases they don’t
believe in themselves. In some way, any
success you enjoy makes them look bad
because they are not willing to extend the
same effort.
Rule 5: Once you get incredible clarity about what you
want to achieve, let your goal-seeking mechanism take
over.
It will help achieve your goals. The pressure
to deliberately achieve generates negative
energy when goal-seeking; the trick is to relax
and be open to opportunities. The universe
Vol. 8, No. 2
46
Journal of Selling & Major Account Management
will bring your goal to you if you have
incredible clarity about what you want. This
may seem mysterious, but may be that,
because you have written your goals, you are
now attuned to possibilities you would have
ignored or dismissed earlier. It is a little like
deciding to buy, say, a flat-screen TV.
Suddenly you are aware of ads and
information about flat-screen TV; they were
always there but you ignored them.
You can accomplish much more in your
life if you have goals and if you develop the
habits, the skills, the specialized knowledge,
and attitude that you need to achieve them. If
you do develop the habits, skills, knowledge,
and the attitude that you can achieve
incredible things, there’s almost no limit to
what you can accomplish. Indeed, I can
virtually guarantee that if you set your goals
and follow the five rules, you will accomplish
the extraordinary.
Jerry Acuff is a principal and founder of Delta
Point in Scottsdale, Arizona.
Prior to founding Delta Point Jerry founded
JBI Associates, a healthcare consulting firm in
Morristown, New Jersey. Jerry was also Vice
President and General Manager of
Hoechst-Roussel Pharmaceuticals prior to its
merger with Marion Merrell Dow. In his
twenty-year career at Hoechst, Jerry was
Salesman of the Year twice and District
Manager of the Year five times.
Jerry has been featured in Sales and Marketing
Management Magazine, Investors Business
Daily, Managed Care Pharmacy Practice and
Hospital Pharmacist Report. He has been an
Executive in Residence at Northern Illinois
University and The Amos Tuck School of
Business at Dartmouth College. He is a
graduate of The Virginia Military Institute.
Northern Illinois University
For over 15 years, he has spoken and
consulted extensively on the issues of sales
excellence, change leadership, and building
customer-focused organizations. Jerry is the
author of The Relationship Edge In Business,
a book that focuses on leveraging
interpersonal skills to build meaningful
customer relationships.
Application Article
Spring 2008
47
What is the difference between selling in a robust economy and selling in a failing economy?
By Sharon Drew Morgan
What is the difference between selling in a
robust economy and selling in a failing
economy? A lot but it’s not what you think.
*
Your product is the same
*
Your pitch/presentation is the same
*
The buyer's need is the same
What's different is the decision making
process the buyers needs to go through. Do
they have a problem that needs to be resolved
now, and the economy has mitigated the types
of solutions they seek? Do they have a
problem that can be fixed with a partial,
cheaper
solution, or with internal resources
that can be modified to create a solution? Do
they wait until…..until they have some belief
that their business won't be at risk?
NEW BUYING CRITERIA
Your wonderful product data or needs analysis are moot here: they need you, they need
your product, and they need a solution. But
they now need additional levels of buy-in
before they can spend money: it's no longer
'who' or 'what' or 'how much', it's 'when' or
'if'. 'Solution' is not their criteria, 'Preserving
Assets' is.
There is a way you can help buyers decide to
choose you now. But it will mean a shift in
focus - from the problem solving/solution
providing outcome that you are currently
familiar with, to a decision-support focus that
will enable a possible purchasing decision:
1. Until your buyer figures out what
immediate needs must be addresses - whatever
that means to them - they will take no action.
In other words, getting their 'needs met' might
include resolving the problem with a creative
or temporary solution rather than a product
purchase.
If you can help buyers actually figure out their
immediate needs (i.e. staffing might be a
priority, or outsourcing, or finding an alternate
route to a problem resolution), and the
appropriate choices using the criteria they
must work from- separate from focusing on a
product sale or the criteria you would prefer
they work from - you will be in line as the first
vendor they will connect with once they
decide to purchase a product.
2. Until the buyer's entire decision team
agrees to take action, no action will be taken.
That means that your regular contact - who
may have been the driver in the decision to
purchase your product - now has a larger
buying decision team: any decisions now must
include corporate economic factors: the risk is
too high for anyone to make decisions
without agreement from the team.
If you help your buyer bring together their
entire decision team so they can reach
agreement - even if their ultimate solution
cannot be to purchase your product at this
time - there is a greater likelihood of a quick
decision to act, although the action might not
be the one you would prefer. But it puts you
in high regard with the buying decision team.
3. Until the entire decision team recognizes
that it would make economic sense to resolve
the problem using an external solution such
as your product, no action will be taken. After
all, they have been resolving the problem in a
Vol. 8, No. 2
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Journal of Selling & Major Account Management
less effective way in their current daily
activities, and there is a case to be made for
continuing the status quo until the economy
gets stable.
If you help the decision team evaluate the
difference between the cost and results of
continuing doing what they are doing vs. the
COST (human, time, political, organizational)
of reorganizing around a new solution that
ensures the people involved with the status
quo are stable, you will become part of the
buyer's decision team. And, if the client sees
that all COSTS can be mitigated, or seen in a
way that overrides their economic concerns
and leaves them better off, they will be able to
choose to make a
purchase now. But it
would be vital for them to understand the full
picture of 'givens' and include the human
systems as well as the financial ones.
A NEW APPROACH
If you can augment your job to include being
a decision consultant, you can make good use
of this time of economic uncertainty.
Buying FacilitationR is a model that works
with the buyer's buying decisions and is a
perfect add-on to the sales process at this
time. In a world where buyers are inundated
by choices, Buying FacilitationR gives the
seller a new set of tools - different from selling
methods - that provide a decision support
capability for buyers to help them understand,
manage, and regulate their new economic
environment.
Use this time to differentiate yourself as a true
consultant. You'll not only get more business
(and faster as you help prospects shorten their
decision/sales cycle) than you otherwise
would in a gloomy economy, but you'll also
gain access to the buying decision team, line
up future business that will close once the
economy turns around, and be seen as an
important company resource.
Northern Illinois University
Sharon Drew Morgan is the author of New
York Times Bestseller Selling with Integrity,
Sales on the Line, and Buying Facilitation: the
new way to sell as well as over 800 articles.
She has been a million-dollar producer and
has 30 years of experience in sales. Sharon
Drew is also the founder of Morgan
Facilitations, Inc. She can be reached at:
service@newsalesparadigm.com
Application Article
Spring 2008
49
Are You Ready for a sales makeover?
Managing the shift from product seller
to problem solver
By Walt Zeglinski
One of the questions I am most frequently
asked is – how do we get our sales people to sell
solutions. When I respond by asking them to
describe what they mean by “selling
solutions”, I am always surprised at how often
they find it difficult to answer. Before making
the shift to selling solutions, it’s important
that organizations develop a common
understanding of what they really mean.
Based on their markets, products, personnel
and sales process, they must clarify their
expectations. It may take too long or not be
acceptable to customers and prospects that
have become accustomed to a product-based
approach. As a result, some organizations may
decide that the transition is too difficult, too
expensive or both. It may not be in their best
interest.
Webster defines a solution as a method of
successfully dealing with a problem. For a sales
organization to succeed in selling solutions,
they must begin by positioning themselves as
problem-solvers. If an organization’s website
and promotional materials identifies them in
terms of their products, it’s likely that their
sales people will see their role as persuading
prospects to buy something.
However, an organization that identifies its
value in terms of the business problems they
solve will encourage sales people to sell
solutions to their customers.
This is not to say that one approach is
necessarily better than the other. It depends
most on three key variables – the value
expectation of their customers, the industry
expertise of a sales staff, and the potential for
their products or services to create a business
impact. The Value Segmentation Model below
illustrates how these key factors might
influence a sales organization’s decision to
migrate to a solution selling model. If their
products or services are not sufficiently
differentiated as compared to competitors,
they will almost certainly get commoditized by
their clients and prospects, making it difficult
to position their value beyond “me-too”
offerings.
VALUE SEGMENTATION
Likewise, if their products or services have
little potential for business impact (i.e. they are
not being linked to business outcomes), they
will probably be handled as a transaction and
not be considered as business solutions.
There are obviously many iterations of this
positioning that might be explored, however,
unless a sales professional can elevate his
status to that of a problem solver, he is
unlikely to be perceived as a value-added
resource, trusted advisor, or partner.
Vol. 8, No. 2
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Journal of Selling & Major Account Management
Solving “BIG” Problems
If a salesperson solves a small problem for a
customer, is it fair to assume she/he might
still have the ability to sell solutions?
Depending on the value proposition of the
company they represent, any sales person
might have the potential for solution selling.
They might have distinguished themselves as
providing added value within an otherwise
transactional situation, and demonstrated,
through their actions, the uniqueness of their
product or service as compared to their
competitor’s offerings. With this in mind, I’d
like to suggest a broader context for
understanding solution selling.
Let’s assume the main goals of making the
shift from products to solutions are to grow
revenue and improve profit margins. If a sales
person focuses on selling solutions that are
more comprehensive and more differentiated
– solutions that solve business problems –
they are more likely to have a significant
impact on sales and profits. Of course, every
business has its own notion of what
constitutes a big problem. But it is fair to say
any problem that is causing a key operational
challenge or directly undermines the
achievement of a business outcome is a big
problem.
In order for an organization to develop a
solution selling capability, it must examine its
willingness to address key four factors:
•
Solution Positioning
•
Marketing Support
•
Organizational Alignment
•
Customer Needs-Focused Sales Process
Solution Positioning
If an organization’s messaging to the market is
dominated by language that focuses on their
product or service, they will not be perceived
as selling solutions. As previously described,
Northern Illinois University
companies that are successful at selling
solutions define their value in terms of the
problems they solve, not the products they sell.
Solution positioning for an office products
organization requires that they avoid focusing
on the “bells and whistles” of the newest
model, but rather position how the model can
be a solution for improving the consistency
and quality of information that will help their
organization make faster and better
management decisions.
Marketing Support
To ensure the success of an organization’s
solution positioning, they must cascade this
value proposition to their marketing efforts.
Marketing collaterals, their website, events,
etc., should focus on specific business issues
with messaging that supports a problem
solving framework. Their emphasis should be
on the “extrinsic” value that exists beyond the
product or service’s features and functions. A
website design that can be navigated from a
customer’s industry perspective should
provide expertise and information that helps
customers focus on that industry’s problems.
Organizational Alignment
The entire organization – all functions/
departments that impact the customer directly
or indirectly including product development,
finance, operations, human resources, and
especially customer service – will need to
support the transition to selling solutions and
creating value.
Likewise, systems and
processes like compensation, performance
management, and CRM should enable the
transition or, at the very least, not become
barriers. The model below illustrates how an
organization can maximize customer value
and solution selling by focusing on alignment.
Unfortunately, many compensation and
performance management systems can
actually cause misalignment. These systems
will often reward behaviors that are in conflict
with a solution selling approach. For example,
Application Article
Spring 2008
Customer Needs-Focused Sales Process
VALUE
ALIGNMENT
The adoption of a customer needs-focused
sales process might be the most critical
component in a transformation from products
to solutions. For a sales professional to create
value, their sales process must effectively
mirror the buying process of their prospects
and customers. The ability to sell solutions can
be very difficult if their process is out of synch
with how buyers want to buy. One way to
ensure the transformation to solution selling is
to ensure that the key outcomes for each step
of a selling process mirrors a customer’s
buying process. The AIDinc® model below is
indicative of a sales process that accomplishes
this within its step-by-step process outcomes.
E
C
VI
R
SE
SA
LE
S
51
VALUE
LEADERSHIP
SYSTEMS
PROCESSES
FUNCTIONS
DEPARTMENTS
MISSION, VISION,
VALUES, GOALS &
STRATEGIES
they may undermine adherence to a rigorous
problem solving process, rewarding short
term payoffs over building long term,
mutually beneficial relationships.
Sales professionals that succeed in executing a
customer needs-focused sales process must be
able to uncover and articulate the operational
challenges and business payoffs of a customer;
establish the unique value in solving the
customer’s problems; overcome any explicit
or implied gaps in value; achieve consensus on
Finally, in order to sustain solution
positioning, an organization must build
alignment between their mission, vision,
values and goals and the attitudes, practices
and behaviors of its frontline sales and service
team and their leadership.
CUSTOMER
NEEDS-FOCUSED SELLING
Approach
Interview
Demonstrate
Val idate
A
I
D
I
ESTABLISH RAPPORT
PROVIDE SOLUTIONS
IDENTIFY NEEDS, WANTS
& VALUE EXPECTATIONS
DIFFERENTIATE VALUE
I
Negotiate Close
N
UNDERSTAND OTHER
CONCERNS
CLOSE VALUE GAPS
C
CONFIRM
VALUE FIT
Vol. 8, No. 2
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Journal of Selling & Major Account Management
a solution’s fit; and implement a solution that
meets or exceeds the customer’s expectations.
To accomplish this, a sales professional must
thoroughly understand the gap between the
prospect’s current and desired situation and be
able to communicate their company’s
expertise in solving similar problems,
including sharing some specific results.
Finally, an organization serious about shifting
to a solution selling should consider how it
might leverage these capabilities across all of
their channels to market.
PERFORMANCE DRIVERS
Making the Shift
There is good news and bad news in making
the shift to a solution selling organization. I’ll
share the bad news later. The good news is
that if an organization is committed to moving
from product-sellers to problem-solvers, they
can start today. However, there is an
interesting dynamic that must be considered.
Companies that have been successful realize
that organizations don’t really change – people change
– and changed people change organizations.
Therefore, the first action to be taken is to
assess the current situation. Before developing
a plan that is consistent with their resource
capabilities and executable within a reasonable
timeframe, there are four performance drivers
to consider. The Performance Driver Model
(below) is a developmental roadmap for
enabling a solution-selling sales organization.
It helps them to diagnose the degree of
change required in their people, processes,
leadership support and commitment. In order
to examine these four components in more
detail, let’s define what we mean by each.
The Right PEOPLE
An emphasis on expertise, independent
thinking, and a commitment to customers are
the keys. Everyone must know and practice a
problem-solving methodology and understand
their accountable for overcoming customer
problems with care, sincerity, and a “can do”
attitude. Typically these individuals possess
Northern Illinois University
some degree of the four traits of sales success
– goal clarity, achievement drive, emotional
intelligence, and social skills.
The Right PROCESS
The success of a sales organization to execute
on a customer needs-focused sales process is
largely a by-product of the attitudes, skills and
beliefs of their people and their capacity to
support it internally. Even if an organization
will commit its resources to a training and
development if must can align its functions
and processes to selling solutions. Otherwise,
the barriers they create can erode the potential
for a successful transition.
The Right SUPPORT
A solution selling organization must have a
leadership team that supports a flexible
go-to-market strategy that focuses on business
results. Remember, customers don’t need or
want an organizations products… they need
and want to achieve business results!
Top-down management support is probably
the most critical element to successfully
accomplish this shift. This is especially true
for frontline managers, the pivotal job for
results-producing change initiatives. They
must coach their people to ensure confidence,
competence and commitment.
Application Article
Spring 2008
53
The Right COMMITMENT
Establishing a solution-focus requires a
commitment to overcome the business
challenges that help their customers achieve
results. An organization must go beyond
product and services strategies and reach
inside each employee to build their attitudes
and beliefs. In order for a solution sales team
to succeed, they should recognize the
importance of problem-solving and
demonstrate a mindset that fosters creating
value for customers.
Obviously, it is possible to make the shift
from product-selling to problem-solving if an
organization is willing to take an unbiased
look in the mirror and has the discipline to
engage in a serious sales makeover.
Actually that’s the bad news. Although you
can make the shift, once you sign up for your
makeover it won’t always be pretty and there
is no turning back!
Walt Zeglinski is the CEO / President and Chief
Client Advocate for Integrity Solutions®, a 42
year old performance improvement company
that specializes in helping clients to create value
for their customers. Walt has also served as
President of Huthwaite Inc, a world-renowned
research, training and consulting organization,
best known as the creators of SPIN Selling. With
over 20 years of successful experience in the
corporate performance industry, Walt applies his
talent and expertise to successfully diagnose, plan
and implement practical solutions for complex
business challenges. You may contact Walt at:
602-253-5700
wzeglinski@IntegritySolutions.com
www.IntegritySolutions.com
Vol. 8, No. 2