CONTENTS
JSMAM VOLUME 8, WINTER 2008
From the Editor
7
by Dan C. Weilbaker, Ph.D.
ACADEMIC ARTICLES
The Effects of Communication Mode in Relationship Selling
8
By John D. Hansen and Robert J. Riggle
Customers’ Proneness to Relationship Selling and Universal Values
By Brent G. Goff, Charles R. Strain, and Lucille V. Pointer, Delia H. Rodriguez
24
APPLICATION ARTICLES
How to Handle Your Most Important Customers:
The St. Gallen KAM Concept
32
By Dirk Zupancic and Markus Mullner
Selling to Executives: How to Stop Losing and Keep Winning!
By Stephen J. Bistritz and Karen L. Jackson
A Case Study of Exceptional Achievement in Selling:
The Raymond D. Meyo Story
40
45
By Jon M. Hawes and Paulette Polley Edmunds
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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Winter 2008
Manuscripts
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. 1
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
Winter 2008
From the Editor
This is the first issue of our third year of publishing the Journal of Selling &
Major Account Management. Although we are a little behind in publishing
four issues a year, we continue to work to obtain quality academic articles
as well as articles from practitioners that are relevant and timely. Your
patience and understanding regarding filling the pipeline of articles is
appreciated. We still are in need of both academic contributions as well as
practitioner articles to fill the demand for four issues per year.
As a relatively new journal, we continue to work towards break-even with subscriptions
since we do not accept advertising. We can use your help in getting the word out about
the journal. Please consider passing along the subscription forms in the journal to your
friends or associates.
In this issue we provide two academic articles and three practitioner articles.
The first academic article deals with the impact of communications on relationship selling.
As we all know communications and relationships are pivotal issues for most salespeople
in the field.
The second academic article also deals with relationship selling but looks at it from the
customer’s perspective. Are certain customers more prone to relationship selling than
others? If so, how do they differ? By reading this article one can start to investigate how
to increase the likelihood of using relationship selling.
The first application article provides a look at how St. Gallen University in Switzerland
proposes that companies can handle their most important customers. This is another
article attempting to show how to manage key customers while trying to increase sales.
The second application article focuses on the top executives in customer company’s and
how best to sell to those key people. As we all know if we can better address key
executives in the selling process we are more likely to be successful.
Finally, the third application article is a case study profiling Raymond D. Mayo. This is
our first article profiling an individual and I hope it will not be our last. It is inspirational
and provides ideas for others to become successful.
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. 1
8
Journal of Selling & Major Account Management
THE EFFECTS OF COMMUNICATION MODE
IN RELATIONSHIP SELLING
By John D. Hansen and Robert J. Riggle
Despite the prominent role salesperson communication plays in relationship selling, our understanding of
the extent to which communication mode affects the relationship development process is limited. The
purpose of this study is to identify those communication modes most capable of positively influencing
desired outcomes in buyer-salesperson relationships. Study results, derived from a sample of purchasing
agents, highlight a discrepancy between those communication modes that are most effective in building
customer relationships and those that salespeople are most heavily relying upon. Managerial implications are
discussed and avenues for future research in the area are provided.
The last two decades have ushered in a new
era in selling - one in which the focus has
shifted from singular customer transactions to
enduring customer relationships. Relationship
selling, encompassing those activities directed
towards the establishment and maintenance of
profitable customer relationships (Johnston
and Marshall, 2008), has been adopted as the
strategy of choice in many organizations. As
spanners of the link between buying and
selling organizations, salespeople play a
prominent role in enacting this strategy as they
assume the responsibility of guiding customers
through the relationship development process
(Cannon and Perreault, 1999; Weitz and
Bradford, 1998). Their personal interactions
and ongoing efforts to build and maintain the
relationship largely determine the level of
value and satisfaction provided the customer
(Jap, 2001). We have therefore seen a
considerable amount of research dedicated to
identifying the means through which
salespeople can make these relationships more
effective and enduring (e.g., Beverland, 2001;
Marshall et al., 2003).
Research has highlighted the particularly
important role communication plays in these
Northern Illinois University
relationships (Campbell and Davis, 2006;
Sengupta et al., 2000; Williams et al., 1990).
Technology provides one vehicle through
which these communications can be enhanced
and the salesperson and customer brought
closer together (Bush et al., 2007; Weeks et al.,
2004). Technological advancements have
provided salespeople a vast array of tools
through which they can better communicate
with the customer (Widmier et al., 2002).
Although some have been slow to adopt these
technologies, the newest generation of
salespeople - the Millennials - are eagerly
embracing them. Millennials have been
weaned on the technologies others have been
introduced to only at some point in their lives
(Howe and Strauss, 2007). They rely heavily
upon voice communications, e-mail, text
messaging, internet faxing, web browsing, and
other wireless information services.
Forecasters predict approximately ten million
Millennials will join the American work force
over the next five years (Cunningham, 2007),
many of them in sales.
The convergence of these two related
phenomena - the vast array of advanced
communication technologies that are now
Academic Article
available and the tendency of the newest
generation of salespeople to rely heavily
upon them - suggest that a fundamental
shift is occurring with respect to the
means through which salespeople are
communicating with their customers. Is
this a good thing? Is there a point at
which salesperson reliance upon
technology becomes too great? Although
technology provides salespeople the
ability to communicate more frequently
with their customers, it at the same time
further inundates customers already
awash in a tidal wave of communications.
A study conducted in 1998 found the
typical manager receives 190 messages
per day, including 52 phone calls, 30 emails, 22 voice mails, 18 pieces of
interoffice correspondence, 18 letters,
and 15 faxes (Associated Press 1998).
Given the proliferation of e-mail in the
past decade, one would assume the
situation has only grown worse.
How can salespeople break through this
clutter? Which communication tools are
most effective in further advancing
customer relationships in this
environment? Unfortunately, we have
very few answers to these type questions,
as the choice and resulting impact of
communication mode in sales
relationships has received little attention
in previous research (Cano et al., 2005).
Accordingly, the purpose of this study is
to empirically examine the effects of
salesperson communication mode in
relationship selling. We employ an
exploratory research design in addressing
Winter 2008
9
three primary research questions from
the perspective of the customer:
RQ1:
Which communication modes are salespeople
most heavily utilizing?
RQ2:
Which communication modes do customers
most prefer?
RQ3:
To what extent does customer gender and age
moderate these preferences?
The remainder of the paper is organized as
follows. In the following section, we introduce
the specific variables of interest and discuss
the relevant literature. The research methods
employed and results attained are then
reviewed. We conclude by discussing the
implications for management and providing
directions for future research in the area.
STUDY BACKGROUND
Figure 1 visually depicts the relationships of
interest in the study. We examine the direct
effects of salesperson communication mode
on buyer trust in and commitment to the
salesperson, buyer perceptions of salesperson
communication quality, and buyer
communication quality. We additionally
examine the extent to which these
relationships are moderated by buyer gender
and age. Our choice of these moderating
variables is driven by research which has
noted their importance in determining
individual communication preferences (Barrett
and Davidson, 2006; Gudykunst, 1998;
Shakeshaft et al., 1991). The following
discussion highlights the specific
communication modes of interest while also
defining and briefly discussing the relationship
outcome variables analyzed.
Vol. 8, No. 1
10
Journal of Selling & Major Account Management
Communication Mode
Communication mode refers to the method
through which the salesperson transfers
information (Mohr and Nevin, 1990).
Although researchers have operationalized
communication mode in a number of
different ways (Stohl and Redding, 1987), we
utilize the most straightforward of these by
examining e-mail, telephone, face-to-face, fax,
written, and text messaging communications.
Previous research examining interpersonal
communications (e.g., Daft and Lengel, 1984)
suggest these communication modes can be
thought of as resting on a continuum, with
those offering a greater ability to convey the
richness of a message resting on one end of
the continuum (e.g., face-to-face
communications), and those providing a more
economical means through which the message
can be conveyed resting at the other end of
the continuum (e.g., e-mail). This
operationalization also provides a mix of more
traditional and more technological advanced
communication tools (e.g., written versus text
messages).
Outcome Variables
Trust and commitment play a critical in the
development of successful relationships. The
presence of both – not just one or the other –
distinguishes successful relationships from
those that merely endure (Morgan and Hunt,
1994). Customers who trust the salesperson
believe the salesperson to be reliable and of
high integrity (Jap, 2001; Moorman et al., 1993;
Morgan and Hunt, 1994; Swan and Nolan,
1985). Trust is developed through repeated
interactions in which the customer observes
Figure 1
Salesperson Communication Mode in Relationship Selling
Buyer Age
Buyer Gender
Buyer Trust in
Salesperson
Buyer Commitment
to Salesperson
Salesperson
Communication Mode
Salesperson
Communication Quality
Buyer
Communication Quality
Northern Illinois University
Academic Article
the salesperson to be dependable, reliable,
honest, and competent (Swan and Nolan,
1985). Through these interactions the
customer comes to believe that the
salesperson will not take unexpected actions
that may result in negative consequences for
the customer (Anderson and Narus, 1990).
Commitment is defined as “an exchange
partner believing that an ongoing relationship
with another is so important as to warrant
maximum efforts at maintaining it; that is, the
committed party believes the relationship is
worth working on to ensure that it endures
indefinitely” (Morgan and Hunt, 1994, p. 23).
Moorman, Zaltman, and Deshpandé (1992)
suggest that committed parties have an
enduring desire to maintain a valued
relationship while Anderson and Weitz (1992)
note that those committed to a relationship
are willing to make sacrifices to ensure this
happens. Commitment thus not only denotes
a desire to continue a relationship, but also a
pledge to work toward this continuance
(Wilson, 1995).
Salesperson and buyer communication quality
refers to the formal and informal sharing of
meaningful and timely information by both
parties (Anderson and Narus, 1990). The
importance of communication in relational
exchanges is supported by the fact that it has
been regularly included in relationship
marketing models (Dwyer et al., 1987; Morgan
and Hunt, 1994) and has been identified as a
key determinant of relationship success in
both industrial and consumer markets (e.g.,
Bendapudi and Berry, 1997; Doney and
Cannon, 1997). Increased levels of
communication facilitate the discovery of
Winter 2008
11
similarities between buyers and sellers
(Bennett, 1996), thereby encouraging feelings
of trust, special status, and closeness (Doney
and Cannon, 1997).
RESEARCH DESIGN
Data for the study were collected through a
web-based survey hosted by Vovici.com. A
contact list of individuals from the purchasing
community was first obtained from the
Institute for Supply Management (ISM) and
purged such that only those individuals with
the primary title “purchasing agent” were
included in the sample. Members of the sample
were sent an initial e-mail invitation which
briefly explained the nature of the study and
provided a link to the URL hosting the survey.
Once accessing the survey, respondents were
again briefly informed as to the nature of the
study and provided directions for completion.
Each respondent was asked to complete the
survey in reference to a salesperson he or she
interacts with on a regular basis.
An initial e-mail was sent to 1,500 sample
members. From this, 153 usable responses
were received for a response rate of 10.2
percent. A second e-mail was sent two weeks
later to those who had not yet participated. An
additional 53 responses were received from
this for a response rate of 3.9 percent. Thus,
in total, 206 usable responses were received
for an overall response rate of 13.7 percent.
Individual and company sample characteristics
are provided in Table 1.
We assessed the likelihood of non-response
bias by comparing the responses of early and
late respondents (Armstrong and Overton
1977). Mean differences between the first and
last ten percent of respondents were tested for
Vol. 8, No. 1
12
Journal of Selling & Major Account Management
Table 1
Gender
Female
Male
Age
26-35
36-45
46-55
56+
Tenure
Less than 1 year
1-3 years
4-6 years
7-9 years
10-12 years
13-15 years
15+ years
2006 Revenues
Less than $5 million
$5 - $49.9 million
$50 - $249.9 million
$250 - $499.9 million
$500 - $999.9 million
$1.0 - $9.9 billion
$10 - $49.9 billion
$50 billion+
Employees
Less than 100
100-999
1,000-4,999
5,000-9,999
10,000-49,999
49,999-100,000
100,000+
Scope
Domestic Only
Domestic/International
International Only
Northern Illinois University
Sample Characteristics
Count
Percentage
47
143
24.74
75.26
15
45
89
46
7.69
23.08
45.64
23.59
4
31
2.04
15.82
41
22
16
8
74
20.92
11.22
8.16
4.08
37.76
8
24
29
20
12
50
21
14
4.49
13.48
16.29
11.24
6.74
28.09
11.80
7.87
17
49
35
16
47
18
13
8.72
25.13
17.95
8.21
24.10
9.23
6.67
104
52.79
90
3
45.69
1.52
Academic Article
Winter 2008
13
Table 1
Continued
Count
Industry
Manufacturing
Services
Government/Public Sector
Petroleum/Petrochemicals
Food and Beverage
Transportation
Information Technology
Education
Metal Products
Construction
Other
Utilities
Retail
Distribution
all constructs. Based on the lack of statistical
significance for any variable (p < 0.05), nonresponse bias was not considered a serious
concern.
Measurement Model
All measures employed in the study were
drawn from previous research and adapted for
use in this context. Per Mohr, Fisher, and
Nevin (1996), communication mode frequency
was assessed by asking respondents to indicate
how frequently the salesperson communicates
via each of the modes of interest over a typical
four-week period (1 = Very Infrequently, 7 =
Very Frequently). Salesperson and buyer
communication quality were assessed via two
sets of four-item measures adapted from
Anderson, Lodish, and Weitz (1987). The
measures for buyer trust in and commitment
to the salesperson were adapted from the
work of Morgan and Hunt (1994).
28
25
23
19
14
14
13
11
11
10
10
9
6
3
Percentage
14.29
12.76
11.73
9.69
7.14
7.14
6.63
5.61
5.61
5.10
5.10
4.59
3.06
1.53
The reliability and validity of all multi-item
measures was assessed through confirmatory
factor analysis. The results of this analysis are
presented in Table 2. Model results indicated
an acceptable level of fit between the final
measurement model and data: χ2(94) = 215.93,
NNFI = 0.99, CFI = 0 .99, IFI = 0.99,
RMSEA = 0.080 (CI90%, 0.066 to 0.094) and
SRMR = 0.046. All item loadings were
statistically significant (p < 0.01), indicating
convergent validity. Reliability was assessed
for each construct by computing composite
reliability and average variance extracted
(Steenkamp and van Trijp, 1991). For a
construct to possess good reliability,
composite reliability should be greater than
0.60 and the average variance extracted should
exceed 0.50 (Bagozzi and Yi, 1988). All
measures met or exceeded these standards.
Discriminant validity was assessed by
examining whether the average variance
extracted by each underlying construct was
greater than the highest shared variance with
Vol. 8, No. 1
Journal of Selling & Major Account Management
14
Construct and Scale Items
Buyer Trust in Salesperson (Given my experience)
Table 2
0.92
0.90
0.90
0.94
0.95
Standardized
Loadings
Measurement Model Results
…the salesperson is very honest and truthful.
…the salesperson has high integrity.
…the salesperson can be trusted completely.
…the salesperson can be trusted at all times.
…the salesperson can be counted on to do what is right.
0.92
0.89
Buyer Commitment to Salesperson (My relationship with the salesperson)
…is one that I am very committed to.
…is very important to me.
0.90
0.86
The salesperson keeps me informed of new company developments.
0.92
0.82
0.91
…is of high significance to me.
…is one that I really care about.
…is worth my effort to maintain.
The salesperson communicates with me frequently.*
The quality of communication from the salesperson is consistently high.
0.78
0.86
0.88
0.95
Composite
Reliability
0.97
0.85
0.91
0.96
Coefficient
Alpha
0.97
0.68
0.71
0.80
Average
Variance
Extracted
0.85
Northern Illinois University
Salesperson Communication Quality
The salesperson constantly updates me with regard to new services.
0.72
0.84
0.90
Buyer Communication Quality
I keep the salesperson informed of new developments within our firm.
I communicate with the salesperson frequently.
The quality of my communications with the salesperson is consistently high.*
I feel it is important I communicate with the salesperson on a regular basis.
Notes: All items measured 1 = Strongly Disagree - 7 = Strongly Agree, * Items deleted during
measurement purification process
Academic Article
Winter 2008
15
Table 3
Communication Mode Descriptive Information
Mean
SD
F-ratio
p-value
E-mail
Telephone
4.80
4.36
1.99
1.92
6.29
0.01
Face-to-Face
3.10
1.83
48.48
0.00
Fax
2.07
1.67
30.87
0.00
Written
1.45
1.02
22.22
0.00
Text
1.37
1.05
0.45
0.50
Communication
Mode
Note:
F-ratio statistic and p-value presented relative to preceding class (e.g., text versus written)
all other latent constructs (Fornell and Larcker
1981). In all cases, this standard was also met
or exceeded.
were in turn utilized significantly more often
than were face-to-face communications (M =
3.10, F(1, 405) = 48.48, p = 0.00).
STUDY RESULTS
In response to our second research question
the direct effects associated with these three
communication modes were assessed through
a series of linear regressions in SPSS 15.0.
Composite indicators were calculated for each
of the multi-item constructs and utilized in the
regressions. Results from the analyses are
presented in Table 4. The table contains
R-squared values for each regression as well as
the standardized path estimates and
corresponding t- and p-values for each
predictor variable.
In addressing our first research question we
examined the descriptive statistics associated
with each communication mode to gain a
better understanding of which are being most
often utilized by salespeople. The mean scores
for each communication mode are presented
in Table 3 (1 = Very Infrequently, 7 = Very
Frequently). As noted in the table, e-mail was
the most heavily utilized communication tool,
followed by phone, face-to-face, fax, written,
and text communications. Given the low
mean scores associated with fax, written, and
text communications, the decision was made
to focus only on the effects of e-mail, phone,
and face-to-face communications in the
remaining analyses. A series of F-tests
subsequently revealed that e-mail
communications (M = 4.80) were utilized
significantly more often than were phone
communications (M = 4.36, F(1, 406) = 6.29,
p = 0.01), and that phone communications
The various communication modes explained
approximately 39 percent of the variance in
buyer communication, 35 percent of the
variance in salesperson communication, 24
percent of the variance in commitment to the
salesperson, and 20 percent of the variance in
trust in the salesperson. Each regression
produced a similar pattern of results. Phone
and face-to-face communications were
Vol. 8, No. 1
16
Journal of Selling & Major Account Management
Table 4
Multiple Regression Results
Trust in Salesperson
E-mail
Telephone
Face-to-Face
Commitment to Salesperson
E-mail
Telephone
Face-to-Face
Salesperson Communication Quality
E-mail
Telephone
Face-to-Face
Buyer Communication Quality
E-mail
Telephone
Face-to-Face
Note:
R2
0.20
β
t-value
p-value
0.13
0.25
0.17
1.56
2.92
2.40
0.12
0.00
0.02
0.13
0.31
0.14
1.69
3.78
2.08
0.09
0.00
0.04
0.12
0.34
0.26
1.62
4.44
4.10
0.11
0.00
0.00
0.16
0.39
0.20
2.30
5.30
3.25
0.02
0.00
0.00
0.24
0.35
0.39
Standardized path estimates provided
significantly and positively related to each of
the outcome variables, while e-mail
communication was only significantly related
to buyer communication (β = 0.16, t-value =
2.30, p = 0.02). Phone communication, the
strongest predictor of each outcome variable,
was most influential in driving buyer
communication (β = 0.39, t-value = 5.30,
p = 0.00), and least influential in driving trust
in the salesperson (β = 0.25, t-value = 2.92, p
= 0.00).
Conversely, face-to-face
communication was most influential in driving
perceptions of salesperson communication (β
= 0.26, t-value = 4.10, p = 0.00), and least
influential in driving commitment to the
salesperson (β = 0.14, t-value = 2.08, p =
0.04).
Northern Illinois University
We addressed our third research question by
examining the moderating effects associated
with buyer gender (1 = Female, 2 = Male) and
age (1 = ≤ 45, 2 = > 45). To conduct this
analysis, we first performed a series of linear
regressions in SPSS utilizing both gender and
age as selector variables. We then compared
the unstandardized regression coefficients
from these analyses to assess the level of
difference between them, which was captured
through the z- and corresponding p-values (cf.
Brame et al., 1998; Clogg et al., 1995).
Results from these analyses are provided in
Table 5. Though the main effects associated
with phone, face-to-face, and e-mail
communications are quite robust across the
two moderating variables, there are some
Academic Article
Winter 2008
17
Table 5
Tests for Moderation: Buyer Gender and Age
Buyer Gender
Trust in Salesperson
E-mail
Telephone
Face-to-Face
Commitment to Salesperson
E-mail
Telephone
Face-to-Face
Salesperson Communication Quality
E-mail
Telephone
Face-to-Face
Buyer Communication Quality
E-mail
Telephone
Face-to-Face
Overall β
Female β
Male β
z-value
p-value
0.13
0.25
0.17
0.01
0.16
0.47
0.17
0.31
0.02
0.70
0.61
3.00
0.48
0.54
0.00
0.13
0.31
0.14
0.05
0.34
0.29
0.15
0.33
0.05
0.43
0.08
1.40
0.67
0.94
0.16
0.12
0.34
0.26
0.17
0.26
0.39
0.10
0.36
0.22
0.48
0.61
1.02
0.63
0.54
0.31
0.16
0.39
0.20
0.21
0.28
0.38
0.15
0.45
0.11
0.54
1.03
1.91
0.59
0.30
0.06
Buyer Age
Trust in Salesperson
E-mail
Telephone
Face-to-Face
Commitment to Salesperson
E-mail
Telephone
Face-to-Face
Salesperson Communication Quality
E-mail
Telephone
Face-to-Face
Buyer Communication Quality
E-mail
Telephone
Face-to-Face
Overall β
Young β
Old β
z-value
p-value
0.13
0.25
0.17
0.28
0.09
0.09
0.05
0.32
0.20
1.38
1.31
0.74
0.17
0.19
0.46
0.13
0.31
0.14
0.21
0.18
0.12
0.08
0.37
0.14
0.77
1.07
0.17
0.44
0.28
0.87
0.12
0.34
0.26
0.14
0.18
0.26
0.08
0.41
0.27
0.40
1.46
0.17
0.69
0.14
0.87
0.16
0.39
0.20
0.32
0.19
0.20
0.07
0.49
0.20
1.55
1.46
0.11
0.12
0.14
0.91
Note:
Standardized path estimates provided
Vol. 8, No. 1
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Journal of Selling & Major Account Management
interesting differences worth noting. First,
results from the analysis would seem to
indicate that female buyers tend to prefer faceto-face communications while male buyers
would rather be communicated with via
phone. The results would also seem to suggest
that younger buyers are more accepting of email communications than are their older
counterparts.
DISCUSSION
Our purpose in this study was to examine and
quantify the effects of salesperson
communication mode in relationship selling.
We believe the issue important given the rapid
advancement of communication technologies
and the emerging presence of the Millennial
generational in the workforce. Study results
indicate that across the moderating influences
examined phone communications are more
effective than face-to-face communications,
which are in turn are more effective than email communications. Study results also
reveal, however, that salespeople are relying
most heavily upon e-mail when
communicating with buyers. We therefore see
a discrepancy between those communication
tools that are most effective in developing
relationships and those tools that are being
most heavily utilized.
Managerial Implications
Our first and most obvious managerial
implication results from the finding that
phone communications are more effective
than e-mail and face-to-face communications
from a relationship building perspective. Thus,
if the salesperson is in a situation in which an
e-mail can be sent or a phone call placed, he
Northern Illinois University
or she should use the phone. Further, there
may be some instances in which the
salesperson can forego face-to-face
communications in favor of a phone call.
Phone skills would therefore appear to
provide salespeople a means through which
they can not only be more efficient in
managing their accounts, but also more
effective in building stronger customer
relationships.
Second, our study also brings up some
interesting implications with respect to
managing the new breed of Millennial
salespeople. These salespeople are
technologically savvy; they have grown up
with many of the more advanced
communication technologies and are very
adept at using them. Managers are, however,
forced to walk a bit of a tightrope when it
comes to technology utilization amongst this
group. They must ensure that Millennials are
leveraging these technologies in order to work
more efficiently, yet at the same time not over
relying upon them by emphasizing the fact
that in some instances the human touch is
required. In these instances, the necessary
time and energy should be devoted to ensure
adequate communications. These instances are
also likely to differ by customer; thus, it is
important salespeople understand the manner
to which individual customers most want to
be communicated.
Third, our findings have some interesting
implications with respect to communication
specialization. It might very well be that
certain salespeople are more adept at face-toface communications, while others are much
more proficient communicating via the phone
Academic Article
or computer. Managers should explore their
options with respect to this type
specialization, particularly in those instances
where an inside and outside sales force is
utilized in unison. Sales managers should also
attempt to leverage the technological skills
possessed by Millennial salespeople,
specifically focusing on how these skills can
best be disseminated to other, less
technologically adept salespeople.
Fourth, the study has some interesting
implications with respect to call reluctance.
E-mail provides a means through which cold
calls and confrontation can be avoided and
the likelihood of personal rejection lessened
(Cano et al., 2005). Even if the customer says
no, there is a buffer through which the impact
is lessened. It is important managers
recognize those salespeople who are using email and other communication technologies
in an effort to be more efficient, and those
salespeople who are using it due to call
reluctance.
Fifth, our perspective in this study highlights
the managerial importance of incorporating
the voice of the customer into the
management and evaluation process. While
firms might be focused on salesperson
efficiencies and cost reduction through
greater use of technology, the customer might
well desire something very different. Indeed,
in this study we found a discrepancy between
those communication tools salespeople are
most often utilizing and those tools that are
most effective in developing customer
relationships. Firms and managers focused
solely on internal metrics might very well lose
sight of these types of customer preferences.
Winter 2008
19
Study Limitations and Future Research
Directions
This study is subject to two of the primary
limitations common to cross-sectional
research. First, aside from those considered
here, there are a myriad of other factors that
could potentially influence the outcome
variables analyzed in this study (e.g., variables
such as salesperson empathy and adaptation).
It is also quite possible that the effects of
communication mode might differ
substantially across a different mix of outcome
variables. Second, the survey methodology
utilized in the study may have created
common method variance. This would be
particularly concerning if we felt the survey
respondents were providing responses they
deemed socially acceptable. However, special
care was taken to insure respondents were not
aware of the specific issues of interest in the
study. The survey was additionally structured
such that items for all of the constructs were
separated and mixed with items of other
constructs so that no one respondent would
be able to detect which items were associated
with which factors.
These limitations notwithstanding, we foresee
several avenues for future research in the area.
First, as we have focused on but one side of
the customer-salesperson dyad in this study,
future research should examine salesperson
perceptions with respect to the issue. What
communication tools do salespeople believe
they are most heavily utilizing? Which of these
tools do salespeople perceive to be most
effective? Are there generational differences
across salespeople with respect to the type
communication tools being utilized? Are
Vol. 8, No. 1
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Journal of Selling & Major Account Management
salespeople cognizant of the fact that
customers might vary in their acceptance of
more advanced communication technologies?
Second, as this and other studies examining the
issue have primarily been quantitative in
nature, future research should employ a
qualitative design to develop a deeper, more
detailed understanding of the issue. In-depth
interviews with salespeople, sales managers,
and customers might very well reveal relevant
issues not addressed in this study. They might
also provide additional information with
respect to the perceptions of Millennial
salespeople regarding the role technology plays
in customer relationships.
Third, future research should take a more
dynamic perspective in examining customers'
communication preferences over time. In this
study, we focused only on established
relationships between salespeople and
customers. Might this have affected the
findings? Might certain communication tools
be more effective during the early stages of a
relationship, and other tools more effective
during the latter stages? Could it be that the
human element is necessary when the
relationship is initially developing, and
technology suffices when the relationship is
being maintained? Interestingly, might some
communication tools be more desirable when
one is trying to disengage from the
relationship?
Fourth, from a customer relationship
management (CRM) perspective, future
research should seek to identify appropriate
communication strategies in relation to the
return provided by the customer. While all
customers may desire phone or face-to-face
Northern Illinois University
communications, not all customers are
deserving of the time these type
communications require. They do not provide
the profit needed to justify the time
expenditures face-to-face communications
require. For those accounts that provide less,
what communication strategies should be
employed? How can technology best be
leveraged here while still adequately
maintaining the relationship? For example,
based on the return provided, might some
accounts only be communicated with via
e-mail? Might others be referred to an Internet
site? Addressing these type questions will not
only assist salespeople in leveraging
technology, but also provide guidance with
respect to how technology can be utilized
across a portfolio of A-, B-, and C-level
customer accounts.
Fifth, future research should be directed
towards identifying the means through which
firms can enhance the communication skills of
salespeople across various technologies. For
example, what is the best way to communicate
with customers via e-mail? Might there be an
optimal way to communicate via textmessaging? Even more specifically, how can
the salesperson best communicate with the
customer during actual presentations? Many
salespeople rely heavily upon PowerPoint - is
this optimal? Importantly, how can Millennial
salespeople be leveraged during this process?
Might there be means through which these
individuals can be used as trainers for others
who might not be as technologically
sophisticated?
Sixth, and finally, as most research is
ultimately concerned with salesperson
Academic Article
performance, future research should more
fully examine the relationship between
salesperson technology use and salesperson
performance. Results from this study
indicate that the relationship might very well
be curvilinear. Is this the case? Is there an
optimal point that exists after which
performance declines due to an over reliance
on technology? If so, where is this point?
Can it be moved through customer
conversations such that the salesperson is
better able to leverage technological
efficiencies while still maintaining or even
enhancing performance?
Conclusion
Technological advances have created
numerous opportunities through which
firms can not only be more effective but also
more efficient in their dealings with external
stakeholders. However, given the prominent
role relationships play in firm success, it is
important managers be cognizant of the
extent to which technology affects the
quality of these relationships. Results from
this study indicate that, in the customersalesperson context, more traditional forms
of communication still play a crucial role in
developing customer relationships. This
should give pause to managers who are
aggressively promoting technology as a
means through which salesperson efficiency
can be enhanced. Amidst the prolific
technological advances made in recent years,
results from this study highlight the fact that
the human touch is still an integral part of
successful customer relationships.
Winter 2008
21
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Vol. 8, No. 1
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Journal of Selling & Major Account Management
Customers’ Proneness to Relationship Selling
and Universal Values
By Brent G. Goff, Charles R. Strain, and Lucille V. Pointer, Delia H. Rodriguez
The development of a new PRS scale examines the relationship between consumers’ values and
susceptibility to relationship marketing. Both Schwartz and Bilsky’s (1987) universal motivation domains
and specific values were found to be associated with PRS. As an individual trait, PRS becomes a marketing
segmentation variable providing insights for competitive strategy. PRS’ linkage to buying motives (values)
provides salespeople information on which motives are best to appeal to during adaptive selling encounters.
It is posited that individuals vary in their likelihood to engage in building relationships with salespeople due
to an individual trait identified as proneness to relationship selling (PRS). Key words: proneness to relationship
selling, relationship marketing, values, segmentation, susceptibility, adaptive selling, motivational domain
This research is the first formal test of the
proposition of associations among PRS and
values. The purposes of this study are to
develop a measure of PRS and explore the
possible associations among PRS and Swartz
and Bilsky’s (1987, 1990) 10 motivational
domains and 56 universal values. Values
represent individuals’ beliefs about life and
acceptable behavior.
Rokeach (1973)
defined values as enduring beliefs that
specify modes of conduct or end states of
existence which are personally or socially
preferable to opposing modes of conduct.
These values are evident across almost all
cultures and thought to be hereditary in the
sense that they represent innate motives
(e.g., security, stimulation). In this study
values are viewed as having elements of both
innate motives (human requirements), as
well as learned, stable and enduring
responses (guiding principles).
The determinants of success in personal
selling are important issues for both
Northern Illinois University
researchers and practitioners alike.
A
plethora of recent research has focused on
the efforts of salespeople to practice adaptive
selling or customer-oriented selling, since
satisfaction with the salesperson is a major
determinant in relationship development
with customers (Williams & Longfellow,
2001). The values of sales personnel appear
to be an integral factor in customer
receptivity to relationship selling (Wright &
Lundstrom, 2004). Consumer susceptibility
to salesperson influence (CSSI) has been
defined as “the proneness to be affected by
the attitudes, opinions and behavior(s) of a
salesperson…” (Goff & Walters, 1990).
Goff, Bellenger and Stojack (1994)
developed CSSI as a multidimensional
phenomena that consisted of three
dimensions:
informational,
recommendational and relational.
Furthermore, studies support the argument
that salespeople who are customer oriented
realize better sales performance (Saxe &
Weitz, 1982).
Academic Article
Winter 2008
25
Table 1
Motivational Types of Values
Type
Achievement
Benevolence
Conformity
Hedonism/
Values
Successful, Capable, Ambitious, Influential, Intelligent,
Self-respect
Helpful, Honest, Forgiving, Responsible, True Friendship,
a Spiritual Life, Mature Love, Loyal, Meaning in Life
Politeness, Honoring Parents and Elders, Obedient,
Self-discipline, Clean
Alpha
.72
.76
.71
Pleasure, Enjoying Life, a Varied Life, Daring, an Exciting
Life
.71
Power
Social Power, Authority, Social Recognition, Wealth,
Preserving My Image
.78
Security
National Security, Family Security, Reciprocation of
Favors, Social Order, Healthy, Sense of Belonging
.70
Self-direction
Creativity, Curious, Freedom, Choosing Own Goals,
Independent
.57
Tradition
Devout, Accepting Position in Life, Humble, Moderate,
Detachment, Respect for Tradition
.85
Stimulation
Universalism
Protecting the Environment, a World of Beauty, Wisdom,
Equality, Unity with Nature, Broad-minded, Social Justice,
.80
a World at Peace, Inner Harmony
METHOD
Sample 1 consisted of college students,
enrolled in business courses, in a
medium-sized university in the Southwest. A
final sample size of 237 students completed a
three-page survey. The sample had the
following characteristics: 64% male; 26%
married; 79% 18 to 30 years old and 19% 31
to 50 years old; 42% with less than $25,000
per year income, 42% with $25,001 to
$45,000, 8% with $45,001 to $65,001, and
7% with more than $65,001 per year income.
The
correlation,
factor
and
reliability
routines of SPSS PC version 15 were used to
analyze the results. PRS items were adapted
from measures reported by Goff, Bellinger
and Stojack (1994); Crosby, Evans and
Crowles (1990) or developed by the authors
(See Table 2). The items were measured on a
1 to 9 scale where 1 equaled “Disagree” and
9 equaled “Agree”. Scale purification was
performed by using factor and reliability
procedures.
Maximum Likelihood confirmatory factor
analysis was utilized to purify the PRS scale.
Original items included those listed in table
Vol. 8, No. 1
26
Journal of Selling & Major Account Management
Table 2
Proneness to Relationship Marketing Scale
Proneness to Relationship Selling (Alphas .81 and .70)
Loading 1 Loading 2
I like to develop a personal relationship with the salesperson I’m dealing with.
.710
I prefer dealing with salespeople who develop a personal relationship with me.
.660
.798
.743
When dealing with a salesperson, I evaluate the relationship for potential
recurring purchases.
.650
.453
Relationships are a priority for me.
.632
.493
I tend to have cooperative relationships with salespeople.
.572
.374
I shop at the same dealership because I am comfortable with the relationship.
.547
.354
I enjoy certain social aspects of the buying relationship.
.539
.374
two plus two additional items. (“I am
comfortable in shopping relationships”, and
“I tend to have adversarial relationships with
salespeople”).
Measures
The nine items were analyzed and resulted in a
two factor solution (promax rotation) with a
Chi-square of 54.908 (df 19, p < .000). The “I
am comfortable” item had a low initial
communality (.184) and low loads on both
factors. The “adversarial relationships” item
had a very low initial communality (.103) and
Northern Illinois University
exhibited factor loads of less than .3 on both
factors. Consequently it was deleted from
analysis. An eight item solution resulted in a
two factor solution (promax rotation) with a
Chi-Square of 35.598 (df 13, p < .000) that
exhibited a heywood case. The “I am
comfortable” item had the lowest
communality and lowest loads on both factors
and was dropped from analysis. A seven item
solution resulted in a one factor solution with
a Chi-square of 65.243 (df 14, p < .000). The
Reliability routine in SPSS 15 was utilized to
assess the Crohnbach alpha of the seven item
Academic Article
Winter 2008
27
scale (alpha = .81). Deletion of any item
reduced the alpha. Schwartz and Bilsky’s
universal values (1987) were used to measure
the values. Respondents were asked to rate
each value on a 0 to 100 scale where 0
indicated “Not at All Important” and 100
indicated “As Important as Something Can
Possibly Be”. The scaling approach is similar
to one used by McCarty and Shrum (2000).
The individual values were grouped into
motive domains reported by Schwartz and
Bilsky (1987, 1990). The uni-dimensionality
of each individual domain was assessed by
confirmatory factor analysis. The hedonism
and stimulation domains were combined
(Swartz & Boehnke, 2004). The reliability of
each domain was assessed by the reliability
procedure of SPSS.
to $45,000, 10% with $45,001 to $65,001, and
8% with more than $65,001 per year income.
Correlations were utilized to determine
association among PRS and the value
domains. Since the individual values are
important buying motives that can be used by
sales personnel and as advertising themes,
correlations between PRS and the individual
values comprising each significant values
domain were also assessed.
RESULTS
To confirm the PRS scale properties, a
second sample was gathered in the spring of
2006. Sample 2 consisted of college students,
enrolled in business courses, in the same
medium-sized university in the Southwest. A
final sample size of 244 students completed a
one and a quarter page survey. The sample
had the following characteristics: 41% male;
20% married; 86% 18 to 30 years old and
12% 31 to 50 years old; 53% with less than
$25,000 per year income, 29% with $25,001
This time PRS scale items were measured on
a 1 to 5 scale where 1 equaled “Disagree” and
5 equaled “Agree”. Maximum Likelihood
confirmatory factor analysis resulted in a one
factor solution with a Chi-square of 53.656
(df 14, p < .000). The Crohnbach alpha was
70. See table 2 for loadings. Constraining the
results to a two factor solution resulted in a
Chi-square of 20.128 (df 8, p < .01). All of
the items had their highest loadings on factor
one and all were larger than .3. For factor
two, only two items had loadings larger
than .3 (.410 and .397). The second factor
appears to be a nuisance factor. The one
factor solution seems stable and reliable.
PRS was significantly associated with the
following value domains: power (.19),
hedonism/stimulation (.19), security (.18),
universalism (.18), benevolence (.17), and
tradition (.17). In order to gain a better
understanding of PRS and individual values,
correlations with each value were computed.
The individual values can be viewed as
customer buying motives that can be utilized
by salespeople in adaptive selling. The values
can also be utilized as motives in advertising
messages. Therefore, an understanding of the
relationships among the values and PRS has
relevance for practitioners.
The following values (domains in bold) were
significantly associated at the .05 level
with PRS: Achievement-intelligent (.17),
influential (.15); Benevolence-mature (.17),
Vol. 8, No. 1
28
Journal of Selling & Major Account Management
meaning (.16), spiritual (.14); Conformityobedient (.15); Hedonism/Stimulationpleasure (.16), daring (.15), exciting (.15);
Power-image (.19), recognition (.19); Security
-belonging (.20), security (.18), healthy (.15);
Self-direction-curious (.14); Traditionhumble (.18), tradition (.18), position (.15),
moderate (.14), detachment (.14); and
Universalism-beauty (.17), equality (.16).
DISCUSSION
This research extends the understanding of
relationship selling by developing PRS as a
new construct and relating it to universal
values that can be construed as buying
motives. The PRS construct is an important
contribution to the selling literature (O’Malley
et al., 1997) by providing a tentative
explanation as to why some customers may
be, and others may not be, amenable to
relationship selling. Therefore, the study
proposes that some individuals are prone to
relationship selling due to an individual trait.
Hence, PRS can be used as a segmentation
variable that may help to identify customers
prone to relationship marketing.
There is support for the proposition of an
association between PRS and both value
domains and individual values. Individual
values from most of the Swartz and Bilsky
motive domains were linked to PRS. The
results confirm that a wide range of values
influence purchase behavior (Long and
Schiffman, 2000) and also support the notion that multiple values may influence
choice (Howard, 1977; Sheth, Newman and
Gross, 1991).
Northern Illinois University
IMPLICATIONS
The linkage of PRS to values provides
salespeople with insights to which motives
may be effectively appealing during adaptive
selling encounters. Salespersons can probe
and gain information from the potential
customer about his or her dominant values to
decide which type of influence approach is
most appropriate to pursue in the sales
interaction. This becomes another tool sales
managers can use to train their salespeople to
enhance their performance similar to their
ability to deter the need for autonomy among
their salespersons – since managing
salesperson perceived autonomy has been
demonstrated to be positively related to
salesperson performance (Strain & Taylor,
1997). The connection of PRS to buying
motives give insights to managers and selling
professionals concerning the development of
marketing relationships with heavy users since
value appeals are more salient for them
(Perkins & Reynolds, 1988). However, the
results also raise issues concerning potential
negative aspects of the implementation of
relationship marketing and relationship selling.
The establishment of PRS has public policy
and corporate policy implications given the
finding that it costs five times as much to
obtain a new customer as to retain an existing
one (Obringer, 2003). Thus, understanding
just how much attention your customer needs
is important! Too much or too little could
jeopardize the continuance of the relationship
and the profitability of the company.
Corporate policy implications may be
considered when using PRS in advertising or
with manufacturer’s sales agents as a primary
means of promotion objectives. Certain
Academic Article
values lend themselves to a situation where a
salesperson could potentially act unethically by
taking advantage of a client’s security or by
exerting too much power.
Clearly, an
implication for clearly laid out sales training
that keeps the client’s needs at the center is
manifested by these findings. The public
policy concerns that the findings suggest are
that sales agents could use the PRS and
knowledge of the client’s values and take
advantage of the client. Although ethically
trained sales agents would behave more
ethically than that, standards need to be
enforced to keep that tendency to take the
advantage too far in check.
Finally,
advertising can benefit from these results, as
IMC uses emotional appeals to engage
consumers and try to gain more loyalty for the
product. Thus, across a broad promotional
spectrum, PRS demonstrates a value-added
approach to enhance the abilities of sales
managers and salespersons alike.
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Brent G. Goff (Ph. D., University of
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Pointer (Ph. D., Texas A&M University) are
Associate
Professors of Marketing in the
MMBA
Department of the University of
Houston-Downtown.
Delia H. Rodriquez (B. B. A., University of
Houston-Downtown) is a Librarian with the
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Vol. 8, No. 1
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Journal of Selling & Major Account Management
How to handle your most important customers:
The St.Gallen KAM Concept
By Dirk Zupancic and Markus Mullner
Synopsis:
•
Key Account Management (KAM) is important for almost every supplier. As a management concept
KAM offers immense opportunities for achieving competitive advantages in business-to-business markets.
•
Despite a lot of existing empirical and conceptual work, an integrated framework is still missing. The
St.Gallen KAM Concept offers such a systematic framework.
•
The concept and its elements "strategy", "solutions", "skills", "structure", and "screening" offer valuable
tools and methods for those responsible for key accounts, the key account managers.
•
Moreover the concept offers important insights and structural aids for those who implement a KAM
programme (sales directors, managing directors).
Johnston & Mayer Inc.: A situation that
may occur in every company
Peter Levers enters the meeting room just in
time. Again traffic jams on the way from a
customer to his office caused some delays.
While he is glad that he has made it in time
the faces of the other participants of the
meeting are signalling bad news.
Ted Johnston, co-founder and CEO of
Johnston & Mayer Inc., a full service provider
of IT-network and telephone systems, opens
the meeting with the first item on the agenda:
Termination of contract by Ovelman &
Partners, the most important customer. Ted
started his explanation while waving a letter of
Ovelman & Partner where they explain why
they gave notice. Products and services seem
to be good but not outstanding. The
relationship in general and especially the daily
cooperation is less than suboptimal from their
point of view. Peter Levers, Head of Sales and
Northern Illinois University
at the same time responsible for Ovelman &
Partner himself, cannot explain how that
could have happened. Whenever he has
visited the customer (not too often in the last
month he must admit) everything seemed to
be in order. There were no complaints next to
minor problems of the daily business. The
meeting goes on and after several
controversial discussions Peter gets the job of
analysing Johnston & Mayer's way to handle
their most important customers. In addition
he is asked to come up with some substantial
suggestions how to optimise it. Hours later
back in his office Peter takes a file out of the
shelf: "Key Account Management: How to
handle your most important customers
successfully". It is a conference binder of an
event that he has visited a view month ago. At
that time he had the impression that he and
his team of sales reps were doing well. Now
he spends some more time and tries to find
Application Article
out what's really behind the label of KAM.
What are the elements of a successful KAM
programme within a company? Who is in
charge of that and who is involved? What are
the tasks of a professional key account
manager? And what are necessary
prerequisites on a corporate level? What are
potential good practices at Johnston & Mayer
Inc. and where do they have potential for
improvements? How should an entire KAM
programme for the company look like?
"Questions,
questions…", Peter says to
himself. He grasps slowly that it is not an easy
task if he really wants to do it right.
KAM: Long tradition, but no integrated
framework
Key accounts are the most valuable customers
for a company, due to size, turnover volume,
strategic fit, reference potential, etc. In times
of exchangeable products and services it is
more than ever crucial to build up excellent
relations with these important customers.
Therefore, key account management (KAM) is
far more than only a specialised channel to
important customers. Professional KAM is a
strategic concept of the entire company. It is
not surprising, that KAM has become one of
the most significant trends in business-tobusiness markets over the past decades (e.g.
Abratt/Kelly 2001). Nevertheless an
integrated framework to help people like Peter
Levers is still missing. The major problem is,
that KAM, if not implemented professionally,
becomes a process of trial and error that
creates additional costs and offers no
opportunity for a corporation's progress and
success.
Winter 2008
33
This surprises even more regarding the fact
that companies have been treated strategic
important customers differently from the very
beginning of their existence. Almost every
supplier in the business-to-business field
realises some kind of KAM, even without
using the term (Boles/Pilling/Goodwyn 1994,
p. 25). Also Peter Levers, as Head of Sales,
certainly handled Ovelman & Partner
differently to other customers. KAM opens a
lot of opportunities for companies. Over 65%
of the participants of an European KAM
survey estimate the KAM contribution both in
revenues and profit up to 25% and more to
the total result (Zupancic/Bussmann 2004).
Although KAM has a long tradition both in
research (e.g. Pegram 1972, Shapiro/Moriarty
1982) and practice, companies still struggle in
realizing successful KAM programmes
(Homburg/Workman/Jensen 2002).
The intention of this article is to introduce the
St.Gallen KAM Concept. It offer substantial
support to answer the questions that Peter
Levers has asked himself in the beginning. It
integrates the existing knowledge of key
account management from a research as well
as from a practical perspective (Zupancic
2004). At the University of St.Gallen key
account management is an important research
topic for over 10 years. During that time a
number of research projects were realised in
close cooperation with companies that wanted
to implement or optimise their KAM
approaches. Each of these projects was based
on the existing literature on KAM. In addition
about 100 interviews with key account
managers and directors were conducted over
the entire period of 10 years to complete the
Vol. 8, No. 1
34
Journal of Selling & Major Account Management
theoretical fundament with insides from
practitioners. Next to that the authors
accompanied about 25 projects that have
implemented or optimised their approaches of
KAM. Hence, our approach combined
qualitative and quantitative research methods
to conceptualise the framework.
Drivers for a systematic KAM approach
A professional KAM approach is nowadays
more important than ever. From our point of
view four mega trends push the topic:
Concentration: Mergers and acquisitions lead to
bigger and more powerful companies in
markets that try to centralise their purchasing
in order to achieve economies of scale and
scope in buying processes.
Professionalism in purchasing: During the last
years a rising number of concepts for
professional purchasers, like supply chain
management, single sourcing, modular
sourcing etc., were developed. The more
professional the supply side the more
professional the key account management side
should be.
Internationalisation and globalisation: Purchasing
processes and sales processes are carried out
more and more on a global basis. Harmonised
prices are just one element among others.
Companies need new concepts and special
solutions to react to this development.
Customer expectations: Key customers expect an
extraordinary way how to deal with them.
Rising expectations are an upcoming
phenomenon in B2C as well as in
B2B-relations. The more important a
customer the higher the expectations.
Northern Illinois University
The St. Gallen Key Account Management
Concept
The focal point of a KAM programme is the
individual relationship between a supplier and
it's defined key accounts. There is a wide
range of existing knowledge about relationship
marketing that contributes to this aspect
(Homburg/Workman/Jensen 2002, p. 39). In
fact KAM is the only real "one-to-one marketing" because it should dedicate exclusive
resources to individual customer relations.
Therefore the knowledge base of this topic
builds the centre of our concept, titled “Key
Account & Supplier”.
Another aspect of the concept is addressed to
individual key account managers and their
tasks. This is strongly connected to the topic
of "personal selling". Key account
management starts with an analysis of the
customer, the supplier’s own situation and
also the competitive situation. These activities
can be named “Analyse” the relationship.
Starting from there a plan has to be developed
and put into practice, i.e. the management of
the key account. This can be described as
“Realise” KAM. Analysing and realising are
activities that should be handled by the key
account manager and a team. Content and
knowledge of this area is named “Operational
KAM” in our concept.
Most of the existing research is focused on the
KAM programme from a company’s point of
view. KAM in this respect requires specific
conditions on corporate level. First, key
account management is not a stand-alone
activity in a company. Instead it has to be
integrated into the organisation (“Integrate”).
Application Article
Winter 2008
Second, it is necessary to consider a
company’s strategy, structure and culture that
often can only be changed in the long run
(“Align” Corporate Strategy, Structure and
Culture). Content and knowledge of these two
areas is named “Corporate KAM” in our
concept.
35
dimensions that we call the 5 "S"-approach:
strategy, solutions, skills, structure, and
screening.
First, “Strategy” is of importance. It covers
the strategic focus on KAM within the overall
corporate strategy (Spencer 1999, p. 308) as
well as specific strategies for the selected key
accounts (Ojasalo 2001, p. 204). Second, a
basic explanation about the needs of key
accounts indicates that “Solution” plays an
important role. Katzen, former
Xerox-manager, stated: “More and more
customers require business solutions that can
be implemented and managed consistently
across their worldwide locations. They want
that consistency to apply in all areas of their
supplier relationship, from programmes and
support services to contracts and pricing.”.
This citation is also true for national account
management programmes. Third, tasks and
processes are relevant in satisfy a key
To cover all the mentioned aspects we suggest
the following definition of KAM:
Key account management means systematic selection,
analysis and management of the most important
current (and potential) customers of a company. In
addition it means the systematic set up and
maintenance of the necessary infrastructure.
Dimensions of KAM
We determine different dimensions to
conceptualise the entire model of KAM.
According to the existing literature and our
own experience a successful KAM
programme can be structured in five
3. SKILLS
D
C
2. SOLUTIONS
4. STRUCTURE
B
D
D
A
C
C
B
B
A
A
Key Account
Supplier
A
B
C
D
1. STRATEGIES
A
Analyse
B
Realise
C
D
5. SCREENING
Integrate
Align
Figure 1: Overview of the St.Gallen KAM Concept
Vol. 8, No. 1
36
Journal of Selling & Major Account Management
account's needs. Thus, “Skills” of people are
undoubtedly key factors for the success of
KAM-programmes (e.g. Weeks/Stevens
1997). Under “Structure”, we subsume
coordination aspects like team approaches and
organizational structures (e.g. Colletti/Tubrity
1987, Millman/Wilson 1999) as the fourth
dimension. The last dimension deals with
information and success management. We call
it “Screening”. For an overview of the basic
structure St. Gallen KAM Concept see figure 1.
Operational Key Account Management
This part of the concept addresses the key account manager and his or her team. The
elements which are not described here in
detail provide them with a lot of tools for
analysing the relationship. Moreover it offers a
complete process to plan and realise strategies
for dedicated key accounts. The analysis
contains content concerning the key account
& competitors, customer needs & competitors
S O L U T IO N S
U n d e r s ta n d th is
c u s t o m e r ’s c u r re n t a n d
p o te n tia l u s a g e a n d th e
c o m p e titiv e s itu a tio n .
D e s ig n , s e ll a n d d e liv e r th e
rig h t s o lu tio n s in th e rig h t
w a y.
S T R A T E G IE S
U n d e r s ta n d th is
c u s t o m e r ’s b u s in e s s
a n d s e t m u lti-le v e l
o b je c tiv e s a n d a n
o v e ra ll s tra te g y .
solutions, resources & competencies,
processes & ways of working and gathering
information & management. All elements are
located in the inner circle of the St.Gallen
KAM-Concept as shown in the following
figure. Realisation should follow a specific
logic. Therefore the second inner circle offers
a systematic management process starting with
objectives and strategies and ending with
success measurement. Both circles should be
understood as a continuous management and
learning process. It is called the "St.Gallen
KAM-Cycle" (see figure 2).
Corporate Key Account Management
Companies often do not give enough
attention to the necessary organisational
prerequisites of KAM. Pardo stated that this
may be the most important area for
improvements (1999, p. 286): “Today, key
account experts on both sides of the Atlantic
agree on […] the problem of key account
S K IL L S
U n d e r s ta n d th e c o m p e te n c e a n d
m a k e -u p o f th e te a m th a t w ill b e
n e e d e d fo r th is a c c o u n t . B rin g
th e te a m to g e t h e r a n d e n s u re
th a t th e y a re w e ll e q u ip p e d .
STR UCTURE
U n d e r s ta n d h o w th e
c o o p e ra tio n w ith th is
a c c o u n t lo o k s lik e . M a k e
c le a r h o w t h e te a m s h o u ld b e
o rg a n is e d a n d c o m m u n ic a te .
E s ta b lis h c le a r p r o c e s s e s ,
p ro to c o ls a n d g u id e lin e s .
S C R E E N IN G
U n d e r s ta n d th e k e y
p e rfo rm a n c e in d ic a to rs fo r
th is a c c o u n t. E n s u re th e y
a re m e a s u re d a n d th e re s u lts
u s e d to s tr e n g th e n th e
re la tio n s h ip
F ig u re 2 : O p e ra tio n a l K A M - T h e S t.G a lle n K A M C y c le
Northern Illinois University
Application Article
management is being an organisational one.”
Therefore we've clearly addressed that topic in
another part of the St.Gallen KAM concept
that is linked to the key account managers’
and team members’ tasks which are explained
above. The important elements are located in
the two outer circles of the concept. They are
called the "St.Gallen KAM-Support
Elements". First, in the dimension "Strategy"
the professional definition and selection of
key accounts is the pre-requisite for the
success of the whole programme. It is not
enough just to pinpoint the biggest customer
according to their turnover. A combination of
qualitative (e.g. reference effect, co-operation
potential) and quantitative criteria should be
combined in various stages or within a scoring
model. Moreover it needs permission and
commitment from top management. If KAM
is understood as a strategic concept for the
entire company it should therefore be
integrated in the corporate strategy. Second,
"Solution" plays an important role also on the
corporate KAM level. The entire company
should be willing to customise products and
services for key accounts individually. This
generally contradicts intentions towards
effective and efficient production planning.
Whenever possible a company should ensure
to benefit as much as possible from special
treatments or innovations for key accounts,
e.g. by multiplying them to other customer
segments. Next "Skills" is a very crucial topic
on the corporate KAM level. Key account
management is a job that needs professional
staff with a lot of different competencies.
Therefore a company has to respect the
human resources carefully and provide key
Winter 2008
37
account managers and team-mates with
specific training modules and carrier paths.
The bigger the company the more important it
becomes to set up a suited KAM "Structure".
This covers primary as well as secondary
organisational structures (e.g. matrix, team
etc.) and working processes that guide cross
functional co-operation. The last dimension
on corporate level, "Screening", does not only
cover controlling aspects like a balanced
scorecard for KAM but also the necessary ITinfrastructure and procedures for knowledge
management.
Managerial Implications
A very common first reaction from managers
concerning the St.Gallen KAM Concept is
that for them it seems to be very complex. In
fact key account management is after all we
know a very complex topic. This is not a
result of the model, but a characteristic of
KAM. Our concept just describes and
structures what we've researched. But the
good message is that it is not necessary to
touch all aspects. Instead, we recommend to
build on the existing strengths that we usually
found in companies. These strengths are the
base for further developing a company's
individual KAM concept. From our
experience, it is necessary, that there are no
substantial competitive disadvantage in any of
the five dimensions and that there is at least
one out of the five dimensions where the
company has a clear competitive advantage.
Coming back to the needs of Peter Levers
from Johnston & Mayer we recommend two
directions of how he could use the model to
answer his questions:
Vol. 8, No. 1
38
Journal of Selling & Major Account Management
S O L U T IO N S
• H o w s h o u ld s p e c ia l o ffe rs
w e m a k e to k e y a c c o u n ts
b e in te g ra te d in to th e
c o m p a n y ’s s ta n d a rd
p ro d u c t d e v e lo p m e n t.
• H o w c o u ld o ffe rin g s to k e y
a c c o u n ts b e a d ju s te s o r
w id e n e d a c c o rd in g to th e ir
s p e c ia l re q u ire m e n ts ?
S K IL L S
• W h a t d e v e lo p m e n t d o k e y a c c o u n t
m a n a g e rs n e e d to fu lfil th e k e y
a c c o u n t’s re q u ire m e n ts ?
• H o w s h o u ld k e y a c c o u n t m a n a g e rs
and key account m anagem ent
te a m s b e re c ru ite d a n d re w a rd e d ?
S T R A T E G IE S
• W h a t p a rt s h o u ld k e y
a c c o u n ts p la y in th e
c o m p a n y ’s o v e ra ll
s tra te g y ?
• W hat m akes a
c u s to m e r a k e y
a c c o u n t?
STRU CTU RE
• H o w s h o u ld k e y a c c o u n t
m a n a g e m e n t b e in te g ra te d
w ith in a c o m p a n y ’s a c tu a l
s a le s s tru c tu re ?
• W h a t c o o rd in a tio n
p ro c e s s e s s h o u ld b e
im p le m e n te d to s tre n g th e n
th e k e y a c c o u n t m a n a g e rs
ro le ?
S C R E E N IN G
• H o w s h o u ld in fo rm a tio n o n
k e y a c c o u n ts s h o u ld b e
m a n a g e d e ffic ie n tly ?
• W h a t k e y a c c o u n t re la te d
p e rfo rm a n c e in d ic a to rs d o
S a le s M a n a g e m e n t a n d T o p
M anagem ent need?
F ig u re 3 : O rg a n is a tio n a l K A M – T h e S t.G a lle n K A M S u p p o rt E le m e n ts
Firstly, he could use the St.Gallen KAM
Concept to assess Johnston & Mayer's internal
and external ways of working with the most
important customers. As mentioned above, it
is not our intention to change everything or to
reinvent the wheel. Moreover, we want to
support companies fundamentally in achieving
excellent practices and results with their
KAM. Therefore, our concept offers a full
overview on the relevant aspects.
Secondly, Peter could use the St.Gallen KAM
Concept to structure an individual KAM
approach for Johnston & Mayer. Here, we
strongly recommend to differentiate the
operational from the corporate KAM because
different target groups are responsible for
each. The St.Gallen KAM Cycle (operational
KAM) should be used to set up or optimise
Peter's activities and those of his sales force.
Tools and instruments, that we could not
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describe here in detail, are at hand for
analysing and realising. By using them Peter
and his sales force will work more
systematically and professionally and achieve
better results. Peter is also in charge for
suggesting solutions for Corporate KAM.
From our experience we recommend to
delegate these tasks to a special project
manager when KAM has to be implemented
from scratch. Otherwise there is a risk that
Peter Levers could not do that job properly
because of his existing work load as Head of
Sales. Nevertheless, Peter or a project
manager could use the St.Gallen Support
Elements to design an own KAM approach
for Johnston & Mayer. The critical questions
can be answered systematically and the
programme can be developed individually.
Existing KAM programmes can be assessed
and evaluated.
Application Article
References
Abratt, R./Kelly, P.M. (2001), “CustomerSupplier partnerships: Perceptions of a
successful key account management
program,” Industrial Marketing
Management, Volume 31, Issue 5,
August 2002, pp. 467-476.
Boles, J.S./Pilling, B.K./Goodwyn, G.W.:
Revitalizing Your National Account
Marketing Program. Journal of
Business & Industrial Marketing, 1994,
Vol. 9, No. 1, S. 24-33.
Homburg, C./Workman, J.P./Jenson, O.
(2002), “A configurational perspective
on key account management,” Journal
of Marketing, Vol. 66, Issue 2, April 2002.
Millman, T.F./Wilson, K. (1999), “Processual
Issues in Key Account Management:
Underpinning the Customer-Facing
Organization”, Journal of Business and
Industrial Marketing, 14 (4), pp. 328-337.
Ojasalo, J. (2001), “Key Account Management
at company and individual levels in
business-to-business relationships,”
Journal of Business & Industrial
Marketing, Vol. 16, Issue 3, pp. 199-218.
Pardo, C. (1999), “Key account Management
in the Business to Business Field: The
Key Account’s Point of View”,
Journal of Personal Selling & Sales
Management, 17(4), pp. 17-26.
Winter 2008
39
Spencer, R. (1999), “Key accounts: effectively
managing strategic complexity”,
Journal of Business and Industrial
Marketing, 14 (4), pp. 291-309.
Weeks, W.A./Stevens, C.G. (1997), “National
Account Management Sales Training
and Directions for Improvement”,
Industrial Marketing Management, 26
(September), pp. 423-431.
Zupancic, D. (2004), “The St.Gallen KAM
Concept: An Integrated Framework
for Key Account Management”, Paper
presented at the ISBM conference
“New Priorities and Challenges for
Business-to-Business Marketers”, Boston.
Zupancic, D./Bussmann, W. (2004), "The
European KAM Survey", Research
Report, St.Gallen: Thexis.
Prof. Dr. Dirk Zupancic is Professor of
Management at Heilbronn Business School in
Germany and Senior Lecturer as well as head
of the Competence Center of B2B Marketing
& Sales at the University of St.Gallen in
Switzerland.
Dr. Markus Müllner Managing Director of the
Marketing Auditorium St.Gallen AG,
International Training and Consulting
Company for Sales and Marketing
Pegram, R (1972), “Selling and servicing the
national account”, Report No. 557.
New York: The Conference Board.
Shapiro, B.P./Moriarty, R.T. (1982), “National
Account Management: Emerging
Insights,” Marketing Science Institute
Working Paper No. 82-100. Cambridge,
MA: Marketing Science Institute.
Vol. 8, No. 1
40
Journal of Selling & Major Account Management
Selling to Executives:
How to Stop Losing and Keep Winning!
By Stephen J. Bistritz and Karen L. Jackson
One thing that great business-to-business
salespeople do on a consistent basis is focus
on the right deals. They seem to have a
built-in GPS system that enables them to
accurately and effectively assess their current
sales opportunities. They don’t waste their
time chasing every deal that’s placed in front
of them. It’s like they have a sixth sense
about working on just the right deals…the
deals they have the best chances of winning.
They can quickly examine ten deals and
determine which ones should receive their
immediate attention and which ones can easily
be placed on the back burner. They are
masters of qualification.
Three Compelling Qualification
Questions in Any Sales Campaign
There are three compelling questions that
should be used throughout each sales
campaign to help you qualify your
opportunity. Things change, people change,
and as a result, you should not just qualify
early—but often!
The three compelling questions are:
Should We Pursue This Opportunity?
Is this project or application (associated with
this sales opportunity) connected to a key
business initiative and has funding been
approved and allocated? Do you understand
the client’s business drivers, business
initiatives and the driving reasons for the
client to change or make a decision to
implement this project or application…or is
the client simply gathering information?
Northern Illinois University
Developing an in-depth understanding of the
client’s business, their key customers and
competitors is an important aspect of this
question. Since time and resources are limited,
it’s important to determine that the
opportunity being assessed is real and
represents a worthwhile investment in time
and resources.
Can We Effectively Compete for this
Opportunity?
Solution fit is but one component of whether
you can be competitive in a sales campaign.
Are there enough internal or external
resources available to compete successfully for
the business? Are there existing business
relationships established with the client? Does
your solution offer specific business value that
enables you to differentiate yourself from your
competitor(s)?
Knowing how your company, as well as your
solution, relates to the specific sales
opportunity can be a key ingredient to
winning the deal. Being able to realistically
contrast that information with that of your
competitor(s) is an important factor when
assessing this compelling question.
Can We Reasonably Expect to Win this
Opportunity?
This question is the one that is most often
overlooked in sales campaigns; however, it is
clearly the most important one.
Many
opportunities are lost even if the salesperson
has the best solution, the best delivery and
even the best terms and conditions. This
Application Article
question deals with how well the salesperson
understands the client’s organizational
structure that ultimately allows them to
identify the inside support necessary to win
the deal.
The answer to this compelling question also
reveals which key executives wield the most
power and influence within the client
organization, as it relates to this sales
opportunity.
Most importantly, the
salesperson must determine the relevant
executive associated with the opportunity – as
outlined above – the executive who stands to
gain the most or lose the most as a result of
the application or project associated with the
sales opportunity.
Do the most powerful people in the client’s
organization want you to win? Do you have
credibility with the client’s key players? Most
importantly, is there political alignment with
the key players in the client organization who
either affect or are affected by the buying
decision? Finally, what facts support these
assessments of your client relationships?
Contrasting these factors with that of your
competitor(s) can have a significant impact on
your decision to continue to pursue a sales
opportunity.
These three compelling questions, and the
underlying criteria, should be asked multiple
times during a sales campaign. They should
certainly be asked near the beginning of a
campaign to determine if a legitimate sales
opportunity exists and should be pursued.
They should be asked again if there’s a
significant change to the client’s business
profile or to the competitive landscape during
a sales campaign. It might also be appropriate
to pose the questions again if there is a major
Winter 2008
41
change to the profile of the sales organization
(i.e., the introduction of new solutions).
Examining each of these three compelling
questions at multiple times during a sales
campaign can be compared to an airline pilot
examining a pre-flight checklist. No matter
how many times a pilot has flown a certain
plane, s/he meticulously examines that
checklist before each and every flight, probing
each question, using an exact, non-negotiable
approach. S/he clearly doesn’t want to be
surprised midflight and does not want to leave
anything to chance because the stakes are too
high.
You have to use the same approach in a sales
campaign.
You can’t leave anything to
chance. You have to not only know the
information you have, but the information
and intelligence you are missing! That can
only be accomplished by applying a
structured, repeatable methodology that you
have internalized and apply consistently.
But, wait, there’s more…those same winning
salespeople consistently create, maintain and
leverage relationships with the most influential
executives inside and outside of the client
organization. They are able to quickly identify
the relevant executive for their sales
opportunity and focus on developing lasting
relationships with that executive. The relevant
executive can be described as the highestranking executive who stands to gain the most
or lose the most as a result of the application
or project associated with the sales
opportunity.
Top performing salespeople clearly
demonstrate the proven paradigm that
executives don’t buy because they understand,
executives buy when they feel understood. What do
they know that most salespeople don’t?
Vol. 8, No. 1
42
Journal of Selling & Major Account Management
Key Reasons for Losing Deals
Recent surveys have indicated that the four
key reasons that salespeople lose deals are as
follows:
•
Lack of relationships at the executive level
•
Client is unconvinced of the service
provider’s level of commitment and/or
credentials
•
No clear strategies exist to effectively
address the executive’s risk sensitivity
•
Inability to effectively articulate a
compelling value proposition that
accelerates the client’s goals, objectives or
aspirations
You’re probably wondering why price didn’t
make the list. Price is not on the list because
anyone can be a winner for a day. It’s called a
discount. Funny thing about offering rock
bottom prices, once you hit bottom, there’s
nowhere else to go. But that won’t stop your
clients for asking for more. There are very
few deals that cut to the bone to win a client
that have been able to keep that same client
long term. In order to consistently win,
you’ve got to demonstrate value above and
beyond the price point.
Now let’s review each of those four reasons
and how to overcome them.
The Number One Reason that salespeople
lose deals couldn’t be more clear – lack of
relationships at the executive level.
How many times in your own career have you
had the best solution, the best price, the best
terms and conditions and the best delivery and
still lost the deal? The key question becomes:
Did the most powerful (or influential)
executive in the client organization want you
to win the deal? If you can’t answer that
Northern Illinois University
question positively, chances are that the
executive was aligned with one of your
competitors. If they really wanted you to win,
they would have done something about it.
How to overcome it
Top sales executives know that executive-level
relationships take time to cultivate and
nurture. You can’t walk into an executive’s
office for the first time and immediately
expect to be treated as a trusted advisor. You
have to demonstrate a consistent level of
integrity and capability in each and every
interaction to achieve that level of
relationship.
That capability can be
demonstrated in one of two ways; namely, by
creating value directly within the client
organization or by using a business reference
that can describe how you have created value
in their organization.
When your relationship is elevated to the
trusted advisor level, it often becomes
collaborative to the point where the executive
starts to think about what s/he can do for you
to continue to further develop the
relationship. This is the level of business
relationship where the finest professional
salespeople continually operate. These are the
salespeople that focus on the client’s success
and view that success as critical to their own
success. They continually demonstrate that
they can create and deliver business value to
the client – and personal value to the client
executive.
The Second Reason that salespeople lose
deals is that the client is not convinced of
the service provider’s level of commitment
and/or credentials.
To some degree, this is linked to the number
one reason salespeople lose. The lack of
executive-level relationships in the client
Application Article
organization helps create a degree of
uncertainty with respect to the salesperson’s
level of commitment.
However, by
continually focusing on enhancing and
developing executive-level relationships, you
are in a much better position to also mitigate
this objection.
How to overcome it
Phenomenal salespeople make certain that
they continually communicate the value they
create and deliver to the client organization.
While this can be viewed as “blowing one’s
own horn”, more importantly it provides the
executive with an understanding of the value
they are contributing to their client’s
organization – and perhaps to the client,
personally. This is critical! Never assume that
an executive understands the extent to which
you are creating and delivering value. Often
those details get lost after contract signing!
Only by communicating the specific business
value that you bring to the table, will you start
to differentiate how you and your company
are different and better than your competitors.
The Third Reason that salespeople lose
deals is by not having clear strategies to
address risk sensitivity.
Executives operate as managers of risk.
Effective executives will take calculated risks
to achieve significant results. However, they
must be convinced that the risk of change will
deliver a significant level of value or potential
achievement.
How to overcome it
Exceptional salespeople are masters of
mitigating the risk(s) executives assign to
making change.
You must be able to
demonstrate to the relevant executive that you
alone have the ability to mitigate those risks
and deliver more value than any of your
Winter 2008
43
competitors. When you are effective in doing
this, the executive’s focus on risk shifts
dramatically from what could go wrong if they
don’t make the change, to how do they make
sure they don’t increase their risk by not
changing.
The Fourth Reason that salespeople lose
deals is that they fail to articulate a
compelling value proposition that is
focused on achieving the client’s goals,
objectives or aspirations.
In surveying a number of CXO-level client
executives, we found that more than 90% of
the executives surveyed said they looked for
salespeople to deliver compelling value
propositions to them.
How to overcome it
Top salespeople know that it’s not enough to
communicate features, functions, speeds and
feeds, they have to be able to communicate
the difference their product/service will make
to an executive’s goals and objectives.
If you, too, are interested in developing
winning value propositions that address the
client’s key issues, you must make sure they
have the following characteristics:
•
Enables the client to perceive that your
solution offers competitive advantage
•
Clearly differentiates your solution from
that of your competitors
•
Quantifies the specific business value of
your solution, using the client’s metrics
•
Creates a sense of urgency for the client to
take immediate action
•
Is provocative and compelling
This will prove next to impossible if you don’t
have a thorough understanding of what drives
Vol. 8, No. 1
44
Journal of Selling & Major Account Management
the client’s business, their key metrics and
what’s most important to them.
Summary – Keys to Keep Winning
If you want to take your sales to the next level,
here are a few things you can do today to
make sure you win more deals tomorrow.
First, begin to expand those
executive-level relationships in the client
organization.
Start by identifying the relevant executive for
the sales opportunity and identify the other
key players of power and influence. Consider
focusing only on your top opportunities to see
how this approach might be of value to you.
This represents a good first step to
implementing a consistent, repeatable process
for all major sales opportunities.
Second, look to learn as much as you can
about each client’s business, their
customers, their competition and their
industry so that you can begin to deliver
value to each one.
Take the steps necessary to elevate your level
of knowledge, as well as your business
relationship, with several key clients so that
you can see the benefits of those efforts.
Then apply those same techniques to all of
your top sales opportunities.
Third, examine the specific ways you can
begin to mitigate the risks associated with
the solutions you propose to your clients.
Look at how you can demonstrate to the
client executive that you alone have the ability
to mitigate any risks associated with the
implementation of a value-driven solution.
Fourth, begin to develop compelling,
provocative value propositions that
demonstrate the return on investment your
solutions can provide to your clients.
Northern Illinois University
Start with a focus on some key deals where
you can clearly articulate and differentiate your
solution from that of your competitors. Share
your value propositions with your sales team
and challenge them to provide you with
suggestions to improve them.
Many of the techniques described in this last
section are related to developing, enhancing
and then leveraging your relationship with key
executives in the client organization. In so
doing you significantly increase your chances
of closing those key deals!
About Steve Bistritz
Steve Bistritz has more than 40 years of high-tech
sales, sales management and training management
experience. He is a published author and lecturer
in the field of sales, sales management and selling
to executives. Steve spent more than 27 years with
IBM in sales and training-related positions. He
then led the development of sales training
programs which were delivered to tens of
thousands of salespeople worldwide. He holds a
doctorate in human resource development from
Vanderbilt University and is currently president of
his own sales training and consulting firm, based
in Atlanta. Visit his website – www.sellxl.com
About Karen L. Jackson
Karen Jackson has more than 20 years of
experience in business strategy, organizational
change and complex sales as an executive with
Fortune 500 corporations. Her solutions have
been the catalyst for achieving unparalleled
results in terms of revenue, profit and competitive
advantage. She has analyzed go-to-market
strategies spanning several industries. Her work
has taken her beyond the U.S. to South Africa,
Sweden, Japan, Malaysia, England, France,
Belgium, Denmark, Australia, Singapore and
Germany. Karen is the Managing Partner of
C-ChangeWork LLC, a business
strategy
consulting firm.
Visit her website –
www.c-changework.com
Application Article
Winter 2008
45
A CASE STUDY OF EXCEPTIONAL ACHIEVEMENT
IN SELLING:
THE RAYMOND D. MEYO STORY
By Jon M. Hawes and Paulette Polley Edmunds
The story of Raymond D. Meyo is one of hope, hard work, family values, and dedication. Diagnosed with
mental retardation as a small boy, Raymond D. Meyo overcame great adversity to later achieve extraordinary
sales success. This story is one that provides inspiration, insight, and illumination of what is possible in our
free enterprise system in which sales success is a function of motivation and skill. In addition, this case
study can provide a road map to people who are currently trying to overcome adversity and discrimination
while seeking the achievement of extraordinary success within the American free enterprise system.
Introduction
Suppose you had taken a tiny firm, whose
debts were fifty times greater than its assets,
from near total obscurity to hundreds of
millions of dollars in sales in the space of a
few years. Suppose that success had made
you a local celebrity and that you lived in a the
second largest house in the county (Dyer
2007) with over 13,914 square feet and 26
rooms on a 2.8 acre lot valued at $3.5 million
and this was detailed in the local newspaper
(Irwin 2003). Would you put your title of
CEO on the line if your company
performance did not further improve? If you
did “put it all on the line” would you really
step down if the promised goals were not
reached? And, if you would do all these
things, would you announce your departure
from the company the day before you were to
speak at a large gathering of people at a
meeting of the Sales and Marketing
Executives Association?
Raymond D. Meyo is the former Chief
Executive Officer of Telxon Corporation,
which was a major player in the hand-held
computer business, and Mr. Meyo did all of
these things. The roots of Meyo’s character
are strong. He knows the difference between
right and wrong and does what is right. He
keeps his promises. When his company's
performance did not improve, he left the firm
as he promised. True to his nature, Meyo
quickly got involved with another business
adventure in which his entrepreneurial and
selling skills could again be tested. And after
that adventure he started another and then
another, and so on. And most importantly, no
matter what adversity was faced, the Meyo
family has always lived happily ever after.
From Coal Fields to Notre Dame and Law
School
Now, let’s go back to the beginning. Life has
not always been easy for Ray Meyo, but he
avows that adversity is an opportunity to show
one’s true character. To Meyo, adversity is a
window of opportunity for trying something
new and different in order to achieve personal
improvement. A look at his life illustrates that
in addition to just saying this, he really
believes this. He has had many opportunities
to put this view of adversity to the test.
Raymond Meyo was born November 1, 1943,
into a warm, close-knit family with an older
Vol. 8, No. 1
46
Journal of Selling & Major Account Management
brother, a loving mother, and a father who
performed the strenuous and demanding work
of a coal miner in western Pennsylvania.
Young Meyo had a serious speech
impediment and, when his concerned mother
took him to a physician for treatment, he was
diagnosed as being mentally retarded, a term
that has become so stigmatic for people
labeled with that diagnosis that the American
Association on Mental Retardation officially
changed its name to the American Society on
Intellectual Disabilities (Schalock 2002).
People outside his family made cruel and
incorrect judgments about him.
These
adversities had three profound effects upon
his life.
First, to this day he detests
stereotypes because of their potentially
limiting effects. Mr. Meyo strongly believes
that each person should have equal
Northern Illinois University
opportunity to succeed, regardless of
circumstances. While it may take extra effort
to overcome past negative stereotyping, his
belief is that the free enterprise system is
eventually the great equalizer and that success
comes to people who perform at high levels.
Second, Ray Meyo dealt with his adversity by
becoming a voracious reader. Unlike so many
people around him, books were the friends
that enlightened, rather than chided him. By
the time he was ten years old, he had read all
of the Harvard Classics not once but three
times.
Third, he became determined to overcome his
speech defect. In keeping with the principle of
adaptation, the first element in the paradigm
of sales street-smarts or contextual
intelligence, Meyo went about the process of
Application Article
Winter 2008
47
changing something about himself (Sujan
1999). This would prove no small task. Meyo
spent hours in front of the mirror training
himself to speak as clearly as others could. In
the tradition of many American success
stories, Ray Meyo worked his way out of
sounding different. Words beginning with the
consonant “p” still require special effort on
his part, though one would never guess it to
hear him speak.
developed his love for the challenge of
persuasion and for the sales profession. He
pursued these interests abroad by going to
work for an import house in London,
England. Meyo was required to return to the
United States, however, when the United
States government informed him that he was
eligible for the draft and a tour of duty in
Vietnam. He gave up his job in London,
came home, and waited to receive his orders.
And speak he does! Meyo has become not
only an outspoken and spirited
conversationalist, but an enthusiastic and
inspirational public speaker as well. He
openly shares his life and work experiences
with others.
After months without a word, he approached
the recruiter and, in his typically candid
manner, requested to be either drafted or set
free to pursue other interests. His father
thought that this was too risky and reminded
Ray of the old adage that “no news is good
news.”
Meyo was never one to avoid
confrontation, though, and his tactic paid off.
He was soon officially notified that his
military services were not going to be
required.
Ray Meyo did not always know that sales and
business management would be his life’s
work. Initially, his love of books led him to
study medieval history at The University of
Notre Dame, where he completed an
undergraduate degree by the age of nineteen.
A law degree from Case Western Reserve
followed three years later.
The young man who had been diagnosed as
mentally retarded was admitted to the Ohio
Bar at age twenty-two after scoring in the top
one percent of all people who took the exam.
What an achievement! Simply passing the bar
is a major life achievement for any American.
Scoring in the top one percent is truly
exceptional. Doing so after having been
diagnosed as mentally retarded is absolutely
amazing!
From History and Law to Sales
It was while working his way through law
school as a car salesperson that Meyo
Books, which had always been a staple in his
life, helped the unemployed Raymond Meyo
plan for his next career move. His research
suggested the potential for a career in
computer sales. First, he sold for Honeywell.
Then he went to work for NCR where he sold
the Century line of main frame computers.
How fitting, that Meyo would work at NCR, a
company with such a history of innovation in
the field of selling. Indeed, John Patterson,
the founder of NCR, has been called the
“father of modern salesmanship” (Hawes
1985).
While
NCR,
suited
wheel
he experienced great sales success at
Meyo readily admits that he was not
to be a small cog in a large corporate
where his candid expressions were not
Vol. 8, No. 1
48
Journal of Selling & Major Account Management
always well received.
Consequently, he
decided to go to work for a much smaller
firm, Marketing Systems, Inc. (MSI). This
innovative company was a manufacturer of
hand-held computers used for inventory
control within the retailing sector.
Building a Company and a Reputation
Exposure to the growing business of
hand-held computers helped Meyo become
aware of the potential of a company called
Electronics Laboratories, Incorporated (ELI),
a small player in the industry. In the early
1970s Meyo began selling for this very small
firm whose products could collect data from
remote locations such as retail stores or water
meters and transmit that data to a central
computer for subsequent processing and
analysis. In 1974, Electronic Laboratories
changed its name to Telxon, an acronym
derived from telecommunications (tel)
transmitting data (x), and sign-on, sign-off (on).
In 1978, Meyo formed a partnership with
Telxon founder Robert F. Meyerson to run
the company and they moved the firm to
Bath, Ohio (Vanac 1999). At that time, the
firm had assets of only $6,000 while facing
accounts payable of over $300,000. But Ray
Meyo was used to overcoming adversity.
Dealing with this financial challenge was
nothing in comparison to the adversity that
Meyo had faced earlier in life.
Meyo set out to build on the organization's
foundation and expand the firm's base of
operations through internal sales growth and
the purchase of other companies. Telxon was
one of Ohio’s fastest growing technology
companies during the 1980s. By 1985, Telxon
Northern Illinois University
had become the dominant player in the
hand-held computer market due to Meyo’s
creation of a worldwide, world class sales
network to promote Telxon’s products and
services. Over the eleven years of Meyo’s
leadership, Telxon’s revenue grew at a
compounded annual rate of 23 percent and its
income grew at a compounded rate of 26
percent (“Ex Telxon Chief . . .” 2000).
Meyo’s initial role in Telxon was to serve as
Executive Vice President with a focus on
developing sales revenue. In 1981, he became
President and Chief Operating Officer. He
was named Chief Executive Officer in 1985
(Vanac 1999). No matter what his title and
official duties, Raymond Meyo always served
as Telxon’s number one salesperson and its
most successful cheerleader.
Meyo exudes enthusiasm, optimism, and
inspiration whether speaking before a large
audience or working alongside one of his
employees. As demonstrated by Sujan (1999),
optimism is a key factor that fosters a
salesperson’s street-smarts and contributes to
success. Perhaps at least partially because of this
personality trait, Meyo took the fledgling Telxon
from the verge of bankruptcy and made it a
healthy, robust firm with revenues in the
hundreds of millions of dollars in only eleven
years. At one point during Meyo’s leadership,
Telxon even attempted to buy MSI, Meyo’s
former employer. MSI, however, had qualms
about being purchased by its primary
competitor, then run by one of their former
salespeople. To avoid such a fate, MSI instead
agreed to be purchased by Symbol Technologies,
Inc. Meyo understood MSI’s point of view and
did not take the turn of events personally.
Application Article
Telxon’s early success made Ray Meyo a
well-known business figure throughout Ohio.
To some extent, Ray became a local celebrity.
He became familiar to many in and out of the
business world. He frequently appeared on
television, fulfilled a variety of speaking
engagements, gathered numerous awards, and
served on many boards.
Meyo’s philanthropic activities added to his
fame and to the regard in which he was held.
He made a major donation enabling the
construction of an athletic facility at Notre
Dame. It includes a 100-yard Prestige Turf
field with end zones, surrounded by a six-lane
track one-fifth of a mile long. There is no
larger indoor track facility in the nation.
Notre Dame named the facility Meyo Field in
his honor.
This contributed significantly to Meyo’s
already considerable reputation for wealth
coupled with generosity. Always a lover of
books, Meyo also made a donation enabling
the creation of the Meyo Library at an
exclusive private school which his children
attended. Meyo, community booster, great
football fan, and friend of coaches Lou Holtz
and Jerry Faust, was once called upon by The
University of Akron to save its football team
when low attendance totals threatened its
recently acquired Division I status. Suddenly,
because of Ray, every remaining seat, for the
entire season, was sold.
Meyo’s Pledge to the Stockholders
Meyo had recognized that, if the firm was to
grow, Telxon needed to develop custom
software packages. But Meyo’s software
development program was not as successful as
planned. Even though sales continued to
Winter 2008
49
climb, manufacturing costs and inventory
expenses increased more rapidly than had
been predicted.
In the Fall of 1989, Ray Meyo, the
consummate and definitive salesperson, made
a surprising promise to his shareholders at the
company’s annual meeting. His unprecedented
pledge was to either improve Telxon’s performance or to step down as Chief Executive
Officer. Analysts in both the business world
and on university campuses termed his pledge
foolhardy. Raymond Meyo, though, believed
that taking risks inspires yourself and those
around you. His bold move was meant to
light a fire under all Telxon employees, including himself.
When Telxon continued to struggle with
earnings, Meyo unexpectedly made good on
his promise to step down in 1992. The very
next day he was scheduled to receive the
Executive of the Year award and speak at the
Sales and Marketing Executives Association of
Akron’s gala celebration of National Sales
Month with an audience of over 350 people.
Many wondered how he would bear up under
public scrutiny in light of the events of the
previous day. Some even offered Meyo their
sympathy for his being put in such an
awkward position. Meyo brushed aside such
sentiments. He responded that, “It is not how
many times you fall down in life that counts,
it’s how many times you get back up and keep
trying.”
Drawing a comparison with the fact that the
Chinese characters for crisis and opportunity
are very similar, Meyo viewed his resignation
from Telxon as an opportunity to branch out
into a noncompeting area and to start other
business ventures.
Vol. 8, No. 1
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Journal of Selling & Major Account Management
Conclusion
Since leaving Telxon, Meyo has achieved
exceptional business success over and over
again. He continues to live the American
dream. A firm believer in capitalism and the
merits of entrepreneurship, Meyo has worked
on a number of different business projects.
What he likes to do is obtain an ownership
position in a small firm, add value to it, then
sell his ownership position and find another
opportunity in which he can add value. He
has also successfully started his own ventures
from scratch.
Meyo has honed his sales and entrepreneurial
skills over the years. He states that he works
on closing the sale from the very beginning of
each sales call. His interaction with his
opposite number in the buyer-seller dyad
begins with Meyo asking what he can do for
that other person. “People will state only two
or three reasons for making a purchase,”
declares Meyo, “so it is up to me to find out
just what the key criteria are.”
Ray Meyo believes that an essential element of
any successful sale is making the customer feel
comfortable and safe. Customers must be
treated with respect and must be convinced of
the marketer's reliability and concern for the
consumer’s well being. People who know Ray
Meyo’s story could hardly doubt the honor
and the trusted word of this sales executive.
“The highest human endeavor is to ethically
persuade someone to your point of view,”
states Raymond Meyo. Those words clearly
and succinctly express the philosophy of a
man who has known tremendous success as a
corporate executive and community leader.
Yet, even with those attainments to his credit,
he still loves to sell and continues to think of
himself as a salesperson first and foremost.
Northern Illinois University
Ray Meyo clearly and consistently shows that
he really does see adversity as a window of
opportunity for improvement and as a chance
to find new success.
References
Dyer, Bob (2007), “King James Builds a Castle
of a Home,” Akron Beacon Journal,
(March 27), A1.
“Ex Telxon Chief Joins Kyber’s Board As the
Startup Begins Vertical Marketing of Its
Product.” Accessed online May 1, 2007
at http://www.khyber.com/news/
press02-08-00.html
Hawes, Jon M. (1985), “Leaders in Selling and
Sales Management: John H. Patterson,”
Journal of Personal Selling and Sales
Management, 5 (November),
Irwin, Gloria (2003), “House for Sale: $3.5 Million,”
Akron Beacon Journal, (April 13), D1.
Schalock, Ropert L. (2002), “What’s In a
Name?” Mental Retardation, 40
(February), 59-61.
Sujan, Harish (1999), “Optimism and StreetSmarts: Identifying and Improving
Salesperson Intelligence,” Journal of
Personal Selling and Sales Management. 13
(Summer), 17-33.
Vanac, Mary (1999), “Hard Times Are Familiar
to Fairlawn, Ohio-Based Wireless
Computer Firm,” Akron Beacon Journal,
(November), A6.
Jon M. Hawes Distinguished Professor of
Marketing and Director of the Fisher Institute
for Professional Selling, The University of
Akron, Akron, OH 44325-4804. E-mail:
jhawes@uakron.edu
Paulette Polley Edmunds Associate Professor
and Chair Management, Marketing &
Entrepreneurship Department, Norfolk State
University, 700 Park Avenue, Norfolk, VA
23504. E-mail: ppolley@nsu.edu