Sales Strategy: Customer Focus vs. Transaction Focus
In the Harvard Business Review, sales experts convincingly argue that in this day of the empowered buyer, aggressive sales tactics are obsolete. Are they right?
These experts characterize the modern salesperson as a solution finder, a relationship builder, and a consultative partner.
In the sales research literature, these qualities correspond to a customer orientation, which is “the degree to which salespeople practice the marketing concept by trying to help their customers make purchase decisions that will satisfy customer needs” (Saxe & Weitz, 1982).
Customer-oriented selling involves relationship building with an emphasis on increasing long-term customer satisfaction rather than short-term sales volume.
The counterpoint is a selling orientation, which involves transactional, high pressure sales tactics designed to convince the prospective customer that your product or service best fulfils their need (whether it does or not) in order to obtain an immediate sale.
In a battle between a customer focus and a transaction focus, which one leads to more sales?
In their seminal study, Saxe and Weitz (1982) found that having a customer orientation, or long-term perspective, was positively correlated with sales performance only when: (1) the customer-salesperson relationship was long-term and cooperative (i.e., repeat business) and (2) the salesperson’s ability to fulfill their customer’s needs – in terms of motivation and company support – was high.
In the absence of these two conditions, having a selling orientation, or a short-term focus, appeared to be advantageous for sales performance. Well, maybe that was true 30 years ago.
What does the current research tell us?
Recently, Jaramillo and Grisaffe (2009) found that a customer orientation was not correlated with immediate sales performance but was related to longitudinal sales performance trajectories: Salespeople high in customer orientation showed greater sales increases over time (i.e., growth) compared to those lower in customer orientation.
Thus, hiring salespeople with a customer-focused approach is a long-term investment in sales productivity. (Tweet This)
These researchers concluded that managers should hire salespeople who can sell transactionally in the short term while building lasting customer relationships in the long run.
When it comes to the increasingly complex world of sales, it appears you need salespeople who can have their cake and eat – or in this case, sell – it too.
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