Approximately one in every ten US employee works in sales, interacting either with a business or a consumer customer (in about equal proportion). With business customers, these employees are the face of the company, the key creator of its brand(s). With consumer customers, they add value to advertising, sales promotion and word of mouth in developing their company’s brands’ reputation. Given the high importance of brand image to companies, salespeople are extremely valuable. With both customer types, salespeople not only enable sales but also develop relationships, manage complaints, negotiate prices, and augment services. Thus, academic researchers have sought to discover ways to enable salespeople to become more effective. This essay summarizes key findings from recent papers from the Journal of Marketing.
of Customers: Accuracy Matters
Although managers would agree to the importance of understanding each customer’s needs, little was known about how well salespeople could judge a customer’s needs when interacting with them. Homburg, Wieseke, and Bornemann (2009) tackled this question through an investigation of 552 salespeople and 859 of their customers. Using dyadic methodology, the authors noted, when salespeople accurately perceived their customers’ needs through verbal interactions, customer satisfaction and willingness to pay improved. More importantly, the authors laid the initial foundation to help managers improve salespeople’s perceptual accuracy. They discovered that customer orientation, empathy, and similarity with their customers improved accuracy. Further, managers can aid their salespeople’s accuracy through customer-oriented training.
Recent research suggests an idea many managers might not have considered or previously discounted: salespeople’s first impression judgments are critical to selling success. Through analyzing salespeople’s perceptions of customers before and after sales interactions, Hall, Ahearne, and Sujan (2015) assert a salesperson’s intuitive first impression of customers’ needs influence how a salesperson treats their customers. When these impressions are accurate, salespeople perform appropriate selling behaviors early in the sales process, building confidence and setting the right tone. Further, when salespeople make accurate judgments of customers’ needs based on their first impressions and maintain this accuracy throughout the interaction, customers are more likely to buy, spend more per transaction, and complete this process faster in comparison to achieving this accuracy later in the interaction process. The authors found that selling experience, empathy, and similarity with customers improves intuitive, first impression accuracy, whereas customer orientation and listening skills improves later accuracy, based on verbal interaction.
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Mullins et al. (2014) took a different perspective in studying salespeople’s perception of customers by focusing on a B2B environment where relationship quality is considered more key. In their research, the authors (a) investigated factors to explain why some salespeople inaccurately judge their customers’ perception of the relationship quality, and (b) conceptualized a new form of perceptual accuracy to understand its impact on financial outcomes in salesperson-customer relationships. The authors concluded that self-efficacious salespeople are upwardly biased, while customer-oriented salespeople are downwardly biased in assessing their customers’ relationship quality. While self-efficacy and customer-orientation are thought to be important characteristics for performance, both can bias salesperson perceptions of their customers. Fortunately, managers can correct these inaccuracies using a behavior-based control system. These corrections should be invaluable given accurate perceptions were shown to directly impact the profitability of a customer’s account. However, when their perceptions are inaccurate, salespeople misallocate the appropriate resources (e.g., time, effort, company resources) to each account, resulting in overinvestment and/or revenue losses.
Interacting with Customers: Appropriate Selling Behaviors
Salespeople’s perceptions of their customers influence how they interact with those customers. As mentioned earlier, Hall, Ahearne, and Sujan (2015) assert a salesperson’s first impression of a customer influences future interactions. Specifically, the authors learned that accurate first impressions enable salespeople to formulate appropriate sales tactics, which leads to an increase of selling effectiveness and efficiency. This finding has important, practical implications for managers. Salespeople should initially strive to show customers product offerings corresponding to customers’ needs and budget. This leads to trust and an expectation for positive outcomes. This is contrary to popular “Top-Down” selling or other anchoring approaches, which show customers the most expensive, feature-rich product in the hope of creating a higher-priced anchor.
Wieseke, Alavi, and Habel (2014) took on another important topic: how salespeople should interact with loyal customers. The authors discovered loyal customers expect a reward for their loyalty, which they typically seek through discounts. Increased price discounts again foster customer loyalty, setting off a spiral of rising loyalty and discount levels. To avoid falling into the trap of deeply discounting prices for loyal customers, which ultimately decreases prices paid in subsequent interactions, the authors suggested salespeople instead reward loyal customers with special, personalized treatments. Of note however, long-standing relationships between salespeople and customers should be heeded with caution. In these situations, the authors suggested salespeople are more inclined to give large customer discounts for retention, which can compromise firms’ performance and profitability.
Implications for Marketers
In sum, these four articles emphasize simple ideas which may challenge many current managers and sales force practices. Further, these studies demonstrate customers are different from one another, and demand to be treated individually. To do this successfully, salespeople must be able to accurately perceive needs and other characteristics that differentiate their customers. These perceptions enable salespeople to formulate and enact appropriate, customized behaviors with their customers.
Questions for Academics in the Classroom
1. Sales training and education focuses on product knowledge and the sales process. Should salespeople be trained to read customers’ verbal and nonverbal behaviors? If so, what are the most effective training techniques? What potential ethical and legal issues occur?
2. Millennials spend an estimated 4-5 hours per day on their phone, spending less time in face-to-face interactions than previous generations. How will this shift in face-to-face social experience affect the next generation of salespeople? Will more experiential training be needed? What additional skills will be necessary for salespeople entering the next decade?
Read the full Journal of Marketing articles:
Zachary R., Michael Ahearne, and Harish Sujan (2015), "The
Importance of Starting Right: The Influence of Accurate Intuition on
Performance in Salesperson–Customer Interactions," Journal of Marketing, 79
Christian, Jan Wieseke, and Torsten Bornemann (2009), "Implementing
the Marketing Concept at the Employee-Customer Interface: The Role of Customer
Need Knowledge," Journal of Marketing, 73
Ryan R., Michael Ahearne, Son K. Lam, Zachary R. Hall, and Jeffrey P. Boichuk
Your Customer: How Salesperson Perceptions of Customer Relationship Quality
Form and Influence Account Profitability," Journal of Marketing, 78
"Willing to Pay More, Eager to Pay Less: The Role of Customer Loyalty in Price Negotiations," Journal of Marketing, 78 (6), 17-37.