Impact of Relationship Selling Behavior on Sales Referrals

Team 1
Arun Palanikumar N [18PGM09]
Ashok D [18PGM12]
Shanmuga Karthiga S [18PGM43]
Vijay Surya V [18PGM57]
Vinotha P [18PGM58]
Vishnukumar M [18PGM59]
Abstract

Relationship selling behavior is the major role in establishing long-term relationship

between seller and customer. For organizations to have a repeated customers, good relations are
essential to keep customers happy and continuing to place orders. The purpose of this study was
to determine whether the relationship selling behaviors of individual salespeople tend to
correlate, and how these variables affect sales person's overall sales performance. Specific
behaviors studied included networking behavior, listening behavior, cognitive moral
development, adaptive selling behavior, and customer-oriented selling behavior.
 TABLE OF CONTENTS

CHAPTER NO TITLE

Introduction

Literature Review
Research Questions
Research Gap
1 Scope of the study
Research Model

2 Objective

3 Research Methodology

4 Findings and Analysis

5 Implications
Limitations
6 Conclusion

7 References

8 Appendix
 CHAPTER 1

1.1 Introduction

Insurance is the field where the Sales agent’s performance depends on the Customer
Satisfaction that he or she is able to obtain from the customer. Here Customer to Customer
communication plays an important role, as if one customer feels satisfied with the performance
of the sales agent then he recommends the same to the other customer who seeks advice. The
new world Relational sales or referral is introduced.

This section describes the general outline of the study. It includes an overview of the
subject, Statement of the study, Scope of the study, research questions and hypotheses.

1.2 Relationship selling overview

Sales can be categorized along a continuum from basic one-time impersonal

transactions in which the buyer and seller never meet again (discrete) to ongoing sales
relationships (relational) in which the parties do business many times over the years. A
discrete exchange is finished once a transaction is completed, whereas relational exchanges are
composed of long-term, continuous, complex relationships. In relational sales, single
transactions are of minor importance in comparison to the overall goal of sustaining the
relationship itself (Kauffman & Stern, 1988). A discrete exchange is also more likely to
involve a relatively small monetary transaction, whereas a relational exchange is apt to
develop when the amount of money involved is relatively high. This study will be focused on
relational and relationship sales, not on discrete sales. Relational sales build upon the long-term
relationships that develop between buyers and sellers.

Referral always takes place in two ways one in which the Agent gets the contact of the
potential customer from his old client or the other one in which the customer recommends the
agents name to the client.

1.3 Statement of the study

The salesperson may have a mental quandary regarding how to behave—should the
salesperson use somewhat deceptive communications to close the sale immediately or be
honest in the interest of establishing or continuing the relationship with the customer?
Although an immediate sale may not take place in this latter case, the potential to begin to build
trust is higher. Which may boost the relationship selling factors.

1.4 Purpose of the study

It is in the best interests of a firm with repeat customers to have a sales force that
encourages and maintains long-term relationships with these clients in an honest and ethical
manner, that would increase the possibility of referrals or relationship selling. Which factors
make up relationship selling behaviors, and how do these factors influence or relate to each
other?

1.5 Theoretical Framework

The study mostly focus on the age group which tends to grow (25 – 45), because these
age group are concerned about the future and tend to invest in insurance. Also the salary level
and the ability to pay the due are mostly favorable in the above case. The people in these group
were assumed that they pay taxes and other subsidies to the government.

1.6 Hypothesis

Negative attitudes toward giving referrals will be a significant predictor of satisfied and
affectively committed clients’ lack of intentions to give referrals.

Subjective norms that are unfavorable to giving referrals will be a significant predictor of
satisfied and affectively committed clients’ lack of intentions to give referrals.

Perceptions of lack of control over giving referrals will be a significant predictor of satisfied and
affectively committed clients’ lack of intentions to give referrals.

1.7 Research Questions

The research questions were formulated as below:

1. How does customer oriented selling behaviour influence sales referrals?

2. How does networking behaviour has an influence on adaptive selling behaviour?

3. How does listening behaviour of sales person influence adaptive selling behaviour?

4. Among the given behaviour which has the most influence on sales performance?
5. How does cognitive moral development influence external networking behaviour?

6. Which factors influence external networking behaviour?

7. How does adaptive selling behaviour influence sales performance?

8. Which has a greater impact on listening behaviour; cognitive model development or

customer oriented selling behaviour?

9. How does customer oriented selling behaviour influence adaptive selling behaviour?

10. How does cognitive moral development influence sales performance?

 CHAPTER 2

LITERATURE REVIEW

CHAPTER 3

3.1 Research Gap

Research gap is a research question which has not been answered appropriately at all in a
chosen field of study. In insurance sector, sales referrals has become a key factor for
improvement of any organization involved. Day by day, the sales referrals multiply to increase
sales of insurance policies and other benefits which will accelerate the improvement of the
organization.

The previous research studies indicated there is negligible amount of research studies
made on referral of insurance sales personnel. Most of the research directly measure the sale
performance of the salesperson. After any sale, the impact of selling behavior can be noticed.
Some customers will recommend their insurance salesperson to their neighbors and relatives due
to the satisfied behavior and serviceability of the respective salesperson. Also, the salesperson
will recommend their fellow colleagues regarding specific insurance policies if they don’t have
proper knowledge about the particular policy benefits.

3.2 Scope of the research

The research work done in the insurance sector so far has clearly indicated that five
variables have a greater and more visible impact on the sales referrals of any insurance agent.
The five variables are Customer Oriented Behavior, Adaptive selling behavior, Cognitive Moral
Development, Listening Behavior and Networking Behavior. These variables help us to define
and understand why a customer referring a sales agent and between sales agents. Briefly these
variables are described below:

Customer Oriented Behavior: Customer satisfaction is the highest priority. The behavior defines
how much a salesperson takes care of customer needs and helps to solve their problems.

Adaptive selling Behavior: This behavior defines the ability of the salesperson to adapt to the
way of approach which the customer prefers and act accordingly.
Cognitive Moral Development: This development mainly measures how well a salesperson
predicts or understands the customer and his/her needs.

Listening Behavior: This behavior defines how much the salesperson listens to the customer
during interactions and take responsibility for their concerns.

Networking Behavior: This variable measures how well a salesperson has knowledge regarding
the sales network and how easily can he is able to build relationship with fellow colleagues and
customers.

These variables are being considered as prime variables for measuring the impact of selling
behavior on the sales referrals.

The research is conducted using a survey questionnaire from insurance salespersons living in
Coimbatore and Chennai.

Listening Behavior (LB):It is a variable with three elements: sensing, processing, and responding.
LB has been defined in the personal sales context as "the cognitive process of actively sensing,
interpreting, evaluating, and responding to the verbal and nonverbal messages of present or
potential customers"

Sales Performance (SP): It is a measurement of the level at which a salesperson is meeting the
personal selling and organizational goals established by the firm. Four dimensions are included
in this construct: success in achieving sales objectives, use of technical knowledge in making
effective sales presentations, providing appropriate information to potential customers, and
controlling unnecessary expenses.

3.3 Research Model

Important factors/variables that decides Relational sales or referral

The study has two variables categories that helps us to find the correlation between Sales
referral (dependent variable) and networking behavior, listening behavior, cognitive moral
development, adaptive selling behavior, and customer-oriented selling behavior (Independent
variable), (Richard D. Killian, 2011)
3.4 Objective of the study

The objective of this project is to study and determine how relationship selling exists
between individual salesperson to end customer and between salespersons. It also determines the
how specific behavior variables can affect the salesperson’s overall sales performance. The
variables that are taken on this study are Listening behavior, Cognitive moral development,
Adaptive selling behavior, Customer oriented behavior and Networking behavior.

The difference between normal selling process and relationship selling process is that the
latter gives more strength to a business organization because there is a continuously healthy
relationship between buyer and the seller thereby increasing customer satisfaction and trust. The
study considers how much of an impact the relationship selling process is having on the behavior
variables mentioned below and how it affects the sales performance in insurance sector.

3.5 Research Methodology

The study’s three testable hypotheses mentioned above are developed and conclusion is
obtained. Above said hypotheses will form the basis of support for the general research design
(correlational), the study’s sample (clients of public accounting firms), the research instrument
and data collection technique, and the method of statistical analysis? The process used to
determine each of these methodological components is described in detail.

The study was based on a comprehensive literature review regarding the identified
problem, followed by the development of a self-report survey. Structural equation modeling was
used to analyze the data and test the study's hypotheses.

The questionnaire consisted of a combination of five previously designed surveys to measure the
study's five latent factors (measurement model). It was then determined how the latent factors
relate to each other (structural model). The survey was complete by 195 individual salespeople.
The data sample originated from two distinct populations.

APPENDIX

Questionnaire

SA-Strongly agree, A-Agree, N-Neither, DA-Disagree, SDA-Strongly Disagree

Question SA A N DA SDA
CUSTOMER-ORIENTED SALES MEASURE
1 I try to figure out what customer needs are
2 I have the customer's best interest in mind
3 I try to give customers a product keeping in mind that solves their problem
4 I offer the product/service that is best suited to the customer's problem.
5 I try to find out what kind of products/services will be most helpful to a customer
6 I try to sell product than to satisfy a customer.
7 It is necessary to tell the truth in describing a product to a customer
8 I try to sell a customer all I can convince them to buy, even if I think it is more than a
wise customer would buy.
9 I paint too rosy a picture of my product/service to make them sound as good as possible.
10 I decide what product/service to offer on the basis of what I can convince customers to
accept, not on the basis of what will satisfy them in the long run.
ADAPTIVE SALES MEASURE
11 I change my sales approach when it is not working
12 I like to experiment with different sales approaches.
13 I am very flexible in the selling approach I use.
14 I don't change my approach from one customer to another
15 I can easily use a wide variety of selling approaches.
16 It is easy for me to modify my sales presentation if the situation calls for it.
17 Basically, I use the same approach with most customers
18 I vary my sales style from situation to situation.
19 I try to understand how one customer differs from another.
20 I feel confident that I can effectively change my planned presentation when necessary.
SELF SALES PERFORMANCE
21 I produce a high market share for my company in my territory
22 I make sales of those products with the highest profit margins.
23 I generate a high level of sales dollars.
24 I identify and sell to major accounts in my area.
25 I produce sales or blanket contracts with long-term profitability
26 I know the design and specifications of company products.
27 I know the applications and functions of company products.
28 I am able to detect causes of operating failure of company products.
29 I keep abreast of my company's production and technological developments.
30 I provide accurate and complete paperwork related to orders, expenses, and other routine
reports.
31 I submit required reports on time
32 I maintain company specified records that are accurate, complete, and up to date.
33 I use expense accounts with integrity.
34 I use business gift and promotional allowances responsibly.
35 I spend travel and lodging money carefully.
36 I entertain only when it is clearly in the best interest of the company to do so
37 I control costs in other areas of the company when taking sales orders
38 I listen attentively to identify and understand the real concerns of my customer
39 I convince customers that I understand their unique problems and concerns.
40 I use established contacts to develop new customers.
41 I communicate my sales presentation clearly and concisely.

42 I work out solutions to a customer's questions or objections.

MEASURING LISTENING BEHAVIORS
43 I project an impression that I sincerely care about what the buyer is saying.
44 I don't interrupt the buyer.
45 I don't jump to conclusions.
46 I ask probing questions.
47 I ask continuing questions like "Could you tell me more?
48 I maintain eye contact with the buyer.
49 I nod to show the buyer that I agree or understand.
50 I read the buyer's nonverbal communications.
51 I wait for the buyer to finish speaking before evaluating what has been said.
52 I ask clarifying questions like "I'm not sure I know what you mean."
53 I restate what the buyer has stated or asked.
54 I summarize what the buyer has said.
55 I make an effort to understand the buyer's point of view.
56 I try to find things I have in common with the buyer.
EXTERNAL CONTACTS – NETWORK BEHAVIOUR
57 I take on honorary jobs (without pay) which could also be useful professionally
58 I develop informal contacts with professionals outside the organization, in order to have
personal links beyond the company

59 I take part in professional association meetings

60 I am an active member of a professional association
61 I use business trips or training programs to build new contacts.
62 I accept invitations to official functions or events out of professional interest
63 When 1 meet a person from another organization who could be an important business
contact for me, I compare notes with him/her about our common work areas

64 I meet with acquaintances from other organizations outside of regular working hours

65 When I obtain informal information that might be of importance to acquaintances from

other organizations, I pass it on to them

66 I ask others to give my regards to business acquaintances outside of our Health System

67 I meet with acquaintances from other organizations that could be of professional

importance to me at casual get-togethers

68 I use my contacts outside my Health System to ask for business advice

69 For business purposes I keep in contact with former colleagues.
70 I use business events outside of the Health System (trade shows, conferences) to talk to
business acquaintances on a personal level

71 Prior to salary negotiations I contact acquaintances and inquire about the average income
for my position

72 I discuss business matters with acquaintances after working hours

73 When information or regulations are not stated clearly, I ask acquaintances outside of my
Health System for clarification.

74 If I meet acquaintances from other organizations, I approach them to catch up on news

and changes in their professional lives

75 I exchange professional tips and hints with acquaintances from other organizations
76 When I hear of an interesting job opening in another company, I contact business
acquaintances for more information

77 I confide in acquaintances outside of the Health System for job-related matters

78 When I can't solve a problem at work I call acquaintances from other organizations and
ask for advice

COGNITIVE DEVELOPMENT MEASURE

79 For my work, I don’t have to rely on other employees.
80 I am self assured about my capabilities to perform my activities well
81 I enjoy interacting with other employees at work
82 I am good at predicting how customers will respond
83 I have developed a clear understanding of how the business function works
84 I can easily tell if someone is interested about what I am saying or bored with it
85 I try to understand everybody’s side of a disagreement, before taking a decision
86 I often get emotionally involved in my friends’ problems
87 Friends talk to me about their problems as they say that I am very understanding
88 Before criticizing someone, I try to imagine how I would feel if I was in their place
89 I appreciate everyone’s viewpoint, even though I don’t agree with it
90 I can easily work out what others want to walk about with me.
SALES REFERRALS
91 I always have all my client transactions in my memory

92 Are you satisfied with the service that you have given to your customer?

93 Do you think you have a special skill to call upon you as successful referral?

94 Do you use standardized process for all the client referral?

95 Do you have enough resources that support you to make as successful referral?

96 Are your clients happy with your service?