COM 539 Week 3 Applying Relationship Selling Example

After the Purchase Order: Relationship Selling With a Hospital System That Buys Floor-Care Equipment

[Student Name]

University of Phoenix

COM/539: Communications: Selling and Customer Engagement

Week 3 Assignment

[Instructor Name]

[Date]

Lakeview Floorcare Systems, its sales team, customers and figures are composites written for a model paper.

Lakeview, the invented Wisconsin cleaning equipment company, sold 14 scrubbers worth $410,000 to Northshore Health, a seven-hospital system, two years ago. It was the largest order in the company's history. Since then, the representative has called the facilities director about twice a year, usually to mention a new model. Last month the director told him that the system had invited a competitor to bid on robotic cleaners for its newest hospital. The representative was surprised; he thought the relationship was strong. This paper assesses the relationship and plans how to strengthen it.

From Transactions to Relationships

Transactional selling focuses on closing individual sales; relationship selling focuses on building long-term exchange that benefits both parties. Morgan and Hunt (1994) placed two ideas at the heart of lasting business ties: commitment, a wish to keep a relationship that one values, and trust, confidence that the partner is reliable and honest. In their account, partners who hold both cooperate more, look less at rivals and are more willing to take reasonable risks together. They found support for the theory in a study of automobile tire retailers and their suppliers.

What Makes Relationship Efforts Work

Palmatier et al. (2006) conducted a meta-analysis of relationship marketing studies and found that relationship efforts had larger effects on outcomes when relationships were with individual salespeople rather than firms alone, and that the seller's expertise and communication were among the strongest drivers of relational outcomes such as trust and commitment. Crosby et al. (1990) studied life insurance relationships and found that relationship quality, measured by trust and satisfaction, depended on the salesperson's similarity, expertise and relational selling behaviors, such as cooperative intentions and regular contact, and that relationship quality predicted the likelihood of future business.

Assessing the Northshore Relationship

Interviews with four Northshore staff and a review of usage data reveal the relationship's real condition.

Value delivered. Machines at five hospitals run daily; at two, they sit mostly idle because new environmental services staff were never trained and supervisors went back to mops. Nobody at Lakeview noticed.

Contacts. The representative knows the facilities director well but has never met the environmental services managers at each hospital, the infection prevention lead or the system's procurement manager, who now leads the robotics bid.

Trust. The director trusts the representative personally but describes Lakeview as "a vendor we bought from," not a partner. The procurement manager has no relationship at all.

Expertise. The representative has not shared any data on cleaning performance, labor savings or infection control outcomes since the sale.

The relationship was strong with one person and nonexistent with the four people now making the next decision.

Measured against the research, the relationship rests on a single personal tie, with little demonstrated expertise and little value visible to the broader committee.

The Account Plan

Recover value first. Within 30 days, Lakeview will offer free training at the two hospitals with idle machines and a usage review at all seven, showing hours used, labor time saved and maintenance needs.

Broaden the relationship. The representative, his manager and a product specialist will meet the environmental services managers, the infection prevention lead and the procurement manager, learning each one's priorities. A simple map of the committee will track each person's role, concerns and last contact.

Demonstrate expertise. Share a short report comparing floor cleanliness audits before and after the scrubbers, using Northshore's own data, and invite the infection prevention lead to a webinar on cleaning standards.

Quarterly business reviews. Starting next quarter, a 45-minute review with the facilities director and procurement manager covering usage, savings, service issues and upcoming needs.

Respond to the robotics bid. Rather than fight the bid on price, propose a 60-day robotic pilot at the new hospital with performance measures agreed in advance.

Repairing the Relationship Honestly

The first meeting with the facilities director should acknowledge the gap directly: Lakeview did not follow up after the sale, and two hospitals' machines went unused as a result. Admitting the lapse is uncomfortable, but research on trust suggests that reliability and honesty matter more than smooth presentations. The representative should come with a specific offer, training at the two hospitals within two weeks, rather than general promises to do better.

Risks

The plan could fail if Northshore has already decided to switch suppliers, if the representative lacks time for a key account or if the robotics pilot underperforms. To reduce these risks, the sales manager will join the first meetings, the representative's territory will be adjusted to free a day a week for Northshore and the pilot's success measures will be agreed before it starts.

Lessons for the Whole Sales Team

Northshore is not unusual. A review of Lakeview's 50 largest customers found that 31 had received no contact beyond service calls in the past year. The pattern reflects how the company pays and measures representatives: commissions reward new orders, and no measure tracks what happens after delivery. Relationship selling will not take hold across the team unless the system rewards it. The Week 6 sales plan therefore adds retention and repeat purchases to the commission plan and makes post-sale reviews part of every representative's job.

Matching Effort to Potential

Northshore spends about $1.8 million a year on cleaning equipment and supplies and plans two new facilities. Its lifetime value justifies a key account approach with more time and resources than a typical account. Smaller customers would receive a lighter version, such as annual usage reviews.

The Representative's Role

Key account work asks more of the representative than transactional selling. He must understand Northshore's budget cycle, its infection control priorities and the pressures on its environmental services staff, and he must coordinate Lakeview's service technicians, product specialists and finance partners. Lakeview will support him with a monthly account review with his manager and access to a key account coach. If he cannot devote enough time, the account may move to a dedicated key account manager, a role the Week 6 sales plan proposes.

Measures

Machine usage rates at each hospital, number of committee members engaged, completion of quarterly reviews, Northshore's share of floor-care spending with Lakeview, results of the robotics pilot and a yearly relationship survey covering trust and satisfaction.

A Ninety-Day Checkpoint

After 90 days, the sales manager will review the account against three questions: are all 14 machines in regular use, has the representative met each committee member at least once and has Northshore agreed to the robotics pilot on shared terms? Any gap will trigger a revised approach for the following three months.

Conclusion

Lakeview treated Northshore as a closed sale. Research on commitment, trust and relationship quality shows why that left the account vulnerable: value went unseen, expertise went unshared and the relationship rested on one person. An account plan that restores value, broadens contacts, demonstrates expertise and reviews results regularly gives Lakeview a chance to keep the account and grow it.

References

Crosby, L. A., Evans, K. R., & Cowles, D. (1990). Relationship quality in services selling: An interpersonal influence perspective. Journal of Marketing, 54(3), 68-81. https://doi.org/10.1177/002224299005400306

Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20-38. https://doi.org/10.1177/002224299405800302

Palmatier, R. W., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: A meta-analysis. Journal of Marketing, 70(4), 136-153. https://doi.org/10.1509/jmkg.70.4.136