Entrepreneurship: Starting & Operating a Small Business, 4e

(Mariotti)
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Chapter 6 Smart Selling and Effective Customer Service

Chapter 6 Contents
Selling Skills Are Essential to Business Success 197
Selling Is a Great Source of Market Research 198
The Essence of Selling Is Teaching 198
The Principles of Selling 198
The Sales Call 200
Electronic Mail, Blogs, and Social Networks 200
Prequalify Your Sales Calls 201
Focus on the Customer 201
The Eight-Step Sales Call 202
Three Call Behaviors of Successful Salespeople 203
Analyze Your Sales Calls to Become a Star Salesperson 204
Turning Objections into Advantages 204
Use Technology to Sell 205
Successful Businesses Need Customers Who Return 206
Customer Service Is Keeping Customers Happy 206
The Costs of Losing a Customer 206
Customer Complaints Are Valuable 207
Customer Relationship Management Systems 208
Why Does CRM Matter? 209
Components of CRM for the Small Business 210
How Technology Supports CRM 211

Chapter 6 Overview
This chapter helps the students understand the importance of planning and evaluating your sales
approach. In addition, the importance of customer service to gaining and maintaining business is
discussed and methods for monitoring and improving this are provided.

Chapter 6 Objectives
Learning Objective #1: Explain the importance of selling based on benefits.
Learning Objective #2: Demonstrate principles of selling to prepare effective sales
calls.
Learning Objective #3: Plan successful sales calls.
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 Learning Objective #4: Analyze and improve sales calls.
Learning Objective #5: Recognize and arrange excellent
customer service.
Learning Objective #6: Define customer relationship management and interpret its value.

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 Chapter 6 Outline
I. Explain the importance of selling based upon benefits.
A. Features are the qualities of a product or service.
B. Benefits are what the product or service can do to fill customer needs.
C. Customers purchase based upon perceived benefits.
II. Demonstrate principles of selling to prepare effective sales calls.
A. Make a good personal impression.
B. Know your product or service.
C. Believe in your product or service.
D. Know your field.
E. Know your customers.
F. Prepare your sales presentation.
G. Think positively.
H. Keep good records.
I. Make an appointment.
J. Treat your customers like gold.
III. Plan successful sales calls.
A. Use technology to assist you.
B. Prequalify your leads, so that you are making the best use of your time and theirs.
C. Focus on the customer, not on the product or service.
D. Incorporate the eight-step sales call.
IV. Analyze and improve sales calls.
A. Was I able to get the customer to open up to me? Why, or why not? Did I do or say
anything that turned the customer off?
B. Which of my questions did the best job of helping the customer zero in on his or
her problem?
C. Was I able to make an honest case for my product/service being the one that could
solve the customer’s problem?
D. Did I improve my relationship with this individual during the call?
V. Recognize and arrange excellent customer service.
A. Customer service is everything you do to keep your customers happy, especially after
the sale. It includes maintaining and repairing the product or service once it has been
sold, and dealing with customer complaints.
B. A successful business is built on repeat customers.
VI. Define customer relationship management and interpret its value.
A. Identify the key components of CRM.
B. Recognize that CRM can be simple or complex and that you can incorporate
technology into it to obtain higher value.
C. Use CRM to tailor your products, services, and promotions to customers to yield
increased profitability.

Chapter 6 Teaching Notes

Class Discussion Ideas:
1. Discuss marketing versus selling. Ask students: How are marketing and selling alike?
(Both focus on customer needs, both bring customer and product together, both
emphasize learning about the customer.) How are they different? (Marketing brings the
customer to the product, but selling brings the product to the customer; marketing uses
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 mostly impersonal and indirect communication vehicles, but selling uses mostly
personal and direct interaction.)
2. Challenge the students: Once the customer has agreed to buy your product or service, is
your job as a salesperson done? Have students raise their hands if they think “no” and call
on a few to give their reasons. Solicit from the students that, in most cases, follow-up to a
sales call is required. Pretend that a student has purchased an item you are selling. On the
board, write a sample sales receipt for the transaction, calculate the 10 percent
commission, and model good “after sales” customer service (shaking hands, arranging
delivery, asking if the customer is satisfied, adding information into a customer
database). Ask the students to suggest additional after sales follow-up ideas based on this
chapter.
3. Discuss customer service experiences. Invite the students to share personal experiences:
Think of a time when you purchased something and thought the customer service was
excellent. What made it so? How did you feel? Think of a time when you thought the
customer service was awful. What made it so? How did you feel? Get the students to
generalize an observation from each example, and record these on the board.
4. Say: “List the types of situations in which customer service plays an important role (at
point of sale, customers’ phone calls, product returns, warranty claims, product liability
claims, requests for information, use of your Web site, etc.).” Help students realize that
just about everything a company does should consider customer service as a component:
Anytime you interact with a customer (or even influence an interaction “behind the
scenes” (such as setting up a return policy) is a “moment of truth,” or choice point, for
improving or hurting relationships with customers.
5. Elicit from the class or explain that customer service involves listening to customers
every time a business interacts with them; it is a form of market research. Ask:
How could the company collect this information?
How might a company organize this information to be useful?
How might the company use the information?

Chapter 6 Lecture Enhancers

PPT Lecture Slides for Chapter 6
Outside the Classroom:

www.eyesonsales.com/: Eye on Sales provides guidance, webinars and information for sales
professionals.

www.salespractice.com: At Sales Practice, members from around the globe discuss sales and
marketing topics in a community of discussion forums. This site focuses on teaching “empathetic
selling” and tuning in to the buyer’s needs.

Forbes magazine
Subscriptions: www.forbes.com

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 The Art of the Pitch; Persuasion and Presentation Skills That Win Business, Peter Coughter
(Palgrave MacMillan, 2012)
Permission Marketing: Turning Strangers into Friends, and Friends into Customers, Seth Godin
(Simon & Schuster, 1999)

Super Service: Seven Keys to Delivering Great Customer Service . . . Even When You Don’t Feel
Like It! . . . Even When They Don’t Deserve It! Jeff Gee (McGraw-Hill; 1st edition, 1999).

Customer Service Training 101: Quick and Easy Techniques That Get Great Result, Renee
Evenson (AMACOM, 2006).

The Sales Bible: The Ultimate Sales Resource, New Edition, Jeffrey Gitomer (Harper Collins,
2008).

Chapter 6 Key Terms

customer relationship management (CRM) 209
customer service 206
database 211
lurk 201
prospect 201
spam 201

Chapter 6 Class Activity Ideas and Group Exercises

1. Demonstrate a mock sales call. This activity will give students an opportunity to practice
the principles of this lesson. Based on the chapter’s principles and steps and your running
example in class, have each student prepare to sell the kind of shirt or other garment he
or she is wearing to a fellow student. Pair up students and provide time for each partner
to act as the salesperson and receive feedback. Allow a few more minutes for
revising the sales approach based on the critiques.
2. Set up customer service scenarios. Have pairs of students think of and write a brief
description of one entrepreneurial situation in which customer service could be important,
without specifying what should be done or what the outcome is (that is, they just “set the
scene”). Each pair should write its scenario on a sheet of paper; then have them fold the
paper in quarters and identify it as theirs on the outside. Collect the papers and then
redistribute them, one each to a different pair. Tell them that they will role-play the
people in the situation and try to create a favorable customer service outcome.
As students prepare for their roles, instruct them to consider: What should the business
owner do during the scenario? What should he/she do in the long term? Students may
also refer to the textbook for customer service tips. Give the groups time to think about
and discuss the issues and plan their role play; then invite each pair to the front of the
room to play out the situation in character. Have the class evaluate the role plays. What
was realistic? What was done well? What could have been done differently? Why?

Chapter 6 Suggested Answers for Critical Thinking Exercises

6-1. Describe the features of each product/service listed below and then create a benefit
statement for each product that you would use as selling points.
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 L.O. 1 Explain the importance of selling based on benefits.
AACSB Analytical thinking
Home pick-up/delivery dry cleaning and laundry service
Feature: home pick-up/delivery
Benefit: This service saves customers time and gives them more time for
the things they prefer to do. They get clean clothes without the work of
cleaning them.
Screen projector cover for smart phones
Feature: Cover with projection
Benefit: Customers can show information to others at a size that is more
legible and convenient from their phones rather than needing laptops and
projectors.
Vegetarian dog food
Feature: Meat-free dog food
Benefit: Studies show that dogs thrive on vegetarian dog food. Not only do
they get enough protein, but the extra vitamins and fiber make their coats
shiny and keep them energetic and happy.
Personal lie detector
Feature: Small size
Benefit: Often, it is difficult to tell when someone is telling the truth. By
carrying a personal lie detector, it would be possible to get a sense of this
without alerting the other person. While it would not give definitive results, it
would help to assess the situation.
6-2. Create a customer profile database for your business containing at least 20 data fields.
Which five questions will you ask every customer?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Application of knowledge
Each student will provide a different answer. The data fields can include:
name, e-mail address, phone, fax numbers, mailing addresses, preferences,
family size, family members, hobbies, memberships, purchase histories,
payment histories, when the contact was made, who made the contact, how
was the contact made?, what has been discussed, when is the follow-up, etc.
The questions should be specific to the products and services provided, or
that of their competition.
Example for the DJ: I will use an electronic database program. Five
questions I plan to ask every customer include:
Who are your favorite performers from the Motown era?

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 What is your favorite song?
What artists do you NOT want me to play?
What is the occasion that is being celebrated?
Do you have any special requests or needs?
6-3. Describe a business that you deal with as a customer. Describe the customer service
you receive there. What do you like (or dislike) about it? How could it be improved?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Reflective thinking
Answers will vary but should reflect an understanding of what qualities
good customer service should include, such as courteousness, patience,
and meeting of customer needs.
6-4. List five things you intend to do at your business to offer superior customer service.

L.O. 5 Recognize and arrange excellent customer service.

AACSB Application of knowledge
Again, answers will vary widely, but should reflect an understanding of what
defines excellent customer service in their market space.
Example:
1. I will use my electronic database to fine-tune my play lists so that when
I return to DJ for a customer, I can play the music he/she really wants
to hear.
2. I will have a Web site where customers can e-mail me about finding
obscure Motown-era recordings.
3. I will give each customer a burned CD of his/her ten favorite songs
after an event.
4. Customers will be able to reach me 24/7 via my cell phone and pager.
5. I will always bring a positive, upbeat attitude to my events.
6-5. Identify five specific sales-call prospects for your business. Prequalify them using
these questions: (a) Is the prospect in my market? (b) Does he or she need my
product/service? (c) Will my product/service remove a problem or source of “pain” or
improve the individual’s life? (d) Can he or she afford it?

L.O. 3 Plan successful sales calls.

AACSB Application of knowledge and analytical thinking

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 Example:

Sales Prospect Description

Terrance Small My grandfather’s best friend. He plans to throw a big party
for his 50th wedding anniversary in June. He has no idea
how to throw a party of this size. He is a retired executive
and can easily afford my services.
Elaine Cartwright Human Resources Manager at a local law firm and family
friend. She is responsible for coordinating employee
retirement events. Her experience is in HR, not running
events! Generally, the firm has an adequate budget for my
services.

Anthony DeSouza Community Coordinator–Peach Grove Retirement Complex.

He organizes a big summer bash for seniors each year on the
Fourth of July. He’d like some new ideas to change up the
party a little. While budgets are often tight, they may have
sufficient funds.
Tanya Spalding Program Director–YMCA Senior Center. She coordinates
social and educational activities for local seniors. She has
been doing this for a number of years. Affording my
services may be a challenge.
Marcella Robinson Friend of the family. She organizes several local charity
events each year. New ideas may help to refresh the event
and bring in new donors. The budgets vary, but often are
large enough to afford my services and cannot include live
bands.

6-6. Have you created any marketing materials for your business? If so, have three friends
and a mentor (someone more experienced whom you respect and who can give you
good business advice) look at your materials and give you feedback. Write a memo
listing their suggestions and what you plan to do to improve your marketing materials.

L.O. 2 Demonstrate principles of selling to prepare effective sales calls.

AACSB Analytical thinking
Answers will vary, but the memo should indicate that the students did
have some people evaluate their marketing materials.

Chapter 6 Key Concept Questions

6-7. Explain Joe Girard’s Law of 250 in your own words, and give examples from your
own life.

L.O. 2 Demonstrate principles of selling to prepare effective sales calls.

AACSB Application of learning

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 Answers will vary but should reflect understanding that every person
encountered has the potential to influence another 250 people.

6-8. Why is customer service an extension of marketing?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Analytical thinking
Every contact a customer has with the business is an opportunity to
reinforce the marketing vision. In addition, customer service is a source
of market research.

6-9. Give three reasons why you think it is important to keep collecting market research
even after you have opened your business.
L.O. 6 Define customer relationship management and interpret its value.
AACSB Analytical thinking
1. Customers who have actually used my product or service are a great
source of information on how to improve it.
2. Remembering that I want to keep collecting market research will
keep me talking to my customers and valuing their opinions.
3. If I keep collecting market research, I can keep continuously
improving my product/service.
6-10. What do you expect your personal “look” to be when you start selling
your product/service, and why?

L.O. 3 Plan successful sales calls.

AACSB Application of knowledge
Answers will vary but should include a neat, clean appearance that also
reflects the image of the company.

6-11. What sources of information can you use to develop a customer profile?

L.O. 6 Define customer relationship management and interpret its value.

AACSB Analytical thinking
Programs and books that are already written. For example, Microsoft
Access or a specialized customer service software system for your industry.

6-12. List three ways you intend to provide superior customer service.

L.O. 5 Recognize and arrange excellent customer service.

AACSB Analytical thinking

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 Each student will have a different approach. Example:
1. I will interview each customer prior to the event to get very specific
information about his/her needs.
2. I will write down customers’ needs and preferences to make sure I
have an accurate record.
3. I plan to follow up with all my customers within three days after the
event to make sure they were satisfied with my services. I want them to
give me feedback about how I can improve.

6-13. Create a company signature for your business e-mail. Keep it under eight words.

L.O. 3 Plan effective sales calls

AACSB Information technology
Example: Oldies but Goodies—We play your favorite
music.

Chapter 6 Application Exercises

6-14. Develop a brief sales pitch for three items that you are wearing. Try out the pitch for
each on a partner. Have your partner help you time the pitches to one minute. Do
the same for your partner.

L.O. 2 Demonstrate principles of selling to prepare effective sales calls.

AACSB Application of knowledge

Students should emphasize understanding customer wants and needs

and selling on the basis of benefits rather than features.
6-15. Write a memo to your partner discussing his or her sales calls and how they could
be improved. When analyzing your partner’s efforts, use the eight steps of a sales
call in the text as your guide.

L.O. 4 Analyze and improve sales calls.

AACSB Written and oral communications and reflective thinking

Memoranda will vary in content. They should be clearly written and

address the positive and negative aspects of the sales call. The eight steps
below should be mentioned:

1. Preparation
2. Greeting
3. Showing the product or service
4. Listening to the customer
5. Dealing with objections
6. Closing the sales

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 7. Follow-up
8. Asking for references

6-16. Arrange to receive a sales pitch from a competitor in the business field that you intend
to enter. After the presentation, write down your objections to purchasing the
product/service. Use Brian Tracy’s method to categorize your objections and then
phrase them in a single question composed of 25 words or less. Avoid deception in
arranging your sales pitch.

L.O. 4 Analyze and improve sales calls.

AACSB Application of knowledge

Answers will vary but should follow Brian Tracy’s method:

Write down every single objection and then group them under the
following headings:
1. Price
2. Performance
3. Follow-up service
4. Competition
5. Support
6. Warranties and assurances
Rephrase the set of objections in a single question of 25 words or less.

Chapter 6 Exploring Your Community

6-17. Visit three businesses in your community and take notes on your experiences as a
shopper. Write a memo comparing the customer service at each. Include such
information as the following: Were you greeted when you came in? Did anyone offer to
help you? If you bought something, were you given a survey? What differentiates the
best firm from the worst in terms of customer service?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Written and oral communications and application of knowledge
Answers will vary.

6-18. Interview an entrepreneur about the types of CRM he/she uses. Discuss customer
service and complaint handling in particular. Summarize the interview in a short paper.

L.O. 6 Define customer relationship management and interpret its value.

AACSB Written and oral communications and application of knowledge
Answers will vary.

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 Suggested Answers for Chapter 6 Case Studies

BNI—Building Businesses through Networking

6-19. How does BNI reinforce the importance of selling based on benefits?

L.O. 1 Explain the importance of selling based on benefits.

AACSB Application of knowledge

Members are expected to provide referrals for one another on both a

formal and informal basis. For example, they are asked to share information
at the regular meetings.

6-20. List three things that BNI does that you could adopt to help build business
relationships.

L.O. 6 Define customer relationship management and interpret its value.

AACSB Analytical thinking

Use a conversational approach that welcomes interaction. Adapt each

discussion to the particular situation. Focus on real, everyday issues that
people have experienced and develop long-term professional relationships.

6-21. What type of referral network might support your proposed venture? Find
such a group and write a paragraph about it and why it could be of value.

L.O. 3 Plan successful sales calls.

AACSB Information technology and analytical thinking

Answers will vary. They may suggest BNI, Rotary, trade groups, chambers
of commerce, or others.

6-22. Visit the BNI site at http://www.bni.com and find the chapter closest to your home.

a. What is the name of the chapter?

b. When does it meet?
c. Who is the executive director of the chapter?
d. How many members are in the chapter?
e. What are the professional classifications of three of the members?

L.O. 3 Plan successful sales calls.

AACSB Information technology

Answers will vary.

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Case Study Analysis: Amazing Customer Service Propels Amazon
6-23. Why would Amazon accept responsibility for the shipping problems of its
vendors, UPS and FedEx? How would you feel about the company’s response if
you were among the customers who did not receive two-day shipping as
promised?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Reflective thinking

Customer service is critical for Amazon and lapses are not tolerated.
The total experience is wrapped around the customer to build customer
satisfaction, sales, and repeat purchases. Amazon had to accept responsibility
if it wanted to maintain its customer base.
Most students will express feelings of frustration and anger.
6-24. List the pros and cons of Amazon’s customer relationship management system from the
company and customer perspectives.

L.O. 6 Define customer relationship management and interpret its value.

AACSB Analytical thinking

Pros: The CRM system helps Amazon increase sales. Customer feedback
helps Amazon customize their website and give insight to other customers
through the reviews and ratings.

From the customers’ perspective, they get customized promotional emails,

up-to-date tracking, and opportunities to provide feedback.

Cons: Customers have high expectations that Amazon has to maintain.

Some customers may find all the contact annoying and may not like Amazon
knowing so much about their account information.

6-25. How has Amazon compensated for the lack of brick-and-mortar stores?
L.O. 5 Recognize and arrange excellent customer service.
AACSB Analytical thinking

Amazon carries a wide selection of merchandise. “Amazon’s user-friendly

website, along with low prices, one-click shopping, no-hassle returns, free-
shipping options” helps them compensate for the lack of “brick-and-mortar
stores.”

6-26. Go to the Amazon.com site and search for The Lean Startup by Eric Reis.
a. What formats are available?
b. What other categories of information are provided, and how might they boost
sales for the company?

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 c. What ordering options are offered? Are any more convenient than others?
Why?

L.O. 5 Recognize and arrange excellent customer service.

AACSB Information technology and analytical thinking

Answers will vary but should reflect genuine research. They should note
print and electronic options, reviews, prices, and the like. Ordering options
should include one-click ordering, regular ordering, electronic delivery, and
various shipping options.

UNIT 2 CASE STUDY ANALYSIS: INTEGRATED MARKETING

Unit 2 Opportunity Assessment:

Kitchen Arts & Letters, Inc. —An Independent Bookstore Defies Industry Odds

U2-1. What opportunity did Nach Waxman identify when founding Kitchen Arts & Letters?

L.O. 4-3 Choose your market segment and research it.

AACSB Analytical thinking

When Waxman created KA&L, he envisioned a store that was more than
just a cookbook outlet. He wanted to provide books on all subjects related to
food.

U2-2. What are the business-definition aspects of KA&L (offer, target market, capability,
problem solving)?

L.O. 3-1 Define your business.

AACSB Application of knowledge

Offer: an inventory of approximately 13,000 titles including books on food

chemistry, the restaurant business, ethnographic monographs, and various
food-related items, such as stationery and art.
Target market: KA&L customers are generally either culinary professionals
or home cooks. These customers are not the “mass market” readers who are
typically drawn to the larger chains or online behemoths.
Production/Delivery Capacity:

U2-3. What is the competition, direct and indirect, for the company?

L.O. 3-3 Analyze your competitive advantage.

AACSB Analytical thinking

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 The competitors include other bookstores including independent, chains, and online.
Other competitors include: online retailers such as Amazon and EBay and specialty
stores such as William-Sonoma. Indirect competitors might include TV cooking
shows.

U2-4. Create a qualitative competitor analysis chart for KA&L. Given its target customers, list
the top five competitive factors as you perceive them. Select three competitors (name them). This
will require some research.

L.O. 3-3 Analyze your competitive advantage.

AACSB Analytical thinking

Answers will vary but should reflect significant online research for the three
competitors. The competitive factors might include: product selection, service,
price, location, and knowledge of staff, etc.

U2-5. Which of the six factors of competitive advantage apply for KA&L? Explain.

L.O. 3-3 Analyze your competitive advantage.

AACSB Analytical thinking

Four of the six factors of competitive advantage apply to KA&L. The first is
quality. Nach Waxman has created a quality independent bookstore that is
NOT just a cookbook store but a “cultural zone” devoted to all aspects of
food. His location on Lexington Avenue in Manhattan is a convenient
location for his target customers. His selection of 13,000 titles is tailored for
his two separate clienteles: the amateurs and professionals. Finally, his staff
provides superior service and helps direct the customers to the appropriate
product offerings. Customers are encouraged to talk to the staff to insure
they find “the right books for the right individuals.”

U2-6. Describe the segmentation for KA&L in geographic, demographic, psychographic, and
behavioral dimensions.

L.O. 4-3 Choose your market segment and research it.

AACSB Analytical thinking

Geographic: Although KA&L operates in Manhattan, one of the food

capitals of the world, it is a “destination shopping location” for customers
anywhere who are seriously interested in food. Because books can be
ordered online, the world truly is its market.
Demographics: The independent bookstore demographics are: College
graduates (57 percent of the market, twice the rate of any other group),
adults ages 45 to 64 (spend 28 percent to 33 percent more than average on
books), married couples (with or without children), between 18 and 24 and

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 65 and older (they spend the least) and high-income buyers.
Psychographic: Clearly their customers’ lifestyles and values are centered
around serious knowledge and preparation of food.
Behavioral dimensions: for professionals, KA&L stocks the books with
photographs of the foods as prepared, restaurant-industry information,
culinary history, memoirs, and literature. For the amateur, the focus is more
on preparation and cooking techniques (cookbooks) and culinary
experiences.

U2-7. Complete the following positioning statement:

Kitchen Arts & Letters, Inc., is the ___________ that ___________

to ___________.

L.O. 4-4 Position your product or service within your market.

AACSB Application of knowledge

Answers will vary. They should mention food and the target customer base.

U2-8. Where in the product life cycle are independent bookstores? Where is KA&L? Why is it
the same or different from others?

L.O. 4-4 Position your product or service within your market.

AACSB Analytical thinking

Independent bookstores are in the decline stage but KA&L is most likely in
the maturity stage. It is able to avoid decline by being specialized in products
and serving niche that is growing (foodies).

U2-9. Create a three-question survey that would be of value to Nach Waxman and his team. To
whom would it be administered? By whom? How would it be administered? Why would it
be useful?

L.O. 4-2 Summarize how marketing research prepares you for success.
AACSB Application of learning

Examples might include: “How did you hear about our business?”, “Were
you able to find what you needed?”, “What additional product offerings
would you purchase?”, and “How often do you shop at KA&L?” It could be
administered to customers who make a purchase via an online survey on the
bottom of the cash register receipt. It might help Waxman in his
promotional efforts and product offerings.

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U2-10. What secondary research could be of value to KA&L management? Find three specific
sources and cite them properly.

L.O. 4-2 Summarize how marketing research prepares you for success.
AACSB Information technology and written and oral communication

Again, answers will vary but students will probably cite several sources on
independent bookstores, food/cooking specialty businesses, and even food
magazines such as Gourmet or Bon Appetit.

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