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Consultative selling in financial services: An observational study of the mortgage mediation process.

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1 CONSULTATIVE SELLING IN FINANCIAL SERVICES: AN OBSERVATIONAL STUDY OF THE MORTGAGE MEDIATION PROCESS Theo M.M. Verhallen, Harriëtte Greve, Ruud Th. Frambach, Tilburg University The Netherlands * KEYWORDS: BANKING, CONSULTANTS, FINANCIAL ADVICE, OBSERVATION, PERSONAL SELLING ABSTRACT The literature on personal selling and advising on services stresses the importance of analyzing the actual client-advisor interaction process. In this study this process of interaction is explored in a mortgage setting. In total, 42 conversations between advisors and 26 clients were observed. The exact content and characteristics of interactions were recorded and coded using a category system based on consultative selling. The coding system was derived from research and theory on a problem solving approach to personal selling. The results show vast differences between advisors * Theo M.M. Verhallen is professor of marketing and marketing research at Tilburg University, The Netherlands., Ruud Th. Frambach is assistant professor of marketing at Tilburg University and associate professor at Gent University, Belgium., Harriëtte Greve is a former PhD student of marketing at Tilburg University, The Netherlands. Address: Tilburg University P.O.Box 90153 5000 LE Tilburg ,The Netherlands, Telephone: 31-13 663043, Fax: 31- 13 662875, E-mail: [email protected] The authors wish to thank the VSB bank for their support for conducting this study and Dr. Jaideep Prabhu for his useful comments on an earlier version. 2 in their selling approach. In most cases, the sequence of problem solving phases that advisors employed differed from those of the ideal model. Advisors generally did not probe for the wishes of clients but instead started by presenting alternative product solutions, a typical feature of a hard selling approach. This research also demonstrates the effectiveness of direct obs

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