Chapter

22
Managing Personal
Communications:
Direct and Database
Marketing and
Personal Selling

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Learning Objectives
1. How can companies conduct direct marketing for
competitive advantage?
2. What are the pros and cons of database
marketing?
3. What decisions do companies face in designing a
sales force?
4. What are the challenges of managing a sales
force?
5. How can salespeople improve their selling,
negotiating, and relationship marketing skills?
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 Direct Marketing
• The use of consumer-direct (CD) channels
to reach and deliver goods and services to
customers without using marketing
middlemen

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 Direct Marketing

Direct mail

Catalog marketing

Telemarketing

Other direct-response marketing

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 Constructing a
Direct-mail Campaign

 Choose objectives
 Choose target markets and prospects
 Choose offer elements
 Test elements
 Measure success: lifetime value

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 Direct Marketing
• Public and ethical issues

Irritation

Unfairness

Deception/fraud

Invasion of privacy

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 Customer Databases and
Database Marketing
• A customer database
– An organized collection of
comprehensive information
about individual customers or
prospects that is current,
accessible, and actionable for
lead generation, lead
qualification, sale of a product
or service, or maintenance of
customer relationships
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 Customer Databases and
Database Marketing
• Database marketing
– The process of building,
maintaining, and using
customer databases and
other databases (of
products, suppliers, or
resellers) to contact,
transact, and build
customer relationships

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 Customer Databases
Customer database Business database
• Transactions •Past purchases
• Registration information •Past volumes, prices, and
• Telephone queries profits
• Cookies •Buyer teams’ names
• Every customer contact •Contract status
• Past purchases •Supplier’s share of
• Demographics customer’s business
• Psychographics •Competitive suppliers
• Mediagraphics •Competitive strengths and
weaknesses
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 Customer Databases and
Database Marketing
• Data warehouse
– Captures, queries, and analyzes data to draw
inferences about an individual customer’s
needs and responses
• Data mining
– Uses sophisticated statistical and
mathematical techniques on data to extract
useful information about individuals, trends,
and segments

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 Customer Databases and
Database Marketing
• Companies can use their databases in five
ways

 To identify prospects
 To decide which customers get an offer
 To deepen customer loyalty
 To reactivate customer purchases
 To avoid serious customer mistakes

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 Customer Databases and
Database Marketing
• The downside of database marketing
– Some situations are just not conducive to database
marketing
– Building and maintaining a customer database require
a large investment
– Employees may resist becoming customer-oriented
and using the available information
– Not all customers want a relationship with the
company
– The assumptions behind CRM may not always hold
true
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 Designing the Sales Force
• Types of sales representatives

Deliverer Order taker

Solution Missionary
vendor

Demand
Technician
creator

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Designing the Sales Force

Sales force objectives

Sales force strategy

Sales force structure

Sales force size

Sales force compensation

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 Sales Force Objectives and
Strategy
• Prospecting
• Targeting
• Communicating
• Selling
• Servicing
• Information gathering
• Allocating

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 Figure 22.1
A Sales Marketing Exchange

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 Sales Force Objectives and
Strategy
• Selling teamwork
– Top management,
technical people,
customer service
representatives, and
office staff
• Direct (company) sales
force
• Contractual sales force
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 Sales Force Structure
• Four types of sales forces
– Strategic market sales force assigned to
major accounts
– A geographic sales force calling on customers
in different territories
– A distributor sales force calling on and
coaching distributors
– An inside sales force marketing and taking
orders online and via phone

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 Sales Force Size
• Workload approach to sales force size
1. Group customers into size classes according to annual
sales volume
2. Establish desirable call frequencies for each customer
class
3. Multiply the number of accounts in each size class by the
corresponding call frequency to arrive at the total
workload for the country
4. Determine the average number of calls a sales
representative can make per year
5. Divide the total annual calls required by the average
annual calls made by a sales representative to arrive at
the number of sales representatives needed
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 Sales Force Compensation
• Four components of sales
force compensation
– Fixed amount
– Variable amount
– Expense allowances
– Benefits
• Straight salary, straight
commission, and
combination of two

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Managing the Sales Force
Recruiting

Selecting

Training

Supervising

Motivating

Evaluating

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 Sales Rep Productivity
• Norms for prospect calls
– Companies often specify how much time reps
should spend prospecting for new accounts
• Using sales time efficiently
– Time-and-duty analysis and hour-by-hour
breakdowns of activities
• Sales technology
– The salesperson today has truly gone
electronic (tablet, Web site, and social media)
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 Motivating Sales
Representatives
• Intrinsic versus extrinsic rewards
• Sales quotas

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Evaluating Sales Representatives
• Sources of information
• Formal evaluation

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 Principles of
Personal Selling
• SPIN method types of questions

Situation

Problem

Implication

Need-payoff
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 Six Steps in
Effective Selling

Prospecting &
Preapproach
qualifying

Follow-up & Presentation &

maintenance demonstration

Overcoming
Closing
objections

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 Relationship Marketing
• In many cases the company seeks not an
immediate sale but rather a long-term
supplier–customer relationship

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Copyright © 2016 Pearson Education Ltd. 22-28