M a r k W. J o h n s t o n | G r e g W.

Marshall
McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Part 1
Formulation of a Sales Program

Linking Strategies and the Sales Role in the Era of Customer Relationship Management

Integrating Sales w/ Other Functions

Sales adoption of marketing concepts

R&D
Crossfunctional meetings

Finance Sales Mkg

Hire excellent sales employees

Mfg IT

HR
Common Cause

CRM

Source: HR Chally Group (2009).

3-4

Understand key components and goals of CRM Explain importance of market orientation and how it is fostered Identify key steps in developing and implementing strategies Describe role of personal selling in marketing strategy Outline stages in developing strategic partnership relationships Discuss actions salespeople can take to ensure long-term buyerseller relationships
3-5

Customer Relationship Management (CRM)

Comprehensive business model for increasing revenues and profits by focusing on customers Overarching business philosophy and process tool to facilitate a customer-driven enterprise
3-6

Sales and Marketing Module

Sources: www.Stromasoft.com, StromasoftCRM software,, Customer Support Helpdesk Module, Sales & Marketing Module, Copyright () 2007 StromaSoft Ltd 3-7

Example of CRM Software

Example of CRM Software

Support Helpdesk Module

Sources: www.Stromasoft.com, StromasoftCRM software,, Customer Support Helpdesk Module, Sales & Marketing Module, Copyright () 2007 StromaSoft Ltd

3-8

Customer Orientation
Customer
price

product

Marketing Concept

Marketing Mix

promotion

distribution

3-9

Customer-Centric Cultures

Partnership business model with shared risks and rewards Selling as customer business consultation Formalized customer analysis processes and agreements Proactively educating customers about value chain and cost reduction opportunities Focus on continuous improvement principles stressing customer satisfaction

3-10

3.1 Marketing evolution

Source: Ronald S. Swift, Accelerating Customer Relationships: Using CRM and Relationship Technologies (Upper Saddle River, NJ: Prentice Hall PTR, 2001), p. 38. 3-11

Objectives of CRM

Customer Retention Customer Acquisition Customer Profitability

3-12

Advantages of CRM

Reduces advertising costs Increases awareness of customer needs Tracks effectiveness of promotional campaigns Competition for customers based on service, not prices Prevents over-spending on low-value clients, under-spending on high-value ones Speeds time to develop and market a product Improves use of customer channel
3-13

3.2

The CRM process cycle

3-14

Source: Ronald S. Swift, Accelerating Customer Relationships: Using CRM and Relationship Technologies (Upper Saddle River, NJ: Prentice Hall PTR, 2001), p. 40.

10 Critical Questions in CRM

Customers

Who are our customers? What do our customers want and expect? What is the value potential of our customers?

The Relationship

What kind of relationship do we want to build? How do we foster exchange? How do we work together and share control?

Managerial Decision Making

Who are we? How do we organize to move value closer to our customers? How do we measure and manage our performance? How do we increase our capacity for change?

3-15

3.1 CRM Failures Often Managements Fault

Disruption of routines Perception of CRM as micromanagement tool Differences in expectations Perceived lack of management support

3-16

Market Orientation

Successful salespeople think beyond selling Market-driven companies do better market sensing Market-driven companies develop stronger relationships with customers and channels Internal partnering a critical component
3-17

3.3 Classifying market-oriented firms

Source: George S. Day, Capabilities of Market-Driven Organizations, Journal of Marketing 58 (October 1994), pp. 3752. Reprinted by permission of the American Marketing Association. 3-18

Answers the most basic questions about an organizations reason for being Flow from the companys mission, represent more specific targets Specific, measurable, and realistically attainable

Strategy Development
Mission

Goals

Objectives

3-19

Soul of Dell

Statement of Dells corporate philosophy

Who we are, aspire to become Guides actions Basis for winning culture Customers Dell team Direct relationship
3-20

Core elements focus on

SBU Strategy

How the business will compete in its industry to achieve sustainable competitive advantage (SCA) SCA focuses on distinctive competencies Porters Three Generic Strategies:

Low Cost Differentiation Niche

3-21

3.2 Netbooks

Low-cost, small, lighter Portability and cost-effectiveness offset lower level performance Moores Law: Every 18 months, double computing power can be produced at the same price. Netbooks reverse this trend

3-22

Porters Typology
Business Strategies Low-cost Supplier Sales Force Implications Large customers, prospects Sell on price Significant order-taking responsibilities

Differentiation

Sell non-price benefits High-quality service Low price-sensitivity customers

Niche (or focus)

Expert in target market operations and opportunities Non-price benefits

Generic business strategies and their implications for the sales force
Source: Adapted from William L. Cron and Michael Levy, Sales Management Performance Evaluation: A Residual Income Perspective, Journal of Personal Selling & 3-23 Sales Management 7 (August 1987), pp. 5766.

3.4a

Miles & Snows Typology

Business Strategies Prospector Sales Force Implications Sales volume growth Customer penetration and prospecting

Defender

Current customer base Little prospecting Customer service, account penetration

Analyzer

Service Prospecting New applications Mature product distribution New product campaign support

Generic business strategies and their implications for the sales force
Source: Adapted from William L. Cron and Michael Levy, Sales Management Performance Evaluation: A Residual Income Perspective, Journal of Personal Selling & 3-24 Sales Management 7 (August 1987), pp. 5766.

3.4b

3.5
Steps in developing and implementing strategies

3-25

3.6 Types of relationships between buyers and sellers

Source: Barton Weitz, Stephen Castleberry, and John Tanner, Selling: Building Partnerships, 6th ed. (New York: Irwin/McGraw-Hill, 2005).

3-26

Personal Sellings Role in

Market Exchanges

One-shot transactions occurring between a buyer and seller with limited thought of future consideration Roles of salespeople

Create new value Adapt Make the market Exit

3-27

Personal Sellings Role in

Functional Relationships

Create a climate of cooperation, with open and honest communication Roles of salespeople

Engender high level of personal trust in well managed business activities Provide expertise for competitive advantage

Danger when one party in the relationship leaves

3-28

Personal Sellings Role in

Strategic Partnerships

Long-term relationships where both parties make significant investments Roles of salespeople

Direct communication with production, production designers, and others Relationship manager and general manager Work with clients large enough to make investments worthwhile
3-29

Relationship Development

Stage 1 Exploration

Stage 2 Expansion

Stage 3 Commitment

Determine value, build trust, set proper expectations, monitor

Generate repeat sales, full-line selling, crossselling

Build loyalty, become a preferred supplier, engage in TQM

3-30

3.3 Building Customer Relationships

Under promise, over deliver Don't forget the small things. Stay in contact Establish a feedback system

3-31

Integrated Marketing Communication (IMC)

Integrates personal selling, advertising and other communications options Advantages of selling in IMC

Face-to-face contact More persuasive More demonstrative Customization opportunities

Disadvantages of selling in IMC

Limited ability to duplicate More costly

3-32

3.7

Factors influencing the role of personal selling in a firms IMC strategy

3-33

3.8

Illustrative factors that influence the design of IMC strategy

Source: Adapted from David W. Cravens and Nigel F. Piercy, Strategic Marketing, 8th ed. (New York: Irwin/McGraw-Hill, 2005), p. 348.

3-34

Customer Feedback

Maintaining customer loyalty is crucial for improving profitability Loyal customers. . .

Supplement satisfaction measures with examinations of customer behavior

Tend to concentrate on purchases Provide positive customer referrals May pay premium prices for value they receive

Annual retention rate Frequency of purchases Percentage of the customers total purchases captured by the firm
3-35

3.4 Bringing Unique Value

Understand the value Believe in the unique value Communicate the unique value

3-36

M a r k W. J o h n s t o n | G r e g W. Marshall
McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.