Sales Force Management

*

3

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

3-*

Finance

R&D

Mfg

IT

HR

Mkg

Integrating Sales w/ Other Functions

Source: HR Chally Group (2009).

Sales

CRM

Common

Cause

Cross-

functional

meetings

Sales’ adoption of marketing concepts

Hire excellent sales employees

3-*

• 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 buyer-seller relationships

3-*

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-*

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

Example of CRM Software
Sales and Marketing Module

3-*

3-*

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

Example of CRM Software
Support Helpdesk Module

3-*

3-*

Customer Orientation

Marketing Mix

Marketing Concept

Market Orientation

Customer Orientation

Customer

3-*

price

promotion

distribution

product

3-*

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-*

Marketing evolution

3.1

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

3-*

3-*

Objectives of CRM

• Customer Retention
• Customer Acquisition
• Customer Profitability

3-*

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-*

The CRM process cycle

3.2

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

3-*

3-*

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-*

3.1 CRM Failures Often Management’s Fault

• Disruption of routines
• Perception of CRM as micro-management tool
• Differences in expectations
• Perceived lack of management support

3-*

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-*

Source: George S. Day, “Capabilities of Market-Driven Organizations,” Journal of Marketing 58 (October 1994), pp. 37–52. Reprinted by permission of the American

Marketing Association.

Classifying market-oriented firms

3.3

3-*

3-*

Strategy Development

Answers the most basic questions about an organization’s reason for being

Flow from the company’s mission, represent more specific

targets

Specific, measurable, and realistically attainable

Mission

Goals

Objectives

3-*

3-*

Soul of Dell

• Statement of Dell’s corporate philosophy
• Who we are, aspire to become
• Guides actions
• Basis for “winning culture’
• Core elements focus on
• Customers
• Dell team
• Direct relationship

3-*

SBU Strategy

• How the business will compete in its industry to achieve sustainable competitive advantage (SCA)
• SCA focuses on distinctive competencies
• Porter’s Three Generic Strategies:
• Low Cost
• Differentiation
• Niche

3-*

3.2 Netbooks

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

3-*

Source: Adapted from William L. Cron and Michael Levy, “Sales Management Performance Evaluation: A Residual Income Perspective,” Journal of Personal Selling & Sales Management 7 (August 1987), pp. 57–66.

Generic business strategies and their implications for the sales force

3.4a

3-*

3-*

Source: Adapted from William L. Cron and Michael Levy, “Sales Management Performance Evaluation: A Residual Income Perspective,” Journal of Personal Selling & Sales Management 7 (August 1987), pp. 57–66.

Generic business strategies and their implications for the sales force

3.4b

3-*

3-*

3.5

Steps in developing

and implementing

strategies

3-*

Types of relationships between buyers and sellers

3.6

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

3-*

Personal Selling’s 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-*

Personal Selling’s 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-*

Personal Selling’s 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-*

Relationship Development

Stage 1

Exploration

Determine value, build trust, set proper expectations, monitor

Generate repeat sales, full-line selling, cross-selling

Build loyalty, become a preferred supplier, engage in TQM

3-*

Stage 2

Expansion

Stage 3

Commitment

3-*

3.3 Building Customer Relationships

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

3-*

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-*

Factors influencing the role of personal selling in a firm’s IMC strategy

3.7

3-*

3-*

Illustrative factors that influence the

design of IMC strategy

3.8

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

3-*

Customer Feedback

• Maintaining customer loyalty is crucial for improving profitability
• Loyal customers. . .
• Tend to concentrate on purchases
• Provide positive customer referrals
• May pay premium prices for value they receive
• Supplement satisfaction measures with examinations of customer behavior
• Annual retention rate
• Frequency of purchases
• Percentage of the customer’s total purchases captured by the firm

3-*

3.4 Bringing Unique Value

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

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

Mark W. Johnston | Greg W. Marshall