12-1 Personal Selling, Database Marketing, And Customer Relationship Management 12 Personal selling...

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Personal Selling,Database Marketing,And Customer Relationship Management12

•Personal selling–Retail sales–Business-to-business sales

•Database marketing•Direct marketing•Permission marketing•Frequency programs•Customer relationship management

Chapter Overview

Personal Selling

• Word of mouth communications– Good experience tell average of 6– Bad experience tell average of 11

• IMC relies heavily on personal selling.• “Last three feet” of marketing• Personal selling categories

– Retail sales– Business-to-business sales

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Retail Sales• Selling in retail outlets

– Single transaction sales– Order takers

• Selling services– Repeat transactions

• Telemarketing– Inbound telemarketing– Outbound telemarketing– Text messaging

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• Problem recognition• Information search• Evaluation of alternatives• Purchase decision• Post-purchase evaluation

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Retail Selling

F I G U R E 1 2 . 1

Consumer Buying Process

The Manufacturer’s Dilemma

• Purchase decisions – 50% in store• Retail sales personnel can influence

purchase decision.• To enhance manufacturer brand within

retail stores, manufacturers• Provide training for retail salespeople• Advertise extensively• Offer contests and incentives at retail level

• Missionary salespeople

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Cross-Selling

• During initial purchase• During inbound telemarketing• Successful cross-selling

– Quality customer data– Integrated information technology– Software and decision models– Selling culture– Hiring and training of right staff

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Business-to-Business Personal Selling

• Field sales• Order-getters

• In-house sales• Technology-based programs

– Telemarketing sales– Internet sales

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Four Attributes of Great SalespeopleJack Carroll

• Integrity – being honest with customers.• Diligence – working hard.• Resiliency – ability to bounce back and

not take “no” personally.• Intelligence

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Source: Jack Carroll, “The Four Attributes of Great Salespeople,” SalesLinks Bulletin, Mentor Associates Sales Training. (Http://www.saleslinks.com/sideline/sep-dec98/102698.htm)

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Types of Selling Relationships

F I G U R E 1 2 . 2

1. Awareness2. Trial purchase3. Expansion of purchases4. Commitment5. Partnership

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Source: Based on James C. Anderson, “Relationships in Business Markets: Exchange Episodes, Value Creation, and their Empirical Assessment,” Journal of Academy of Marketing Science, Vol. 23 (19960, pp. 346-350.

Steps in Developing a Strategic Partnership

How to Build Trust in a Strategic Partnership- Thomas Wood-Young

• Communicate frequently.• Return all phone calls immediately.• Handle complaints promptly with empathy and

honesty.• Offer great customer service.• Understand your customer.• Become a valuable resource.• Create solutions that add value for your customers.• Partner with customers.• Create a customer, not a sale!

12-11Source: Thomas Wood-Young, “Building Trust Results in Customer Loyalty,” Sales Doctors Magazine (Http://www.salesdoctors.com/diagnosis/3trust2.htm)

• Identifying prospects• Qualifying prospects• Knowledge acquisition• Sales approaches• Sales presentation• Follow-up

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Personal Selling Process

F I G U R E 1 2 . 4

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Sales promotion Vendor leads Channel leads Networking Cold calls

Methods of Prospecting

F I G U R E 1 2 . 5

Customer leads Databases Trade shows Advertising

inquiries Internet inquiries

• What is the sales volume potential?• Is the prospect dissatisfied with its current

vendor?• Does the prospect use single or multiple

sourcing?• Is the prospect a good fit with current

customers?• Does the prospect fit with the firm’s IMC plan?• How difficult will it be to get past the

gatekeeper(s)?

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Questions for Qualifying Prospects

F I G U R E 1 2 . 6

• Identify current vendor(s).• Identify prospect’s customers.• Assess customer needs.• Determine the roles of price, service, and product

attributes in the purchase decision.• Determine roles of trade and sales promotions in

purchase decisions.• Determine critical customer benefits or product

attributes.• Identify risk factors in switching vendors.• Identify the buyer’s personality type.

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Knowledge Acquisition

F I G U R E 1 2 . 7

Buyer Personality Types

• Intrinsic value buyers• Extrinsic value buyers• Strategic value buyers

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Sales Presentations• Types of sales presentations

– Stimulus-response– Need-satisfaction– Problem-solution– Mission-sharing

• Determinants of sales approach– Buyer-seller relationship– Product being sold– Buyer personality– Buying situation

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Sales Presentationsand

Buyer-Seller Relationships

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Mission-sharing

Problem-solution

Need-satisfaction

Stimulus-response

Strategic partnership

EDI relationship

Trust relationship

Contractual agreement

Repeat transactions

Occasional transactions

Single transactions

Follow-Up• Customer satisfaction• Repeat business and loyalty• Salespeople and follow-up

– No incentive to follow up– Create environment– Provide incentive

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• Decline in the number of salespeople• Expansion of selling channels• Long-term relationships and strategic

partnering• Team selling• Database customer segmentation

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Trends in Personal Selling

F I G U R E 1 2 . 9

Database Marketing

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Database Programs

Direct Marketing

Database

• Determine objectives.• Collect data.• Build a data warehouse.• Mine data for information.• Develop marketing programs.• Evaluate marketing programs and

data warehouse.

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Steps in Developing a Database

F I G U R E 1 2 . 1 1

Determining Objectives

• Who will use the information?• What kinds of data are available?• When will data be collected and used?• Where will the data be located or stored?• Why do we need certain data and not other

types?• How will the data be used?

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• Internal customer data.• Survey data of customers.• Channel members.• Commercial data sources.• Government data sources.

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Sources of Data

• Internal customer data.• Survey data of customers.• Channel members.• Commercial data sources.• Government data sources.

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Sources of Data

F I G U R E 1 2 . 1 2

• Where are the customer located?• What have they purchased?• How often have they purchased?• How did they initially make contact?• How do they order or purchase? (in person, Web, mail, phone, etc.)• What is known about their families, occupations, payment

histories, interests, attitudes, etc.?• If B-to-B, who are the influencers, users, deciders and purchasers?• If B-to-B, is it a corporate office or branch offices?

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Internal Data Information

F I G U R E 1 2 . 1 3

The Data Warehouse

• Internal data• External data• Geocoding information• Data put into warehouse must be

relevant to objectives.

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Mining Data for Information

• Building profiles of customer groups• Preparing models that predict future purchase behavior• Examples

– First Horizon – profiles best prospects– American Eagle – price markdowns– Goody’s – shopper baskets– Staples – profiles of best customers

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Developing Marketing Programs

• Data can be used:– to develop advertising, sales promotion and

other marketing materials.– for sales support.– for direct marketing efforts.– to target specific customers.– by service support staff.

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Direct Marketing

• Direct Marketing Association– Prospecting 60%– Customer retention 40%

• Dell Computers– Catalog– TV and radio ads– FSI ads

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• Mail• Catalogs• Telemarketing• Mass media• Alternative media• Internet• E-mail

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Methods of Direct Marketing

F I G U R E 1 2 . 1 4

Direct Mail

• High usage in B-to-B markets.• Success depends on quality of database.• Message must appeal to target group.• Digital direct-to-press.• Major problem is large volume of direct

mail received by both consumers and businesses.

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Catalogs

• Viewed as low-pressure sales tactics.• Catalogs saved for a longer period of

time.• Catalogs often passed along to others or

viewed by others.• Key is the use of enhanced database and

targeting of catalogs.

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Direct Marketing(cont.)

• Mass media– Broadcast (television, radio)– Print (magazines, newspapers)

• Alternative media– Package insert programs (PIPs)– Ride-a-longs– Card pack

• Internet• E-mail

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Steps in Developing aPermissions Marketing Program

Obtain permission from the customer. Reinforce the incentive to continue the

relationship.Increase the level of permission.Leverage the permission to benefit both

parties.

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Source: Seth Godin, “Permission Marketing: The Way to Make Advertising WorkAgain, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.

SuccessfulPermission Marketing Programs

Mutual relationshipParticipant empowermentCompany reciprocity

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Frequent Shopper Programs

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Source: A.C. Nielson, Santella & Associate

70% of U.S. households participate in a frequent-shopper program. 59% of participating households belong to two or more programs. 82% use their frequent shopper card each time they shop. Primary reason for joining is to receive discounts. 60% say the reason they shop at a particular grocery store is because the store has a frequent shopper program.

• Maintain sales, margins or profits.• Increase loyalty of existing customers.• Induce cross-selling to existing customers.• Differentiate a parity brand.• Preempt the entry of a new brand.• Preempt or match a competitor’s frequency

program.

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Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty ProgramsReally Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.

Frequency Program Objectives

F I G U R E 1 2 . 1 5

Principles in BuildingFrequency Programs

Design the program to enhance the value of the product.

Calculate the full cost of the program.Design a program that maximizes the

customer’s motivation to make the next purchase.

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Customer Relationship ManagementFoundation

• Database technology• Interactivity through Web sites, call centers,

and other means of contacting customers• Mass customization technology

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Customer Relationship ManagementSteps to Develop

• Identify the company’s customers.• Differentiate customers in terms of their needs and

their value to the selling company.– Lifetime value– Share of customer

• Interact with customers in ways that improve cost efficiency and the effectiveness of your interaction.– Improve cost efficiency– Enhance effectiveness of interaction.

• Customize some aspects of the goods or services being offered to the customer.

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Share of a Customer

• Customer spends an average of $24,000 per year with Company A.

• The customer purchases from two other vendors a total of $36,000 for the same materials or product.

• Total expenditures by the customer is $60,000.

• Company A has 40% share of the customer.

© 2007 by Prentice Hall 11-42

Customer Relationship ManagementReasons for Failure

• Implemented before a solid customer strategy is created.

• Rolling out a CRM program before changing the organization to match the CRM program.

• Becoming technology driven rather than customer driven.

• Customers feel like they are being stalked instead of being wooed.

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