Chapter Thirteen Communicating Customer Value:


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Chapter Thirteen Communicating Customer Value:

  1. 1. Chapter Thirteen Communicating Customer Value: Personal Selling and Direct Marketing
  2. 2. <ul><li>Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. </li></ul><ul><li>Identify and explain the six major sales force management steps. </li></ul><ul><li>Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. </li></ul><ul><li>Define direct marketing and discuss its benefits to customers and companies. </li></ul><ul><li>Identify and discuss the major forms of direct marketing. </li></ul>
  3. 3. <ul><li>Background </li></ul><ul><li>Nation’s largest reseller of technology products and services to small and mid-size businesses. </li></ul><ul><li>Since 2000, sales up 48% to $5.7 billion and profits up 15% annually. </li></ul><ul><li>Highly devoted to customer with “Circle of Service” philosophy. </li></ul>Case Study <ul><li>Personal Selling’s Role </li></ul><ul><li>“ Clicks & people” strategy combines personal selling with strong Web presence. </li></ul><ul><li>Salespeople build and manage relationships by being trusted advisors. </li></ul><ul><li>Training is extensive as salespeople must be knowledgeable and customer focused. </li></ul>CDW – Relationship Building Success
  4. 4. The Nature of Personal Selling <ul><li>Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term customer relationships. </li></ul><ul><li>The term salesperson covers a wide range of positions: </li></ul><ul><ul><li>Order taker: Department store clerk </li></ul></ul><ul><ul><li>Order getter: Creative selling in different environments </li></ul></ul>
  5. 5. The Role of the Sales Force <ul><li>Personal selling is a paid, personal form of promotion. </li></ul><ul><ul><li>Involves two-way personal communication between salespeople and individual customers. </li></ul></ul><ul><li>Salespeople: </li></ul><ul><ul><li>Probe customers to learn about problems. </li></ul></ul><ul><ul><li>Adjust marketing offers to fit special needs. </li></ul></ul><ul><ul><li>Negotiate terms of sales. </li></ul></ul><ul><ul><li>Build long-term personal relationships. </li></ul></ul>
  6. 6. The Role of the Sales Force <ul><li>Sales force serves as critical link between company and its customers. </li></ul><ul><ul><li>They represent the company to the customers. </li></ul></ul><ul><ul><li>They represent the customers to the company. </li></ul></ul><ul><ul><li>Goal = customer satisfaction and company profit. </li></ul></ul>
  7. 7. Sales Force Management <ul><li>The analysis, planning, implementation, and control of sales force activities. </li></ul><ul><li>Includes: </li></ul><ul><ul><li>Designing sales force strategy & structure </li></ul></ul><ul><ul><li>Recruiting and selecting salespeople </li></ul></ul><ul><ul><li>Training salespeople </li></ul></ul><ul><ul><li>Compensating salespeople </li></ul></ul><ul><ul><li>Supervising salespeople </li></ul></ul><ul><ul><li>Evaluating salespeople </li></ul></ul>
  8. 8. Sale Force Structure <ul><li>Territorial: </li></ul><ul><ul><li>Salesperson assigned to exclusive area and sells full line of products. </li></ul></ul><ul><li>Product: </li></ul><ul><ul><li>Sales force sells only certain product lines. </li></ul></ul><ul><li>Customer: </li></ul><ul><ul><li>Sales force organized by customer or industry. </li></ul></ul><ul><li>Complex: </li></ul><ul><ul><li>Combination of several types of structures. </li></ul></ul>
  9. 9. Outside & Inside Sales Forces <ul><li>An outside sales force travels to call on customers in the field. </li></ul><ul><li>An inside sales force conducts business from their offices via telephone or visits from perspective buyers. </li></ul><ul><ul><li>Includes: </li></ul></ul><ul><ul><ul><li>Technical support people </li></ul></ul></ul><ul><ul><ul><li>Sales assistants </li></ul></ul></ul><ul><ul><ul><li>Telemarketers </li></ul></ul></ul>
  10. 10. Team Selling <ul><li>Used to service large, complex accounts. </li></ul><ul><li>Can find problems, solutions, and sales opportunities that no single person could. </li></ul><ul><li>Can include experts from different areas of selling firm. </li></ul><ul><li>Pitfalls: </li></ul><ul><ul><li>Can confuse or overwhelm customers. </li></ul></ul><ul><ul><li>Some people have trouble working in teams. </li></ul></ul><ul><ul><li>Hard to evaluate individual contributions. </li></ul></ul>
  11. 11. Successful Salespeople <ul><li>Careful selection can greatly enhance overall sales force performance while minimizing costly turnover. </li></ul><ul><li>Key talents of successful salespeople: </li></ul><ul><ul><li>Intrinsic motivation. </li></ul></ul><ul><ul><li>Disciplined work style. </li></ul></ul><ul><ul><li>Ability to close a sale. </li></ul></ul><ul><ul><li>Ability to build relationships with customers. </li></ul></ul>
  12. 12. Recruiting Salespeople <ul><li>Searching the Web </li></ul><ul><li>College placement services </li></ul><ul><li>Recruit from other companies </li></ul><ul><li>Recommendations from current sales force </li></ul><ul><li>Employment agencies </li></ul><ul><li>Classified ads </li></ul>
  13. 13. Sales Force Training Goals <ul><li>Learn about different types of customers and their needs, buying motives, and buying habits. </li></ul><ul><li>Learn how to make effective sales presentations. </li></ul><ul><li>Learn about and identify with the company, its products and its competitors. </li></ul>
  14. 14. Compensating Salespeople <ul><li>Fixed amount: </li></ul><ul><ul><li>Salary </li></ul></ul><ul><li>Variable amount: </li></ul><ul><ul><li>Commissions or bonuses </li></ul></ul><ul><li>Expenses: </li></ul><ul><ul><li>Repays for job-related expenditures </li></ul></ul><ul><li>Fringe benefits: </li></ul><ul><ul><li>Vacations, sick leave, pension, etc. </li></ul></ul>
  15. 15. Supervising Salespeople <ul><li>Goal of supervision is to encourage salespeople to “work smart.” </li></ul><ul><ul><li>Help them identify customers and set call norms. </li></ul></ul><ul><ul><li>Specify time to be spent prospecting: </li></ul></ul><ul><ul><ul><li>Annual call plan </li></ul></ul></ul><ul><ul><ul><li>Time-and-duty analysis </li></ul></ul></ul><ul><ul><ul><li>Sales force automation systems </li></ul></ul></ul>
  16. 16. Motivating Salespeople <ul><li>Goal of motivating sales force is to encourage salespeople to “work hard.” </li></ul><ul><ul><li>Organizational climate. </li></ul></ul><ul><ul><li>Sales quotas. </li></ul></ul><ul><ul><li>Positive incentives: </li></ul></ul><ul><ul><ul><li>Sales meetings </li></ul></ul></ul><ul><ul><ul><li>Sales contests </li></ul></ul></ul><ul><ul><ul><li>Recognition and honors </li></ul></ul></ul><ul><ul><ul><li>Cash awards, trips, profit sharing </li></ul></ul></ul>
  17. 17. The Personal Selling Process <ul><li>Prospecting: </li></ul><ul><ul><li>The salesperson identifies qualified potential customers (called prospects). </li></ul></ul><ul><li>Preapproach: </li></ul><ul><ul><li>The salesperson learns as much as possible about a prospect before making a sales call. </li></ul></ul><ul><li>Approach: </li></ul><ul><ul><li>The salesperson meets the customer for the first time. </li></ul></ul><ul><li>Presentation: </li></ul><ul><ul><li>The salesperson tells the “product story” to the buyer, highlighting customer benefits. </li></ul></ul>
  18. 18. The Personal Selling Process <ul><li>Handling Objections: </li></ul><ul><ul><li>The salesperson seeks out, clarifies, and overcomes customer objections to buying. </li></ul></ul><ul><li>Closing: </li></ul><ul><ul><li>The salesperson asks the customer for an order. </li></ul></ul><ul><li>Follow-up: </li></ul><ul><ul><li>The salesperson follows up after the sale to ensure customer satisfaction and repeat business. </li></ul></ul><ul><li>The selling process is transaction oriented; most firms go beyond this and attempt to build mutually profitable relationships. </li></ul>
  19. 19. Direct Marketing <ul><li>Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. </li></ul><ul><ul><li>One-on-one communication in which offers are tailored to needs of narrowly defined segments. </li></ul></ul><ul><ul><li>Usually seeks a direct, immediate, and measurable consumer response. </li></ul></ul>
  20. 20. The New Direct-Marketing Model <ul><li>Some firms use direct marketing as a supplemental medium. </li></ul><ul><li>For many companies, direct marketing constitutes a new and complete model for doing business. </li></ul><ul><li>Some firms employ the direct model as their only approach. </li></ul><ul><li>Some see this as the new marketing model of thismillennium. </li></ul>
  21. 21. Benefits of Direct Marketing <ul><li>Benefits to Buyers: </li></ul><ul><ul><li>Convenient. </li></ul></ul><ul><ul><li>Easy to use. </li></ul></ul><ul><ul><li>Private. </li></ul></ul><ul><ul><li>Ready access to products and information. </li></ul></ul><ul><ul><li>Immediate and interactive. </li></ul></ul>
  22. 22. Benefits of Direct Marketing <ul><li>Benefits to Sellers: </li></ul><ul><ul><li>Powerful tool for building customer relationships. </li></ul></ul><ul><ul><li>Can target small groups or individuals. </li></ul></ul><ul><ul><li>Can tailor offers to individual needs. </li></ul></ul><ul><ul><li>Can be timed to reach prospects at just the right moment. </li></ul></ul><ul><ul><li>Gives access to buyers they could not reach through other channels. </li></ul></ul><ul><ul><li>Offers a low-cost, efficient way to reach markets. </li></ul></ul>
  23. 23. Customer Databases <ul><li>An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data. </li></ul>
  24. 24. Direct Marketing Forms <ul><li>Telephone marketing </li></ul><ul><li>Direct-mail marketing </li></ul><ul><li>Catalog marketing </li></ul><ul><li>Direct-response TV marketing </li></ul><ul><li>Kiosk marketing </li></ul><ul><li>Online marketing </li></ul>
  25. 25. Telemarketing <ul><li>Used in both consumer and B2B markets. </li></ul><ul><li>Can be outbound or inbound calls. </li></ul><ul><li>Do-Not-Call legislation has impacted the telemarketing industry. </li></ul>
  26. 26. Direct-Mail Marketing <ul><li>Involves sending an offer, reminder, announcement, or other item to a person at a particular address. </li></ul><ul><li>Permits high target-market selectivity. </li></ul><ul><li>An be personalized, and is flexible. </li></ul><ul><li>Higher CPM yields better prospects than mass media. </li></ul><ul><li>Easy to measure results. </li></ul>
  27. 27. Catalog Marketing <ul><li>With the Internet, more and more catalogs are going digital. </li></ul><ul><li>Print catalogs still the primary medium. </li></ul><ul><li>Expected sales in 2008 = $175 billion. </li></ul><ul><li>Web catalogs have specific advantages and disadvantages when compared to printed catalogs. </li></ul>
  28. 28. Direct Response TV Marketing <ul><li>Direct-response advertising: </li></ul><ul><ul><li>TV spots that are 60 or 120 seconds long. </li></ul></ul><ul><li>Infomercials: </li></ul><ul><ul><li>A 30 minute or longer advertising program for a single product. </li></ul></ul><ul><li>Home shopping channels: </li></ul><ul><ul><li>Entire cable channels dedicated to selling multiple brands, items, and services. </li></ul></ul>
  29. 29. Kiosk Marketing <ul><li>Information and ordering machines generally found in stores, airports, and other locations. </li></ul><ul><ul><li>Example: In-store Kodak kiosks allow customers to transfer pictures from digital storage devices, edit them, and produce high-quality color prints. </li></ul></ul>
  30. 30. Integrated Direct Marketing <ul><li>Involves carefully coordinated multiple-media, multiple-stage campaigns. </li></ul><ul><ul><li>Marketers try to improve response rates and profits by adding media and stages that contribute more to additional sales than to additional costs. </li></ul></ul><ul><ul><li>Example: Integrating a paid ad with response channel (Web or phone), direct mail, outbound telemarketing, face-to-face sales call, continuing communication. </li></ul></ul>
  31. 31. Public Policy and Ethical Issues in Direct Marketing <ul><li>Irritating to consumers </li></ul><ul><li>Taking unfair advantage of impulsive or less sophisticated buyers </li></ul><ul><li>Targeting TV-addicted shoppers </li></ul><ul><li>Deception, fraud </li></ul><ul><li>Invasion of privacy </li></ul>
  32. 32. <ul><li>Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. </li></ul><ul><li>Identify and explain the six major sales force management steps. </li></ul><ul><li>Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. </li></ul><ul><li>Define direct marketing and discuss its benefits to customers and companies. </li></ul><ul><li>Identify and discuss the major forms of direct marketing. </li></ul>