Download as PDF, PPTX
B2B - module3.pdf
- 1. B2B MARKETING Module 3 CustomerRelationship Management
- 2. MARKETING MIX -INADEQUACIES • Assumptions • Conflict of interest between marketer and customer • Focus on each individual transaction • Marketer is active, customer is passive • Process consists of study of buying behaviour, then attempt to influence the behaviour favourably • Prescriptive approach • Neo-classical economic concepts do not hold in business markets everytime (?) • Zero-sum game
- 3. RELATIONSHIP MARKETING All activitiesdirected towards establishing, developing, and maintaining successful exchanges with customers and other constituents
- 4. BENEFITS 1. Loyal customers •are far more profitable than customers who are price sensitive • perceive few differences among alternative offerings 2. Firms can secure important and durable advantages that are hard for competitors to understand, copy or displace
- 5.
- 6.
- 7. SPOTTING TRANSACTIONAL EXCHANGES •Narrow communication content • Identity not relevant • Clear and simple trading terms • Immediate (almost) performance
- 8. CORE ELEMENTS • Trust Willingnessto rely on an exchange partner in whom one has confidence • Commitment One partner’s belief that an ongoing relationship is so important that it deserves maximum efforts to maintain it
- 9. RANGE OF BUYER-SELLERRELATIONSHIPS Transactional Collaborative Availability of alternatives Many Few Supply market dynamism Stable Volatile Importance of purchase Low High Complexity of purchase Low High Information exchange Low High Operational linkages Limited Extensive
- 10. RELATIONSHIP DEVELOPMENT PROCESS Awareness Exploration Expansion Commitment Nointeraction Unilateral consideration • Interactions occur • Increase in dependence • Simpler termination • Satisfied with customisation • Additional benefits sought Shared values Decision-making structures Joint investment in relationship Attraction Norm development Power & Justice Communication & bargaining Expectations development • Contracts • Shared ownership • Mutual dispute resolution
- 11. SWITCHING COSTS • Investments •Money • People • Lasting assets • Procedures • Risk of exposure – cost of making wrong choice • Critical to operations • Less established suppliers • Technically complex products
- 12. CUSTOMER PROFITABILITY • Accuratetracing of costs to individual customers • The profitable few • Large customers – most/least profitable, seldom in the middle • Low cost-to-serve customers – profitable • High cost-to-serve customers – unprofitable, unless paying premium for specialised services received
- 13. CHARACTERISTICS High cost-to-serve Lowcost-to-serve Pre-sales Extensive support (technical and sales resources) Limited (standard pricing and ordering) Production Custom-made products Small order quantities Unpredictable ordering pattern Manual processing Standard Large Predictable Electronic Delivery Fast Standard Post-sales Extensive support (customer training, installation, customer support) Limited
- 14.
- 15. SALESPERSON ASSIGNMENT REP AREP B REP C Current assignment A Top 20% customer A Middle 60% Customer A Bottom 20% Customer Cost to serve Low cost to serve Varies High cost to serve Closing the deal 30% 40% 40% Education Bachelors in Industrial Psychology Bachelors in Business/Marketing Recent MBA graduate with technical undergraduate degree Experience Limited to current position Jumps industries and company for pay. Some unrelated sales experience Years of service to the company 25 yrs 5 yrs 1 yr Years of service to the account 15 yrs 3 yrs as inside sales 0
- 16. MANAGING COSTLY CUSTOMERS •Look inside • Internal processes should accommodate customer preferences • Sharper profit lens • Net margin vis-à-vis cost-to-serve → Identify profitable customers
- 17. MANAGING UNPROFITABLE CUSTOMERS • Improveprofitability • Reduce cost of activities for serving • Focus on the high-cost elements • Loss making • Assess other benefits • New customers – payback on a longer term • Opportunity for learning Firing – self-firing: refusing discounts, reducing/eliminating technical support
- 18. CUSTOMER RELATIONSHIP MANAGEMENT Cross-functionalprocess to achieve a continuing dialogue with customers across all customer touch-points with personalised treatment of the most valuable customers to ensure customer retention and the effectiveness of marketing initiatives
- 19. CRM SYSTEM CRM Software Salespersons Service teams Dealers Distributors Callcentres E-mails Social media • Future customer interactions • Market forecasts • Product design • SCM Synthesis
- 20. STRATEGIC ALLIANCES • Long-runlinkage vis-à-vis JV • Accessing complementary skills • Benefits • Access to markets and/or technology • Economies of scale in manufacturing, R&D, marketing • Reduced TTM • Risk sharing
- 21. ALLIANCES • Non-competing firms •International expansion – Renault & Diesel Nacional (Mexico) • Vertical integration – Aerospatia &Thomson • Diversification – BMW & Rolls Royce • Competing firms • Shared supplier alliance –Volkswagen & Renault (gearbox) • Quasi-concentration alliance – BAE, EADS Systems,Alenia (Tornado fighter) • Complementary alliance –Tata & Fiat (distribution)
- 24. EXTENDED ENTERPRISE –DAIMLER Transaction (market-based competition) Coordination (selective competition) Cooperation (selective partnership) Alliance (strategic partnership) Operational types Strategic types Relationship based on Data Exchanging information Transferring know-how Building up to specialist knowledge Relationship lasts for Transaction Annual contract Series life cycle Life cycle and beyond Extent of joint commitment Suppliers not integrated Integrated into NPD to limited extent, via well- defined interfaces Integrated into NPD to limited extent, interfaces defined jointly Several depts integrated, joint NPD, investment in joint assets Examples Office supplies Mouldings Exhaust systems Fuel cells
- 25. DETERMINANTS OF SUCCESS •Building a dedicated alliance function • Developing a joint value proposition • Developing close working relationships • Boundary-spanning connections • Integrating points of contact • Strategic • Tactical • Operational • Inter-personal • Cultural
- 26. EVOLUTION OF NETWORKS •Transactions → collaborative relationships → strategic alliances → channels → supply chains → networks • Marketing & purchasing distinction is meaningless - seamless, iterative process • Purchasing can overlap with product development, marketing planning
- 27.
- 28. NETWORK • Situated/embedded ina network of relationships • Relative value is function of its position in the network • Change in mindset • Interdependent • Limit on the ability to think & act independently • Extends capabilities beyond the boundaries of the firm
- 29. NETWORK INDUSTRIES • Telecom •Broadcasting • Finance • ATM, bank, payment systems, clearing houses • Exchanges – stocks, derivatives, commodities • Airlines
- 30. Source:World Bank, 2013 Geographicalregions are colour-coded
- 31. KEY ACCOUNT • Applicationof relationship portfolio management • Of critical and/or strategic importance • Receive special treatment in order to maintain and develop the relationship
- 32. KEY ACCOUNT MANAGEMENT •‘Seller-initiated type of strategic alliance’ (Millman &Wilson, 1995) • Strategic • Beyond direct economic importance • Reference value • Access to process / technological knowledge • Also termed as – national/strategic/major account marketing/management • Hold power advantage over the supplier • Key account manager has to reduce the instability associated with this asymmetry
- 33.
- 34. EVOLUTION OF KAMCONTD.
- 36. PITFALLS • Opportunity-loss • Othercustomers prone to competition attack • Neglect of customer prospecting • Opportunism • Anti-trust litigation
- 37.
- 38. CUSTOMER EXPERIENCE MANAGEMENT • Sumtotal of processes that capture customer’s subjective thoughts about a firm • Encompasses the dimensions of the offering • Product features • Service aspects • Process of becoming a customer • Way problems are resolved • Ease of use • Reliability • Advertising IIM Ranchi MBA 2022-24
- 39.
- 40. ACADEMIA & INDUSTRYPERSPECTIVE • A process of strategically managing a customer’s entire experience with a product or a company (Schmitt, 2010) • The practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy (Gartner) IIM Ranchi MBA 2022-24
- 41. IMPORTANCE • Fewer &larger customers • Contracts are never signed without due diligence • Peer groups & WOM • Social media IIM Ranchi MBA 2022-24
- 42. PROCESS • Mapping thecustomer journey • Convergence – CRM, DM, digital advertising, e- commerce, customer service • Data – volume, relevant • Automation & mobile IIM Ranchi MBA 2022-24
- 43. TOUCHPOINTS Pre-purchase (t-n) Purchase (Time period: t) Post-purchase (t+n) Brand-ownedAdvertising Website SEO Mobile apps Business development Salesforce Packaging Customer Service Training Accounts Partner- owned Website Media platforms Salesforce Outlet Customer Service Logistics Customer- owned Need Payment terms Usage Evaluation Social /external Other customers Independent information sources Social media Social media Social media Independent information sources Other customers IIM Ranchi MBA 2022-24
- 44.
- 45. DRIVERS • Commoditisation • Competitivedisruption • Globalisation • Global contracts • Buyer expectations • Customisation • Personalisation • Wider DMUs
- 46. WHAT IS ABM? •Structured process for developing and implementing highly customized marketing programmes to strategic accounts, partners or prospects • Customer experience-centric approach needing sales and marketing teams to collaborate on • best-fit account opportunities • engage specific buying groups inside target accounts with relevant experiences to generate more revenue
- 47. B2B VS ABM TraditionalB2B ABM Objective Acquisition of new accounts Grow existing accounts + new accounts Segmentation Broad-based (e.g. industry) Narrow focus on highly targeted accounts Value proposition Product & solution marketing Customized solutions at account level Sales alignment • Lead generation for sales • Handoff from marketing to sales • Opportunity development with sales • Collaboration throughout the sales cycle Fishing with Net Fishing with Spear
- 48. CHALLENGE • Largest customerwas evaluating potential partners for its next- generation virtualised, software-defined network • Cutting-edge project would set the direction and tone for the whole industry, defining the technology leaders in the process • Customer viewed Juniper as a small hardware vendor OBJECTIVE • Change customer perception to a strategic software partner that can support the customer’s future business most effectively
- 49. APPROACH • Forming cross-functionalcustomer team • Hired a dedicated marketing manager to oversee ABM • Developed a three-year, integrated marketing plan, aligned with the sales plan and customer’s vision • Segment the account contacts into - decision makers; circle of influence; operational teams EXECUTION • Long-term communications plan, thought leadership through education, awareness building, and sales-enablement tactics • Multiphase communications - highly targeted messaging for each individual • Delivery through executive advisory boards, round tables, briefings, newsletters, webinars and events • Communicated to external circle of influence - analysts, bloggers, and technologists, followed by decision makers - received content through customised events, webinars, direct marketing, and one-to-one meetings • Extensive customer insight reporting to enable sales to bring extremely relevant messaging to individual contacts
- 50. HOW? • Personalisation • Recognitionand engagement • Nurture through the buyer journey • Ease of interaction • Relevant content • Starts with data/insights • Sales + all other third party • Growth mindset
- 51. ABM = Storytelling+ Technology Personalized Content with Purpose
- 52. STORYTELLING • In UK,An estimated £3 billion in fines are levied for breaches of financial regulations. Personal salaries are forfeitable with potential prison sentences. • BLP is a law firm that offers advice to help well-known financial institutions and other companies to navigate risk and make business transactions work. • Objectives • One need’s to be top of mind when legal issues arise • Marketing team was asked to generate in-person meetings with 20 highly- qualified potential buyers of the firm’s regulatory services • Target audience • Risk and compliance officers, senior lawyers, within financial institutions • BLP research revealed over 20 different regulatory issues
- 53.