Download tools Consistent use of CRM systems External challenges include

BGS
Customer Relationship Management
Chapter 8
Sales Strategy and CRM
Thomson Publishing 2007 All Rights Reserved
New Sales Challenges
The New Sales Challenge
• Sales forces are experiencing significant new
challenges in the sales process:
– Internal challenges include integrating:
• (SFA) tools
• Consistent use of CRM systems
– External challenges include:
• Competitive environment
• Improving technologies
• New data resources
The Use of CRM
• CRM has been developed to meet the everevolving needs of sales
• Sales forces use CRM systems to deliver:
– The right offer
– To the right customers
– At the right time
CRM and Sales
• A salesperson’s principle responsibility is to
improve his or her business and relationship
with his or her customer continually.
– Today’s sales forces must record customer needs.
– The single greatest impediment to effective CRM
is the lack of sales force participation.
CRM and Sales Strategies
• There are several different selling strategies
currently used based on the strengths of
organizations.
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Transactional selling
Consultive selling
Strategic selling
Partnership selling
Strategic Selling Example
• 3M uses this approach in its adhesive divisions
with their windows and doors industry
customers.
– Invest significantly in providing technical resources
for new customer new product development.
– The key account representative must mobilize
resources in 3M for the long term.
Who Executes these Sales Strategies?
• Same sales technique?
– Boeing 787
– Wellbutrin XL (an antidepressant)
– Crest toothpaste
Who Executes these Sales Strategies?
• Different skills are needed by:
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Manufacturer’s representatives
Brokers
Direct salespeople
Inside telephone salespeople
• CRM system can help
CRM Benefits
• CRM provides salespeople with the ability to
– Document customer needs quickly
– Provide senior management exposure to customer
problems
– Direct other departments
Sales Challenges in Consumer Package
Goods
• Sales is challenged with
– Managing extensive customer relationships
– Reacting to customer demands
– Developing local promotional programs to achieve
marketing objectives
Sales Challenges in Consumer Package
Goods (CPG)
• What caused this organizational change for sales?
– The introduction of scanner technology
– Retailers were more aware of customer
demand
– Data collection system was faster and more
accurate
– New data created a new approach to
customer management called frequent
shopper or customer loyalty programs
Sales Challenges in Consumer Package
Goods (CPG)
• Leveraging household data and running
promotions are at the heart of the channel
conflict between manufacturers and retailers.
– Who will control the dollars and the message used
to motivate households to purchase products?
– Who makes decisions?
CPG Relationships
An Expansion of Sales and the CRM
Mentality
The Selling Landscape
• The selling landscape today is filled with a variety of
selling techniques:
– SPIN Selling
– Miller Heiman
• The time is right for us to consider selling as a buying
management process
Sales Models and CRM
• Sales models today use fact-based selling
• Essential facts and compelling reasons to buy
must be recorded in a CRM database
– What if your sales representative leaves?
Commitment to Customer Management
• At its heart, CRM is a disciplined approach to
customer management.
– Successful CRM requires a clear commitment of the entire
company to the process from the top down.
– CRM is not technology dependent but rather a business
framework for improving performance.
• Small companies with good knowledge of their customers, such
as Dry Cleaning to Your Door, practice CRM without a
sophisticated CRM system.
CRM and Customer Management
• Today, sales strategy is changing because of the need
to serve larger and more influential customers more
expeditiously.
– CRM systems can provide a wealth of information
previously unavailable.
– CRM empowers sales to take more control of customer
management.
• Account Specific Marketing
• Category management programs
Information Empowerment
• CRM is providing sales forces with the capability to
monitor their business better.
– The foundation for these capabilities is the acquisition of
better information collected from a variety of customer touch
points.
– Sales collects and inputs the following buyer organization
data:
•
•
•
•
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•
objectives
motivations
purchase cycles
available budgets (open to buy)
purchase authority
buying-committee involvement
Information Empowerment
– In addition, the salesperson is responsible for
inputting:
•
•
•
•
sales forecasts
sales probabilities
delivery specifics
expected sale timing
Information Empowerment
• Today’s CRM systems provide for superior
relationship management because information is more
– accurate
– timely
– comprehensive
• CRM systems provide management with improved
sales forecasts and better pipeline management to
direct production
Information, Sales, and CRM
What Strategies Work Better when
Supported by CRM?
• The following strategies are now utilizing new data
resources and better analytics to improve company
performance with retailers:
– Category Management (CM)
– Account Specific Marketing (ASM)
– Continuity and Frequency Programs (FSP)
Using CRM for Selling
• We evaluate the impact of CRM with the following
analytics
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ROI
Sales opportunities closed
Prediction accuracy
The capability to track major sales events
It is easy to see how sales leaders are using CRM and
gaining prominence in their organizations
Objectives, Strategy, and Tactics?
• Objectives specify an intended
accomplishment.
• A strategy statement focuses on how
you will accomplish your objective.
• A tactical statement is what you will
do specifically to reach your goal.
Category Management and CRM
• Category management is selection of the
appropriate assortment, shelf space, and
promotion for a group of products.
• Sales forces regard CRM as a valuable tool
for category management
– it improves the speed
– accuracy
– quality of information exchanged by partners by
using CRM analytics to evaluate the performance
of the sales force and the profitability of the
programs
ASM and CRM
• CRM supports Account Specific Marketing through
– improved customer information
– more timely communication
– providing better pipeline data
• The metrics observed in ASM are
– opportunity conversion rates
– revenue and profitability of account initiatives
• The sales force is responsible for ASM
Loyalty Programs/Frequent Shopper
Club Programs and Sales
• Loyalty programs become CRM programs
• Most loyalty programs are in a B2C channels
– United Airlines Mileage Plus Program
– The Hertz Gold Program
– Hilton Hotels Honors Program
• Programs in B2B2C environments such as Safeway’s
Safeway Club are also CRM programs
FSP and CRM
• Frequent shopper club activity in the grocery industry
is a promotion effort that works on three levels at any
time
– A reward to customers for purchase
– A means to deliver in-store electronic incentives
– A vehicle to target and deliver incentives via direct
mail, web site, and at checkout
CPG, Promotion, and CRM
• As sales forces become more involved with
customer strategy, CRM becomes more
important to a company’s success.
• CRM provides the sales force the analytics to
measure product and campaign performance.
CPG: What Have we Learned?
• A new generation of leaders
– Decisions made by sale forces are determining the
success of customers’ marketing efforts
• Empowered by CRM, the line between the sales and
marketing functions is being blurred
• Strategic decision making regarding loyalty programs,
category management, customer communication, and
consumer promotion are made by sales
CRM and Sales Techniques
CRM: The Foundation
• CRM systems serve as the foundation for sales
action maintaining record of
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Buyer preferences
Process requirements
Purchase cycles
Contact dates
Contract information
Customer service interface information
Forecast sales
Proactive Sales Action and CRM
• The ability to be more proactive with CRM results
from having the right information to address a
problem immediately.
• Companies need to reduce the response time for
solutions due to competition and technology.
– According to Frank Loftus, 3M’s General Manager of
Automotive Sales in Detroit, “Our customers require
answers to business problems in minutes and hours not
days!”
The Issue of Sales Usage
• The key, of course, in sales involvement in CRM is
actual usage of a CRM system.
– According to Todd Forsythe, VP Integrated Marketing at
Oracle, “The number one reason that CRM has not been
successful is connection of the CRM system to the sales
force. All the technology and sophistication of CRM is
dependent on one function and that is the sales person must
believe in the value that the system can provide.”
The Issue of Sales Usage
• CRM systems used by sales forces began as
server-driven programs exclusively designed to
speed order entry.
• New on-demand solutions like salesforce.com
or NetSuite provide
– Easier system access
– Simpler interface to the system
– A shorter system learning curve
CRM: Sales Force Value
• CRM’s value to salespeople translates into
the following areas
– CRM must save the salesperson time,
– CRM must save the salesperson effort
– CRM must make the salesperson more
productive
– CRM must streamline the decision-making
process for a sales organization
McKinsey and Company on CRM Usage
• If salespeople are recalcitrant regarding system usage,
they can cripple a CRM initiative.
– Salespeople are inherently skeptical about CRM
– Salespeople fear they loose their value to the company
• Managers understand the benefit of CRM, but shortterm volume pressure can compromise the initiative.
• If sales managers do not support CRM, employee
skepticism results.
CRM System Usage
• Sales managers must focus on increasing sales
force CRM participation
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Short-term incentives for CRM compliance
Implementing more user friendly applications
Recognition of exceptional CRM compliance
Merchandising successful CRM results
The R in CRM
A Question of Value
• How does CRM help to increase customer
satisfaction?
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More timely response to needs
An improved and smoother sales process
Better forecasting and performance
Providing the correct solutions at the right time
PERFORMANCE / TRUST
CONTINUUM
Trust
Unfamiliarity
PERFORMANCE
Negotiation
Dialogue
TIME
Transactional
Selling
Relationship
Selling
Creating Customer Value
• CRM helps to establish a competitive edge in
providing added value and differentiating the
companies offering by creating process value.
– Two ways to add customer value
• Impressive cost or process advantages (Southwest
Airlines)
• Creating better consumer perception of value
CRM and the Sales Organization
• The sales force can be enticed to participate more fully in
CRM if
– They are part of a team responsible for CRM deployment
– Clear direction is provided to the entire sales organization
National Sales
Manager
Regional Sales
Manager
Territory Sales
Representative
Territory Sales
Representative
Regional Sales
Manager
Territory Sales
Representative
Territory Sales
Representative
Regional Sales
Manager
Territory Sales
Representative
Territory Sales
Representative
CRM and the Sales Organization
• A CRM solution can play a critical role in the
reorganization of a sales department, both on
the cause and effect sides.
•
On the cause side, new tools make it
possible to segment the customer base
easily based on a criterion
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•
In segmenting the sales operation,
companies can use an inside sales force to
service the smaller accounts
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•
Like company size
Or market potential
This provides the benefit of reducing the
cost per sale and providing better service
since it is easier to reach the inside
person.
GBC (General Binding Corporation)
recently went through a reorganization of
this sort and it was very successful. CRM
was implemented after the sales changes.
•
On the effect side, CRM applications
have the ability to assign accounts to the
correct salespeople because of
reorganization.
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This lets the company get on quickly and
easily with its plan. The newly assigned
sales representative gets immediate access
to the account history, including scheduled
follow-ups.
This lets them hit the ground running and
minimize the disruption caused by
reorganization.
Sales Engagement
• Once sales is fully engaged in the CRM
process, the company will be prepared to deal
effectively in a new sales environment with
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Different management structure
Compensation platforms
Account assignments
Call plans
The CRM Sales Cycle
The CRM Sales Cycle
• In the CRM system, the campaign results are
input into to the database for future reference
and promotional activity.
• Successful campaigns build relationships.
Long-term success breeds true partnerships
between companies.
Conclusion
• The success of the company and often their
customer will be dependent upon how well
sales forces use CRM.