Download Figure 13-1 Personal Selling process - Prospect of e

12
Personal Selling,
Database Marketing,
And Customer Relationship
Management
Chapter Overview
•Personal selling
–Retail sales
–Business-to-business sales
•Database marketing
•Direct marketing
•Permission marketing
•Frequency programs
•Customer relationship management
12-1
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
© 2007 by Prentice Hall
11-2
Retail Sales
• Selling in retail outlets
– Single transaction sales
– Order takers
• Selling services
– Repeat transactions
• Telemarketing
– Inbound telemarketing
– Outbound telemarketing
– Text messaging
© 2007 by Prentice Hall
11-3
FIGURE
12.1
Consumer Buying Process
Retail Selling
•
•
•
•
•
Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Post-purchase evaluation
© 2007 by Prentice Hall
11-4
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
12-5
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
© 2007 by Prentice Hall
11-6
Business-to-Business Personal Selling
• Field sales
• Order-getters
• In-house sales
• Technology-based programs
– Telemarketing sales
– Internet sales
12-7
Four Attributes of Great Salespeople
Jack Carroll
• Integrity – being honest with customers.
• Diligence – working hard.
• Resiliency – ability to bounce back and
not take “no” personally.
• Intelligence
Source: Jack Carroll, “The Four Attributes of Great Salespeople,” SalesLinks
Bulletin, Mentor Associates Sales Training.
(Http://www.saleslinks.com/sideline/sep-dec98/102698.htm)
12-8
FIGURE
12.2
Types of Selling Relationships
12-9
Steps in Developing a Strategic Partnership
1.
2.
3.
4.
5.
Awareness
Trial purchase
Expansion of purchases
Commitment
Partnership
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.
© 2007 by Prentice Hall
11-10
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!
Source: Thomas Wood-Young, “Building Trust Results in Customer Loyalty,” Sales Doctors Magazine
(Http://www.salesdoctors.com/diagnosis/3trust2.htm)
12-11
FIGURE
12.4
Personal Selling Process
•
•
•
•
•
•
Identifying prospects
Qualifying prospects
Knowledge acquisition
Sales approaches
Sales presentation
Follow-up
12-12
FIGURE
12.5
Methods of Prospecting





Customer leads
Databases
Trade shows
Advertising
inquiries
Internet inquiries





© 2007 by Prentice Hall
Sales promotion
Vendor leads
Channel leads
Networking
Cold calls
11-13
FIGURE
12.6
Questions for Qualifying Prospects
• 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)?
© 2007 by Prentice Hall
11-14
FIGURE
12.7
Knowledge Acquisition
•
•
•
•
•
•
•
•
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.
© 2007 by Prentice Hall
11-15
Buyer Personality Types
• Intrinsic value buyers
• Extrinsic value buyers
• Strategic value buyers
© 2007 by Prentice Hall
11-16
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
© 2007 by Prentice Hall
11-17
Sales Presentations
and
Buyer-Seller Relationships
Strategic partnership
Mission-sharing
EDI relationship
Problem-solution
Trust relationship
Contractual agreement
Need-satisfaction
Repeat transactions
Stimulus-response
Occasional transactions
Single transactions
© 2007 by Prentice Hall
11-18
Follow-Up
• Customer satisfaction
• Repeat business and loyalty
• Salespeople and follow-up
– No incentive to follow up
– Create environment
– Provide incentive
© 2007 by Prentice Hall
11-19
FIGURE
12.9
Trends in Personal Selling
• Decline in the number of salespeople
• Expansion of selling channels
• Long-term relationships and strategic
partnering
• Team selling
• Database customer segmentation
© 2007 by Prentice Hall
11-20
Database Marketing
Database Programs
Database
Direct Marketing
© 2007 by Prentice Hall
11-21
FIGURE
12.11
Steps in Developing a Database
•
•
•
•
•
•
Determine objectives.
Collect data.
Build a data warehouse.
Mine data for information.
Develop marketing programs.
Evaluate marketing programs and
data warehouse.
12-22
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?
© 2007 by Prentice Hall
11-23
Sources of Data
•
•
•
•
•
Internal customer data.
Survey data of customers.
Channel members.
Commercial data sources.
Government data sources.
© 2007 by Prentice Hall
11-24
FIGURE
12.12
Sources of Data
•
•
•
•
•
Internal customer data.
Survey data of customers.
Channel members.
Commercial data sources.
Government data sources.
12-25
FIGURE
12.13
Internal Data Information
•
•
•
•
•
•
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?
12-26
The Data Warehouse
•
•
•
•
Internal data
External data
Geocoding information
Data put into warehouse must be
relevant to objectives.
12-27
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
12-28
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.
12-29
Direct Marketing
• Direct Marketing Association
– Prospecting 60%
– Customer retention  40%
• Dell Computers
– Catalog
– TV and radio ads
– FSI ads
© 2007 by Prentice Hall
11-30
FIGURE
12.14
Methods of Direct Marketing
•
•
•
•
•
•
•
Mail
Catalogs
Telemarketing
Mass media
Alternative media
Internet
E-mail
12-31
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.
12-32
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.
12-33
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
© 2007 by Prentice Hall
11-34
Steps in Developing a
Permissions 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.
Source: Seth Godin, “Permission Marketing: The Way to Make Advertising Work
Again, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.
12-35
Successful
Permission Marketing Programs
Mutual relationship
Participant empowerment
Company reciprocity
© 2007 by Prentice Hall
11-36
Frequent Shopper Programs
 70% of U.S. households participate in a frequentshopper 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.
Source: A.C. Nielson, Santella & Associate
12-37
FIGURE
12.15
Frequency Program Objectives
•
•
•
•
•
•
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.
Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty Programs
Really Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.
12-38
Principles in Building
Frequency 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.
© 2007 by Prentice Hall
11-39
Customer Relationship Management
Foundation
• Database technology
• Interactivity through Web sites, call centers,
and other means of contacting customers
• Mass customization technology
© 2007 by Prentice Hall
11-40
Customer Relationship Management
Steps 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.
12-41
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 Management
Reasons 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.
12-43