Linking Strategies and the Sales Linking Strategies and the Sales Role in the Era of Customer Role in the Era of Customer Relationship ManagementRelationship Management

Sales and Distribution Sales and Distribution ManagementManagement

Marketing 3345Marketing 3345

CRM is…CRM is…

a comprehensive business model for a comprehensive business model for increasing revenues and profits by increasing revenues and profits by focusing on customers.focusing on customers.

both an overarching business both an overarching business philosophy and a process tool to philosophy and a process tool to facilitate a truly customer-driven facilitate a truly customer-driven enterprise.enterprise.

“…“…a journey of strategic, process, a journey of strategic, process, organizational and technical change organizational and technical change whereby a company seeks to better whereby a company seeks to better manage its enterprise around customer manage its enterprise around customer behaviors. This entails acquiring behaviors. This entails acquiring knowledge about customers and deploying knowledge about customers and deploying this information at each touchpoint to this information at each touchpoint to attain increased revenue and operational attain increased revenue and operational efficiencies.”efficiencies.”

PriceWaterhouse CoopersPriceWaterhouse Coopers

CRM is…CRM is…

Customer-Centric Cultures Customer-Centric Cultures Include…Include…

Adopting a partnership business model Adopting a partnership business model with mutually shared risks and rewardswith mutually shared risks and rewards

Defining selling as “Defining selling as “customer business customer business consultation”consultation”

Formalizing customer analysis processes Formalizing customer analysis processes and agreementsand agreements

Being proactive in educating customers Being proactive in educating customers about value chain and cost reduction about value chain and cost reduction opportunitiesopportunities

Focusing on continuous improvement Focusing on continuous improvement principles stressing customer satisfactionprinciples stressing customer satisfaction

The Marketing EvolutionThe Marketing Evolution

Objectives of CRMObjectives of CRM

Customer RetentionCustomer Retention - retain loyal and - retain loyal and profitable customers and channelsprofitable customers and channels

Customer AcquisitionCustomer Acquisition - acquire customer - acquire customer based on known characteristics which based on known characteristics which drive growth and increase marginsdrive growth and increase margins

Customer ProfitabilityCustomer Profitability - increase individual - increase individual customer margins by offering the right customer margins by offering the right product at the right timeproduct at the right time

Advantages of CRMAdvantages of CRM Reduces advertising costsReduces advertising costs Increases awareness of customer needsIncreases awareness of customer needs Tracks the effectiveness of promotional Tracks the effectiveness of promotional

campaignscampaigns Allows competition for customers based on Allows competition for customers based on

service, not pricesservice, not prices Prevents overspending on low-value Prevents overspending on low-value

clients and under spending on high-value clients and under spending on high-value onesones

Speeds the time it takes to develop and Speeds the time it takes to develop and market a productmarket a product

Improves use of the customer channelImproves use of the customer channel

The CRM Process CycleThe CRM Process Cycle

10 Critical Questions in CRM10 Critical Questions in CRM

CustomersCustomers• Who are our customers?Who are our customers?• What do our customers want and expect?What do our customers want and expect?• What is the value potential of our customers?What is the value potential of our customers?

The RelationshipThe Relationship• What kind of relationship do we want to build?What kind of relationship do we want to build?• How do we foster exchange?How do we foster exchange?• How do we work together and share control?How do we work together and share control?

Managerial Decision MakingManagerial Decision Making• Who are we?Who are we?• How do we organize to move value closer to our How do we organize to move value closer to our

customers?customers?• How do we measure and manage our performance?How do we measure and manage our performance?• How do we increase our capacity for change?How do we increase our capacity for change?

The Importance of Market The Importance of Market OrientationOrientation

Successful salespeople think beyond Successful salespeople think beyond “selling”“selling”

Market-driven companies do better market Market-driven companies do better market sensingsensing

Market-driven companies develop stronger Market-driven companies develop stronger relationships with customers and channelsrelationships with customers and channels

Internal partnering is a critical component Internal partnering is a critical component of market orientationof market orientation

Classifying CapabilitiesClassifying Capabilities

Process of Strategy Process of Strategy DevelopmentDevelopment

The mission statement answers the most The mission statement answers the most basic questions about an organization’s basic questions about an organization’s reason for being.reason for being.

Firms should define their mission in terms Firms should define their mission in terms of broad human needs to be satisfied.of broad human needs to be satisfied.

This approach makes it easier to identify This approach makes it easier to identify attractive market opportunities.attractive market opportunities.

GoalsGoals – flow from the firm’s mission – flow from the firm’s mission statement and represent specific statement and represent specific targets the firm intends to hit.targets the firm intends to hit.

ObjectivesObjectives – more specific than goals – more specific than goals and should always be:and should always be:• Specific and in writingSpecific and in writing• MeasurableMeasurable• Realistically attainableRealistically attainable

Process of Strategy Process of Strategy DevelopmentDevelopment

SBU StrategySBU Strategy Business-level strategy involves how the Business-level strategy involves how the

business will compete in its industry to business will compete in its industry to achieve a achieve a ““sustainable competitive sustainable competitive advantageadvantage (SCA)” (SCA)”

An SCA focuses on distinctive An SCA focuses on distinctive competencies competencies

Porter’s Three Generic Strategies:Porter’s Three Generic Strategies: Low CostLow Cost DifferentiationDifferentiation NicheNiche

Process of Strategy Process of Strategy DevelopmentDevelopment

Personal Selling’s Role in Personal Selling’s Role in Marketing StrategyMarketing Strategy

Stages in Relationship Stages in Relationship DevelopmentDevelopment

Stage I – ExplorationStage I – Exploration Determine value, build trust, set Determine value, build trust, set

expectations, monitorexpectations, monitor Stage II – ExpansionStage II – Expansion Generate repeat sales, full-line Generate repeat sales, full-line

selling, cross-sellingselling, cross-selling Stage III – CommitmentStage III – Commitment Build loyalty, become a preferred Build loyalty, become a preferred

supplier, engage in supplier, engage in

Role of Personal Selling in IMCRole of Personal Selling in IMC An Integrated Marketing Communications An Integrated Marketing Communications

(IMC)(IMC) strategy effectively integrates personal strategy effectively integrates personal selling, advertising and other communications selling, advertising and other communications optionsoptions

Advantages of Selling in IMCAdvantages of Selling in IMC• Face-to-face contactFace-to-face contact• More persuasiveMore persuasive• More demonstrativeMore demonstrative• Customization opportunitiesCustomization opportunities

Disadvantages of Selling in IMCDisadvantages of Selling in IMC• Limited ability to duplicateLimited ability to duplicate• More costlyMore costly

Sales Force CostsSales Force Costs

Advertising vs. Personal SellingAdvertising vs. Personal Selling

Customer Loyalty ROICustomer Loyalty ROI

Customer Satisfaction and Customer Satisfaction and FeedbackFeedback

Maintaining customer loyalty is one outcome of Maintaining customer loyalty is one outcome of customer orientation.customer orientation.

Loyal customers. . .Loyal customers. . .• Tend to concentrate their purchases.Tend to concentrate their purchases.• Provide positive word-of-mouth and customer Provide positive word-of-mouth and customer

referrals.referrals.• May be willing to pay premium prices for the value May be willing to pay premium prices for the value

they receive.they receive.

Satisfaction measures need to be supplemented Satisfaction measures need to be supplemented with examinations of customer behavior, such as with examinations of customer behavior, such as annual retention rate, frequency of purchases annual retention rate, frequency of purchases and percentage of the customer’s total and percentage of the customer’s total purchases captured by the firm.purchases captured by the firm.