C HAPTER 13 Communicating Customer Value: Personal Selling and Direct Marketing.

CCHAPTER HAPTER 1313

Communicating Communicating Customer Value: Customer Value: Personal Selling Personal Selling

and Direct Marketingand Direct Marketing

Copyright 2007, Prentice-Hall Inc. 13-2

Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

Identify and explain the six major sales force management steps.

Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

Define direct marketing and discuss its benefits to customers and companies.

Identify and discuss the major forms of direct marketing.

Roadmap: Previewing the Concepts


Background Nation’s largest reseller

of technology products and services to small and mid-size businesses.

Since 2000, sales up 48% to $5.7 billion and profits up 15% annually.

Highly devoted to customer with “Circle of Service” philosophy.

Personal Selling’s Role “Clicks & people” strategy

combines personal selling with strong Web presence.

Salespeople build and manage relationships by being trusted advisors.

Training is extensive as salespeople must be knowledgeable and customer focused.

CDWCDW – Relationship Building Success – Relationship Building Success


Personal Selling

Personal presentation by the Personal presentation by the firm’s sales force for the purpose firm’s sales force for the purpose

of making sales and building of making sales and building customer relationships.customer relationships.

Salespeople engage in prospecting, communicating, servicing, and information

gathering on behalf of the firm.


The Nature of Personal Selling

Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term customer relationships.

The term salesperson covers a wide range of positions:– Order taker: Department store clerk– Order getter: Creative selling in different

environments


The Role of the Sales Force

Sales force serves as critical link between company and its customers.– More effective than advertising in complex

selling situations.– They represent the company to the

customers.– They represent the customers to the

company.– Goal = customer satisfaction and

company profit.


Figure 13-1Major Steps in Sales Force Management


Sale Force Structure

Territorial: – Salesperson assigned to exclusive area and sells

full line of products.

Product: – Sales force sells only certain product lines.

Customer: – Sales force organized by customer or industry.

Complex: – Combination of several types of structures.


Sale Force Size

Workload approach to setting sales force size:– Firm first groups accounts into different

classes according to size, account status, or other factors related to the effort need to maintain them.

– The firm then determines the number of representatives needed to call on each class the desired number of times.


Outside and Inside Sales Forces

An outside sales force travels to call on customers in the field.

An inside sales force conducts business from their offices via telephone or visits from perspective buyers.– Includes:

Technical support people Sales assistants Telemarketers


Let’s Talk!

Insides sales forces use the phone or Internet to service and contact customers. For what types of products or services do you think that an inside sales force might be more effective than an outside sales force? Explain.


Team Selling

Used to service large, complex accounts. Can find problems, solutions, and sales

opportunities that no single person could. Can include experts from different areas of

selling firm. Pitfalls:

– Can confuse or overwhelm customers.– Some people have trouble working in teams.– Hard to evaluate individual contributions.


Careful selection can greatly enhance overall sales force performance while minimizing costly turnover.

Key talents of successful salespeople:– Intrinsic motivation.– Disciplined work style.– Ability to close a sale.– Ability to build relationships with

customers.

Successful Salespeople


Recruiting Salespeople

Searching the Web

College placement services

Recruit from other companies

Recommendations from current sales force

Employment agencies

Classified ads


Learn about different types of customers and their needs, buying motives, and buying habits.

Learn how to make effective sales presentations.

Learn about and identify with the company, its products, and its competitors.

Sales Force Training Goals


Compensating Salespeople

Fixed amount: – Salary

Variable amount:– Commissions or bonuses

Expenses:– Repays for job-related expenditures

Fringe benefits:– Vacations, sick leave, pension, etc.


Supervising Salespeople

Goal of supervision is to encourage salespeople to “work smart.”– Help them identify customers and set call

norms.– Specify time to be spent prospecting:

Annual call plan Time-and-duty analysis Sales force automation systems


Figure 13-2How Salespeople Spend Their Time


Motivating Salespeople

Goal of motivating sales force is to encourage salespeople to “work hard.”– Organizational climate.– Sales quotas.– Positive incentives:

Sales meetings Sales contests Recognition and honors Cash awards, trips, profit sharing


Sales Force Incentives

Many firms offer their sales forces cash, trips, and other incentives to motivate performance.

Salesdriver.com helps companies select and manage sales incentives.

Marketing in Action

http://www.salesdriver.com/


Sales Force Evaluation

Information about the sales force and its activities comes from:– Sales reports– Call reports– Expense reports

Management uses this information to evaluate the planning ability of individuals, and offers feedback as necessary.

The performance of the sales force as a whole is evaluated in terms of ROI.


Figure 13-3Major Steps in the Selling Process


The Personal Selling Process

Prospecting: – The salesperson identifies qualified potential

customers (called prospects). Preapproach:

– The salesperson learns as much as possible about a prospect before making a sales call.

Approach: – The salesperson meets the customer for the first

time. Presentation:

– The salesperson tells the “product story” to the buyer, highlighting customer benefits.


The Personal Selling Process

Handling Objections: – The salesperson seeks out, clarifies, and

overcomes customer objections to buying.

Closing: – The salesperson asks the customer for an order.

Follow-up: – The salesperson follows up after the sale to

ensure customer satisfaction & repeat business.

The selling process is transaction oriented; most firms go beyond this and attempt to build mutually profitable relationships.


Technology in Selling

Today’s presentation technologies allow for full multimedia presentations to take the place of flip charts. Presentations can be launched from DVD, CD, the laptop hard drive, or a Web site, when using wireless connections.

Marketing in Action


Let’s Talk!

How do the actions of the sales force and its use of technology contribute to building / maintaining customer relationships? Explain.


Direct Marketing

Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.– One-on-one communication in which

offers are tailored to needs of narrowly defined segments.

– Usually seeks a direct, immediate, and measurable consumer response.


Some firms use direct marketing as a supplemental medium.

For many companies, direct marketing constitutes a new and complete model for doing business.

Some firms employ the direct model as their only approach.

Some see this as the new marketing model of the next millennium.

The New Direct Marketing Model


Benefits of Direct Marketing

Benefits to Buyers:– Convenient.– Easy to use.– Private.– Ready access to

products and information.

– Immediate and interactive.

Moto, the Motorola brand cell phone, uses direct marketing as one method

of communicating with consumers. Branding is important.

Video Snippet


Benefits to Sellers:– Powerful tool for building customer relationships.– Can target small groups or individuals.– Can tailor offers to individual needs.– Can be timed to reach prospects at just the right

moment.– Gives access to buyers they could not reach

through other channels.– Offers a low-cost, efficient way to reach markets.

Benefits of Direct Marketing


Customer Databases

An organized collection of comprehensive data about

individual customers or prospects, including geographic,

demographic, psychographic, and behavioral data.


Figure 13-4Forms of Direct Marketing


Telemarketing

Used in both consumer and B2B markets.

Can be outbound or inbound calls.

Inbound consumer telemarketing and outbound business-to-business telemarketing remain strong, despite DNC legislations.


Telemarketing

Do-Not-Call legislation forbids most telemarketers to contact phone numbers that have been registered on its Web site.

Businesses that violate the DNC can be fined $11,000 per violation.

Learn more at:

https://www.donotcall.gov/default.aspx


In-Bound Telemarketing

Marketers commonly use inbound toll-free 1-800 numbers to handle orders from television and print ads, direct mail, or catalogues.

Marketing in Action


Direct-Mail Marketing

Involves sending an offer, reminder, announcement, or other item to a person at a particular address.

Permits high target-market selectivity. Can be personalized, and is flexible. Higher CPM yields better prospects

than mass media. Easy to measure results.


Catalog Marketing

More and more catalogs are going digital on the Internet.

Print catalogs are still the primary medium.

Expected catalog sales in 2008 = $175 billion.

Web catalogues have specific advantages and disadvantages when compared to printed catalogues.


Direct-Response Advertising:– TV spots that are 60 or 120 seconds long.

Infomercials:– A 30-minute or longer advertising program

for a single product.

Home Shopping Channels:– Entire cable channels dedicated to selling

multiple brands, items, and services.

Direct Response TV Marketing


Direct Response TV

HSN – The Home Shopping Network – is a direct response marketer’s dream. Products shown on the channel can be ordered via a 1-800 number or over the Internet from the HSN Web site.

Marketing in Action

www.hsn.com


Kiosk Marketing

Information and ordering machines generally found in stores, airports, and other locations.


Let’s Talk!

Suppose that you were responsible for the fundraising activities of a charitable organization.

What type of direct marketing efforts would you use? Why did you select those forms?


Figure 13-5An Integrated Direct Marketing

Campaign


Irritating to consumers Taking unfair advantage of impulsive

or less sophisticated buyers Targeting TV-addicted shoppers Deception, fraud Invasion of privacy

Public Policy and Ethical Issues in Direct Marketing


Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

Identify and explain the six major sales force management steps.

Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

Define direct marketing and discuss its benefits to customers and companies.

Identify and discuss the major forms of direct marketing.

Rest Area: Reviewing the Concepts

C HAPTER 13 Communicating Customer Value: Personal Selling and Direct Marketing.

Documents

Transcript of C HAPTER 13 Communicating Customer Value: Personal Selling and Direct Marketing.