1. Sales and Distribution Management Marketing 3345
Linking Strategies and the Sales Role in the Era of Customer Relationship Management
Sales and Distribution Management
Marketing 3345

2. CRM is…
a comprehensive business model for increasing revenues and profits by focusing on customers.
both an overarching business philosophy and a process tool to facilitate a truly customer-driven enterprise.

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

4. Customer Orientation Continues to move toward being customer-centric.
Builds upon…
The marketing concept which overarches all business strategy
Use of the marketing mix as a “tool kit” for marketing strategy creation
Consumers information fueling strategic decisions about products
Aligning all business processes and functions to maximize the firm’s success.

5. Customer-Centric Cultures Include…
Adopting a partnership business model with mutually shared risks and rewards
Defining selling as “customer business consultation”
Formalizing customer analysis processes and agreements
Being proactive in educating customers about value chain and cost reduction opportunities
Focusing on continuous improvement principles stressing customer satisfaction

6. The Marketing Evolution

7. The Marketing Evolution
MASS MARKETING
Evolved in the early 1900s and dominated marketing management for decades
TARGET MARKETING
In the ‘60s, many firms began to apply the principles of segmentation to different customer groups.

8. The Marketing Evolution
CUSTOMER MARKETING
In 1980, the focus shifted towards developing customer relationships.
ONE-TO-ONE MARKETING
Technology allows firms to customize offerings to individual users.

9. Objectives of CRM
Customer Retention - retain loyal and profitable customers and channels
Customer Acquisition - acquire customer based on known characteristics which drive growth and increase margins
Customer Profitability - increase individual customer margins by offering the right product at the right time

10. Advantages of CRM Reduces advertising costs
Increases awareness of customer needs
Tracks the effectiveness of promotional campaigns
Allows competition for customers based on service, not prices
Prevents overspending on low-value clients and under spending on high-value ones
Speeds the time it takes to develop and market a product
Improves use of the customer channel

11. The CRM Process Cycle

12. 10 Critical Questions in CRM
Customers
Who are our customers?
What do our customers want and expect?
What is the value potential of our customers?
The Relationship
What kind of relationship do we want to build?
How do we foster exchange?
How do we work together and share control?
Managerial Decision Making
Who are we?
How do we organize to move value closer to our customers?
How do we measure and manage our performance?
How do we increase our capacity for change?

13. The Importance of Market Orientation
Successful salespeople think beyond “selling”
Market-driven companies do better market sensing
Market-driven companies develop stronger relationships with customers and channels
Internal partnering is a critical component of market orientation

14. Classifying Capabilities

15. Process of Strategy Development
The mission statement answers the most basic questions about an organization’s reason for being.
Firms should define their mission in terms of broad human needs to be satisfied.
This approach makes it easier to identify attractive market opportunities.

16. Process of Strategy Development
Goals – flow from the firm’s mission statement and represent specific targets the firm intends to hit.
Objectives – more specific than goals and should always be:
Specific and in writing
Measurable
Realistically attainable

17. SBU Strategy
Business-level strategy involves how the business will compete in its industry to achieve a “sustainable competitive advantage (SCA)”
An SCA focuses on distinctive competencies
Porter’s Three Generic Strategies:
Low Cost
Differentiation
Niche

18. Process of Strategy Development

19. Personal Selling’s Role in Marketing Strategy
Market exchanges - one-shot transactions occurring between a buyer and seller with limited thought of future consideration
Roles of salespeople in market exchanges
Create new value
Adapt
“Make the market”
Exit

20. Personal Selling’s Role in Marketing Strategy
Functional relationships create a climate of cooperation, with open and honest communication.
Functional relationships engender a high level of personal trust in well managed business activities.
One danger is what happens when one party in the relationship leaves.

21. Personal Selling’s Role in Marketing Strategy
Strategic Partnerships are long-term relationships where both parties make significant investments.
This relationship requires direct communication with production, production designers, and others.
Salespeople serve two roles-- relationship manager and general manager.
Strategic partnerships work best with clients large enough to make investments worthwhile.

22. Personal Selling’s Role in Marketing Strategy

23. Stages in Relationship Development
Stage I – Exploration
Determine value, build trust, set expectations, monitor
Stage II – Expansion
Generate repeat sales, full-line selling, cross-selling
Stage III – Commitment
Build loyalty, become a preferred supplier, engage in

24. Role of Personal Selling in IMC
An Integrated Marketing Communications (IMC) strategy effectively integrates personal selling, advertising and other communications options
Advantages of Selling in IMC
Face-to-face contact
More persuasive
More demonstrative
Customization opportunities
Disadvantages of Selling in IMC
Limited ability to duplicate
More costly

26. Sales Force Costs

27. Advertising vs. Personal Selling

28. Customer Loyalty ROI

29. Customer Satisfaction and Feedback
Maintaining customer loyalty is one outcome of customer orientation.
Loyal customers. . .
Tend to concentrate their purchases.
Provide positive word-of-mouth and customer referrals.
May be willing to pay premium prices for the value they receive.
Satisfaction measures need to be supplemented with examinations of customer behavior, such as annual retention rate, frequency of purchases and percentage of the customer’s total purchases captured by the firm.

30. Key Terms marketing concept marketing mix
marketing communication mix (promotion mix)
market orientation
customer orientation
customer-centric
formalization
customer relationship management (CRM)
touchpoints
mass marketing
target marketing
customer marketing
one-to-one marketing
customer value
customer loyalty
lifetime value of a customer
firing a customer
data warehouse
data mining
return on customer investment
strategic direction
mission statement
goals
objectives
strategic business units
sustainable competitive advantage
distinctive competencies
generic strategies
market opportunity
marketing program
market exchanges
functional relationships
strategic partnerships
trust
customer delight
upgrading
full-line selling
cross-selling
preferred supplier
total quality management (TQM)
integrated marketing communication
pull strategy
push strategy
just-in-time reorder and delivery
category management
supply chain alliances
efficient consumer response (ECR)
selling team
top-to-top selling