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


Linking Strategies and the Sales Role in the Era of Customer Relationship Management Sales and Distribution Management Marketing 3345 CRM is a comprehensive ... – PowerPoint PPT presentation

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

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

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.

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

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 firms success.

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

The Marketing Evolution
The Marketing Evolution

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

In 1980, the focus shifted towards developing
customer relationships.
Technology allows firms to customize offerings to
individual users.
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

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
  • Improves use of the customer channel

The CRM Process Cycle
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
  • How do we measure and manage our performance?
  • How do we increase our capacity for change?

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

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

Process of Strategy Development
  • Goals flow from the firms 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

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
  • Porters Three Generic Strategies
  • Low Cost
  • Differentiation
  • Niche

Process of Strategy Development
Personal Sellings 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

Personal Sellings 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
  • One danger is what happens when one party in the
    relationship leaves.

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

Personal Sellings Role in Marketing Strategy
Stages in Relationship Development
  • Stage I Exploration
  • Determine value, build trust, set expectations,
  • Stage II Expansion
  • Generate repeat sales, full-line selling,
  • Stage III Commitment
  • Build loyalty, become a preferred supplier,
    engage in

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

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Sales Force Costs
Advertising vs. Personal Selling
Customer Loyalty ROI
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
  • 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 customers total purchases
    captured by the firm.

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 distinctiv
e 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