chapter thirteen communicating customer value: personal selling and direct marketing

Chapter Thirteen

Communicating Customer Value: Personal Selling

and Direct Marketing

Copyright 2007, Prentice Hall, Inc. 13-2

Roadmap: Previewing the Concepts

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

2. Identify and explain the six major sales force management steps.

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

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

5. Identify and discuss the major forms of direct marketing.


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.

CDW – Relationship Building CDW – Relationship Building SuccessSuccess

Case StudyCase Study

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.


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

Personal selling is a paid, personal form of promotion.– Involves two-way personal communication

between salespeople and individual customers.

Salespeople:– Probe customers to learn about problems.– Adjust marketing offers to fit special needs.– Negotiate terms of sales.– Build long-term personal relationships.


The Role of the Sales Force

Sales force serves as critical link between company and its customers.– They represent the company to the

customers.– They represent the customers to the

company.– Goal = customer satisfaction and company

profit.


Sales Force Management

The analysis, planning, implementation, and control of sales force activities.

Includes:– Designing sales force strategy & structure– Recruiting and selecting salespeople– Training salespeople– Compensating salespeople– Supervising salespeople– Evaluating salespeople


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.


Outside & 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


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.


Successful Salespeople

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.


Recruiting Salespeople

Searching the Web

College placement services

Recruit from other companies

Recommendations from current sales force

Employment agencies

Classified ads


Sales Force Training Goals

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.


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


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


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 and repeat business.

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


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.


The New Direct-Marketing Model

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 thismillennium.


Benefits of Direct Marketing

Benefits to Buyers:– Convenient.– Easy to use.– Private.– Ready access to products and information.– Immediate and interactive.


Benefits of Direct Marketing

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.


Customer Databases

An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data.


Direct Marketing Forms

Telephone marketing Direct-mail marketing Catalog marketing Direct-response TV marketing Kiosk marketing Online marketing


Telemarketing

Used in both consumer and B2B markets.

Can be outbound or inbound calls. Do-Not-Call legislation has impacted

the telemarketing industry.


Direct-Mail Marketing

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

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

than mass media. Easy to measure results.


Catalog Marketing

With the Internet, more and more catalogs are going digital.

Print catalogs still the primary medium. Expected sales in 2008 = $175 billion. Web catalogs have specific advantages

and disadvantages when compared to printed catalogs.


Direct Response TV Marketing

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.


Kiosk Marketing

Information and ordering machines generally found in stores, airports, and other locations.– Example: In-store Kodak kiosks allow

customers to transfer pictures from digital storage devices, edit them, and produce high-quality color prints.


Integrated Direct Marketing

Involves carefully coordinated multiple-media, multiple-stage campaigns.– Marketers try to improve response rates

and profits by adding media and stages that contribute more to additional sales than to additional costs.

– Example: Integrating a paid ad with response channel (Web or phone), direct mail, outbound telemarketing, face-to-face sales call, continuing communication.


Public Policy and Ethical Issues in Direct Marketing

Irritating to consumers Taking unfair advantage of impulsive or

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


Rest Stop: Reviewing the Concepts

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

2. Identify and explain the six major sales force management steps.

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

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

5. Identify and discuss the major forms of direct marketing.

chapter thirteen communicating customer value: personal selling and direct marketing

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