LINKING SALES TO CRM AND ORGANIZING SALES EFFORT

PRESENTED BY MANOJ ATTRI(23-MBA-11)

PALLVI ARORA(27-MBA-11) PRANAV GUPTA(28-MBA-11)

Customer relationship management

CRM is concerned with the creation, development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value.

The purpose of CRM The focus is on creating value for the customer and

the company over the longer term .

When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs .

CRM enables organisations to gain ‘competitive

advantage’ over competitors that supply similar products or services.

Why is CRM important? Today’s businesses compete with multi-

product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies is critical to corporate performance .

The adoption of C.R.M. is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organisation.

What does CRM involve?

CRM involves the following :

Organisations must become customer focused.

Organisations must be prepared to adapt so that it take customer needs into account and delivers them.

Market research must be undertaken to assess customer needs and satisfaction

To improve the effectiveness of CRM

• Who are our customers?• What do our customers want and expect?• What is the value potential of our customers?• What kind of relationship do we want to build with our customers?• How do we foster exchange?• How do we work together & share control?• How do we organize to move value closer to our customers?

Analyze market opportunities Generate strategies Select the strategy Program the marketing mix Review and revise the strategy Audit & adjust the strategy

Strategy development

Market exchanges Functional relationships Strategic partnerships

Relationship types

Occur between a buyer and seller without much thought of future interaction.

Neil Rackham describe 4 roles: Create new value Adapt Make the market Exit

Market exchanges (1 shot transactions)

It is based on long term relationship. It is required for high level of personal trust.e.g. Financial planning Contract manufacturing

Functional relationships

To achieve profitability of both the partners. It requires direct communication with production, product designers & others but sales person is responsible for

strong relationships. e.g. P&G and Wal-Mart

Strategic partnership

Salespeople have a key role to play in fostering successful relationships. Relationships between organization that result in strategic partnerships generally go through four stages:-

Awareness Exploration Expansion Commitment

Personal Selling In Relationship Era

In this stage, each side tries to determine the potential value of the relationship. As time goes on, the relationship becomes defined through the development of expectations for each party and the results of individual interactions.

When buyer tries the product for the first time, the customer is excited about receiving the benefits of the product as being promised. A poor initial experience is extremely difficult to overcome .

Exploration

For beginning the relationship well, a salesman requires

To set proper expectations To monitor order processing and delivery To ensure proper use To assist in servicing

This stage of the relationship process is marked by the

opportunity to sell new products or increase the share of the account’s business. Trust is developing, allowing the sales person to focus on identifying additional needs and recommending solutions.

Expansion

Various strategies used to expand business with current accounts and move them toward loyalty and long term commitment to relationship. These are:-

Generating Repeat Sales and Upgrading Full-Line Selling Cross-Selling

When the buyer-seller relationship has reached the commitment stage, a stated or implied pledge to continue the relationship is in place.Formally, this pledge may begin with the seller being designated a preferred supplier.

Preferred supplier means that the supplier is assured a large percentage of the buyer’s business and will get the first opportunity to earn any new business.

Commitment

Persuasive Better communication with the customers Demonstrate the product or use visual aids Devote time to leaning about customer problems Educating the client Customization

Advantages of Personal Selling In Marketing Communication Mix

Small number of potential customers Costly per person

Disadvantages of Personal Selling In Marketing Communication Mix

Company resources, goals, and marketing strategy Characteristics of the target market Product characteristics Distribution practices Pricing policies

Factors Influencing The Role Of Personal Selling In a Firm’s IMC Strategy

Organizing the sales force is one of the most important decisions made by sales management. It has a significant impact on every aspect of the salesperson’s performance. Changes in the way selling is done, the increasing importance of effectively managing customer relationships have led to fundamental changes in organization of today’s sales force.

Organizing the sales force

Activities should be divided and arranged in such a way that the firm can benefit from the specialization of labor.

The organizational structures should be provide for stability and continuity in the firm’s selling efforts.

The structure should provide for coordination of various activities assigned to different persons in the sales force and different departments in the firm.

Purpose of Sales Organization

The two common agents a manufacture might use to perform the selling functions are

Manufacturing representatives:-those who sell part of the output of their principals. They neither take ownership nor physical possession

Selling agents:-those who are compensated by commissions of their principals

Types of Agents

The following are sets of factors for a manager to consider while deciding which agent is appropriate

Economic Criteria Control and Strategic Criteria Transactional Costs Strategic Flexibility

Types of organisation structures Geographic Organisation Product Organisation Organization by customer Type or markets Organization by selling function

Geographic organization Simplest and most common method Individual salespersons are assigned to separate

territories Lower cost Fewer mangerial levels are required Its major disadvantage is that it does not enjoy benefits

of division and specialisation of labour

Product Organisation Separate sales force for each product

category Salesperson develop familiarity with the

product Duplication of effort may occur,leading to

higher expenses

Organisation by customer type

Separate teams for different kinds of customers

Familiarity with customer type Helps in penetration in previously untapped

market

Organisation by selling function Different salesperson perform different

selling functions Customer might object Conflicts may happen Creates specialisation

Role of telemarketing Helps in identiying potential new accounts Used for technical assistance hotlines Seeking repeat purchases Gaining quicker communication of

newsworthy developments

Organising national and key accounts Must be able to customize Knowledgeable about key account key

strategies At IBM 75% of revenues are generated from

industry solution accounts Assigning key accounts to sales executives A separate key account division

Team selling Assigning specialists Induces prompt answers High cost Can present cordination problems

Multilevel selling Variation of team selling Adhoc arrangement where individuals at

different levels are responsible for maintaining a relationship with key customer

Co marketing alliances Situation in which customer buys systems

made up of components manufactured by two or more suppliers

Suppliers are forming alliances and forming their own marketing and sales program

Logistical alliances For eg wall mart having with P&G through

automatic restocking system Speeds up the process Minimise finished goods inventories More convienent for customers

Vertical structure of the sales organisation Define managerial positions authority for

carrying out specific sales management activities

Dilemna concerning span of control and number of levels

Selling responsibilities Sales related functions Impact of new technologies Staff support and outsourcing

Start up of a new sales force Start with a strategy Appoint an expansion team Leverage existing strengths Go to the press Avoid compensation snafus Provide support