Lecture Principles of Marketing - Chapter 13: Communicating customer value: Personal selling and direct marketing

Chapter Thirteen
Communicating Customer Value:
Personal Selling
and Direct Marketing


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.
Copyright 2007, Prentice Hall, Inc.

13-2


Case Study
CDW – Relationship Building Success
Background

Personal Selling’s Role

 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.

 “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
 Recommendations  Searching the
from current sales
Web
force
 College
 Employment
placement
agencies
services
 Classified ads
 Recruit from
other companies


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.