Chapter 22

1. Chapter 22 Managing Personal Communications: Direct and Database Marketing and Personal Selling

2. Learning Objectives • How can companies conduct direct marketing for competitive advantage? • What are the pros and cons of database marketing? • What decisions do companies face in designing a sales force? • What are the challenges of managing a sales force? • How can salespeople improve their selling, negotiating, and relationship marketing skills?

3. Direct Marketing • The use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen

4. Direct Marketing Direct mail Catalog marketing Telemarketing Other direct-response marketing

5. Constructing aDirect-mail Campaign • Choose objectives • Choose target markets and prospects • Choose offer elements • Test elements • Measure success: lifetime value

6. Direct Marketing • Public and ethical issues Irritation Unfairness Deception/fraud Invasion of privacy

7. Customer Databases and Database Marketing • A customer database • An organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships

8. Customer Databases and Database Marketing • Database marketing • The process of building, maintaining, and using customer databases and other databases (of products, suppliers, or resellers) to contact, transact, and build customer relationships

9. Customer Databases • Customer database • Transactions • Registration information • Telephone queries • Cookies • Every customer contact • Past purchases • Demographics • Psychographics • Mediagraphics • Business database • Past purchases • Past volumes, prices, and profits • Buyer teams’ names • Contract status • Supplier’s share of customer’s business • Competitive suppliers • Competitive strengths and weaknesses

10. Customer Databases and Database Marketing • Data warehouse • Captures, queries, and analyzes data to draw inferences about an individual customer’s needs and responses • Data mining • Uses sophisticated statistical and mathematical techniques on data to extract useful information about individuals, trends, and segments

11. Customer Databases and Database Marketing • Companies can use their databases in five ways • To identify prospects • To decide which customers get an offer • To deepen customer loyalty • To reactivate customer purchases • To avoid serious customer mistakes

12. Customer Databases and Database Marketing • The downside of database marketing • Some situations are just not conducive to database marketing • Building and maintaining a customer database require a large investment • Employees may resist becoming customer-oriented and using the available information • Not all customers want a relationship with the company • The assumptions behind CRM may not always hold true

13. Designing the Sales Force • Types of sales representatives Deliverer Order taker Missionary Solution vendor Demand creator Technician

14. Designing the Sales Force Sales force objectives Sales force strategy Sales force structure Sales force size Sales force compensation

15. Sales Force Objectives and Strategy • Prospecting • Targeting • Communicating • Selling • Servicing • Information gathering • Allocating

16. Figure 22.1A Sales Marketing Exchange

17. Sales Force Objectives and Strategy • Selling teamwork • Top management, technical people, customer service representatives, and office staff • Direct (company) sales force • Contractual sales force

18. Sales Force Structure • Four types of sales forces • Strategic market sales force assigned to major accounts • A geographic sales force calling on customers in different territories • A distributor sales force calling on and coaching distributors • An inside sales force marketing and taking orders online and via phone

19. Sales Force Size • Workload approach to sales force size • Group customers into size classes according to annual sales volume • Establish desirable call frequencies for each customer class • Multiply the number of accounts in each size class by the corresponding call frequency to arrive at the total workload for the country • Determine the average number of calls a sales representative can make per year • Divide the total annual calls required by the average annual calls made by a sales representative to arrive at the number of sales representatives needed

20. Sales Force Compensation • Four components of sales force compensation • Fixed amount • Variable amount • Expense allowances • Benefits • Straight salary, straight commission, and combination of two

21. Managing the Sales Force Recruiting Selecting Training Supervising Motivating Evaluating

22. Sales Rep Productivity • Norms for prospect calls • Companies often specify how much time reps should spend prospecting for new accounts • Using sales time efficiently • Time-and-duty analysis and hour-by-hour breakdowns of activities • Sales technology • The salesperson today has truly gone electronic (tablet, Web site, and social media)

23. Motivating Sales Representatives • Intrinsic versus extrinsic rewards • Sales quotas

24. Evaluating Sales Representatives • Sources of information • Formal evaluation

25. Principles ofPersonal Selling • SPIN method types of questions Situation Problem Implication Need-payoff

26. Six Steps inEffective Selling Prospecting & qualifying Preapproach Presentation & demonstration Follow-up & maintenance Closing Overcoming objections

27. Relationship Marketing • In many cases the company seeks not an immediate sale but rather a long-term supplier–customer relationship