Managing & Understanding The Customer In Oil & Gas Industry. Advance Level

1. Managing & Understanding The Customer In Oil & Gas Industry. Advance Level

2. Person-to-person dialogue Between prospective buyer and the seller Direct human contact Matching products to needs Involves… developing relationships discovering and communicating customer needs communicating benefits Personal selling defined

3. Personal selling • Personal selling is the most widely used means by which organizations communicate with their customers • Used by profit and nonprofit organizations, big and small • Money spent on personal selling far exceeds money spent on advertising

4. Limitations of personal selling • Expensive per contact • Many sales calls may be needed to generate a single sale • Labor intensive

5. Types of personal selling tasks • ORDER TAKING • Do very little creative selling • Write up orders • Check invoices for accuracy • Assure timely order processing • May use suggestive selling • Inside or field order- takers • Telemarketers are often order-takers • Due to improvements in inventory management and communications technology, some field order-takers have been replaced by computers

6. ORDER GETTING Creative selling More time consuming Sell to new prospects (pioneers) Sell to continuing customers (account managers) Some use of telemarketing, particularly to small accounts Seek out customers Analyze their problems Discover solutions Sell solutions to customers Types of personal selling tasks

7. Selling function Working with orders Servicing the product Information management Servicing the account Conferences/meetings Training/recruiting Entertainment Out-of-town traveling Working with distributors Common activities of order-getting salespeople

8. THE CREATIVE SELLING PROCESS FOLLOWING UP CLOSING THE SALE HANDLING OBJECTIONS MAKING THE SALES PRESENTATION APPROACHING THE PROSPECT IDENTIFYING & QUALIFYING PROSPECTS

9. Identifying and qualifying prospects • Identify prospects who have… • the need to buy • the financial ability to buy • the authority to buy

10. Identifying and qualifying prospects • Finding these prospects? • Trade lists ( GNPC,NPA Website) • Referrals • Inquiries • Internet visits • Government publications • Cheque returns • Previous customers • Internet smart agents

11. The approach • Initial contact • Establish rapport • Make a good impression • Problem solver for prospective buyer • Collect information

12. Sales presentation • Tell the product story • Attention, interest, desire, action • Use of appropriate sales aids (computers, videos, brochures) • Importance of verbal and non verbal communications

13. Handling objections • Listen and learn first • Yes…but • Additional information • Counter arguments • Change product or service to overcome objection

14. Closing the sale • Know when to close • Trial closing • Assumptive closing • Straightforward approach • Summative approach • Narrow the alternatives When would you like to take delivery?

15. Closing the Sale • The point when the salesperson obtains agreement from customer. • Customers are willing to purchase when: • Benefits have been explained. • Features are demonstrated.

16. When Can You Close? • At any point in time: • Approach • During Presentation • Overcoming Objections

17. Follow up • Make sure all promises have been kept and the customer is satisfied with the purchase • Resolve any problems encountered It’s working perfectly!!!

18. Ethical issues in sales and sales management • Kickbacks, bribes and “gifts” • Price discrimination • Cheating on expense accounts • Misrepresentation

19. CUSTOMER CARE-OUTLINE • Definition of customer care • Requirement of good customer care • Why has customer service remained elusive? • Who are the internal customers • Customer service dynamics • Reputation management • Problem solving skills

20. What is customer service Customer service is defined as the commitment to providing superior value to customers through caring customer contact, technical support and adding benefits in order to maximize service experience.

21. Fundamental requirements of customersCustomer wants and needs differ. However, most customers are united in their quest for the following: • Service: Depending on the level of involvement, customers will require some appreciable level of service delivery. High contact services such as buying fuel from the pumps require a high level of customer service. • Appreciation: Customers derive some pleasure when service providers appreciate their custom. Name recognition, courtesy, expressing gratitude and offering discounts are ways of showing appreciation.

22. Action: Swift response to concerns, complains and questions provides reassurance to customers which enhances service experience. • Price: Customers need fair prices. Unfair prices give customers a sense of exploitation leading to negative customer encounters. • Quality: Customers desire products that meet stated attributes. In customer care, quality is a function of how a customer feels and not the inherent benefits of a product.

23. Why has customer service remained elusive? • Lack of trained and qualified customer service staff • Reluctance to invest in customer care infrastructure • Failure to leverage on information technology to enhance customer service. • Lack of periodic evaluation of customer service. • Customer service providers inability to perceive themselves as customers. • Absence of regular performance appraisal. • Low level of empowerment.

24. Treating employees as internal customersAll employees need to be treated as internal customers. Organizations need to engage in a set of activities that will keep their employees happy before they can expect an exhibition of client care to external customers.According to Kotler, internal marketing deals with “marketing by a service firm to train and effectively motivate customer contact employees and all the supporting services to work as a team of people to provide customer satisfaction”.Oil and gas firms need to promote internal customer culture by:

25. Creating an internal awareness of customer care vision and objectives. • Determine the expectations of internal customers (employees) • Communicating to internal customers using face to face meetings, intranet, newsletters etc. • Set a feedback mechanism which employees (internal customers) can use to proffer suggestions complaints etc. • When internal customers are satisfied, it will lead to manifold effects such as, • Fewer shoddy goods. E.g. refining crude to desired standards • Boosted morale of workers • Diminished labour turnover • Fewer apologies to customers. E.g. for incorrect bills to fuel wholesalers and distributors • Enhanced company reputation • Retention of valued customers.

26. Loss of customers • Poor customer care can lead to the loss of valued customers with adverse consequences. The loss of customers lead to he following: • Loss of sales revenue • Loss of future business • Fall in competitive position • Job redundancies • Decline in reputation

27. CUSTOMER SERVICE DYNAMICS • Satisfying and exceeding customer expectations • Expectations involve our personal desire and vision of the results that will emanate from a service encounter. • The following can be used to satisfy customer needs and exceed their expectations. • Know your customers (who are they) • Determine customer expectations. • Inform customers of service standards. • Live up to customer expectations. • Maintain consistency and reliability.

28. REPUTATION MANAGEMENT Reputation management is the process of identifying the perceptions held by a company’s publics and establishing a definite scheme to correct, maintain and enhance the company’s image. Customer survey is a starting point but the perception of the larger stock of stakeholders should also be evaluated. Characteristics of a reputable firm • Shows responsiveness to customers. • Its trustworthy. • Keeps and delivers service promise. • Adds value to customers.

29. Compliant to ethics and statutory regulations • Environmentally friendly . For instance, The EPA gave Tema Oil Refinery and Tema Lube Oil Company Ltd red ratings, a manifestation of poor environmental performance. • Leverages on up to date technology • Treats employees as internal customers • Exhibits sound financial performance • Has excellent internal and external communications • Top management is customer friendly • Is a good corporate citizen.

30. Firms reputed for excellent customer service. The impressions and reflections of customers represents the reputation company has: An organization with a good customer service culture will exhibit the following features • Conducts business with a human face • It is amenable to change in industry practices • Provides superior value to customers • It is ethical and environmentally friendly • Has a policy of “customer is always right” • Empowers employees

31. Barriers to excellent customer care Hurdles faced by customer contact employees in the course of providing customer service can be categorized as; a) Controllable Barriers: Those within the influence and control of customer service employees. b) Uncontrollable Barriers: Those obstacles that are beyond the spheres of control of the customer care employee. Barriers that customer service providers can surmount are: • Poor communication skills. • Laziness. • Inability to handle “difficult customers” • Poor time management. • Poor attitude.

32. Personal credibility To boost customer service, employees involved in customer service need to build some good sense of credibility by: • Practicing consistency: Display professionalism, maintain composure and show warmness at all time. • Keep to your words: Endeavour to fulfill all your promises • Develop your knowledge: Understand the marketing mix of the firm. • Be a team player. • Be dedicated to satisfying customers. • Express apology when there is a shortfall in service delivery.

33. Dealing with conflict Conflict emanates from hostile encounters due to opposing needs. Customer service employees regularly handle conflicts. Dealing with Conflict Involves: • Listen to customer viewpoints and opinions. • Don't play the blame game. • Avoid referring to negative past encounters. • Use the diplomatic card to play the game. • Use opportunity to solve broad problems. • Brainstorm and offer the best solution.

34. Follow Up’s in Problem Solving Follow ups involve attempts to find out whether devised solutions are working according to plan. It can help also measure customer satisfaction • Keep customers informed about the status of their problem if the process to solve the issue is ongoing • Provides an opportunity to let customers know the firm values their custom. Apologizing to a customer • Acknowledge customer’s feeling • Accept some responsibility for the problem • Convey sincerity in verbal, written and non-verbal communication • Ask for the opportunity to solve the problem • Request the opportunity to continue doing business in the future.

35. EMPOWERMENT Empowerment involves giving a customer service providers adequate authority and responsibility to enable them make a range of decisions to service customers. Empowering customer service staff involves; • Clearly state customer service objectives. • Set up effective customer service systems. • Allow workers to take ownership of their decisions. • Reward employees who exhibit excellent customer service. • Long time commitment.

36. CRM •CRM–Customer relationship management. . .“is the overall process of building and maintaining profitable customer relationships by delivering superior CUSTOMER VALUE and satisfaction.”

37. CRM • "I haven't noticed the quantity going down but if I'm paying the same price and it is going smaller it will make me think again. • “BP going by their concept of satisfying their clients . You would have thought it would have got larger. • "I love BP enough to pay the same amount for it products, but I'd rather the price went up and we got more quantity." Imogen Bliss, 20, favourite fuelling @ BP

38. CRM •“It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied.” •Marketers must be concerned with the lifetime value of the customer (LCV)

39. CRM (Key Concepts) •Attracting, retaining and growing customers •Customer equity The total combined customer lifetime values (LCV) of all customers. Measures a firm‟s performance, but in a manner that looks to the future.

40. CRM (Key Concepts) • Building customer relationships and customer equity •Customer relationship levels and tools Target market typically dictates type of relationship Basic relationships Full relationships Customer loyalty and retention programs Adding financial benefits Adding social benefits Adding structural ties

41. KEY ACCOUNT MANAGEMENT • KAM • Pareto principle – focus on the 20% of customers who contribute to 80% of the profit Several stages of KAM Although relationships are being developed, KAM still deals initially with TRANSACTIONS

42. TRANSACTION or RELATIONSHIP? • Straight re buys are essentially, TRANSACTIONS • Modified re buys may involve some NEGOTIATION • “New tasks” are the area of OPPORTUNITY • Particularly if the organisation knows what it wants but does not know how to get it • More than a transaction, new business requires a RELATIONSHIP approach

43. RELATIONSHIP MARKETING • Christopher and Peck (1998) suggested that transactional approach may not be appropriate • Market activity has become less of a TRANSACTION and more of a RELATIONSHIP between the buyers and sellers • How can RELATIONSHIP MARKETING be characterised?

44. CUSTOMER MARKETS • Customer is always the PRIMARY focus • Customer is the source of REVENUE • The LOYALTY LADDER is a model showing how PROSPECTS may become ADVOCATES Source: Christopher, Payne & Ballantyne (1991)

45. Ladder of customer loyalty

46. Understand The Buyer • Key reading:. Kotler (12thedn) Ch 5 & 6

47. BUYERS’ DECISIONS IN PRACTICE • Please think of a product that you bought recently. What decision processdid you go through before you made the purchase? • Discuss in Groups for 10 minutes and then choose TWO examples for presentation. • Present to whole class, 5 minutes each example, by each Group.

48. Understanding the Buyer • Products • Consumer Markets • Business Markets

49. CONSUMER MARKET • “Individuals and households who buy or acquire goods and services for personal consumption.”

50. CONSUMER BEHAVIOUR BUYER’S “BLACK BOX ” Buyer characteristics Buyer decision process MARKETING STIMULI BUYER RESPONSE 4Psproduct; price; place; promotion. PEST Political Economic Social Cultural Product? Brand? Dealer? Purchase timing? Purchase amount?