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Personal Selling and Direct and Online Marketing: Building Direct Customer Relationships

After studying this chapter, you should be able to: 1. Discuss the role of a companys salespeople in creating value for customers and building customer relationships
2.

Identify and explain the six major force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing

3.

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1. 2.

Personal Selling The Personal Selling Process

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The Nature of Personal Selling

Examples of people who do the selling include: Salespeople Sales representatives District managers Account executives Sales engineers Agents Account development reps

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The Nature of Personal Selling Salespeople can include an order taker such as someone standing behind the counter or an order getter whose position demands more creative selling and relationship building Personal selling is the interpersonal part of the promotion mix and can include: Face-to-face communication Telephone communication Video or Web conferencing

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The Role of the Sales Force Salespeople can be more effective than advertising

Learn about customer problems and adjust the marketing offer and presentation accordingly to meet the special needs of each customer Representing the company to customers Representing customers to the company

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Managing the Sales Force

Sales force management is the analysis, planning, implementation, and control of sales force activities and includes: Designing the sales force strategy and structure Recruiting Selecting Training Compensating Supervising Evaluating

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Managing the Sales Force

Sales Force Structure

Territorial sales force structure Product sales force structure

refers to a structure where each salesperson is assigned an exclusive geographic area and sells the companys full line of products and services to all customers in that territory refers to a structure where each salesperson sells along product lines refers to a structure where each salesperson sells along customer or industry lines refers to a structure where a wide variety of products is sold to many types of customers over a broad geographic area and combines several types of sales force structures

Customer sales force structure Complex sales force structure

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Managing the Sales Force

Sales Force Size

Salespeople are one of the companys most productive and expensive assets Increases in sales force size can increase sales and costs

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Managing the Sales Force

Other Sales Force Strategy and Structure Issues

Outside salespeople call on customers in the field Inside salespeople conduct business from their offices Technical sales support people Sales assistants

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Other Sales Force Strategy and Structure Issues Team selling is used to service large complex accounts and can include experts from:

Managing the Sales Force

Sales, Marketing, Technical , R&D, Engineering, Operations and Finance

Some challenges of team selling Customers used to working with one salesperson may become confused or overwhelmed Salespeople used to working alone can have difficulties working with and trusting teams Evaluating individual contributions can lead to compensation issues

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Recruiting and Selecting Salespeople

Issues in recruiting and selecting include: Careful selection Increases sales performance Poor selection Increases recruiting and training costs
Lost sales Disrupts customer relationships

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Compensating Salespeople Compensation is made up of: Fixed amounts - a salary, give the salesperson some stable income

Variable amounts - commission or bonus based on sales performance; rewards the salesperson for greater effort and success Expenses Fringe benefits
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Supervising and Motivating Salespeople The goal of supervision is to help salespeople work smart by doing the right things in the right ways The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals Sales morale and performance can be increased through: Organizational climate - feelings Sales quotas Positive incentives sales contest, sales meeting
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Evaluating Salespeople and Sales Force Performance

Sales reports Call reports Expense reports

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The goal of the personal selling process is to get new customers and obtain orders from them

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Steps in the Personal Selling Process

1. 2. 3. 4. 5. 6. 7.

Prospecting and qualifying Pre-approach Approach Presentation and demonstration Handling objections Closing Follow-up

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Steps in the Personal Selling Process Step 1 Prospecting identifies qualified potential customers through referrals from:

Customers Suppliers Dealers Internet

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Steps in the Personal Selling Process Step 1 Qualifying is identifying good customers and screening out poor ones by looking at:

Financial ability Volume of business Needs Location Growth potential

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Steps in the Personal Selling Process Step 2 Pre-approach is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers

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Steps in the Personal Selling Process Step 2

In the pre-approach stage, the salesperson sets call objectives and the best approach
Objectives Qualify the prospect Gather information Make an immediate sale

Approaches Personal visit Phone call Letter

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Steps in the Personal Selling Process Step 3 Approach is the process where the salesperson meets and greets the buyer and gets the relationship off to a good start, and involves the salespersons:

Appearance Opening lines Follow-up remarks

Salesperson must listen to customers Presentation, need satisfaction approach

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Steps in the Personal Selling Process Step 4

Handling objections is the process where salespeople resolve problems that are logical, psychological, or unspoken
When handling objections from buyers, salespeople should: Be positive Seek out hidden objections Ask the buyers to clarify any objections Take objections as opportunities to provide more information Turn objections into reasons for buying

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Steps in the Personal Selling Process Step 5 Closing is the process where salespeople should recognize signals from the buyer, including physical actions, comments, and questions to close the sale

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Steps in the Personal Selling Process Step 5

Closing techniques can include: Asking for the order Reviewing points of agreement Offering to help write up the order Asking if the buyer wants this model or another one Making note that the buyer will lose out if the order is not placed now Offering incentives to buy, including lower price or additional quantity

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Steps in the Personal Selling Process Step 6

Follow up is necessary if the salesperson wants to ensure customer satisfaction and repeat business

Personal Selling and Customer Relationship Management Personal selling is a transaction-oriented approach to close a specific sale with a specific customer, with the longterm goal to develop a mutually profitable relationship

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After studying this chapter, you should be able to:

1.

Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies Discuss how companies go about conducting online marketing to profitably deliver more value to customers Overview the public policy and ethical issues presented by direct marketing
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2.

3.

4.

5.

1. 2. 3. 4. 5. 6. 7.

The New Direct-Marketing Model Growth and Benefits of Direct Marketing Customer Databases and Direct Marketing Forms of Direct Marketing Online Marketing Integrated Direct Marketing Public Policy Issues in Direct Marketing

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Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships

No intermediaries An element of the promotion mix Fastest-growing form of marketing

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Benefits to Buyers

Convenience Ready access to many products Access to comparative information about companies, products, and competitors Interactive and immediate

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Benefits to Sellers

Tool to build customer relationships Low-cost, efficient, fast alternative to reach markets Flexible Access to buyers not reachable through other channels

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Customer Database Customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data Uses: Locate good and potential customers Generate sales leads Learn about customers Develop strong long-term relationships

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Personal selling direct marketing Direct-mail direct marketing Catalog direct marketing Telephone marketing Direct-response television marketing Kiosk marketing Digital direct marketing Online marketing

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Direct-mail marketing involves an offer, announcement, reminder, or other item to a person at a particular address

Personalized Easy-to-measure results Costs more than mass media Provides better results than mass media

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Catalog direct marketing involves printed and Web-based catalogs

Benefits of Web-based catalogs Lower cost than printed catalogs Unlimited amount of merchandise Real-time merchandising Interactive content Promotional features
Challenges of Web-based catalogs Require marketing Difficulties in attracting new customers

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Telephone direct marketing involves using the telephone to sell directly to consumers and business customers

Outbound telephone marketing sells directly to consumers and businesses Inbound telephone marketing uses toll-free numbers to receive orders from television and print ads, direct mail, and catalogs

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Benefits of telephone direct marketing Purchasing convenience Increased product service and information

Challenges of Webbased catalogs Unsolicited outbound telephone marketing Do-Not-Call Registry

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Direct-response television (DRTV) marketing involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase and 30-minute infomercials such as home shopping channels Less expensive than other forms of promotion Easier to track results

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Kiosk marketing involves placing information and ordering machines in stores, airports, trade shows, and other locations

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Digital direct marketing technologies Mobile phone marketing Podcasts Vodcasts Interactive TV

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Mobile phone marketing includes: Ring-tone giveaways Mobile games Ad-supported content Contests and sweepstakes

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Podcasts and Vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or iPod and listening to them at the consumers convenience

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Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences

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Marketing and the Internet Internet is a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository

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Online Marketing Domains

Business to consumer (B2C) Business to business (B2B)

involves selling goods and services online to final consumers involves selling goods and services, providing information online to businesses, and building customer relationships occurs on the Web between interested parties over a wide range of products and subjects, blogs involves consumers communicating with companies to send suggestions and questions via company Web sites
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Consumer to consumer (C2C) Consumer to business (C2B)

Types of Online Marketers

Click-only marketers

Operate only online without any brick and mortar presence E-tailers (Amazon), search engines and portals, shopping or price comparison sites, Internet service providers (ISP)

Click-and-mortar marketers

Companies are brick-and-mortar companies with an online presence Advantages of click and mortar companies include
known and trusted brand names, strong financial resources, large customer bases, industry knowledge, reputation etc

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Setting Up an Online Presence Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site

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Setting Up an Online Presence Types of sites Corporate Web site Marketing Web site

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Setting up an Online Presence Corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the companys products directly to: Provide information Create excitement Build relationships

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Setting Up an Online Presence Marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

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Designing Effective Web Sites To attract visitors, companies must: Promote in offline promotion and online links Create value and excitement Constantly update the site Make the site useful

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Designing Effective Web Sites

The seven Cs of effective Web site design 1. Context - is the sites layout 2. Content - is the sites pictures, sound, and video 3. Community - is the sites means to enable user-touser communication 4. Customization - is the sites ability to tailor itself to different users or to allow users to personalize the site 5. Communication - is the way the site enables user-touser, user-to-site, or two-way communication 6. Connection - is the degree that the site is lined to other sites 7. Commerce - is the sites capabilities to enable commercial transactions
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Designing Effective Web Sites The eighth C To keep customers coming back, the site needs to constantly change

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Placing Ads and Promotions Online Forms of online advertising Display ads Search-related ads Online classifieds

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Placing Ads and Promotions Online

Display ads Banners are banner-shaped ads found on a Web site Interstitials are ads that appear between screen changes Pop-ups are ads that suddenly appear in a new window in front of the window being viewed Rich media ads incorporate animation, video, sound, and interactivity

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Placing Ads and Promotions Online Search-related ads are ads in which textbased ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion

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Placing Ads and Promotions Online Other forms of online promotion include
Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information Alliances and affiliate programs are relationships where online companies promote each other Viral marketing is the Internet version of word-ofmouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends

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The Future of Online Advertising Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix

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Creating or Participating in Web Communities Web communities allow members to congregate online and exchange views on issues of common interest iVillage.com MyFamily.com

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Using E-mail Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment

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Integrated direct marketing involves the use of carefully coordinated multiplemedia, multiple-stage campaigns

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Customer irritation, unfairness, deception, and fraud Privacy Security

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Irritation, Unfairness, Deception, and Fraud

Irritation includes annoying and offending customers Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers Deception includes heat merchants who design mailers and write copy designed to mislead consumers Internet fraud includes identity theft and financial scams

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