Linking Strategies and the

Sales Role in the Era of

Customer Relationship
Management
Chapter
Chapter 33
Chapter Three Outline

What is the focus of The objectives of The advantages of

What is Customer
Customer Customer Customer
Relationship
Relationship Relationship Relationship
Management(CRM)?
Management(CRM)? Management (CRM) Management (CRM)

The Customer
How Market Internal Partnering
Relationship The Importance of
Orientation Affects to Create a Market
Management (CRM) Market Orientation
Performance? Orientation
Process

Personal Selling’s
Personal Selling’s Stages that result in
Types of Role in the
Role in Marketing a Strategic
Relationships Marketing
Strategy Partnership
Communication mix
What is Customer Relationship
Management(CRM)?
• Firms moving towards a culture that is market-oriented and customer-centric need a
high degree of formalization.
• Customer-centric- The customer is at the center.
• Formalization means that structure, processes, and tools, and managerial knowledge
and commitment are formally established to support the culture.
• Customer Relationship Management(CRM) is used to formalize an organization’s culture
so that a company can become more market-oriented and customer-centric.
 Customer Relationship Management (CRM)
is the overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction.

What is Customer
Relationship
Management(CRM)?

Customer Relationship Management (CRM)

involves managing detailed information
about individual customers and carefully
managing customer touch points. (where a
customer directly or indirectly interacts
with the company in some form).
Example of • Example of a Hotel’s customer touch points:

Customer
Internet and phone reservation, Hotel
website, Hotel reception, check-in process,
room service, laundry service, restaurants,
Touch and checkout processes.

Points
What is the focus of
Customer Relationship
Management(CRM)?
• The goals of CRM is to align the organization’s internal and
external systems to be customer-centric.
• The sales force is group inside the company that can add
value to the success of CRM.
• How does the Sales Force add value to CRM?
• The sales force are the closest to customers.
• CRM requires the integration of sales with other business
functions and the use of cross-functional teams.
 • A move towards one-to-one marketing- customize
The objectives of offerings for individual customers.
Customer • The objectives of CRM

Relationship 1. Customer retention- Retain loyal and profitable

customers and channels. (Less expensive to
Management retain existing customers rather than acquire
new customers).
(CRM) 2. Customer Acquisition-Acquire the right
customer to drive growth and increase
margins. (high profit customers).
3. Customer Profitability-Increase individual
customer margin by offering the right product
at the right time.
• (cross-selling and up-selling).
The advantages of Customer Relationship
Management (CRM)
• Reduce advertising costs
• Make it easier to target specific customers
• Easier to track the effectiveness of a particular promotion.
• Companies can compete for customer based on service, not price.
• Less spending on low-value customers (firing a customer) and more spending on high-
value customers
• Speeds the time to develop a new product
• Improves the use of the customer channel which maximizes each contact with a
customer.
• What is the lifetime value of a customer?
• It is the value of the entire stream of purchases that the customer would make over a
lifetime of patronage.
The Customer Relationship Management (CRM)
Process
1. Knowledge Discovery-Analyzing the customer information that was acquired through
touch points. (Use data warehouses) Data mining- Analysts can mine the data to get
information on neglected customer segments, and customer trends).
2. Market Planning-Develop customer strategies and programs based on output from
the Knowledge Discovery stage.
3. Customer Interaction-Implement the customer strategies and programs.
• This includes the personal selling effort.
• This effort should be aimed at all customer touch points, both in person and
electronically.
The Customer Relationship (CRM) Process

• 4. Analysis and Refinement- Learning takes place based on customers’ response to

strategies.
• Continuous dialogue based on feedback from customers.
• Adjustments of strategies
 The marketing concept is
based on indentifying and
satisfying customer needs.

The Salespeople play a large role

Importance in market-oriented
companies: They
of Market • Identify customers needs through the
Orientation sale of a product or service
• Represent customer’s needs to
various areas in the sales company
• Identify changing customer
requirements and communicate
these changes to the right people
How Market Orientation Affects Performance?

• Market-oriented companies are superior in two ways:

1- They do a better job of market-sensing, or anticipating market requirements before the
competition by the gathering of information through:
• The sales force
• Observing competitors
• Market research
• Monitoring customer complaints.
 • 2. Market-oriented companies can develop
How Market stronger relationships with their customers and
Orientation their channels of distribution.
• Direct links of communications between customer,
Affects manufacturer and supplier (no middleman).
Performance? • What are spanning processes?
• Processes that link internal processes with the
customer.
• Sales Management is an important link in the
spanning process.
Classifying capabilities of market-oriented firms
Internal Partnering to Create a Market Orientation

Internal partnering is a
Internal partnering or
tool for carrying the
creating partnering
customer’s voice to
relationships with
many parts of the
other functional areas.
company.

To be customer-centric
It is usually a Sales
companies must create
Manager’s job to build
a sound mission and
internal partnerships.
appropriate goals.
Personal Selling’s Role in Marketing Strategy

PERSONAL SELLING- FACE- WHAT IS PERSONAL IT DEPENDS ON THE TYPE THREE BASIC TYPES OF
TO-FACE SELLING IN WHICH SELLING’S ROLE IN OF RELATIONSHIP THAT A RELATIONSHIPS EXIST:
A SELLER ATTEMPTS TO MARKETING STRATEGY? COMPANY WANTS TO HAVE
PERSUADE A BUYER TO WITH THEIR MARKETS OR
MAKE A PURCHASE. MARKET SEGMENTS.

MARKET EXCHANGES FUNCTIONAL STRATEGIC RELATIONSHIPS

RELATIONSHIPS
Types of 1. Market Exchanges ( Transactional)-One time
transactions that occur between a buyer and
Relationships •
seller.
Smaller role for salespeople in this type of
relationships. ( Gasoline purchase)
2. Functional Relationships-Are long-term
relationships between buyers and sellers based on
close personal friendships.
• A salesperson’s relationship with a buyer is very
important. (Financial planning where the broker
becomes a trusted confidant of the client)
 Types of Relationships
• A high level of trust must exist between the salesperson and the buyer.
• The danger in this relationship is if the salesperson or the buyer
changes jobs.
• 3. Strategic Partnerships-Are long-term relationships in which the
partners make substantial investments to improve the profitability of
both companies and to jointly achieve objectives. (B2B).
• IBM & Apple ( big data and analytics on iOS devices)
• Google & Luxottica ( technology & Fashion)
 • The relationship is between two organizations and
Types of includes personal relationships between different
Relationships functional members of each organization.
• Wide relationship and It is not centered on
salespeople.
• What is the role of salespeople in a strategic
partnership?
• The salesperson (sales manager and general
manager) is responsible for making sure the
relationship stays strong between both groups
(production, product developer, and designer)
form the two different companies.
• Should companies have this type of relationship with every customer?
• No, strategic partnerships should be created with customer that are large and can make
substantial investment.
• Customer that is innovative and provide new technology or provide access to the
market.
• Example, Walmart and (P&G) have strategic partnership. P&G provide market knowledge
and advance technology; while Walmart provides supply chain management.
Types of relationship
 • 1. Awareness- In this stage, the buying organization recognizes
Stages that result that the selling organization is a possible exchange partner
but has yet to start any communication with the organization
in a Strategic or purchase any of its products.

Partnership • 2. Exploration- Both sides try to determine the potential value

of the relationship.
• To begin a relationship positively, a salesperson must
1. Set Proper expectations (under promise and overdeliver)
Customer delight
2. Monitor order processing and delivery
3. Ensure proper use of product (maximum efficiency)
4. Assist in servicing-Not all quiet customers are happy.
Monitor complaints carefully.
• A Poor initial experience by the customer is very difficult to
overcome.
 • 3. Expansion- Opportunity to sell new things.
Stages that result • Repeat Sales
in a Strategic • Upgrading-Convince the customer to use a higher
Partnership quality product or newer product.
• Full-Line Selling-Selling the entire line of
associated products.
• Cross-Selling
• 4. Commitment- Solid foundation of customer
loyalty.
• Customer is reluctant to switch to other
companies.
• A pledge to continue relationship.
• Preferred supplier
Personal Selling’s Role in the Marketing
Communication mix
• Personal Selling is one of the marketing communication mix (others include advertising,
sales promotion, direct marketing, and public relation/publicity).
• Face-to-face communication is a big advantage of personal selling because the
salesperson can:
• Be more persuasive than an advertisement
• Communicate larger amount of complex information
• Devote more time to learn about a customer’s problem
Personal Selling’s Role in the Marketing
Communication mix
• Disadvantages of Personal Selling
• Salesperson can only communicate with a small number of customers.
• Personal Selling is more costly per person than any other promotional tools.
• Research suggests that firms with a higher level of customer orientation are more
successful.
• TRUE
• CRM is both a philosophy and a pragmatic system.
• TRUE
• The major cause of growth in CRM is technology.
• TRUE
• CRM has facilitated the shift from one-to-one to mass marketing.
• FALSE
Q:

Personal selling is part of a firm's

• A. Product mix
• B. Pricing mix
• C. Marketing communication mix
• D. Distribution mix
• E. Personal selling is an integral part of all parts of a firm's marketing mix
• C
Q:

The evolution of customer relationship marketing has progressed from:

• A. Mass, target, one-to-one, to customer marketing
• B. One-to-one, mass, target, to customer marketing
• C. Customer, mass, target, to one-to-one marketing
• D. Mass, target, customer, to one-to-one marketing
• E. Customer relationship marketing has always existed
• D
New Product
Reference

• Johnston & Marshall (2016) , Sales Force Management, 12th edition, McGraw-Hill,
International Edition.