12 Personal Selling, Database Marketing, And Customer Relationship Management 12 Chapter Overview Personal selling Retail sales Business-to-business sales Database marketing Direct marketing Permission marketing Frequency programs Customer relationship management

12 Retail Sales How much influence does a retail sales clerk have on your purchase decision? What products do sales people have the most influence? What type of sales approach works the best? Discussion Slide

The Manufacturer’s Dilemma Retail sales personnel can influence purchase decision. To enhance manufacturer brand within retail stores, manufacturers Provide training for retail salespeople Advertise extensively Offer contests and incentives at retail level Missionary salespeople Missionary – help with merchandising

Business-to-Business Personal Selling Field sales In-house sales Telemarketing sales Internet sales Telemarketing – inbound and outbound

Four Attributes of Great Salespeople Jack Carroll Integrity – being honest with customers. Diligence – working hard. Resiliency – ability to bounce back and not take “no” personally. Intelligence Source: Jack Carroll, “The Four Attributes of Great Salespeople,” SalesLinks Bulletin, Mentor Associates Sales Training. (Http://www.saleslinks.com/sideline/sep-dec98/102698.htm)

F I G U R E 1 2 . 2 Types of Selling Relationships

How to Build Trust in a Strategic Partnership - Thomas Wood-Young Communicate frequently. Return all phone calls immediately. Handle complaints promptly with empathy and honesty. Offer great customer service. Understand your customer. Become a valuable resource. Create solutions that add value for your customers. Partner with customers. Create a customer, not a sale! Source: Thomas Wood-Young, “Building Trust Results in Customer Loyalty,” Sales Doctors Magazine (Http://www.salesdoctors.com/diagnosis/3trust2.htm)

Identifying prospects Qualifying prospects Knowledge acquisition F I G U R E 1 2 . 4 Personal Selling Process Identifying prospects Qualifying prospects Knowledge acquisition Sales approaches Sales presentation Follow-up Everyone should have had or will have personal selling so I’ll spend little time here.

Mine data for information. Develop marketing programs. F I G U R E 1 2 . 1 1 Steps in Developing a Database Determine objectives. Collect data. Build a data warehouse. Mine data for information. Develop marketing programs. Evaluate marketing programs and data warehouse. OH’s that follow discuss these Objectives – who will use? How? Etc. E.g., track who buys what and why, where they reside Collect data – next oH

Internal customer data. Survey data of customers. Channel members. F I G U R E 1 2 . 1 2 Sources of Data Internal customer data. Survey data of customers. Channel members. Commercial data sources. Government data sources.

F I G U R E 1 2 . 1 3 Internal Data Information Where are the customer located? What have they purchased? How often have they purchased? How did they initially make contact? How do they order or purchase? (in person, Web, mail, phone, etc.) What is known about their families, occupations, payment histories, interests, attitudes, etc.? If B-to-B, who are the influencers, users, deciders and purchasers? If B-to-B, is it a corporate office or branch offices?

The Data Warehouse Internal data External data Geocoding information Data put into warehouse must be relevant to objectives.

INTEGRATED LEARNING EXPERIENCE STOP INTEGRATED LEARNING EXPERIENCE Building a data warehouse – Professional firm. Sagent Technology http://www.qmsoft.com

Mining Data for Information Building profiles of customer groups Preparing models that predict future purchase behavior Mine – build customer profiles or develop purchase behavior model

INTEGRATED LEARNING EXPERIENCE STOP INTEGRATED LEARNING EXPERIENCE Firms offering data mining services Geo-marketing services. Http://www.db-marketing.com/geo Data mining services Http://www.database-marketing.com

Executives from Unica, a maker of marketing automation software, discuss the importance and use of data mining and management. Click picture to view video.

Developing Marketing Programs Data can be used: to develop advertising, sales promotion and other marketing materials. for sales support. for direct marketing efforts. to target specific customers. by service support staff.

F I G U R E 1 2 . 1 4 Mail Catalogs Telemarketing Mass media Methods of Direct Marketing Mail Catalogs Telemarketing Mass media Alternative media Internet E-mail Selling products directly to consumers Mass media – radio, tv Alt media – package inserts; ride alongs; card pack Next OH’s cover

Cysive B-to-B Direct Marketing Plan Http://www.cysive.com

Direct Mail High usage in B-to-B markets. Success depends on quality of database. Message must appeal to target group. Digital direct-to-press. Major problem is large volume of direct mail received by both consumers and businesses. Digital – software that instructs the computer to send a tailor-made message (popular in the business-to-business sector)

Catalogs Viewed as low-pressure sales tactics. Catalogs saved for a longer period of time. Catalogs often passed along to others or viewed by others. Key is the use of enhanced database and targeting of catalogs.

Number of Catalogs Received per Month Source: Direct Marketing Association (Http://www.the-dma.org)

Total Annual Expenditures from Catalogs Mean = $637 Median = $300 Source: Direct Marketing Association (Http://www.the-dma.org)

Steps in Developing a Permissions Marketing Program Obtain permission from the customer. Reinforce the incentive to continue the relationship. Increase the level of permission. Leverage the permission to benefit both parties. Source: Seth Godin, “Permission Marketing: The Way to Make Advertising Work Again, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.

Frequent Shopper Programs 70% of U.S. households participate in a frequent-shopper program. 59% of participating households belong to two or more programs. 82% use their frequent shopper card each time they shop. Primary reason for joining is to receive discounts. 60% say the reason they shop at a particular grocery store is because the store has a frequent shopper program. Source: A.C. Nielson, Santella & Associate

F I G U R E 1 2 . 1 5 Maintain sales, margins or profits. Frequency Program Objectives Maintain sales, margins or profits. Increase loyalty of existing customers. Induce cross-selling to existing customers. Differentiate a parity brand. Preempt the entry of a new brand. Preempt or match a competitor’s frequency program. Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty Programs Really Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.

Reasons Retailers Develop Loyalty Programs Reason for program Indication % Promotes consumer loyalty 90% Increases “best shopper” sales 65% Gain consumer information 65% Maintain market share 42% Enhance image 29% Respond to competition 10% Source: A.C. Nielson, Santella & Associate

Customer Relationship Management Steps to Develop Identify the company’s customers. Differentiate customers in terms of their needs and their value to the selling company. Interact with customers in ways that improve cost efficiency and the effectiveness of your interaction. Customize some aspects of the goods or services being offered to the customer. 2. Lifetime value and share of customer should be calculated. 3. Reach some in person and some via internet 4. Customize – e.g., Barns and Nobel offers a good price on an author’s new book (if customer likes this author).

Customer Relationship Management Foundation Database Technology Interactivity through websites, call centers, and other means of contacting customers. Mass customization technology

Customer Relationship Management Reasons for Failure Implemented before a solid customer strategy is created. Rolling out a CRM program before changing the organization to match the CRM program. Becoming technology driven rather than customer driven. Customers feel like they are being stalked instead of being wooed. CRM has a high failure rate

Building Your IMC Campaign Develop the role of personal selling in the IMC Plan. Decide what type of database will be needed and how it will be used by your company. Will you have a direct marketing program Will there be a permissions marketing program? Will you have a frequency marketing program? Decide what type of CRM program will be developed.