Sales Force Management
13th Edition
Mark W. Johnston
Greg W. Marshall
© 2016 Taylor & Francis
Linking Strategies and the Sales Role in the Era
of CRM and Data Analytics
CHAPTER 3
© 2016 Taylor & Francis
Learning Objectives
• Understand key components and goals of
CRM
• Explain importance of market orientation
and how it is fostered
• Identify key steps in developing and
implementing strategies
• Describe role of personal selling in
marketing strategy
• Outline stages in developing strategic
partnership relationships
• Discuss actions salespeople can take to
ensure long-term buyer-seller relationships
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What Is Customer Relationship Management
(CRM)?
• Comprehensive business model for increasing
revenues and profits by focusing on customers
• Overarching business philosophy and process
tool to facilitate a customer-driven enterprise
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Customer Orientation
• Customer drives the marketing
strategy, which is driven by the
marketing mix
• Customer is the center of all
marketing activities, and CRM
software and touchpoints help
ensure that the customer is
accurately captured and monitored
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Customer-Centric Cultures
• Partnership business model with shared risks and rewards
• Selling as customer business consultation
• Formalized customer analysis processes and agreements
• Proactively educating customers about value chain and cost
reduction opportunities
• Focus on continuous improvement principles stressing
customer satisfaction
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Marketing Evolution: Technology and
Characteristics
Source: Ronald S. Swift, Accelerating Customer Relationships: Using
CRM and Relationship Technologies (Upper Saddle River, NJ: Prentice
Hall PTR, 2001), p. 38. © 2016 Taylor & Francis
Objectives of CRM
• Customer Retention
• Customer Acquisition
• Customer Profitability
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Advantages of CRM
• Reduces advertising costs
• Increases awareness of customer needs
• Tracks effectiveness of promotional campaigns
• Competition for customers based on service, not prices
• Prevents over-spending on low-value clients, under-spending
on high-value ones
• Speeds time to develop and market a product
• Improves use of customer channel
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The CRM Process Cycle
Source: Ronald S. Swift, Accelerating Customer Relationships:
Using CRM and Relationship Technologies (Upper Saddle River, NJ: © 2016 Taylor & Francis
Prentice Hall PTR, 2001), p. 40.
10 Critical Questions in CRM
• Customers
1. Who are our customers?
2. What do our customers want and expect?
3. What is the value potential of our customers?
• The Relationship
4. What kind of relationship do we want to build?
5. How do we foster exchange?
6. How do we work together and share control?
• Managerial Decision Making
7. Who are we?
8. How do we organize to move value closer to our customers?
9. How do we measure and manage our performance?
10. How do we increase our capacity for change?
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CRM Failures Often Management’s Fault
• Disruption of routines
• Perception of CRM as micro-management tool
• Differences in expectations
• Perceived lack of management support
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CRM- Driven Data Analytics
• Data Driven Insights into Consumers and
Markets
– Insights for customer segmentation
– Insights into value of customers
– Insights into market opportunities
– Promote accountability for the sales force
– Provide greater decision clarity and motivation for
the sales force
– Enable sales managers to lead and manage
© 2016 Taylor & Francis
The Importance of Market Orientation
• Successful salespeople think beyond “selling”
• Market-driven companies do better market
sensing
• Market-driven companies develop stronger
relationships with customers and channels
• Internal partnering is a critical component
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Classifying Capabilities of Market
Oriented Firms
Source: George S. Day, “Capabilities of Market-Driven Organizations,”
Journal of Marketing 58 (October 1994), pp. 37–52. Reprinted by © 2016 Taylor & Francis
permission of the American
The Process of Strategy Development
• From the company mission come the goals
and objectives
• These goals and objectives are overarching for
the company, and generate strategy meant to
fulfill them
• Goals and objectives are cut into smaller,
attainable ones for employees to reach
• Strategic business units aid in this process
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SBU Strategy
• How the business will compete in its industry to
achieve sustainable competitive advantage (SCA)
• SCA focuses on distinctive competencies
• Porter’s Three Generic Strategies:
– Low Cost
– Differentiation
– Niche (or Focus)
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Steps in Developing and Implementing
Strategies
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Types of Relationships
between Buyers and Sellers
Adapted from Stephen B. Castleberry and John F. Tanner, Selling:
Building Partnerships, 8th ed. (New York: Irwin/McGraw-Hill, 2011). © 2016 Taylor & Francis
Personal Selling’s Role in
Marketing Strategy
• Market exchanges are one-shot transactions
occurring between a buyer and seller with
limited thought of future consideration
• Roles of salespeople
– Create new value
– Adapt
– “Make the market”
– Exit
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Personal Selling’s Role in
Functional Relationships
• Create a climate of cooperation, with open and
honest communication
• Roles of salespeople
– Engender high level of personal trust in well managed
business activities
– Provide expertise for competitive advantage
• Danger when one party in the relationship leaves
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Personal Selling’s Role in
Strategic Partnerships
• Long-term relationships where both parties make
significant investments
• Roles of salespeople
– Direct communication with production, production
designers, and others
– Relationship manager and general manager
– Work with clients large enough to make investments
worthwhile
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Relationship Development
Stage 1 Stage 2 Stage 3
Exploration Expansion Commitment
Determine value, Generate repeat Build loyalty,
build trust, set sales, full-line selling, become a
proper cross-selling preferred
expectations, supplier, engage
monitor in TQM
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Building Customer Relationships
• Under promise, over deliver
• Don't forget the small things.
• Stay in contact
• Establish a feedback system
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Integrated Marketing Communication (IMC)
• Integrates personal selling, advertising and other
communications options
• Advantages of selling in IMC
– Face-to-face contact
– More persuasive
– More demonstrative
– Customization opportunities
• Disadvantages of selling in IMC
– Limited ability to duplicate
– More costly
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Factors Influencing Personal
Selling in IMC Strategy
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Key Questions for Investing in
Advertising versus Personal
Selling
Source: Adapted from David W. Cravens and Nigel F. Piercy, Strategic
Marketing, 10th ed. (New York: Irwin/McGraw-Hill, 2005), p. 348. © 2016 Taylor & Francis
Customer Feedback
• Maintaining customer loyalty is crucial for improving
profitability
• Loyal customers. . .
– Tend to concentrate purchases
– Provide positive customer referrals
– May pay premium prices for value they receive
• Supplement satisfaction measures with examinations of
customer behavior
– Annual retention rate
– Frequency of purchases
– Percentage of the customer’s total purchases captured by the firm
© 2016 Taylor & Francis