chapter 17 Flashcards
direct marketing
the use of consumer-direct channels to reach and deliver goods and services to customers without using marketing middlemen.
direct-order marketing
seeking measurable response, typically a customer order.
market demassification
has resulted in an ever-increasing number of market niches.
direct marketers’ decisions
- objectives
- target markets and prospects
- offer elements
- testing elements
- measuring success: lifetime value
direct-mail marketing
sending an offer, announcement, reminder, or other item to an individual consumer.
offer strategy elements
- the product
- the offer
- the medium
- the distribution method
- the creative strategy
all these elements can be tested.
components of the mailing
- outside envelope
- sales letter
- circular
- reply form
- reply envelope
often, direct mail is followed up by e-mail.
catalogue marketing
companies may send full-line merchandise catalogues, specialty consumer catalogues, and business catalogues, usually in print form but also as DVDs or online.
telemarketing
the use of phones and call centres to attract prospects, sell to existing customers, and provide service taking orders and answering questions.
inbound telemarketing
receiving calls from customers.
outbound telemarketing
initiating calls to prospects and customers.
customer databases’ uses
can provide a source of competitive advantage.
1. identify prospects
2. decide which customers should receive a particular offer
3. deepen customer loyalty
4. reactivate customer purchases
5. avoid serious customer mistakes
five main problems prevent effective use of database marketing
- some situations are not conducive to database marketing
- building and maintaining a customer database requires a large investment
- employees may resist becoming customer-oriented and using the available information
- not all customers want a relationship with the company
- the assumptions behind CRM may not always hold true
a customer database may not be worthwhile when
- the product is a once-in-a-lifetime purchase
- customers show little loyalty to a brand
- the unit sale is very small so customer lifetime value is low
- the cost of gathering information is too high
- there is no direct contact between the seller and ultimate buyer
sales representative positions (least to most creative types of selling)
- deliverer
- order taker (inside/outside)
- missionary
- technician
- demand creator (relies on creative methods)
- solution vendor
missionary
a salesperson not permitted to take an order but expected to build goodwill or educate the actual or potential user.
solution vendor
a salesperson whose expertise is solving a customer’s problem, often with a system of the company’s products or services.
six major steps in effective selling
- prospecting and qualifying
- pre-approach
- presentation and demonstration
- overcoming objections
- closing
- follow-up and maintanence
customers prefer suppliers who
- sell and deliver a coordinated set of products and services to many locations
- quickly solve problems in different locations
- work closely with customer teams to improve products and processes
direct sales force
consists of full- or part-time paid employees who work exclusively for the company.
contractual sales force
consists of manufacturers’ reps, sales agents, and brokers who earn a commission based on sales.
managing the sales force steps
- recruiting and selecting sales representatives
- training the representatives in sales techniques and in the company’s products, policies and customer-satisfaction
- supervising the sales force and helping reps to use their time efficiently
- motivating the sales force and balancing quotas, monetary rewards, and supplementary motivators
- evaluating individual and group sales performance.
designing a sales force
- sales force objectives
- sales force strategy
- sales force structure
- sales force size
- sales force compensation
types of sales force
- strategic market sales force assigned to major accounts
- a geographic sales force for customers in different territories
- distributor sales force calling on and coaching distributors
- an inside sales force marketing and taking orders online and via phone
leveraged sales force
focuses reps on selling the company’s more complex and customized products to large accounts and uses inside salespeople and online ordering for low-end selling.
workload approach
used to establish sales force size
1. group customers into size classes according to annual sales volume
2. establish desirable call frequencies for each class
3. multiply by the number of accounts in each size class by the corresponding call frequency to arrive at the total workload for the country, in sales calls per year
4. determine average number of calls a sales representative can make per year
5. divide the total annual calls required by the average annual calls made to arrive at the number of sales representatives needed
inside salespeople
conduct business from the office and receive visits from
prospective buyers.
field salespeople
travel and visit customers.
components of sales force compensation
- fixed amount (salary)
- variable amount (commissions, bonus, etc.)
- expense allowances (meet costs of travel and entertaining on the company’s behalf)
- benefits (eg. paid vacations)
fixed compensation
common in jobs with a high ratio of non-selling duties, when the selling task is technically complex and requires teamwork. it provides a secure income, encourage completing non-selling activities, and reduce incentive to overstock customers.
variable compensation
works best if sales are cyclical or depend on individual initiative. it attracts high performers, provide more motivation, require less supervision, and control selling costs. however, it may emphasise getting the sale over building the relationship.
time-and-duty analysis and hour by hour breakdown of activities
help sales reps to understand how they spend their time and how they might increase their productivity.
feed-forward aspects of sales supervision
how management communicates what the sales reps should be doing and motivates them to do it. it requires good feedback, which means evaluating their performance.
information about reps
- sales reports
- personal observation
- self-reports
- customer letters and complaints
- customer surveys
- conversations with other reps
annual territory-marketing plan
sales reps outline their program for developing new accounts and increasing business from existing accounts.
call reports
sales reps write up completed activities.
key indicators of sales performance extracted from reports
- average number of sales calls per person per day
- average sales call time per contact
- average revenue per sales call
- average cost per sales call
- entertainment cost per sales call
- percentage of orders per hundred sales calls
- number of new customers per period
- number of lost customers per period
- sales force costs as a percentage of total sales
