HI5004: Marketing Management

Lecture 11 Managing Personal Communications: Direct, Database &

Personal Marketing
 Learning Objectives
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1. How can companies conduct direct marketing for

competitive advantage?
2. What are the pros and cons of database marketing?
3. What decisions do companies face in designing a sales
force?
4. What are the challenges of managing a sales force?
5. How can salespeople improve their selling, negotiating,
and relationship marketing skills?

Applied Business Statistics for Managers Holmes Institute

 Direct Marketing
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The use of consumer-direct (CD)

channels to reach and deliver goods
and services to customers without
using marketing middlemen

Applied Business Statistics for Managers Holmes Institute

 Direct Marketing
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Direct mail

Catalog marketing

Telemarketing

Other direct-response marketing

Applied Business Statistics for Managers Holmes Institute

 Direct Marketing
Click to edit Master title style

Direct mail

Catalog marketing

Telemarketing

Other direct-response marketing

Applied Business Statistics for Managers Holmes Institute

 Direct marketing
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edit Master title style

Applied Business Statistics for Managers Holmes Institute

 Direct Marketing
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Applied Business Statistics for Managers Holmes Institute

 Customer Databases
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Master title Database Marketing

A customer database
An organized collection of comprehensive
information about individual customers or
prospects that is current, accessible, and
actionable for lead generation, lead
qualification, sale of a product or service,
or maintenance of customer relationships

Applied Business Statistics for Managers Holmes Institute

 Customer Databases
Click to edit andstyle
Master title Database Marketing
Database marketing
– The process of building,
maintaining, and using
customer databases and other
databases (of products,
suppliers, or resellers) to
contact, transact, and build
customer relationships

Applied Business Statistics for Managers Holmes Institute

 Customer Databases
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▪ Customer database ▪ Business database

 Transactions Past purchases
 Registration information  Past volumes, prices,
 Telephone queries and profits
 Cookies Buyer teams’ names
 Every customer contact Contract status
 Past purchases Supplier’s share of
 Demographics
customer’s
business
 Psychographics
Competitive suppliers
 Mediagraphics
 Competitive strengths
and weaknesses
Applied Business Statistics for Managers Holmes Institute
 Customer Databases
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Master title Database Marketing

• Data warehouse
– Captures, queries, and analyzes data to
draw inferences about an individual
customer’s needs and responses
• Data mining
– Uses sophisticated statistical and
mathematical techniques on data to extract
useful information about individuals, trends,
and segments

Applied Business Statistics for Managers Holmes Institute

 Customer Databases
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Master title Database Marketing

Companies can use their databases in five ways,

to:

1. identify prospects
2. decide which customers get an offer
3. deepen customer loyalty
4. reactivate customer purchases
5. avoid serious customer mistakes

Applied Business Statistics for Managers Holmes Institute

 Click toCustomer Databases
edit Master title styleand Database
Marketing
The downside of database marketing:
1. Some situations are just not conducive to
database marketing
2. Building and maintaining a customer database
require a large investment
3. Employees may resist becoming customer-
oriented and using the available information
4. Not all customers want a relationship with the
company
5. The assumptions behind CRM may not always
hold true

Applied Business Statistics for Managers Holmes Institute

 Designing
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Master Force
style

• Types of sales representatives

Deliverer Order taker

Solution Missionary
vendor

Demand
Technician
creator

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 Click to edit
Designing theMaster
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Applied Business Statistics for Managers Holmes Institute

 Click to edit
Designing theMaster
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Applied Business Statistics for Managers Holmes Institute

 Click to edit
Designing theMaster
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Applied Business Statistics for Managers Holmes Institute

 Click to edit
Designing theMaster
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Applied Business Statistics for Managers Holmes Institute

 Click to edit
Designing theMaster
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Applied Business Statistics for Managers Holmes Institute

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Applied Business Statistics for Managers Holmes Institute

 Designing
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Master Force
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Sales force objectives

Sales force strategy

Sales force structure

Sales force size

Sales force compensation

Applied Business Statistics for Managers Holmes Institute

 Designing
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Master Force
style

Sales force objectives

What is the sales force supposed to do? What is the amount

of revenue we need?

Applied Business Statistics for Managers Holmes Institute

 Designing
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Sales force strategy

Who does the company want as a client? What is the annual spend?
How do we reach them?

Applied Business Statistics for Managers Holmes Institute

 Designing
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style

Sales force structure

How do we divide our territory: geography? product? demographics?

Business? Retail?

Applied Business Statistics for Managers Holmes Institute

 Designing
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Sales force compensation

Commission only? Base plus? Remember the remuneration method

drives behaviour – how your salespeople act.

Applied Business Statistics for Managers Holmes Institute

 Designing
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style

Sales force size

Is bigger always better? Should a company establish an agency

rather than appoint their own sales person?

Applied Business Statistics for Managers Holmes Institute

 Sales Force
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title style

• Prospecting
• Targeting
• Communicating
• Selling
• Servicing
• Information gathering
• Allocating

Applied Business Statistics for Managers Holmes Institute

 A Sales
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title style

Applied Business Statistics for Managers Holmes Institute

 Sales Force
Click to Objectives
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• Selling teamwork
– Top management, technical
people, customer service
representatives, and office staff
• Direct (company) sales force
• Contractual sales force

Applied Business Statistics for Managers Holmes Institute

 Sales Force
Click to Structure
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Four types of sales forces

1. Strategic market sales force assigned to

major accounts
2. A geographic sales force calling on
customers in different territories
3. A distributor sales force calling on and
coaching distributors
4. An inside sales force marketing and
taking orders online and via phone

Applied Business Statistics for Managers Holmes Institute

 Sales Force
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edit Master

Workload approach to sales force size

1. Group customers into size classes according to

annual sales volume
2. Establish desirable call frequencies for each customer
class
3. Multiply the number of accounts in each size class by
the corresponding call frequency to arrive at the total
workload for the country
4. Determine the average number of calls a sales
representative can make per year
5. Divide the total annual calls required by the average
annual calls made by a sales representative to arrive
at the number of sales representatives needed
Applied Business Statistics for Managers Holmes Institute
 Sales Force
Click to Compensation
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• Four components of sales force
compensation
– Fixed amount
– Variable amount
– Expense allowances
– Benefits
• Straight salary, straight
commission, and combination of
two

Applied Business Statistics for Managers Holmes Institute

 Managing the
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Master Force
style

Recruiting

Selecting

Training

Supervising

Motivating

Evaluating

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 Sales Rep
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1. Norms for prospect calls
Companies often specify how much time reps
should spend prospecting for new accounts

2. Using sales time efficiently

Time-and-duty analysis and hour-by-hour
breakdowns of activities

3. Sales technology
The salesperson today has truly gone electronic
(tablet, Web site, and social media)
Applied Business Statistics for Managers Holmes Institute
 Motivating
Click to editSales Representatives
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• Intrinsic versus
extrinsic rewards
• Sales quotas

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 Evaluating
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• Sources of information
• Formal evaluation

Applied Business Statistics for Managers Holmes Institute

 Principles
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Personal
titleSelling
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• SPIN method types of questions

Situation

Problem

Implication

Need-payoff

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 Six Steps
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titleSelling
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Prospecting &
Preapproach
qualifying

Follow-up & Presentation &

maintenance demonstration

Overcoming
Closing
objections

Applied Business Statistics for Managers Holmes Institute

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Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

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Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

 Click
Six to edit
Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

 Click
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Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

 Click
Six to edit
Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

 Click
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Steps inMaster titleSelling
Effective style

Applied Business Statistics for Managers Holmes Institute

 Relationship Marketing
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In many cases the company

seeks not an immediate
sale but rather a long-term
supplier–customer
relationship

Applied Business Statistics for Managers Holmes Institute

 Key
ClickTakeaways
to edit Master title style

1. We know how companies can conduct direct marketing for

competitive advantage
2. We have examined the pros and cons of database marketing
3. We appreciate what decisions companies face in designing a
sales force
4. We have reviewed the challenges of managing a sales force
5. Reviewed how salespeople can improve their selling,
negotiating, and relationship marketing skills

Applied Business Statistics for Managers Holmes Institute