Complete Leadership Challenge in a Word document approximately 2 pagesLeadership Challenge: What Have You Done For Me Lately
Terri Ann Masters, Vice President of Sales for Startech
Corporation, was wrestling with a critical issue related to one of her longtime
and, until recently, most talented salespeople, Jason Benjamin. Startech was a
French high tech manufacturer with its corporate offices in Paris and
manufacturing operation in France and China. Jason, whose territory included Silicon
Valley in California, had been one of Startech’s top salespeople for 11 of his
15 years with the company. At first, Terri Ann thought it was just “bad luck”
and Jason would be able to turn it around. Now, however, after four years of
seeing Jason miss sales targets and hearing increasing complaints from
customers, Terri Ann knew something was wrong.
This was especially critical for Startech because Jason called
on some of the company’s biggest clients. Jason had worked his way up in the
company and been given these accounts seven years ago. During his first three
years with the accounts, Jason generated substantial new business from his
clients. Management at the customers had actually gone to the trouble of
calling Terri Ann and complimenting Startech on the relationship Jason had
established. The end result was that Jason frequently exceeded his sales quotas
and received healthy bonuses.
In the last few years, however, there was very little new
business coming from Jason’s accounts. At the same time, Terri Ann knew these
companies were growing and were taking business to other competitors. It was
not that Jason had lost the accounts; they were still doing a reasonable
business with Startech. Rather, Terri Ann recognized there was additional
business the company was not getting for some reason.
Of even greater concern was the number of complaints
about Jason that had been coming in to Terri Ann. Jason certainly did not have
the greatest number of complaints, but given his history, they were high. In
addition, Jason seemed to be less motivated. When Terri Ann would call his
office on Friday afternoons, she would find that he had already left for the
weekend. The “old” Jason was one of the hardest-working salespeople in the company.
In addition, EU and French employment law limited Terri Ann’s flexibility in
dealing with employment performance issues.
The problem was coming to a head. Management had a big
push on inside the company to increase productivity. Terri Ann also had several
younger salespeople who were eager to move into larger, more demanding and
higher potential accounts. (Johnston & Marshall, 2013).
Questions:
1.
You are Terri Ann Masters. What would you
do about Jason Benjamin?
2.
What would you do with these younger salespeople
who are looking for new opportunities inside the company?
3.
Offer ideas on why Jason’s performance
might have slipped after all these years with the company?
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CHAP T E R
3
Linking Strategies and the Sales
Role in the Era of Customer
Relationship Management
T H E I M P O R T ANC E O F IN TE G R ATI NG SALES WI TH
O T H E R B U S I N E S S F U N C TIO N S
Looking back in time, it is fair to say that the sales function operated as a stand-alone entity
for many years. In truth, the sales force has been something of a mystery to the rest of
the organization. Whether because of the widely dispersed footprint of most sales forces
or perhaps the renegade image of salespeople as individualists, sales has stood alone and
frankly never seemed to mind.
The most classic example of the sales force being at odds with other business functions
is the tenuous relationship that has existed over time between sales and marketing. These
two functions that are so aligned in their ultimate objectives (i.e., to acquire and retain
profitable customers) seemed to have bickered back and forth since the beginning of time.
Marketing accuses sales of failing to execute on their elegantly designed marketing strategies, while sales accuses marketing of sitting in an ivory tower unaware of the real-world
challenges they face in the field. It has appeared for decades as though the siblings would
never move beyond their distrust of one another.
The icy relationship between sales and marketing has now warmed in most top organizations. In part, this improved relationship has been driven by sales’ adoption of concepts
like customer segmentation and value propositions, which were traditionally in marketing’s
realm. Similarly, marketing has come under pressure from executives to demonstrate their
ability to drive revenue growth, traditionally a metric directly attributable to sales. These
trends, along with the implementation of CRM to improve the sharing of information, have
contributed to sales’ and marketing’s decision to join forces.
Marketing is not the only corporate function that has begun to integrate itself with sales,
though. With the introduction of technology like sales force automation (SFA) in the 1990s,
sales has come to depend heavily on the information technology (IT) department for its
mission-critical tools. And as the demand for talented professional salespeople has come to
outstrip supply, sales has also developed an intimate relationship with human resources to
help them identify, hire, retain, and develop world class sellers and managers.
The willingness of various departments within world class sales companies to link with
the sales leaders specifically to work on common initiatives seems to be a direct outcome
of progress in building a customer-driven culture. Managers and individual contributors
–
c.:::…Chally Group>
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70
FORMULATION OF A SALES PROGRAM
throughout the organization start to judge the value of their contribution by its impact on
both internal and external customers. When a common external objective becomes the
focus, intra-political positioning begins to diminish in favor of the “bonding” impetus from
all parties facing a common “enemy,” such as customer dissatisfaction or the competition. The constant refocus of attention on the external goal of delighting customers and
surpassing competitors creates an enthusiasm and project momentum that usually dwarfs
all but the most imbedded turf issues. In addition, recognition and even key compensation
elements that are geared to broader company goals tend to melt the functional silos that
occur in most “traditional” organizations.
The incidence of cross-functional meetings increases. Operations meetings routinely
include customer service reps and have salespeople participating by teleconference. Human
resources and training departments regularly meet with sales to review the tracking associated with the efficiency and effectiveness of the selection, development, and retention
processes for customer-interfacing personnel. IT professionals design and develop tools
through extensive field study and user input so that the resulting automated processes
reduce workload and come across as intuitive and user friendly.
The boundaries between functions blur as more initiatives are collaborative from onset
to completion rather than a series of sequential outcomes managed separately within each
function. “Team” becomes an adjective attached to the core values of the total organization, and it is not just politically correct corporate speak. In short, leading sales forces no
longer view themselves as self-contained entities with all of their required support functions
within. Their sales executives have purposefully narrowed their scope so they can concentrate on what they do best—adding value through personal interactions with customers.
Marketing, IT, HR, and other corporate peers are more capable in their areas of expertise,
and they are being called on to support sales in meaningful ways. The more tightly sales
can integrate itself with other parts of the organization, the more leverage they will have to
ratchet up their own performance.
Source: Chally Group Worldwide (2012).
LE A R N ING OB JECTI VES
Successful organizations today place the customer at the center of firm strategies and
processes. Such customer-centric business models place the sales force in a crucial role, as
salespeople are the first line of customer contact in most firms. Thus, salespeople and the
selling function are key success factors in modern organizations.
An important comprehensive customer-centric business model is called customer relationship management, or CRM. This chapter provides an overview of CRM and then proceeds to illustrate how the sales force and selling function interface with strategies and
processes in market-oriented, customer-centric firms. The process of strategy development
and implementation is outlined, and specific guidance is provided on how personal selling
can contribute to marketing strategy and what salespeople can do to maximize the success
of long-term customer relationships.
After reading this chapter you should be able to
• Understand and outline the key components and goals of CRM.
• Explain the importance of a market orientation and how a market orientation is fostered
within a firm.
• Identify the key steps in developing and implementing strategies.
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LINKING STRATEGIES AND THE SALES ROLE IN THE ERA OF CUSTOMER RELATIONSHIP MANAGEMENT
• Describe the role of personal selling in marketing strategy.
• Outline the stages in developing strategic partnership relationships between
organizations.
• Discuss the actions salespeople can take to ensure successful long-term buyer–seller
relationships.
W H A T I S CU S TOME R R E L AT IO NSHI P MANAGEMENT?
For many years, introductory marketing textbooks have talked about the marketing concept as an overarching business philosophy. At its essence, companies practicing the marketing concept turn to consumers themselves for input in making
strategic decisions about what products to market, where to market the products
and how to get them to market, at what price, and how to communicate with consumers about the products. These four elements (product, distribution, price, and
promotion) are referred to as the marketing mix. The elements of the marketing
mix represent the “tool kit” marketers use to develop marketing strategy. Personal
selling fits into the marketing mix as part of a firm’s marketing communication
mix, or promotion mix, along with the other elements of the promotional message used by a firm to communicate with customers: advertising, sales promotion,
direct marketing, and public relations and publicity.
Recently, the operationalization or implementation of the marketing concept
has become known as a market orientation. That is, the actions taken by a firm
that is market-oriented would be focused on aligning all the various organizational
processes and functions toward maximizing the firm’s success in the competitive
marketplace.1 Not surprisingly, a successful market orientation requires that the firm
place the customer in the center of all strategic decisions and firm activities. Thus,
a key component of market orientation is exhibiting a customer orientation in all
levels and units of an organization. Considerable research indicates that firms with a
higher level of customer orientation are usually more successful than less customeroriented firms. Firms high in customer orientation are often referred to as customercentric, because they have the customer at the center of their business model.
From a selling function perspective, a customer-centric culture includes, but is
not limited to, the following major components:2
1. Adopting of a relationship or partnership business model, with mutually shared
rewards and risk management.
2. Defining the selling role in terms of the provision of customer business consultation and solutions.
3. Increasing formalization of customer analysis processes and agreements.
4. Taking a proactive leadership role in educating customers about value chain and
cost reduction opportunities.
5. Focusing on continuous improvement principles stressing customer satisfaction.
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72
FORMULATION OF A SALES PROGRAM
The efforts a firm makes toward cultivating a culture that is market-oriented and customer-centric require a high degree of formalization within the firm. Formalization
means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. With these things in place,
strategies and programs may be successfully developed and executed toward the goals
related to customer centricity. In general, these goals revolve around establishing and
maintaining long-term customer relationships. Today, the most prevalent formalization of a customer-centric culture is customer relationship management (CRM).
CRM is a comprehensive business model for increasing revenues and profits
by focusing on customers. More specifically, CRM refers to “any application or
initiative designed to help your company optimize interactions with customers,
suppliers, or prospects via one or more touchpoints—such as a call center, salesperson, distributor, store, branch office, Web, or e-mail—for the purpose of acquiring,
retaining, or cross-selling customers.”3
PricewaterhouseCoopers Consulting has defined CRM as “a journey of strategic,
process, organizational, and technical change whereby a company seeks to better
manage its enterprise around customer behaviors. This entails acquiring knowledge about customers and deploying this information at each touchpoint to attain
increased revenue and operational efficiencies.”4 Touchpoints are viewed as the
intersection of a business event that takes place via a channel using a medium (e.g.,
online inquiry from a prospect, telephone follow-up with a purchaser on a service
issue, face-to-face encounter with a salesperson, etc.). At their essence, touchpoints
are where the selling firm touches the customer in some way, thus allowing for
information about customers to be collected.
Our discussion of CRM so far leads one to conclude that it is both an overarching
philosophy of business that puts the customer at the center of strategic decision making (i.e., a customer-centric enterprise) and a programmatic, integrated implementation system (i.e., software-driven) involving a variety of channels and providers, all
of which interact to contribute to the delivery of customer value. Many companies
are now adopting CRM as a mission-critical business strategy. These companies are
redesigning internal and external business processes and associated information systems to make it easier for customers to do business with them. Because the focus of
CRM is aligning the organization’s internal and external systems to be customercentric, marketing as a discipline becomes a core contributor to the success of CRM
by virtue of its disciplinary expertise on customers. Specifically, the sales force is a
group within most firms that can add substantial value to the success of this process. And as we saw in the chapter opener from Chally Group Worldwide, integrating
sales with other organizational functions is critical to firm success.
Many of the concepts underlying CRM are not at all new. One might open a
Principles of Marketing textbook from 20 years ago and find a discussion of many
of the tenets of what we now refer to as CRM, albeit not particularly integrated or
cross-functional in scope. What has changed in the environment to allow for the
more integrated approach to customers represented by modern CRM is technology.
More sophisticated approaches to data management are a key enabler of CRM.
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LINKING STRATEGIES AND THE SALES ROLE IN THE ERA OF CUSTOMER RELATIONSHIP MANAGEMENT
Yet, it is a serious mistake to consider CRM as mere software. In fact, many firms
are struggling with their CRM initiatives precisely because they have bought the
sophisticated software but do not have the culture, structure, leadership, or internal
technical expertise to make the initiative successful.
The next section provides a foundation for understanding the concept of CRM.
Then, in the remainder of the chapter we expand our discussion of the role of personal selling and the sales force in market-oriented firms and in developing and
executing marketing strategies.
From Mass Marketing to One-to-One Marketing
CRM has its evolutionary roots in the progression of marketing, as enabled by
advancing technology. Exhibit 3.1 illustrates this evolution from mass marketing,
through target marketing, to customer marketing, to one-to-one marketing.
Mass marketing evolved in the early 1900s and dominated marketing management and strategy for decades. In the 1960s, many firms began to apply principles
of segmentation, target marketing, and positioning to create different strategies
and marketing programs for different consumer groups. A major change in mindset precipitates a shift from targeted consumer marketing (i.e., marketing to big
groups of like-minded buyers) to customer marketing, or a focus on developing
relationships with individuals. This approach first gained widespread attention in
the 1980s. Many of the issues on relationship selling and strategic partnering presented later in this chapter relate to customer marketing.
Ultimately, the sophistication and multiplicity of available technology today
enable true one-to-one marketing, as some firms are now able to truly customize
offerings for individual users. This concept has been introduced and expanded upon
in several books by Don Peppers and Martha Rogers.5 The Technology box provides
excellent examples of how tablets and smartphones can be used to enhance the
customer relationship.
Mass
marketing
Target
marketing
Customer
marketing
One-to-one
marketing
Characteristics
• Market share
• Individual sales
• Limited segmentation
• Huge campaigns
• Not cost-effective
• Single treatments
• Focus on transactions
• Number of relationships
Characteristics
• Segmented campaigns
• Small mass marketing
• Focus on products
Characteristics
• Customer share
• Lifetime value
• Model distribution
• Ongoing refinement
• Multiple treatments
• Focus on customer
• Breadth of relationships
• Event-driven
Characteristics
• Interactive segmentation
• Real-time matching
• Interactive TV
• Active Web pages
• Customer interaction
• One-to-one relationships
• Real-time marketing
• Prediction-driven
Technology
• In-house
• Outsourced mailings
• Flat files/mailing lists
• Some packaged
applications
Technology
• Individual database(s)
• Application for projects
• Proprietary solutions
• Limited analysis
Technology
• Data warehouse
• Integrated data and
applications
• Customer knowledge
• Modeling, analysis,
and refinement process
Technology
• Integrated data warehouse
• Internet enabled
• Many touchpoints integrated
• Cross-organization process
• Management by interaction
EXHIBIT 3.1
Marketing
evolution with
characteristics
and technology
attributes
Source: Ronald S. Swift, Accelerating Customer Relationships: Using CRM and Relationship Technologies, 1st Edition,
© 2001. Printed and electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New
Jersey.
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74
FORMULATION OF A SALES PROGRAM
TECHNOLOGY
Sales Mobility and the Emergence of Tablets
The sales industry is always on the go. Upselling customers and finding new customers is a never ending process.
Face-to-face selling continues to have the highest success rate, which means salespeople are constantly meeting with
different clients in different places. There is an emerging trend of mobile devices, specifically tablets, being used to
empower salespeople who are always travelling. The many features that tablets provide are drastically changing the
sales industry and processes.
Tablets are easier to use and more portable than laptops, which makes them perfect for mobile selling. They
provide easy access to critical data and streamline the sales cycle for the client or prospect. Salespeople have access
to client information 24/7, wherever they are. Tablets and applications are able to provide quick and professional
sales quotes, proposals, and other forms that are essential in the selling process. The speed and efficiency that these
mobile devices are able to provide greatly increase the chances for closing deals. Customers also appreciate the use
of tablets because it adds a degree of transparency to the deal. Customers have full visibility of the process and what
is being negotiated. Tablets also eliminate any confusion as salespeople are able to explain and iterate the customer� …
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