Business-to-Business (B2B) Sales and Customer Relationship Management：中国经济管理大学 MBA课堂笔记《销售管理学》
Business-to-Business (B2B) Sales and Customer Relationship Management
中国经济管理大学/中國經濟管理大學
Business-to-Business (B2B) Sales and Customer Relationship Management
Learning objectives:
After completing this chapter your students should be able to:
· Recognize how people make organizational purchasing decisions.
· Describe and explain the three buying situations.
· Identify the different roles played by buying center members.
· Understand individual forces that influence B2B buying process.
· Understand how buyer-seller relationships are established and maintained.
· Explain success factors that apply to buyer-seller relationships.
· Discuss seller performance factors that lead to successful customer relationships.
Introducing the Chapter:
Business relationships occur between people, so it is important to remember that personal relationship skills are an essential part of making purchases and conducting successful commerce. Forming and maintaining a relationship with a B2B customer is a complex undertaking that requires a highly skilled sales force and constant support from the firm’s other functional groups---especially the salespeople’s managers. Understanding buyers also requires an information technology system that’s easy for salespeople to use and gives them and their managers accurate and near, real-time information they need to serve their customers.
This chapter focuses on two main themes: how firms buy the products they need and how the sales leader puts together a customer relationship management (CRM) strategy to form and maintain relationships with customers that generate a positive customer lifetime value (CLV). One way to get the class involved in the chapter material is to have them discuss how they purchase and then compare consumer purchasing to B2B purchasing. Consumers generally buy in small quantities, primarily for their own personal use, need both spouses or partners to make significant purchase decisions for high-involvement goods, etc.
Contrast through questions or remarks that firms buy for both personal use and to manufacture or resell products to others. This means that not only can the B2B buyer be dissatisfied with an unwise purchase, but this mistake will most likely be passed on to others! Firms also buy in larger quantities than consumers. As a result, firms take additional steps to reduce the likelihood of making bad business decisions. One way to reduce risk is to partner with firms that provide goods and services to the customer. When sellers prove that they are dependable and can be trusted, the buyer is willing to enter a deeper relationship with the seller. This means the seller is expected to do the right thing at all times to help the buyer succeed. When the seller or buyer take the other for granted or try to take advantage of the relationship, it will end. Also, firms can use a purchasing agent to buy standard products that fall under a certain dollar amount. For larger, more complex purchases a buying team is used. This team can be formal or informal. Thus, the salesperson must be able to assess key individuals within the firm.
A final key point that students often fail to grasp is that each buying firm has a process that the sales organization must understand and comply with if they are to succeed. For example, some firms work with multiple sellers or vendors while others work with one or two sellers. Buyers can also follow a very formal purchasing process while other buying situations are less formal. The most successful sales efforts follow the established process, interact with the correct individuals in the firm, and provide information and samples that best advance the seller’s offering.
Chapter Outline:
I. Understanding Purchasing Decisions
A. Buyer Decision Process
1. Steps for making a purchasing decision
a) Recognize that a need exists
b) State required product specification
c) Placement on an approved vendor list
d) Place an order
B. Organizational Buying Situations
1. Three buying situations
a) New Buy
b) Modified Rebuy
c) Straight Rebuy
2. Buying Process
a) Request for Quotation (RFQ)
b) Approved Vendor’s list
c) In-Suppliers
d) Our-Suppliers
C. Multi-Attribute Matrix
1. Used to Evaluate Vendors
a) Assign importance to categories
b) Must meet minimum standards
D. Buying Center Purchase Behavior
1. Understanding Role Theory
a) Roles in a B2b buying center
i. Initiator
ii. Decision Maker
iii. Controller
iv. Purchaser
v. Influencer
vi. Users
vii. Gatekeeper
1. Screens
2. Filters
2. Provides insight on how participants interact
3. Buying center actions
E. Team Selling and Multi-Level Selling
1. Sales Teams
a) Extended selling team
b) Multilevel selling
c) Marketing alliances
d) Value-added reseller (VAR)
e) Turn Key Operation
II. B2B Customer Relationship Management
A. What is Customer Relationship Management (CRM)?
1. Relationship strategy
2. Production, product or sales orientation
3. Market orientation
a) Customer-centric
B. The Nature of B2B Relationships
1. Types of relationships between buyer and seller
a) Transactional relationship
b) Facilitative relationship
c) Integrative relationship
2. Importance of trust
C. Customer Lifetime Value (CLV) Strategies
1. Measuring CLV
a) Probability of future purchases
b) Future marketing costs
c) Future contribution margins
D. The Stagers of B2B Customer Relationship Management
1. Gather information
a) Up-sell
b) Cross-sell
2. Categorize customer status
3. Offer customized solutions
E. Maximizing the Buyer’s Value
1. Calculate satisfaction
2. Increasing buyer satisfaction
a) Increase benefits
i. Functional and emotional
b) Decrease buyer’s cost
i. Monetary
ii. Time
iii. Energy
iv. Psyche
c) Drivers of delight
3. Importance of customer value
F. Risk and the Organizational Buyer
1. Reducing risk
a) Return policy
b) Share info
G. Important Salesperson Behavior
1. Attributes of a salesperson
a) Foster a long-term perspective
b) Integrity
c) Understanding of customers’ needs
d) Meet commitments
e) Follow-up services
H. Why Business Relationships End
1. Reasons why relationships end
a) Complacency
b) Dissimilar goals
c) Diverged cultures
d) Irresponsible behavior
2. Blame often placed on salesperson
I. Summary
1. Buyers engage in specific process when making a purchase decision
a) Depends upon new, current, or routine purchase
b) Each purchasing situation impacts relationship formed and information shared
2. Buyers use a multi-attribute matrix to evaluate sales offers
a) Use criteria like price, delivery, and quality
b) Number of participants in buy will increase with value/risk of purchase
3. More buyers and sellers are adopting a customer relationship strategy
a) CRM data bases used to collect information and understand buyers needs
b) Relationship growth requires a cooperation and trust
c) Not all firms want to partner
d) Not economically feasible to partner with everyone
Questions and Problems:
1. Define customer lifetime value (CLV). What three factors comprise the formula for computing CLV? Why is CLV the most effective metric for managing future customer profitability?
Customer lifetime value refers to the profitability of partnering with a buyer for an extended period of time. The selling firm can compute CLV by knowing or projecting three criteria: (1) the probability of future purchases; (2) future marketing costs; and (3) future contribution margins. Sales revenue does not communicate whether the selling firm is making money and profitability often is computed for a single sales period or year. In contrast, CLV looks at profitability for a five-year or longer period of partnership.
2. Go to Multimedia Education Resource for Learning and On-line Teaching (MERLOT) at: http://www.imrtn.com/lifetimecalc.asp and compute two lifetime customer values (LCV) based upon a one-year customer experience and a five-year relationship. First, assume you will sell $25,000 two times per year to your new customer, but for only a single year. The customer will not provide you with any referrals. Compute the total value of a satisfied customer given this scenario. Second, run the same calculation, but make these new assumptions: The customer continues to buy $25,000 twice a year for five years; in addition, the customer provides two referral customers that result in one additional customer. Based upon this information, re-compute the total value of a satisfied customer. What are the financial differences between a one-year and five-year customer? How can sellers increase their profitability by computing the expected LCV?
In the first situation in which you sell $25,000 twice to the buyer, the total value returned is $50,000. In the second situation—with a five year partnership and referrals—the relationship is worth $500,000 to the selling firm. While this example is not precise because it assumes that the referral will buy the same dollar value as the first partner, it does show students that long-term relationships result in a steady cash flow versus one-year transactional relationships. In this example the difference in value between a one-year and five-year customer is $450,000. Sellers can increase their value by selling more, maintaining the relationship for a longer time period, increasing the number of referrals, and converting the referrals to long-term relationships.
3. What actions can a sales manager propose, other than lowering the price, to increase value for the customer?
Buyers look for value and satisfaction in their purchases. Value can be computed as:
Benefits = Functional Benefits + Emotional Benefits
Costs Monetary Costs + Time Costs + Energy Costs + Psychic Costs
Salespersons can increase their product or service’s value in the minds of the customer by: (1) increasing product/service benefits, (2) decreasing buyer costs, or (3) doing both. For example the selling firm, through the salesperson, can maximize the functional benefits of their offering by ensuring that the product exceeds the buyer’s expected satisfaction level. Emotional benefits are maximized through trust and shared successful business relationships. Although it may not be possible to lower the buyer’s monetary costs, the seller can reduce the buyer’s time and energy costs through electronic ordering, high quality products that exceed expectations, and by assuming additional service duties like monitoring the buyer’s inventory and communicating directly with the buyer’s manufacturing and quality control personnel when problems arise. Likewise, the buyer’s “psychic” costs are reduced when the seller exhibits high levels of trust, dependability, and honesty.
4. A bank wants to purchase a new PC based computer system. Who do you think would play each of the roles in the buying center? What would the president's role be? What about that of the office manager, the average teller, the manager of customer service, or any other manager? What characteristics or personal interests might influencers have? How might size of bank influence the purchase? That is, compare and contrast the different purchase decision for a bank that wanted to purchase 25 PCs and had one location and $50 million in assets versus 125 locations and $2 billion in assets?
The president would almost certainly be the decider. The office manager might play an influencer and/or gatekeeper role(s), a teller is a user, and customer service and other managers could play influencer and user roles. The smaller bank might have a less formal process and the purchase decision, while significant for the bank, would probably not exceed $75,000. Conversely, the larger financial institution with 125 locations would most likely purchase at headquarters with a formal purchasing team and process that would possibly include a consultant. The decision, which could exceed $1 million might be decided by an executive committee. Thus, each buying situation would need to be handled differently by the sales team.
5. Discuss the differences between a new buy, modified rebuy, and straight rebuy situation in respect to time, information required, and role of the salesperson. How does a relationship influence the roles played by the in-supplier and the out-supplier?
New buy – long term, most information required, salesperson must provide desired information to deciders, influencers, users, etc.
Modified rebuy – short or medium term, information required that allows modification to existing purchase arrangements, salesperson interacts with fewer individuals.
Straight rebuy – standard purchase of existing products, buyer may ask availability or may simply reorder electronically, little information needed by buyer.
In-suppliers work hard to maintain the relationship through meeting buyer needs and resolving issues quickly. Out-suppliers try to raise issues about the in-supplier so that that the out-supplier will be given an opportunity to bid on future requests for quotations or modified rebuys.
6. Use the multi-attribute matrix below to compute the assigned list of attributes for a machine.
A B A B
Price (.5) 9 7 4.5 3.5
Dependability (.3) 7 9 2.1 2.7
Warranty (.2) 7 9 1.4 1.8
8.0 8.0
Machine A costs $12,000 and Machine B costs $14,000. A is considered to be average dependability and warranty, and B is considered to have above-average dependability and warranty.
As seen in the multi-attribute matrix above, even though Product B is more expensive, when looking at the three major criteria, the product offerings may be very similar. In this case both products are rated an 8.0/10.0. Salespersons can increase their likelihood of winning the business by offering a better warranty and being dependable in all interactions.
7. Why is it important for a salesperson to properly identify the decision-maker in a buying center? How should a sales manager go about coaching his or reps to find out who this person really is?
If possible the salesperson should meet with the decision maker to understand the criteria considered important and to gauge their position in regard to the seller. Likewise, as the offer moves toward the award of the contract, the more quality time the salesperson can spend with the decision maker, the more likely a positive decision will be forthcoming. Sales managers can coach their sales team to ask questions such as: who will be making the final decision and more importantly to look for intuitive behaviors—deferring to technical engineers or managers—by members in the buying firm. Simply because a manager has a title does not mean he or she will actually make the decision.
8. Define multilevel selling. Give an example of a marketing alliance and explain why such a partnership benefits both parties.
Sales firms form multilevel teams from different areas of the organization to sell to their counterparts in buying firms. That is, multilevel selling occurs when two or more personnel from the selling firm make a sales call to their functional counterparts at the buying organization. For example, a salesperson may call upon the purchasing agent at the buying firm, while a vice-president of engineering calls upon the buyer’s vice-president of engineering, and a quality assurance supervisor visits with the buyer’s chief of quality control. From a protocol perspective, each sales firm member calls upon their counterpart at equal levels of the organizational chart. As necessary the executive team member can negotiate price agreements, policy deviations, and expedited shipping dates to win the order and establish a deeper relationship with the buying partner.
9. What is a value-added reseller (VAR)? How should VAR sales managers coordinate their service and repair issues with their manufacturer partners?
A value-added reseller (VAR) purchases products from one or more manufacturers and assembles these products into a system before delivering the package to specialized customer segments. A VAR might purchase a computer system from Gateway®, add software from SAS® and have their technical staff merge, test, and install the system for the end user. When a VAR delivers a complete package, buyers may call their purchase a turn-key operation. VARs may also handle customer service and repair issues or if one of the manufacturers partners with the value-added reseller, then the manufacturer may assume responsibility for repair and customer service.
10. Why have B2B firms been shifting to a customer relationship management perspective? What are the benefits of pursuing a CRM strategy? How does such a shift in a company’s focus impact its sales force and sales managers?
Progressive firms have known for years that the key to successful business means keeping customers satisfied by developing a deeper understanding of their buyers’ needs and producing products and services that they truly need or want. This is often easier for business-to-business firms to do because their sales forces are very in-touch with their customers. Advances in information technology like e-mail and EDI have made it easier for sellers to communicate with their buyers, predict their purchasing needs in order to forecast future sales, and more accurately understand buyer behavior. Firms that data mine examine information collected in their CRM databases. The bulk of this information is gathered by salespeople and may include: purchase dates, incentives offered the customer, product/services purchased, selling price, the buyer’s position in his or her organization, number of rep visits between buys, and samples and promotional materials requested by the company.
A “successful” CRM strategy allows sellers to form deeper relationships with more profitable buyers, reduce wasted marketing efforts, and earn higher, longer-term profits. However, switching to a CRM strategy requires higher quality salespersons, a willingness to look long- versus short-term, and a need for the firm to be organized internally to match external buyer needs. To follow a true CRM strategy the firm and its sales force must earn the trust and respect of their best customers every day and demonstrate this trust through both actions and communications.
11. What are the three levels of B2B customer relationships? How do they differ?
In a transactional relationship, the buyer-seller relationship can be adversarial if either party views the situation from a purely economic perspective. In this case, important and powerful buyers might play sellers off against one another to get lower prices or free services.
In a facilitative relationship, trust and cooperation between buyers and sellers improves. This can create value for both parties. For example, a buyer might award most of a company’s business to one particular seller, allowing the seller to reduce its purchasing and marketing costs through efficiencies and economies of scale. That is, the buyer saves time and money by not having to coordinate multiple vendors and their systems, while the seller minimizes expenses needed to win new accounts.
Integrative relationships are the deepest relationships. They occur when the buyer decides to partner with a seller that can add a significant amount of value to the buyer’s product or processes. In a deep relationship buyers and sellers trust one another and cooperate to reduce costs and advance their mutual goals and the selling firm becomes the buyer’s sole source supplier --the single supplier for the buyer’s product or service, in other words.
12. What actions should a sales manager take when a firm adopts a CRM strategy? What sales force skills are driven by a CRM strategy, and how does it affect the type of people sales managers hire and how they’re trained?
First, the sales firm should categorize their customers by their own ability to provide high-quality products and services and receive lifetime customer value. Second, the sales manager must insure the sales force is qualified—through proper selection and training—to implement a customer relationship strategy. Salespersons must be well-educated and able to adapt to customers at all levels of the buying firm. The salesperson cannot be a talking head, but must have the skills, knowledge, and attitudes to listen, solve problems, engender trust, and follow through to win and keep profitable customers.
13. What types of behaviors lead to the demise of a business relationship? How can a sales manager minimize the loss of profitable partners? What role should a sales manager play in terms of dealing with dis-satisfied partners? Why?
Business relationships are likely to end when one or both parties feel their partner is too complacent, their goals no longer match, their cultures have diverged, or one or both parties have behaved irresponsibly. This can include acting in a way that is not trustful, being dishonest, looking out for their own interests, sharing confidential information with others, and/or taking unfair advantage of information shared with their partner. When such behavior occurs, one or both parties conclude that it is not in their best interests to maintain the business relationship.
Salespersons can be a “lightning rod” whenever anything goes wrong because they are boundary spanners. After all, it is a salesperson’s job to bring the selling and buying firms together to conduct business for mutual benefit. As a result, it is often the salesperson who is blamed for the loss of the relationship with a valued partner. When a salesperson makes a promise—that she will have parts air freighted to the buyer to maintain production, for example—this commitment must be honored or the buyer will rightly assume that the seller cannot be trusted and does not have its best interests at heart. In fact, research confirms that the strength of the buyer-seller relationship plays an important role in reducing buyer defection.
The trouble is that salespeople can’t always control everything that occurs at their firms. Sometimes the selling firm itself is responsible for “cracks” in the relationship with a B2B partner. For example, a manufacturer might assure the salesperson that a product will be delivered to the customer on a specific date; whereupon, the salesperson passes the information to the buyer. But when the product doesn’t arrive on time, who do you think the customer will blame? The salesperson of course!
Even if it’s not the salesperson’s fault, it is often best to have him or her resolve the buyer’s conflicts instead of, say, the firm’s service center. In other words, for the relationship to be maintained it’s the salesperson who should optimally break the “bad” news to customers. However, sales manages can help in situations such as this by taking speedy actions to remedy the misunderstanding. For example, Bill Bencsik who was featured in the opening profile makes a special effort to correct misunderstandings that resulted in broken relationships. Bencsik feels that he should communicate with the buyer as soon as possible and meet personally over dinner with buyers, whenever possible. According to Bencsik moving quickly to resolve disputes shows the value of the relationship with the buyer and when successful, can make the relationship stronger because he went the extra mile for his customer.
14. Some firms have tried to form and maintain relationships with all their customers. Is it a wise strategy for a sales manager to emphasize? Why or why not?
No, sales managers and salespersons must understand that not all buyers are profitable; thus not all buyers are worthy of expending time and effort to form and/or maintain. Sales managers should develop criteria for selecting partners. For example, if the customer is a transactional buyer that is profitable, then the firm should continue the relationship. However, a higher priority should be given to buyers who are potentially more profitable and willing to enter a “win-win” relationship. Unprofitable buyers must be charged higher prices or be allowed to buy from other sellers who are willing or able to charge low prices.
Answers for Chapter Caselets:
Caselet 5-1
Managing Buying Dynamics at Hughes Aircraft
In this short case, students are exposed to the often confusing and conflicting information they are provided by customers as they attempt to sort out the roles people play in a buying center. Sales engineer Ron Hartley meets with three managers and engineers at Hughes Aircraft where he is given conflicting information about the weights of purchasing criteria and how the process will unfold. Ron needs to seek additional information to understand the actual buying process and try to find a product champion who will advocate for WRT during consideration of the bid.
How can Fred explain Sharon, Matma, and Ralph’s motivations to Ron based upon the different buying roles they play.
First, each of the Hughes managers is motivated by their department’s goals. That is, purchasing (Sharon) is being evaluated on costs, Engineering is responsible for design tolerances, and Ralph (Quality Assurance) wants high quality for all products delivered. Ron must aware that, depending upon who he is talking to, different priorities exist and second that different information and communications are necessary for each department. Ron should endeavor to identify the priority and weight of each known criterion and see if there are other criteria (delivery and warranty) that also fit into the buying firm’s needs.
How could Fred explain each buyer’s weights in the multi-attribute model. You should make assumptions about their choices for weights.
Let’s assume that cost is weighted at .3, conformity to standards at .4, and quality is .3. Ron should be able to gauge the influence of price based upon previous dealings with the customer.
Given these assumptions, what recommendations should Fred Johnson offer Ron to successfully manage this major account? Why?
Not be as concerned about pricing, but clearly communicate that price will be kept as low as possible but that higher conformity to standards, and quality will drive the price higher. Most firms ask for a low price, but understand that purchasing a high quality, tight conformance product is more difficult to make and deliver.
Caselet 5-2
Choosing a CRM System for Burlington Mechanical Solutions
Bobby Puckett, Sales Vice President of Burlington Mechanical Solutions (BMS), wants to purchase a CRM system and implement a new sales strategy at BMS. Puckett wants BMS to reallocate time with accounts based upon customer lifetime value. He meets with a CRM vendor and wants to make the best decision for his firm’s future. How can Puckett buy the best system to provide appropriate information and, at the same time, increase the likelihood of sales force adoption?
1. How can Puckett ensure the CRM system is easy for the sales force to load and use? What role can members of the sales force play in making the CRM system “user friendly”?
First, the CRM vendor must demonstrate the ease to load and use. Puckett can have vendors bring their software to the firm and load it on selected salesperson’s personal computers. The sales force should try the software for a specified period and report problems that need to be corrected. Salespersons can also provide feedback regarding how useful the CRM software is and what additional information is needed to make the sales force more efficient.
2. Is CRM an information-based system, a sales force based strategy, or both? How does each role vary? In what ways do they vary?
CRM is a sales force strategy that employs an information-based system to implement. In effect a sales firm’s strategy comes first and then the information-based system needs to support the strategy. Information-based systems should not drive a firm’s sales strategy.
3. Make a list of important information that a CRM should provide to a sales force. How should a sales manager use this information to assist the sales team? What is the likely outcome if CRM information does not help the sales force succeed?
Average purchase amount, time between purchase, response to special offers, objections to past offers, and sales trends are just a few metrics. Sales managers can point out relationships, pending buy cycles (customer buys every six weeks), and best strategy to approach the buying firm. If CRM is not perceived as a tool to help the sales team succeed and make more money, it is less likely the average salesperson will use the system.
Role Play:
Managing a Sales Team at Alamance Associates
This role play forces the students to gain valuable group experience and to decide what roles are played by Alamance Associates’ sales, engineering, and service areas. Students should learn that (1) each area will approach the opportunity from a different perspective; (2) different questions will emanate from each area; and (3) it is not easy to anticipate all the questions the buyer will pose. At the end of the 15-30 minute meeting, each group should provide the instructor with a list of 10 or so questions that they expect the buying firm to ask---price, delivery, quality, shipping mode, warranty, ability to manufacture, etc. One important point for students to see is the importance of such meetings because it is unlikely the salesperson alone has the depth of expertise found in the team. Depending upon the discussions, the team should appoint a leader. In many cases, the salesperson is the team leader due to his or her close interactions with the buying firm. However, in some circumstances the team could be headed up by a technical expert who allows the salesperson to make most calls, after seeking guidance from the team leader. The students should also learn the importance of coordinating with other team members and that team members need to be evaluated on different criteria. For example, the team leader may be evaluated on overall success, ability to communicate, ability to resolve conflicts, decision making, etc. The technical team member might be evaluated on timeliness and quality of responses to technical questions, ability to get along with other team members, and support provided the team leader. The salesperson may receive financial remuneration for sales revenue while other members may receive a bonus at the end of the quarter or year. Each situation could vary depending upon the significance of the role played by each team member. As a sales manager, it is your responsibility to make such a decision.
Sales Manager’s Workshop:
You are Promedia’s district sales manager for the North Central District that is comprised of five salespersons who are assigned to geographical territories. After three years of conducting business in this geographical area, it is apparent that some territories are growing while others are stagnant. This misbalance has resulted in several salespersons not being able to properly call upon new customers while serving long-standing customers. As sales manager, it is your responsibility to adjust the size of territories utilizing appropriate criteria. Go to the Aplicor data and compare the sales revenue, potential, and number of accounts per territory to analyze the current workload for each of the five territories. Based upon your findings, recommend the appropriate changes and turn in a printed copy of your decisions to your sales management professor.
In order to register for Aplicor, email tanner@aplicor.com. Within 2 business days, you will be verified as an instructor, and then will be provided with your login information. Once you log in to Aplicor at www.pearsonhighered.com/tanner, you will be able to register all your students. Once you do so, share the login information with your students so they may access the site as well, via the same URL.
Self-Assessments:
In your copy of Sales Management, you will find an Access Code Card. By using this code at www.pearsonhighered.com/tanner, you will gain access to the SAL program. Students will find an Access Code Card in their copy of the book as well.
IIA2: How Good Are My Listening Skills
In the section on Team Selling, there is a self-assessment box that asks students to go on-line or use a CD to determine: “How Good Are My Listening Skills?” Ask your students to take this self-assessment of their level of listening. If their level is low, have the students relook at the scale and determine what they answered that lowered their scores. If, on the other hand their score for this self assessment was high, then the probability of succeeding in sales is also high. I always tell my class that God gave humans two ears and one mouth—thus, they should listen twice as much as they talk. Students often believe that a good salesperson talks continually until the buyer is convinced they should buy. However, this is simply not how professional sales encounters are handled today. High performance salespersons must know when to speak and most importantly what to say. This means that listening is an extremely important skill for salespersons and sales managers in today’s professional sales organizations. This SAL could be utilized during team selling or later when the discussion of unique sales skills for CRM is covered.
IIC5: What’s My Preferred Conflict Handling Style?
Another SAL exercise for students is “What’s My Preferred Conflict Handling Style?” This SAL is appropriate when discussing the important topics of team selling and maintaining long-term relationships. Students must understand how they approach a conflict with a customer and if they need to learn new resolution styles to help them succeed. Again, this is an extra SAL provided by the authors to help enrich the ability of the instructor to engage the students.
Using Videos:
To access these videos, go to www.pearsonhighered.com/tanner. Listed below are potential ways to introduce each video and questions that can be asked to spur discussion after you show the videos.
Video 1: The Secrets to Successful CRM – Eric Berridge
Eric discusses how to best implement CRM software systems by starting at the customer and working backwards to select 5-10 criteria or measures that will help drive sales success. A major problem is that early CRM systems were driven by IT personnel and the average salesperson user had little or no input into the design of the system. A few questions you might ask the class to look for and consider:
1. How does Eric define CRM?
2. Can a firm buy a standard package and implement CRM? Why not?
3. Name two tangible results derived from a CRM system.
4. Why does Eric state that every CRM application differs?
Video 2: Best CRM Practices – Michelle McMahon
Michelle believes that the best CRM practices start by obtaining ownership from the top (in most of her examples she uses Senior VP of Sales). Better CRM systems offer a number of metrics from lead generation to sales analytics. The sales manager and hopefully the sales force should be able to understand close ratios and what strategies are not working. Michelle sees CRM as a sales management tool. A few questions you could ask the class to look for and consider:
1. Is CRM a sales management, salesperson, or tool for the entire company?
2. What does Michelle mean by “sales in the pipeline”?
3. Why would a salesperson want to be tied to a computer and CRM system unless the system generates higher levels sales success and pay?
4. It is important to have high level buy-in, but how does a firm achieve sales force buy-in?
Full Case Recommendations:
Case 3: San Francisco Giants
The San Francisco Giants case is a chronology of an in-house developed sales force automation software system. The case highlights some of the challenges that the team faced in trying to get the system designed and utilized.
The case is interesting in several respects. First, the sales force is divided by customer type; current customers (renewals) versus prospective customers. The renewals are then further segmented by section in the stadium. For class purposes, it can be instructive to discuss the impact this has over a customer´s life cycle. If a customer is a prospect, an acquisition rep calls. If the customer buys the cheapest season ticket, then another rep takes over. If that rep sells the customer on a more expensive seat, the customer is then passed to another rep… and so forth, and so forth. Having a personal relationship with the sales rep is pretty difficult for a customer unless they stay in the same seat over time. That system then makes the other ways that the team communicates with customers very important in order to create a relationship.
Other In-Class Exercises:
In this in-class exercise, students can work separately or in small groups to be given the following scenario:
XYZ, Inc. wants to switch from a transactional sales approach to a CRM strategy. The Sales VP has asked you, the sales manager, to provide answers to the following questions in order to form a plan for switching over to CRM. Based upon your understanding of CRM (derived from the text and classroom discussions), how would you answer each of the following questions?
Customer Relationship Management (CRM)
If your firm wants to establish a CRM system, what actions have to be undertaken:
Technological:
Organizational
Philosophy
Customer service
Information flow
Sales Force
Hiring
Training
Compensation
Authority
Sales support
Evaluation metrics
Answers:
First, a CRM platform has to be selected. Not all CRM platforms are the same and may require a consultant to help select a proper system. That said a firm’s CRM strategy should drive the system through selection of metrics and information flow. In other words, a sales firm cannot allow the CRM system to drive the organization. Second, this means that the firm’s philosophy toward short-term sales revenue must be evaluated, customer service levels may differ by customer category, and information must flow throughout the firm. It will not be possible to hide poor results and late responses/orders. Third, given the adoption of a CRM strategy, this change will necessitate the hiring of sales personnel with different skills, their authority will need to be broadened, sales support is essential, and rather than meeting sales quotas and revenue goals, the sales force will also be gauged on lost customers, increase in sales to current customers, customer complaints/praise, and customer feedback. In other words, adopting a CRM strategy will significantly change how business is done and the roles played by the sales force.
Time Management:
Many (most?) students do not manage their time well. As salespersons it is essential and as sales managers it will be imperative to help others manage their time. There are a number of books that go into great detail with amusing anecdotes to teach time management skills. I have used the following short list to try to get my students to consider how they are current spending their time and after identifying where there is waste, to readjust how they invest their time. For example, UPS teaches their drivers to plan their routes for right turns only. This keeps the driver from waiting to turn left against traffic when entering and leaving a stop. If this saves 30 seconds per stop, then a significant amount of time is saved each day.
How to Better Manage Your Time
Where does your time go now? To understand your time management skills, you need to record and analyze your daily activities. You may be surprised at how much time you spend on video games, TV, sports, reading, etc. Use a journal or spreadsheet to record 15 or 30 minutes blocks of time.
What is fun? What do you enjoy doing? What helps you achieve your goals?
What are your short and long-term goals? To make more money? Move up the corporate ladder? To have comfortable and relaxed time with your family?
*Prioritize your activities. Set A, B, and C projects.
Set reasonable goals. Becoming an Olympic athlete is probably not reasonable
Chop large projects into “doable” parts.
Work for a specified period and reward yourself by doing something you enjoy. It is best not to reward yourself with food or deserts since this will pack on weight and slow you down!
It’s OK to tell your friends “NO” in a nice way.
Make it easy to maximize your time. Organize for success—it saves time!
Accept that you can always be more efficient (Don’t become obsessive-compulsive!).
*Perhaps the key to time management is the ability to prioritize your activities. That is, we all tend to work on things that are fun rather than important. It is fun to drink coffee and chat with other salespersons in the morning. Socializing with friends is fun, but will not help us respond to customer requests and management’s directives. “A” priority activities should always receive your full attention at work. When you run out of “A” activities, take on important “B” activities. One time management expert told me that most people should ignore the “C” priorities on their list! However, the key to take away from this discussion is that rather than following a list of things to do, it is more important to have an “A” list that receives top priority and only when the “A” list is complete should we switch to lower priority activities.
An example of “A” might be respond to a request for quotation for one of our best customers. Conversely, a forecast that is due the end of the month might be initially listed as a “B” activity. A “C” activity might be a request from a student to complete a survey about your satisfaction with sales as a career. “C” activities can almost always be delegated or ignored!
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