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Sales Management: Shaping Future Sales Leaders

Leveraging Information Technologies Chapter 6

6-1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Learning Objectives  Explain how common technologies used today have altered sales forces and the way they are managed  Explain what sales force automation technology is and what it’s used for  Explain what a customer relationship management system is and the challenges related to implementing one  Describe what sales managers can do to encourage their employees to adopt and effectively utilize technology 6-2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Commonly Used Technology  Cell phone  GPS (Global Positioning Systems)  Laptop computer  PDA (personal digital assistant)  E-mail

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E-mail  Drives $8.8 billion in business-to-business sales

 85% of salespeople use e-mail to communicate with existing customers

 67% to prospect for new customers  60% to communicate with the home office  24% to check existing stock

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Knowledge Management, Proposal Writing, and Pricing Software

Knowledge Management

 Knowledge-based information (e.g., product catalog) taken online  Knowledge base is the data in the system

 Library of successful proposals from which reps can Proposal-writing select portions and create new proposals Software  One of the first KM apps created for salespeople  Makes sure all components are accounted for, resulting in a more accurate estimate of job’s cost Pricing Software  Often industry-specific software is available

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Sales Force Automation (SFA) Systems  SFA automates salespeople’s contact management, scheduling, and reporting functions  One of first types of information technology used by salespeople  Contact management is the use of customer databases to keep track of customer information, calendaring to schedule customer activities such as sales calls, follow-up, and so forth

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Contact Screen in Aplicor

Account Type and Address

Account Name & Contact Person’s Info Background

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Benefits of SFA Instant Access

 Helps managers evaluate and coach reps  Improves firm’s sales forecasts

Retention of Customer Records

 If rep takes records when moving to another company or throws them away, customer data is lost

Improved Customer Interaction

 More information about each customer readily available

Ticklers

 Automatic reminders to complete certain tasks

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Challenges of SFA  Getting salespeople to use the system  How managers should use the system  Flexibility may be lost

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Customer Relationship Management (CRM) Software  Encompasses the types of relationships you want to create with your customers  Philosophy, strategy, way of life

 Can result in more effective communication, integrating rep’s customer communications with other channels  CRM must integrate with other software systems, cannot just automate rep activities  CRM data must be visible to those who need it 6-11 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Global Sales Management: Global Issues in Sales Technology  How do you manage one client with 500 locations worldwide? E lle s m e r e I s la n d

A r c tic O c e a n B a n k s Islan d

V ic to ria I s la n d

B a ff in

S e v e r n a y a Z e m ly a

A rc tic O c e a n

G re e n la n d (D e n .)

J a n M a y e n ( N o r.)

A r Nc etwi cS i b Oe r i a cn Ies l aa n nd s

F ra n z Jo se f L a n d

S v a lb a r d ( N o r.)

N o v a y a Z e m ly a

W r a n g e l Is la n d

I s la n d

F a r o e Is . (D e n .)

U .S .A .

N o rw a y

F in la n d

Ic e la n d

R u s s ia

E s to n ia L a tv ia L ith u a n ia B e la r u s N e th . P o la n d G e r m a n y B e l. U k ra in e C zech. A u s . H uS nl og v. a k . M o ld o v a F ra n c e S w itz . S lo v . C r o . Y u g Ro .o m a n i a B o s. B u lg a ria Ita ly M ac. A lb a n ia S p a in G re e c e T urk U n ite d K in g d o m D en.

C anada

S w eden

60°

A le u tia n I s la n d s (U S A )

 500 customers each with 1 location? Ir e la n d

Is la n d o f N e w fo u n d la n d

N o rth A tla n tic O c e a n

U n ite d S ta te s o f A m e ric a

P o rtu g a l

G e o rg ia A r m e n ia A z e rb a ija n

ey

T u rk m e n is ta n

M o n g o lia K y rg y z s ta n

N . K orea

T a jik is ta n

Japan

S . K o re a

 SFA software allows lead distribution to reps around the world, and all reps can access data via portal

N o rth P a c ific O c e a n

C y p . L e b . S y ria Ira q Isra e l Jo rda n K u w a it

T u n is ia

M o ro c c o

C a n a r y I s la n d s ( S p .)

A lg e r ia

T he B aham as

H a w a iia n Is la n d s U . S.A .

K u ril Isla n d s

K a z a k h s ta n

U z b e k is ta n

M e x ic o

C uba

Jam .

G u a te m a la E l S a lv a d o r

B e liz e H o n d u ra s

L ib y a

W e s te r n S a h a r a ( M o r.)

E gypt

H a iti P u e rto R ic o (U S )

D o m in ic a

B a rb a d o s

N ic a ra g u a

T rin id a d a n d T o b ag o G uyana S u r in a m e F r e n c h G u ia n a ( F r.)

M a li

Senegal T h e G a m b ia G u in e a -B is s a u G u in e a

N ig e r

E ritr e a

S udan

C had

B u rk in a F a so

Ira n

N epal

P a k is ta n

N o rth P a c ific O c e a n

B hu.

Q a ta r

Saudi

D o m in ic a n R e p u b lic

M a u rita n ia

C h in a

A fg h a n is ta n

A rUa . bA i .a E . O m an

In d ia

B ang.

L aos

Yem en

T h a ila n d

P h ilip p in e s

V ie tn a m

A n d a m a n I s l a n d s ( I n d iCa a) m b o d i a

D jib o u ti

B e n in

T a iw a n

M y a n m a r (B u rm a )

M a rs h a ll Is la n d s

 “Users can assign leads to certain distributors or send out emails with 1,000 names quickly and easily” C o s ta R ic a

V e n e z u e la

Panam a

C o lo m b ia

G a la p a g o s I s la n d s ( E c u a d o r)

S ie rra L e o n e

C ô te D ’ Iv o ire

L ib e r ia

N ig e ria

Congo

B ra z il

P e ru

A n g o la

M a la w i

B u ru n d i T a n z a n ia

S in g a p o re

K irib a ti

In d o n e s ia

P a p u a N e w G u in e a

S e y c h e lle s

Z im b a b w e

M adagascar

 Communication via email declining sales productivity N a m ib ia

F r e n c h P o ly n e s ia ( F r.)

B o ts w a n a

P a ra g u a y

S o lo m o n

Is la n d s

M o z a m b iq u e

Z a m b ia B o liv ia

G u a m (U S A )

M a la y s ia

K enya

R w anda Z a ire

S a o T o m e & P r in c ip e

B ru nei

M a ld iv e s

S o m a lia

U ganda

G abon

E cuador

F e d e ra te d S ta te s o f M ic ro n e s ia

S ri L an k a

E th io p ia

C .A . R .

C a m e ro o n

G hana Togo E q . G u in e a

M a u r itiu s

In d ia n O c e a n

S w a z ila n d

F iji N e w C a led o n ia

A u s tra lia

S o u t h A f r i Lc ae s o t h o

S o u th P a c if ic O c e a n

U ru g u a y

C h ile

A rg e n tin a

S o u th A tla n tic O c e a n

N e w Z e a la n d T a s m a n ia

F a lk la n d I s la n d s ( Is la s M a lv in a s ) ( a d m . b y U K , c la im e d b y A rg e n tin a )

 Training in effective written communications Île s C ro z e t ( F ra n c e )

S o u th G e o rg ia (a d m . b y U K , c la im e d b y A rg e n tin a )

Sources: Anonymous, “Flexibility and Mobility Increase CRM Adoption Rate,” Manufacturing A n ta rc tic a Business Technology (December 2006) 24, p. 16; and Chris Smithers, “Improving Communication to Boost Sales at BT,” Strategic Communication Management (January 2006), 18–22. 6-12 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Software as a Service (SaaS)  “Hosted” applications: makers of the software host the program and data on their own servers  Benefits 1

Vendor is responsible for software

2

Access data real-time from anywhere

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On-Premise Software  Software installed on buyer’s computers  Benefits

1

Data are held in company computers – may be safer

2

Company has more control over how software is customized and integrated into other software systems

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Sales Tools and Uses of SFA/CRM by Job Role CEO  Sales forecast

VP of Sales

Sales Management

 Sales forecast

 Sales forecast

 Identify/share best practices

 Identify big impact opportunities

 Track performance — by salesperson, product, etc.  Capture win/loss data for strategic planning/pricing

 Identify coaching & training opportunities by examining win/loss ratios by rep & stage of sales process

 Create or use models to understand segments

 Monitor activities by account or by rep relative to results

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Sales Rep  Access to customer data  Access to pricing formulas & product info for better proposals  Integrated access to other relevant info (shipping, billing, etc.)  Faster access to leads

What Can a CRM System Do? Seamless Interaction

 Enables customers to interact with the selling organization via all channels in a seamless fashion

Access Same Information

 Critical feature of a hosted version of CRM is the ability for reps and managers in multiple locations to access the same customer information  Helps with opportunity management

Predictive Models

 Enables managers to create predictive models using customer data

Campaign Management

 Rules-based way to determine which message to send to a buyer at what time  Track customers’ responses to various offers

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An Example of Simple Rules-Based Campaign

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CRM Applications  Segmentation: grouping customers  Customer lifetime value (CLV) analysis is a CRM tool that calculates the value of a customer over time  Predictive and “lifestyle model” information can be matched to CLV  Create more effective sales campaigns  Design better products  Price more strategically 6-18 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Usage Pattern: The Customer Pyramid Most Profitable What segment spends more with us over time, Customers

costs less to maintain, spreads positive word of mouth?

Least Profitable Customers What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?

Source: Zeithaml, Rust, Lemon (2001), California Mgt Review, 43, p. 125.

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Guided Sales Tool  Guided sales tools: repeatable processes that managers can help reps implement in order to move a prospect closer to a sale  Examples  Edward Jones bond call list  Script that a call center rep can use verbatim  Databases of proposals that can be used over and over  Pop-up menus that suggest approaches salespeople can take based on the types of accounts they are calling on

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CRM Data: Where Does It Come From?

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Challenges of Implementing CRM and SFA Systems  Who “owns” the relationship with the customer  Sales technology makes reps more productive, but it also makes them feel like their jobs are less secure

 Customer data strategy: What data are needed, how will it be used? Where is the data? Who needs access to it?  How much information should be available, to whom, and for what use?

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Self-Assessment Library  Go to http://www.prenhall.com/sal/  Access code came with your book

 Click the following  Assessments II. Working with Others C. Motivation Insights 3. How Good Am I at Playing Politics?

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Encouraging Salespeople to Use Technology Effectively  Reluctance to use the system is biggest barrier to CRM implementation  Salespeople who have been successful without technology may not see the need  Tactics 1 2 3

Communicate benefits to reps Eliminate opportunities not to use the technology Create reward/punishment systems for using the system

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Implementing Technology Training Management Support Technical Support Communicating Benefits Making the Transition 6-25 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Discussion Question (#1)  A salesperson says, “This new software is like Big Brother. Now my company and manager watch every move I make! As long as I make my quota, why can’t they leave me alone?” As a sales manager, how would you counter an argument like this?

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Discussion Question (#4)  One student argued that he didn’t want companies to know what he ate for breakfast, what television shows he watched, magazines he read, or Web sites he visited. Another student said she wanted companies to know that information if it meant she got better products and services as a result. What information about you is okay for salespeople to put in their database? What information would you like to keep private? As a sales manager how do you manage this private–public balance? 6-27 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Role Play: Blackburg Technologies  Solutions Division: hardware, software, maintenance  Services Division: consulting, training  Marketing Department: manages exposure at trade shows, special events, and technology shows  New CRM system allows customers and Blackburg access to info

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Role Play (continued): Assignment  Break into groups of 3  VP of Marketing  VP of Sales for Solutions  VP of Sales for Services

 Have a meeting to determine who owns the account

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Role Play (continued): Assignment  Before the meeting, determine  Why your division should be in charge of a particular account, including:  What communication is provided to an account  Who should access and track the overall sales performance of an account  Who should develop strategies for it

 Should current accounts vs. prospective clients be assigned differently?  When conflicts in strategies or pricing decisions occur, how should they be resolved? 6-30 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Sales Manager’s Workshop: Promedia Technology–Familiarizing Yourself with Aplicor  Review the chapter  Examine Aplicor’s features  Identify and describe how Aplicor provides the following 1. Knowledge management 2. Opportunity management 3. Campaign management

 Write a short training script that you would use to show someone unfamiliar with Aplicor how to create an opportunity management report 6-31 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Caselet 6.1: Frisco Solutions  Frisco implemented sales software  Sales haven’t increased, have declined in some regions  Regions with higher sales use the software more  Sales managers were not given additional training, many don’t use system or use it incorrectly  Reps follow managers’ lead

 No $$ for additional training, would take more than training now 6-32 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Caselet 6.1 (continued): Questions  Should Frisco create penalties for not using the new program or rewards for using it?  How can Frisco make sure managers get trained?

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Caselet 6.2: Zeron Corporation  Sells supplies to horse trainers and feed stores  Reps gathered e-mail addresses for ~30% of 200,000 accounts  60,000 addresses, probably 45,000 are feed stores

 Feed stores can order via Web site  Additional 60,000 e-mail addresses; Zeron knows whether these belong to trainers or feed stores

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Caselet 6.2 (continued): What Would You Do?  VP of sales wants to create campaign strategy encouraging smaller customers to always order via Web site  Big vs. small customers can’t be determined by looking just at purchases of Zeron products  Potentially large account can look small if customer only buys a few products from Zeron

 If you were a sales manager for Zeron, how would you go about developing a rules-based campaign for the 120,000 e-mail addresses Zeron has? 6-35 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

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