Customer Relationship Management. Moderator: Adam Rapp, D. Paul Jones, Jr. and Charlene Jones Chair Professor, University of Alabama

Transcription

1 Customer Relationship Management Moderator: Adam Rapp, D. Paul Jones, Jr. and Charlene Jones Chair Professor, University of Alabama

2 PAPER PRESENTATIONS CRM and the Relationship between Marketing and Sales - Othman Boujena, Wesley Johnston, and Russell Winer How Sales Efforts Accelerate Loyalty Program Adoption in a B2B setting - Manfred Krafft, Kalyan Raman, Vijay Viswanathan, and Javier Sese The Role of Buyer-Seller Relationships in Tender Evaluations and Outcomes - Shankar Ganesan, Christian Schmitz, and Eva Steinbacher

3 CRM and the Relationship between Marketing and Sales Presenter: Othman Boujena, Professor, Neoma Business School, Head of the Center for Markets, Brands & Experiences Co-authors: Wesley Johnston, CBIM Roundtable Professor, Georgia State University Russell S. Winer, William H. Joyce Professor, New York University

4 INTRODUCTION! Marketing and sales relationships are always difficult and complex within companies! There is an old conflict between consumer/customer understanding (marketing) and market field expertise (sales force)! The impact of a paradigm shift in marketing : from transactional to relationship (marketing has been for a long time reduced to sales)! The success of companies strategies and business performance depends heavily on the capacity of surpassing this rivalry (a real challenge especially in hard economic periods)! Marketing can help sales be successful through marketing automation, building customer relationships, lead generation, and lead scoring! Sales can help marketing be more successful by assuming ownership of a lead at the appropriate time and therefore realizing a more desirable close ratio

5 ISSUE AND APPROACH? Marke&ng Customer Marke&ng Sales CRM Sales

6 RESEARCH QUESTION If and how CRM could contribute to the relationship between sales and marketing?

7 CRM: ENABLING ROLE? IMPORTANCE OF OTHER CONTINGENCY FACTORS Technology Organiza.on and processes People

8 RESEARCH DEVELOPMENT PROCESS Literature review Interna&onal exploratory survey (dyadic approach) Empirical survey Modeling CRM contribu&on

9 THEORETICAL BACKGROUND SALES AND MARKETING RELATIONSHIP EXAMINATION! In too many companies, Sales and Marke&ng feud like Capulets and Montagues! Reasons of conflict :! Approach differences! Culture! Educa&on Kotler, P., Rackham, N. and Krishnaswamy, S. (2006)! Evalua&ng the quality of the rela.onship between sales & marke.ng through 4 models! Kotler, Rackham and Krishnaswamy (2006)! Malshe (2010)! Homburg, Jensen, and Krohmer (2008)! Le Meunier- FitzHugh and Piercy (2007)

10 THEORETICAL BACKGROUND SALES AND MARKETING RELATIONSHIP EXAMINATION The Marke.ng Sales Interface at the Interface: Crea.ng Market- Based Capabili.es through Organiza.onal Synergy Hughes, Le Bon and Malshe (2012)

11 EXPLORATORY SURVEY QUESTIONING PROCESS Marke&ng func&on role? Sales and marke&ng rela&onship? Customer rela&onship strategy? CRM and S&M rela&onship? Sales func&on role?

12 FIELD SURVEY : SAMPLE DESCRIPTION Func.on Sex 48, 48% Sales 52, 52% Marke&ng Male Female Industry

13 FIELD SURVEY : SAMPLE DESCRIPTION 13, 13% Seniority in job 18, 18% 42, 42% Less than 2 years Between 2 and 5 years Between 5 and 10 years More than 10 years 27, 27% 13% 8, 8% Less than 25 years 25 to 30 years 22% 43, 44% 31 to 40 years 41 to 50 years Age 13% More than 50 years

14 MOST USED SOLUTIONS AMONG THE SAMPLE Salesforce.com Oracle/Siebel Microsoft Dynamics

15 MAIN INSIGHTS AND RESULTS

16 SALES FUNCTION ROLE PERCEPTION THREE MAIN DIMENSIONS! Delivering message! Company eyes! Interface with customers Aligning with/ reflec.ng strategy and vision (Company and Marke.ng) Customer rela.onship Acquisi&on and reten&on/ loyalty! Approach and follow up scored leads! Co- driving experience! Servicing Addressing and priori&zing marketplace needs Value crea&on! Consulta&ve selling! Solu&ons Mastering core business processes Managing networks Business development and growth! Volume/annual revenue! Maximize return! Market share

17 SALES FUNCTION ROLE PERCEPTION THREE MAIN DIMENSIONS! Three main dimensions! Vision source?! The issue of customer ownership?! From lead generation to lead conversion : who is responsible?

18 SALES FUNCTION EVOLUTION MAIN PERCEIVED CHALLENGES! Digital access! Informa&on asymetry! Monitoring percep&ons! Intelligence ac&vity Prospects and customers informa.on! Digital channel! Social media! Proac&ve ini&a&ve! Importance of marke&ng to evaluate value of sales efforts! Interna&onal teams coordina&on! Increasing onnec&on with other fucn&ons Channels structure and design Markets structure and globaliza.on! Feature benefit # solu&on! Customer orienta&on (&me orienta&on)! Metric driven! Focus on key accounts Selling approach More complexity

19 MARKETING FUNCTION ROLE PERCEPTION THREE MAIN DIMENSIONS Customer knowledge and analy.cs Offer design and communica.on Brand building and equity Needs assessment Lead genera&on (sales funnel) Path to purchase monitoring Value proposi&on Product development Point of sale Content genera&on Strategy Awareness Image Preference Marketing creates the brand halo that facilitates sales closing Provide strategic directions and the right offerings and messages How to drive awareness in the marketplace and placement of our solution to initiate the purchase cycle - setting customer preference (communication channels : website, PR, media,

20 MARKETING FUNCTION EVOLUTION MAIN PERCEIVED CHALLENGES! Increasing strategic role! More collabora&on with sales! Innova&on! Build brand trust! Metrics and data driven! Inbound marke&ng! Media shig and ROI Marketing needs to understand the selling process and dynamics of selling interaction with customers

21 SALES AND MARKETING RELATIONSHIP IDENTIFIED LEVERS Organizational culture! Relationship : A matter of mindset and human interaction! Leadership : inspiration role Collaboration structure! Reporting : common person/board (CEO?, chief operating officer? customer revenue manager?...)! Common definition: goals and revenue plan! Common meetings! Daily communication! Common decision making! Project

22 SALES AND MARKETING RELATIONSHIP IDENTIFIED LEVERS Role assignments! Lazy versus stupid function or the pitcher and the catcher! Support function: marketing or sales?! Marketing : source of sales tools for effectiveness! Marketing : set up structure and strategy in the sales organization! Marketing: field expertise?! Marketing and empathy development: re-framing sales conversation from providing data pipes to insights about how to support customer s business processes! Collaboration domains! Budget allocation for customer acquisition! Customer cycle over channels versus product development cycle! Pricing! Event management! Aligning message and time! Innovation : Sales growth # risk taking? Alignment with needs?! Leads management and targeting! Opportunities management : Fact based and better detection

23 SALES AND MARKETING RELATIONSHIP IDENTIFIED LEVERS! Performance and sales compensation! Coordinating performance control and measurement! Correlating sales production to marketing efforts! Compensation system! Salary based versus commission?! Built around value creation (net income per capita, market share )

24 CUSTOMER RELATIONSHIP STRATEGY SHARED PERSPECTIVES Customer at the center of all func&ons Treatment of most profitable customers Customer knowledge Sa&sfac&on and loyalty Customer rela&onship strategy Preference genera&on and trust development Acquisi&on and reten&on

25 CRM AND SALES & MARKETING RELATIONSHIP Contribu.on levels Rela.onship management Sales are not the only function to have control over the relationship Everybodey talks the data but then the customer is not front and center and the decision to design, system design the strategy is not customer based it becomes sales and marketing based Knowledge and analy.cs We got data driven analytics and then personalized marketing experience Marketing and data are helpful to salespeople and to get 360 view of customers Customer centricity implies good listening skills which implies to store information somewhere Descrip.on! CRM : customer oriented selling! Experience management! Closer to customers! Customers valoriza&on and centricity! Delivering value! Reten&on capacity! Timely interac&on with customers! Up to date and accurate! Storage capacity! 360 view of customers! Predic&ve modeling! Support to sales! Bemer relevance and coherence of conversa&ons with customers! Listening development! Proac&vity! Big data challenge?

26 CRM AND SALES & MARKETING RELATIONSHIP Contribu.on levels Descrip.on Visibility,tracking transparency,.meliness! Pipeline! Market We know who we are talking to, what roles, what levels, are you talking to VP s of sales or VP s of sales operations. I gives marketing a big more insights into our targets, the types of companies we are talking to, industry type of people which I think is helpful in terms of figuring out different messages! Customer journey! Individual ac&vity! Shared vision of the business! Avoiding misunderstanding! Performance Teamwork! Real &me coordina&on! Informa&on/insight sharing follow colleagues topics and answer their clients when unavailable, exchanging sales contacts, following, keeping information and avoiding useless tasks CRM is the platform from the marketing standpoint to get the word out to everybody very quickly We ve got stronger relationships and information sharing within the same department! Communica&on! Effec&ve measurement! Shared objec&ves : margin and sa&sfac&on! Shared control over customer rela&onship! Facilita&ng project mode! Sales team : accountable for feeding the CRM! Pricing seong! Feeding the database : responsibility

27 CRM AND SALES & MARKETING RELATIONSHIP Contribu.on levels Effec.veness and efficiency CRM helped salespeople to be more planful and to archive key bits of knowledge especially as we have accounts transitions CRM (in digital environment) I pull through campaign that brings people to our website through intriguing questions about products and services and over banner ads or whatever that pull them and then scoring that leads as they develop from an inquiry to web page, white paper, demo, developing emarketing component of lead generation Connecting sales metrics with responses getting off of SEO and SEM allows good and healthy conversations end better lead generation conversion by channel Lead management Producing leads for the sales organization and they are of the first voice out there so it s critical that information is up to date, accurate and producing results so that they can keep the prospect intrigued by coming back for more information and then the whole automation part of that with CRM systems and helping to score leads and rate leads as warmer or colder before sales force time and effort allocation Descrip.on! Imapcpul content genera&on (marke&ng side)! Time alloca&on # lead poten&al (sales side)! Metrics and dashboards (Each pipeline stage)! E- CRM: flexible and richer interac&on with customers! Increased responsiveness! Compe&&ve advantage! Visibility on customer online journey! Complaint management (social media)! Aligning sales cycle and buying cycle! Lead and opportuni&es: bemer! Segmenta&on and qualifica&on

28 CRM COMPONENTS : IMPORTANCE AND CONTRIBUTION 1 2 Collabora&ve CRM Analy&cal CRM 3 Opera&onal CRM

29 CRM : A TECHNOLOGY IN USE DIFFERENT DEGREES Order taking Repor&ng Tracking Analy&cs If data entry is up to date and accurate, expectation is possible otherwise CRM will be just a reporting tool to roll up sales results or track weeklly closes We use it for our funnel, or pipeline and pipeline growth and other metrics around pipeline performance

30 CRM : COLLABORATIVE CAPABILITIES BUILDING ROLE Lead management Segmenta&on Capabili&es scope Targe&ng Pricing Events management and monitoring Forecas&ng Product development Ac&vity planning

31 CONCLUSION! Importance of CRM dimensions as an IS! Inspiring role of top management! The perceptual triad between: expected function, assigned function and interest! The role of CRM editors: solutions architecture! Market dynamics, business model, and industry

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33 How Sales Efforts Accelerate Loyalty Program Adoption in a B2B Setting Presenter: Manfred Krafft, Professor, University of Muenster Co-authors: Kalyan Raman, Professor, Northwestern University Vijay Viswanathan, Assistant Professor, Northwestern University Javier Sese, Assistant Professor, University of Zaragoza

34 AGENDA Loyalty Programs in B2B Objectives and contribution Role of status and targeted marketing & sales communications Our data and insights Discussion & managerial implications

35 LOYALTY PROGRAMS IN B2B Loyalty programs (LPs) are one of the most commonly used relationship management tools to reward the firm s best customers and are increasingly popular in business markets

36 LOYALTY PROGRAMS IN B2B Loyalty program success " fast spread, deep penetration (Allaway et al. 2003) Core challenge: How to accelerate the adoption of a new B2B loyalty program Known: Outcome of loyalty programs Unknown: Drivers of loyalty program adoption, in particular role of status, impact of direct marketing & sales activities Special interest: Hierarchical loyalty programs, i.e. elevated status to preferred customers

37 OUR FRAMEWORK SOCIAL EFFECTS - # recent adopters - # early adopters - # pla&num LP members TARGETED FIRM ACTIVITIES - Direct marke&ng - Sales efforts - Calls to call center EARLY (VS. LATE) ADOPTION OF A LOYALTY PROGRAM INDIVIDUAL CHARACTERISTICS - Farm size (in hectar) - Gender (male=1) - Family (joint family=1) SPATIAL EFFECTS - Recep&ve versus deliberate regions (see map)

38 MARKETING & SALES ACTIVITIES Firms invest in marketing & sales campaigns to make customers aware of the new program and persuade them to adopt the LP Focus on targeted campaigns: activities that target individual customers, instead of on impersonal mass marketing activities Direct marketing Sales efforts Goal: accelerating adoptions by increasing the benefits and reducing the costs of LP adoption

39 OUR DATA Agriculture industry: Data obtained from a Global Fortune 200 firm Region studied: Bavaria (33% of total German customers) Spatial analysis: First two digits of zip codes in this region as aggregation criterion LP introduced in 2008: Rewards customers for their purchases with points that can be redeemed for a variety of gifts Hierarchical design: 4 tiers " standard, silver, gold and platinum, depending on level of purchases made. Focus on effects of highest tier (platinum) Data from introduction until 2012 for a sample of 7,473 farms that adopted the LP

40 OUR DATA Year LP Adoptions (Freq) LP Adoptions (%) ,470 33% ,637 22% ,381 18% ,144 15% % Grand Total 7, %

41 ADOPTION / DIFFUSION IN 2008

46 OUR FINDINGS SOCIAL EFFECTS - # recent adopters ** - # early adopters ** - # pla&num LP members + ** TARGETED FIRM ACTIVITIES - Direct marke&ng n.s. - Sales efforts + ** - Calls to call center n.s. EARLY (VS. LATE) ADOPTION OF A LOYALTY PROGRAM INDIVIDUAL CHARACTERISTICS - Farm size (in hectar) + ** - Gender (male=1) ** - Family (joint family=1) n.s. SPATIAL EFFECTS - Recep.ve versus deliberate regions (see map)

47 OUR FINDINGS (SPATIAL EFFECTS)

48 DISCUSSION & MANAGERIAL IMPLICATIONS First study on loyalty programs in B2B context Some individuals have a disproportionate influence on potential adopters High status of elite members drives adoption of non-members While (direct) marketing does not have an effect, sales efforts are a powerful driver of adoption

49 HOW TO ACCELERATE ADOPTION OF B2B LOYALTY PROGRAM: By design: Implement a hierarchical loyalty program with several tiers " high status members are highly influential Sales effort: Key driver of adoption; synergies of sales & marketing (LP) By region: Focus on receptive regions for fast adoption, work on deliberate regions later (if status & sales do not suffice)

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51 The Role of Trust in Competitive Tenders: Direct and Mediated Effects on Supplier Choice Eva K. Steinbacher, University of St. Gallen, Switzerland Christian Schmitz, University of Bochum, Germany Shankar Ganesan, University of Notre Dame, USA

52 Use of Compe&&ve Tenders The use of compe&&ve tenders is increasing Globaliza&on Cost pressures Sophis&cated technology Requirement for transparency Detailed specifica&ons and formal proposal design While organiza&onal customers used to pursue long- term, mutually beneficial rela&onships with their suppliers since the 1990s, today a shig towards a more transac&on- focused approach to procurement is observed in business prac&ce.

53 Compe&&ve Tenders - A Customer- Dominated Buying Process Tender refers to a business ini&a&on process, in which the customer asks mul&ple suppliers to submit a proposal mee&ng pre- deﬁned speciﬁca&on requirements and selects one supplier based on the proposal. Customer Supplier Saturated markets Growing compe&&on Buyer dominance Professionaliza&on of purchasing Highly sophis&cated demands Formalized procedures Increased need for customiza&on Need to comply with extensive formal requirements Successful par&cipa&on in tenders is a key challenge for many suppliers. 53

54 Research ques&on KEY QUESTION: Do relationships matter in competitive tender situations?

55 Data collec&on and sample Data collec.on:! Survey among 435 purchasing managers in Switzerland and Germany (response rate 17.82%)! Ques&ons cover a recent tender the par&cipants were involved in (two diﬀerent ques&onnaires for winning vendor/ a vendor who lost)! Addi&onal survey among corresponding salespeople to validate the key informants statements (analysis in progress) Informants, that completed the ques.onnaire:! 435 purchasing managers in the following industries: industrial goods (38.4%), consumer goods (8.5%), retail (9.2%), services (18.2), public ins&tu&ons (8.3%), others (17.4%)! Age: min. 22, max. 63, avg years! Experience in a purchasing posi&on: min. 1.5, max. 43, avg years 55

56 The Nature of Tenders! Purchase object! 46.7% product, 17.5% solu&on, 33.3% combina&on of product and solu&on! Buy class! 17.7% new buy, 42.3% straight rebuy, 37.3% modified rebuy! Won/lost! 203 (46.9%) winning vendors, 230 (53.1%) losing vendors

57 Results Proposal evalua&on directly affects supplier choice in tenders Trust in the salesperson does not have a direct effect on supplier choice. However, purchasing managers do not evaluate proposals independent of the submiong salesperson Trust in the salesperson has an effect on proposal evalua&on The effect of trust in the salesperson on proposal evalua&on is con&ngent on Personal factors (e.g., purchasing manager s product knowledge) Situa&onal factors (e.g., &me pressure) 57

58 Contribu&on and Implica&ons What is the role of rela&onal investments in compe&&ve tenders? Under what circumstances do rela&onal investments lead to posi&ve purchase evalua&ons? 58

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60 CRM PANEL DISCUSSION Moderator Adam Rapp Subject Matter Expert Panelists Joe Calamusa Tina Reese Associate Professor Sales Program Director Chief Sales Officer University of Alabama University of Alabama AquatixElite Scott Sims Principal ZS Associates