Selling

Use of the sales force is qualitatively different to almost other aspects of marketing. It is much more dependent upon relationships between individuals; between sales personnel and customers, and between sales management and their sales personnel. It is generally the management of these human relationships, rather than the logistics, which is most important.

The most important, first, decision is how responsibilities are to be allocated within the sales team; and the now traditional basis for this uses the building block of the individual territory.

Most territories are based on a geographical area; ranging from a whole country downwards to single postal district. One advantage of such an approach is that they are relatively easy to define, and hence should avoid unnecessary contention - since it should be obvious what are the physical boundaries of these territories.

Sales activities are very expensive! For example, the 1988/1990 survey carried out by the Chartered Institute of Marketing[1] showed that the average cost per year of maintaining a salesperson in the field was £25,524 per annum. This figure covered salaries (£12,000), bonuses/commission (£2,000/£3,000), cars and other expenses. If the cost of management and office overheads were added, the figure grew to £35,225 per annum; for the average sales person! The average cost of each customer visit was £9 in the retail sector and £50 in the capital goods sector. These costs are probably, if anything, on the low side. In the US, for instance, Moriarty and Moran[2] quote a "loaded cost of face-to-face selling time" for account managers of up to $500 per hour and that for direct sales representatives an average of $300 dollars per hour!

Most managers, who have little practical experience of selling are just as surprised by how short a time is actually spent with the customer. The table below, which is taken from Malcolm McDonald's book[3], shows a breakdown of a salesman's daily workload in one consumer goods company. It indicates that less than a third of his time was spent on customer's premises and almost a quarter of even this short time was spent waiting for the customer to see him! Malcolm McDonald's understandable conclusion is that it is important for a salesperson to plan their time effectively.

The traditional view of selling has been that it is a 'professional' role (if even that) rather than a management one (where very few sales professionals formally manage teams of subordinates). In practice, as you will see from the next few paragraphs, much of the sales professional's role is actually concerned with management.

The sales professional is typically solely responsible for his or her territory (usually, as we have seen, geographically defined). He or she is responsible for everything that happens on this territory; for all activities, with the range of responsibilities (albeit on a smaller scale) comparable with those normally assumed by a brand manager, or even by the chief executive of a subsidiary. In addition, every sales professional will have, to a greater or lesser extent, some organisational resources at his or her command; not least his or her own time - but also support resources (including service support, marketing support and, possibly, even budgeted amounts of territory based promotional funding). All of these resources will have to be managed in exactly the same way as the rest of the organisation's resources are managed by its team of managers.

It is conventionally assumed that sales professionals do not manage people; and, indeed as mentioned earlier, very few do actually have formal responsibility for subordinates. Yet many indirectly control the activities of support personnel. What is more, they have to achieve this management control, often under difficult circumstances on customer premises, without any formal authority! In many respects, on a narrower front, this is similar to inner marketing, described later in the chapter:

Above all, the sale professional manages the 'customer interface', that most important asset of any organisation, the relationship with the customer (and/or the customer organisation); the 'goodwill'. As we will see, this demands a great deal of skill; and it is a role which contains many of the key elements of management - and is one from which other managers, perhaps including yourself, could learn some lessons (particularly about communication with other people).

Without any doubt, the most important split on almost all territories is that between customers and prospects.

and indeed are more productive than many sales professionals (or their management) allow for. What is more, assuming that the organisation has previously offered good customer service, they are already tied to it; competitors will have to justify breaking these links before they can even begin their selling process. In such customers the organisation already has an existing base on which it is natural to build. It doesn't have to sell over the psychological barrier caused by them not wanting to bring in new ideas (justifiably so because new installations often are painful).

Yet many, if not most, sales professionals devote disproportionately less time to customers. The "macho" image, the stereotype discussed later in this chapter, persuades them to spend their time unproductively; touting for new business, when common-sense should tell them to spend at least adequate time defending, and growing, their customer base.

So the first priority of any sales professional must be to allocate resources to the customer set; but also differentiating between customers - according to what they are worth. Some will be "bankers" and will bring in a large part of the easy 80 percent of business - and these investments must be cosseted. Some, on the other hand, will be totally unproductive; demanding resource for little return - and in these cases the plan must be to contain the "bleeding".

The sales team should know their customers well enough to be able to predict the sales performance of each. But the real skill comes in being able to separate out the sheep from the goats amongst the prospects. They need to decide which are the ten percent or so of prospects who will bring in 50+ percent of the new business. This is partly a function of their size (in terms of potential business) and partly of their probability of closing. These are the prospects that should take first cut of the resources left after the planned support of customers.

No matter how much marginal prospects plead, the productive sales-force will have to be ruthless and refuse to fritter away resource on unproductive areas. The main danger is that they allocate some of their precious resource, only to find that the prospects are "tyre-kickers" (in the jargon of the sales discipline - which does not always hide its questionable origins in the used car industry!) after all - happy for the sales professional to spend considerable time talking to them, indeed demanding this, but never really likely to buy (despite their loud promises). So the true professional must be ruthless and insist they prove their good intentions. It is the reverse of popular belief - but:

The basic building block of any sales campaign has to be its calls. Generally speaking a number of calls are needed to get the business; and it is certainly true that

This is often described in sales circles as the "numbers game". I prefer to call it the 'numbers mountain', for each level must rest firmly on the one below if you are to be able to climb to the peak.

Thus, for every 1000 mailshots sent out there will be a certain percentage of returns which justify a sales professional calling personally; and telesales and cold calling will also generate proportional results. From these subsequent calls a proportion will turn into serious prospects (some of whom will progress to demonstrations and proposals). And out of these serious prospects a proportion will place orders, and a proportion (hopefully a good proportion) will place those orders with the organisation undertaking these activities rather than with its competitors.

At each stage, therefore, there is a conversion ratio. It is clearly the sales professional's personal skills (backed by sound account management) which ensure that this conversion ratio; is as high as it can be. Converting a good prospect into a customer requires all the skills a sales professional possesses, but it is a basic fact of the sales game that providing the raw material, the numbers of prospects to feed into the 'machine' which eventually converts them into business, is just sheer hard work. The more mailshots sent out, the more teleselling done and the more cold calls made, the greater the raw material for the conversion process. The eventual outcome is almost directly proportional to the numbers that are fed in.

The professional salesperson is more likely to come into contact with "complex sale". This is the sale where there are a number of individuals involved in the buying decision, and the sales campaign extends over a number of calls. Miller, Heiman & Tuleja[4] comment;

"In a complex sale, you have short-term and long-term objectives. In the short term, you must close as many individual deals as you possibly can, and as quickly as possible. In the long term, you want to maintain healthy relations with the customers signing the deals, so they'll be willing to make further purchases in the months and years to come. It would be great if these two objectives always coincided, but you know that they don't."

Thus, in many ways this environment is very different to that of the single call sale, which is the staple diet of many (if not most) sales trainers.

Perhaps the most obvious difference of the complex sale is the complexity introduced by the multiplicity of "buyers" involved. It is no longer just sufficient to persuade one buyer. Instead the sales professionals have to convince a whole range of individuals, all with different (often contradictory) requirements! The first problem this poses is quite simply that of identifying who are the various buyers. In a complex sale it is no longer an easy task. It )s no longer a matter of looking for the door helpfully labelled "buyer". The "buyers" involved in the complex sale can range down from the Chief Executive down to members of the typing pool.

As we saw earlier, the convention is to split these "buyers" into "Decision-Makers" and "Influencers"; with the clear implication that the small group of "Decision-Makers" should be the prime target - though "Influencers" should not be neglected. This is a useful distinction, in that it correctly focuses the sales professional's attention on the key decision-makers, and forces him or her to contact these; where too many sales personnel remain bogged down amongst the "Influencers".

Selling has traditionally been seen as a confrontational activity; with the salesperson 'hierarchically' subservient to the buyer - the former trying to persuade the latter to buy something not wanted or needed. It is seen as a 'zero-sum game', where each of the participants can gain only at the expense of the other.

This is at odds with the trust which we saw, earlier, were so important in building relationships with customers of all types. Thus, in recent years, it has been argued that the most productive relationship in such sales deals is based on an approach in which it is expected that both sides will 'win' - will gain from the deal (albeit in different ways) - so that they start out with the intention of producing a mutually beneficial arrangement. Miller, Heiman and Tuleja[5] encapsulated this relationship in the concept of "Win-Win". Their related matrix was described in the earlier chapter - along with my own enhancement (the Win-Win Balance - where both sides must win if the balance is to be maintained);

An increasing number of organisations have, indeed, come to see the relationship as one of interdependence; where the two sides adopt a 'peer to peer' relationship. The sales role here is sometimes described as 'relationship management'. As this type of relationship requires a higher level of personal support, from a more skilled sales professional (a 'relationship manager'), it will typically be limited to the five or ten most important customers.

Indeed, as Theodore xe "Levitt, Theodore"[6] says "The relationship between a seller and a buyer seldom ends when the sale is made. In a great and increasing proportion of transactions, the relationship actually intensifies subsequent to the sale. This becomes the critical factor in the buyer's choice of the seller the next time around....The sale merely consummates the courtship. Then the marriage begins. How good the marriage is depends on how well the relationship is managed by the seller."

Thus, regular contact is essential to maintain rapport; to maintain the partnership. It is also very productive in terms of growing the account. Once more, the investment in a satisfied customer may not show on the balance sheet, but it contributes handsomely to the bottom-line profit!

Probably the most important activity in developing these key relationship accounts is the development of a sound plan; the account plan. Unlike the overall sales plan, however, which will deal with groups of customers, each account plan (or 'key account plan') deals quite specifically with a single customer.

For each of these key accounts a unique plan should be developed, which matches (at least in its scope of content) the overall marketing plan. It should detail the specific objectives, which will be individually related to the customer's needs and wants. It should detail the activities which are planned to meet these objectives; and to build the 'relationship'.

If such a plan is produced internally within the selling organisation it will be a productive exercise. If it is produced in co-operation with the customer, so that the resulting plan becomes a shared plan, it may make a major contribution to the development of that business relationship; so that it becomes a genuine peer-to-peer relationship.

It is probably the most important single skill (apart from selling itself) required of a sales professional; and yet, perhaps typically, it is almost entirely neglected by sales trainers.

One factor, above all others, overshadows many aspects of selling; and it is a totally artificial one. It is, though, essential to describe it; for it often largely determines the nature of the buyer-seller relationship. This factor is the 'stereotype' of the 'salesman' For the rest of society the 'salesman' is often to be despised, or to be feared, or even to be pitied. This problem, of the poor opinion society holds of the sales 'profession', is beyond the scope of this book. But what is important is that many members of the sales profession themselves hold very similar views! The relationship as seen by them is aggressively competitive; a 'zero-sum game' where the sales professional can only win by the customer losing.

It is an environment in which the only contribution the sales professional has to make is the skilled use of techniques of deception. Yet, as we have seen, the role of manager - managing the totality of the interface with the customer - is probably the most critical of all, in terms of ultimate success for the organisation. The most productive approach to almost any sales force is to persuade them (by training or leadership) to switch from being cowboys to being relationship managers.

There is one special category of customers; those who control the distribution channels for the product or service. In many respects they need to be cosseted in exactly the same way as all the other customers I have been talking about. I will not expand upon this aspect, except to point out that their main 'product' requirements are likely to be quite simple (albeit very different to those of other customers); the maximisation of profit, and the minimisation of risk, from the business arising from your own organisation.

They are special, however, in that beyond their role as customers they also become, in effect, members of your sales-force! Your own sales will directly depend upon how efficiently they conduct their sales operations in general; and upon how well motivated they are to direct customers to your product or service in particular.

Managing distribution channels is, therefore, a very sophisticated process. It requires all the techniques needed to run your own sales-force, but at a distance! Two contrasting philosophies can help this process:

Rule #128 - PRIVATE DISBELIEF - your (senior) management must recognise exactly where the real organisational boundaries lie. In particular, they must always understand what motivates distributors and their staffs. They should not be seduced by proximity into assuming that the distributor REALLY is an extension of your own operations.

If you reward them with the status, and rights, of your own staff there is a chance that the distributors' staff will also take on at least some of the accompanying responsibilities.

It is too easy to react to the very close relationship with the distributors' staffs, and direct your business to meet their needs, rather than match the indirectly registered needs of those who pay the final bill - the customers of the distributors, who are the real buyers of the service or product.

Rule #130 - CUSTOMER SERVICE LEVELS - the 'product' should be available when and where the customer wants it. If it is not so available, an immediate sale may well be lost. More important, long term sales may also have been lost if the customer is forced to change to another brand, and then decides to stay with that brand.

One of the most important aspects of customer or client service, in terms of delivery of a product or service, is that

The percentage availability is described as the service level. It might seem that the simple answer would be to achieve 100% availability. The problem is that the cost of achieving these service levels rises very steeply as it approaches 100%;

There is a very clear trade-off here between customer service (level) and cost. Fortunately, the indications are that, in terms of demand generated, customers are not significantly affected by minor variations if there are generally high levels of availability;

There are, however, other elements of customer service level. Some of these relate to the time it takes to meet an order (where, unlike the situation described earlier, the product is not delivered 'ex-stock'). This is called the 'lead-time' (or sometimes the 'order cycle time'). Clearly, the shorter the lead-time the better the service.

A customer who has to arrange a number of other activities to mesh in with the delivery of the product will often prefer that the delivery date is certain, albeit at a later date, rather than it being uncertain at an earlier one (when the other elements of the customer's operation may be kept, unproductively - and usually very publicly, waiting until the delivery actually occurs!).

A subsidiary, but important, element is how long (the response time) it takes a customer to find out what is actually happening to the order!

Rule #131 - QUEUING - in the specific context of queues associated with provision of a service, David Maister[7] lists a number of 'proportions', the principles behind which have wider applicability;

"1: Unoccupied time feels longer than occupied time...

2: Preprocess waits feel longer than in-process waits...

3: Anxiety makes waits seem longer...

4: Uncertain waits are longer then known, finite waits...

5: Unexplained waits are longer than explained waits...

6: Unfair waits are longer than equitable waits...

7. The more valuable the service the longer the customer will wait...

8: Solo waits feel longer than group waits..."

I suspect his points about the psychology of queuing will probably tap a rich vein of your own personal experience! They are all reasonably well known principles, indeed almost obvious, yet how often have you recognised a management that has taken notice of them.

David Maister[8] also formulates two "Laws of Service". The first of these is expressed by the formula we looked at earlier: "Satisfaction equals perception minus expectation. If you expect a certain level of service and perceive the service received to be higher, you will be a satisfied customer. If you perceive this same level where you had expected a higher one, you will be disappointed and therefore a dissatisfied customer."

As explained earlier, the important point is that and both what is perceived and what is expected are psychological phenomena - not reality [and it is the relative level of service - related to expectations - which is important, not the absolute one]...

Rule #133 - THE SECOND LAW OF SERVICE - it is hard to play 'catch-up ball'. There is a halo effect created by early stages of any service encounter...the largest payoff may well occur in the earliest stages of the service encounter [a problem early in the provision of the service sours the whole process!]

Complaints are often treated as a nuisance by many organisations, and yet they have considerable value for a number of reasons;

1. Although there will always be a small proportion of 'frivolous complaints', a complaint usually highlights something which has gone wrong with a part of the overall marketing operation; usually the high quality, which should be a fundamental requirement for most organisation, has not been achieved. Whatever the reason, the sensible marketer will want to know exactly what has gone wrong - so that remedial actions may be taken.

2. The way a complaint is handled is often seen by customers, and their many contacts, as an acid-test of the true quality of support. What is more, it is also a powerful reminder to the organisation's own staff of just how important is quality.

3. Not least, customers who complain are usually loyal customers (those who are not loyal tend just to switch to another supplier), and will continue to be loyal (and valuable) customers - just so long as their complaint is handles well.

Rule #134 - ENCOURAGE COMPLAINTS - THE FIRST REQUIREMENT IS THAT COMPLAINTS SHOULD BE POSITIVELY ENCOURAGED.

The second requirement is that all complaints should be carefully handled by painstakingly controlled, and monitored, procedures.

The third, and most important requirement , is that the complaint should then be fully investigated, and the cause remedied.

The first requirement is that complaints should be positively encouraged. That is not the same as saying that the reasons for complaints should be encouraged. But, assuming that despite your best efforts the problems has occurred, you should put nothing in the way of any customer who wants to complain; and, indeed, positively encourage such complaints - since the main problem lies with the many more customers who do not complain (and instead change to another supplier) rather then the few who abuse the complaints system.

The second requirement is that all complaints should be carefully handled by painstakingly controlled, and monitored, procedures. Complaints must be handled well, and must be seen to be well handled; by the complainant, and by the organisation's own staff.

The third, and most important requirement , is that the complaint should then be fully investigated, and the cause remedied. Complaints are only symptoms. The disease needs to be cured! There may be an understandable temptation to overlook complaints until they reach a 'significant level' - but holding off until the complaints reach this 'pain level' usually means that they have already become damaging to the organisations' image. It is far better to assume that 'one complaint is too many'!

The reality in most organisations is very different. The number of complaints are minimised, not by remedying the reasons for them but by evading the complainants! The assumption is usually made, wrongly so, that complainants are 4rouble-makers; and have to be handled in a confrontational manner!

Most dissatisfied customers do not complain (a US survey[9] showed that 97% didn't!), but they do tell their friends (the same survey showed that 13% complained to more than 20 other people!).

Clearly, if it was not already obvious, any organisation should be highly motivated to make certain its customers are satisfied. Yet, in practice, remarkably few do so!

Rule #135 - SATISFACTION SURVEYS - it is essential that an organisation monitors the satisfaction level of its customers. This may be, all else failing, at the global level; as measured by market research. Preferably, though, it should be at the level of the individuals or groups.

IBM, at the peak of its success, every year conducted a survey of all its direct customers. The results were not just analysed to produce overall satisfaction )ndices, though that was done (and senior management viewed any deterioration with alarm), but they were also provided to field management so that they could rectify any individual problem situations - where the customer was dissatisfied with any aspect of the IBM service and the IBM representative (presumably in 96% of the occasions if the above results hold true in this field) did not realise this to be the case!

There are a number of advantages to conducting satisfaction surveys (particularly where any individual problems highlighted can be subsequently dealt with);

2. If they cover all customers, they allow the 96% of non-complainers to communicate their feelings; and vent their anger

3. They positively show, even the satisfied customers, that their supplier is interested in the customer, and their complaints - which is at least half way to satisfying those complainants

4. They help persuade the supplier's staff to take customer service more seriously.

The importance of very high standards of customer service is evidenced by two examples. The marketing philosophy of McDonalds, the world's largest food service organisation, is encapsulated in its motto "Q.S.C.& V." (Quality, Service, Cleanliness & Value). The standards, enforced somewhat quixotically (but memorably) on its franchisees and managers at the 'Hamburger University' in Elk Grove Village (Illinois), require that the customer receive a 'good tasting' hamburger in no more than five minutes, from a friendly host or hostess; in a spotlessly clean restaurant. The second example, Disneyland, also insists on spotless cleanliness, and on the customer being 'The Guest'. It is salutary to observe how few of the competitors in either of these fields manage the simple task of keeping their premises clean, let alone being able to think of their customers as 'guests'; where the terms used in the fairground trade (with which Disney competes, albeit at a very different level) usually see the customer as some form of victim ('pigeon', 'mark', 'punter' etc) - to be fleeced before the fair moves on!

Marketing is, by definition, primarily concerned with the world outside the organisation. On the other hand, if it is to optimise the use of the resources, it also has to be concerned with what lies inside the organisational perimeter. This is inner marketing.

Increasingly, indeed, the most valuable resource of any organisation (and particularly those in the service sector) is its people; and the skills they possess. In tapping this internal resource, so that the organisation can face up to its external environment, it turns out that many of the traditional tools of marketing can be used to great effect in the very important areas of internal communication and motivation; of harnessing and focusing this (people) resource to meet the objectives of the marketing plan..

Recently, such campaigns have tended to focus on Total Quality Management (TQM); on the basis that the overall quality that the customer perceives comes from every part of the organisation- from support and administration staff just as much as from the workers (or the robots) on the production lines. 'Inner marketing' is in many ways therefore the ultimate extension of TQM; in that it fixes 'quality' exclusively in terms of the marketing context (of what is important to the customer) for every employee.

In a similar vein, many organisations in the service sector, and not a few in the manufacturing sector, have 'customer service programmes'. These use many of the promotional devices of marketing - advertising, incentives, seminars etc - to persuade employees (particularly those in contact with customers) to adopt the correct attitude to those customers. Such campaigns have received a mixed response. The problems has often been that the management implementing them are themselves unconvinced of the message; and it is unrealistic, under these circumstances, to expect the employees to react more favourably than the management itself. Probably the most frequent shortcoming is that such campaigns are run as very short term programmes, as the flavour of the month; which everyone knows they can ignore, since the next month will be bound to bring a newer flavour still!

Implicit in this concept (which should not be confused with the internal market) is that all the aspects of marketing as a whole should be incorporated; in particular, that a 'dialogue' takes place - 'inner marketing' is as much about finding out what the employees want as persuading them to do what the organisation wants!

The first requirement, and the one which distinguishes it from almost all other 'customer service programmes', is some form of MARKETING RESEARCH; exactly as with any other marketing programme - but here conducted on the organisation's own employees! This should be used to determine where they stand, for example, in relation to their perception of the customer (Is the customer seen as friend or foe?) - and of the customer service programmes which are likely to be the main focus of the research (Does anyone do anything more than pay lip-service to them? Why?). More, as with any piece of sound research, it should also attempt to find out where employees might wish to stand in the future; exploring their attitudes and motivations (Do they really want to offer a good service? If not, why not? How can they be persuaded to change their views?). The outcome of this is most productively described as consensus, since this best incorporates the attitude of mind which should lie behind it - the search should be positively designed to find the outcomes, especially in terms of values, to which all the participants (in this context most importantly members of staff at all levels, but also the managers and customers who will also have to accept these) will be able to commit themselves.

Rule #138 - INTERNAL OPINION SURVEYS - internal research may have great benefits. Such 'opinion surveys' are remarkably effective devices for obtaining information on the 'inner market. If applied regularly to all staff, they are also remarkably good motivators and contributors to a positive culture.

One of IBM's most powerful tools, in developing its justly famed relationship with its staff, was the 'Opinion Survey'. Every two years, every employee in IBM took part in an anonymous survey of how they felt about IBM and what it was doing; as well as how they felt about their immediate management - which was, since the results were published, a remarkably powerful device for ensuring that managers took note of their subordinates opinions! The results were (very publicly) acted upon; to the benefit of the 'inner market' - not least because the employees (unlike those in most other organisations) recognised that IBM was listening to them. Unfortunately, remarkably few other managers use them.

Only with this basic information on employee attitudes (however derived) can the 'inner marketer' start to devise the programmes necessary to create the new attitudes, the conviction in the goals handed down to them, which will deliver the requisite service to the external customers.

The actions needed to achieve the end result follow the well trod path of any marketing campaign; although they are alien to much of human resource management. Even in the marketing context, it should be recognised that it may take far longer to achieve the desired results than in a traditional consumer marketing campaign - for the requirement frequently is to make fundamental shifts in attitude.

At the most basic level, the staff will need to understand what is expected of them; by their own management and, in particular, by their customers. It is remarkable how many 'improvements' in customer service are advertised to the customers but never explained to the employees who are to deliver them; let alone agreed with those employees. Beyond this, the essence of any marketing campaign, as with any military one, is that all the actions happen at the right time, and in the manner planned. The inner marketing campaign is essential (whether it is formally or informally implemented) to ensure this happens. How many times have you heard of, or even experienced, offers advertised by retailers which their branch staff deny exist!

One especially powerful technique lies at the heart of so-called Japanese techniques; and, indeed, at the heart of Toyota's success. This was developed by the American Philip Crosby, but adopted by the Japanese rather than the US corporations, as the eleventh step of his famous 14 step 'zero-defects' programme. In the original, as developed for the Pershing missile programme in the US, it was titled 'Error Cause Removal (ECR)'. This emminently forgettable title may be why it has been forgotten by the West! Toyota, however, retitled it - confusingly for the outside world - as their 'Suggestions Scheme'. Like the Western version, the idea is that any employee puts a suggestion into the nearest suggestion box as soon as he or she recognises a problem which needs solving; and they are then rewarded for this observation (in the case of Toyota, the company receives more than 2 million suggestions each year, and implements more than 90% of them). The crucial difference from the Western equivalent is that the employee is only required to identify the problem, and need not suggest a solution (which is the main thrust of Western schemes, and it is the solution there which justifies the payment). The problem then is passed to the relevant management, and it is their task to find a solution. To distinguish between the two, I call this process "Managed Suggestions".

Rule #138A - MANAGED SUGGESTIONS - this is simultaneously the simplest and the most powerful technique in inner marketing. Employees are merely required to submit their "suggestions" (their identification) of problems immediately they recognise them, and management then are required to solve them.

This may sound a trivial process, but it is usually identification of the problem (the correct question to ask) which is the most difficult part of problem solving. The Crosby approach directly addresses this difficulty, and ensures that the problem is captured immediately it is identified. This technique, orginally proposed for use in quality improvement, can be used in a wide range of situations (ranging from JIT to customer complaints). It is, at the same time, one of the simplest techniques (it could be implemented, in theory at least, in any company in a matter of days), and one of the most powerful.

The one inherent limitation is that it can be too successful too soon. It can pose impossible demands on managers who are unprepared to deal with the problems thus unerathed. How many managers could respond effectively to each worker under their control generating dozens of "suggestions" a year. That the benefit only comes after the manager has identified the solution is bad enough, as is the demoralisation of the managers faced with a massive backlog of suggestions, but the demoralisation of the workers whose suggestions are not being dealt with is even worse. Thus, in practice, this simple technique can only be used by an organisations which has already implemented many of the other techniques (typically those problem solving techniques used by the Japanese corporations) - and whose managers are already conditioned to meet its demands. Crosby deliberately waits until later in his overall programme, typically until more than a year after the start, to introduce it.

The most difficult of all, however, is the process of changing attitudes; of developing the necessary conviction. Staff who have been bound by the rigid rules of a bureaucracy, for example, will not suddenly become receptive to the concept that 'customer is always right' just because a memo from head office sates that this will be the case in future! The most important input from management at this stage is leadership. If senior management are believed to be highly committed (and very publicly so) to goals (and especially to values) which take account of the consensus views then the majority of staff are likely to be convinced by the validity of those goals. Thus, the first stage in effectively implementing the plans needed to reach the organisation's external marketing goals is to match these external goals to a realistic appreciation of what the inner market can (and is willing to) deliver. This is an essential step, but one which even so is taken by very few organisations! This balance, and the role of management, is graphically illustrated below:

But the process does not stop there, for the most important, but least well appreciated, aspect of 'inner marketing' is that it is a process of managing change; and the marketing department needs to adopt the role (consciously or not) of 'change agent'. This process should lead to a positive commitment by the staff to meeting the goals of the organisation in general and of customer service in particular. The process of bringing customer and staff expectations into alignment is illustrated below:

The important fact to note here is that the process also includes the lowering of customers' expectations, as experience brings home the truth of what they may realistically expect . In many situations, too many, it is the customers' expectations which are steadily adjusted downwards (without any improvement of the staff positions) until their view accords with the lower levels on offer. The dotted line shows what might be achieved with the application of inner marketing to positively improve the response rate of staff. The end result is that the final level of perception is significantly higher, potentially offering a major competitive advantage.

The techniques here may often be closer to those of education - and, indeed, may revolve around significant amounts of retraining. The service offered to customers, for instance, is in many cases only as good as the skills available to provide it; and those skills may, and usually do, need developing.

In the ultimate extension of 'inner marketing', Peters and Waterman[10] stress that the resulting 'culture' of an organisation (generally speaking the common values that its employees share - whether developed positively by management as suggested here or by default) can be a very important contributor to its success. Such 'culture ' can be even more important in determining what 'customer service' is provided. They conceptualise this cultural element as 'shared values' as I do - but they do not spell out, as I do, the very lengthy steps needed to achieve it.

The 'culture' of the company is often what conditions 'customer service'. IBM - as one supreme example - maintained a philosophy of 'customer service' throughout the whole company (applying to all employees) as its only marketing objective for more than half a century; with spectacularly successful results (and an equally spectacular disaster when it abandoned it). Both McDonalds and Disney have similarly strong cultures; and they show (not least in their spotlessly clean premises - but also in their bottom-line profits).

The problem of addressing the 'cultural dimension', even though this is an essential element which must be allowed for in any marketing operation, is that of time. Changes in the culture of an existing organisation may literally take years to be completed. If existing cultures are strong, and the changes are major, the process may take decades. Both IBM and the Japanese corporations, who probably have the strongest cultures of all, needed as much as fifteen years to fully develop all the detailed aspects of the new, and rich, cultures they were introducing. Culture is not, therefore, a topic to be taken lightly; though more minor changes (particularly those which 'complement' the existing culture - and characterise the earlier conviction and commitment stages) may be accepted more rapidly - but, even then, not in days!

Based on my experiences with IBM, which at its peak had the most successful culture of all, I postulated a number of overall management philosophies which can lead to outstanding corporate success, and which (in recognition of their origin in the example of IBM - albeit in its heyday rather than in its later fall from grace, following its wholesale abandonment of many of these precepts!) I christened the 'Philosophies I'. Although they are mainly concerned with Organisational Development (OD), I will briefly mention them here (now grouped under six main headings - for easier use in practice); since, in their impact upon the cultures, they have significant implications for marketing in such an organisation.

They fall into two categories. The first represents the legacy of paternalistic management practices, derived from IBM's earlier days. These were later copied by the Japanese, so they also lie at the heart of their management culture:

Within this category, as you can see, the most important - making up the first group - are probably those related to the culture itself - and these reflect many of the values of conviction marketing described earlier. The second group, though, relates much more to inner marketing; since the factors in it reflect the degree to which organisations recognise their intimate relationship with all their employees. To a degree all of these concepts are recognised by management thinkers (though are much less often put into practice by managers).

The second category, however, is little recognised by anyone outside of IBM - yet the factors this contains may be the most powerful of all (not least because of their uniqueness and distinctiveness, which leads to an especially strong, tight-knit, culture):

Of the four groups, the first is probably the most powerful; and the most neglected. It is paradoxical that the recognition of the power of the individual, which fuelled many of the political developments of the 1980s, was accompanied by many organisations (in the market-led environment which reflected this increased power of the individual) taking draconian steps to reduce the rights of their staff (and often in the name of these same 'market forces').

The middle two groups should be obvious developments of our times, and are the heart of the very fashionable 'Human Resource Strategies', but again the lessons seem not to have been genuinely accepted by many Western organisations. The final group reflects the obvious, and much reported fact, that the endemic change which is sweeping through organisations (including now, paradoxically, IBM itself) needs to be dealt with at a structural level not just at the tactical one - but once more there are relatively few organisations brave enough to act upon this.

Since the time when these two stages of philosophy held sway, IBM has experienced the 'catastrophic' downside of the cultural approach; and has abandoned many of these philosophies in the process (those indicated with an asterisk, at least). This has led me to add a new series - Philosophies III - which indicates the pitfalls awaiting the exponents of strong culture/conviction marketing:

A successful culture can be immensely strong, but one that becomes unsuccessful (even is, as with IBM, only relative to its own standards) and loses confidence (and, as a result, many of the resources needed to maintain standards) can rapidly as dramatic a failure; following the path prescribed by catastrophe theory.

When the paradigm (described in a later chapter) changes, which is usually the trigger for the loss of confidence, all the cultural landmarks disappear - and the organisation's leaders lose their sense of direction. False data can then be disastrous, for - with no direction - the leaders may seize upon it; and use it to reinforce their prevailing Groupthink (also described later).

It may then even forget its core competences (as IBM did) and ignore its customers (as IBM also did); even though these were central to the dying culture.

[1] Chartered Institute of Marketing (1989) Money the Motivator Marketing Business, Issue 8 December 1989

[2] Moriarty, Rowland T & Moran, Ursula (1990) Managing Hybrid Marketing Systems Harvard Business Review Nov-Dec 1990

[3] McDonald, Malcolm H B (1984) Marketing Plans Heinemann

[4] Miller, Robert B, Heiman, Stephen E and Tuleja, Tad ((1985) Strategic Selling William Morrow

[5] Miller, Robert B, Heiman, Stephen E and Tuleja, Tad ((1985) Strategic Selling William Morrow

[6] Levitt, Theodore (1983) After the Sale is Over Harvard Business Review, September/October 1983

[7] D H Maister, The psychology of waiting lines, Managing Services: Marketing, Operations and Human Resources (Prentice-Hall, 1988)

[8] D H Maister, The psychology of waiting lines, Managing Services: Marketing, Operations and Human Resources (Prentice-Hall, 1988)

[9] K Albrecht and R Zemke, Service America (Dow-Jones Irwin, 1985)

[10] T J Peters and R H Waterman, In Search of Excellence (Harper & Row, 1982)