MARKETING MATERIAL

9086 MARKETING MANAGER 5 - SALES TALK

We have found out what the customer wants, and what we have to offer; hopefully matching these wants. So now let's now see how we tell the customers about what we have for them. But, first, let me explain one further marketing concept you may come across; the marketing mix or 4 Ps. We have seen how complex the 'product' package may be, but many marketers like to integrate all the aspects of the brand, including promotion; the subject of this chapter and the next one. This integrated package is, overall, referred to as the marketing mix, and the term the 4 Ps is usually offered as a simple (I would claim, as you will see later, simplistic) guide to the elements of this. These four Ps are: Product and Price, which we have already looked at, Promotion, which we are about to explore, and Place. This last category may offer a clue as to why I, and many other marketers, are dubious about the value of this approach. This rather oddball title of 'Place' is included simply because it has a 'P' at the beginning! In fact it is a catch-all which sweeps up what is left-over by a rather inadequate set of categories. In addition, the 4 Ps do not work well for services, so the predictable answer was to add another three: People, Process, Physical Evidence. But enough of this frivolity. Like so many marketing gimmicks this approach confuses and distracts more than it helps. So ignore it!

Back to the real world, and to promotion in general. This term covers a very wide range of ways we can talk to customers. The easiest of these, and probably the most commonly used, is selling face-to-face. Your sales personnel meet with the customers, in their offices for industrial customers or in your shop for retail business, and talk to them face to face. But there are whole range of other means of communication; for instance, at the other extreme, there is mass advertising. Where 'selling' involves just two people - the salesperson and the buyer - talking face to face, advertising talks to many - perhaps many millions - as a mass audience. This parallels the way that, earlier, we listened to large numbers with market research; though, here, we cannot just talk to a sample of them - we must reach each and every one. Clearly the two extremes demand very different solutions. As I explained at the beginning of the book, this is not from choice - the perfect solution, in almost all cases, would be to send out a sales professional with every can of baked beans (though a lot of committed advertising folk would still have you believe that their commercials are better than any salesperson!). But, simply because - with literally millions of customers - suppliers to the mass markets simply cannot afford face-to-face selling! Advertising is their only option, which is why they have developed it to an art-form; in their commercials on television and their advertisements in newspapers and magazines.

Somewhere in between the two extremes sits direct marketing; in the early days direct mail, the junk-mail that landed on your doormat, but now the sophisticated promise of computerised database marketing! And there are others, from the immediacy of sales promotion, usually 'money-off' to bring in very short-term business, to the long-term investment in public relations, building the image of the organisation through editorial comment in the media.

All of this is often referred to as the promotion(al) mix, which is a useful concept since it implies a carefully planned, integrated, mix of the separate elements to optimise the overall impact; rather than focusing exclusively on one or another - selling, say, for industrial goods, or advertising, for consumer goods. Of course certain of these elements will dominate in any marketing campaign, few consumer goods marketers would assume that they could only use sales personnel and few industrial CEOs would be happy to see all their marketing effort concentrated on advertising. But in almost all cases a mix is used; sales teams persuade the supermarket owners to stock their mass-consumer goods, and merchandisers hand out samples to the consumers; and leads, new prospects, are generated for sales teams by trade press advertising or mail-shots.

There all sorts of clever ways of looking at the promotional mix; but in essence that is all it is - the most productive mix of the various forms of promotion open to you! So let's move along and look at some of the individual elements. We will start with selling, since - for most of us - this employs simple concepts that are easier to understand.

SELLING

Selling has traditionally been seen as somewhat different to the other elements in the promotional mix, but that is a mistake - except for one thing. So let's get that genuine difference out of the way now. Selling is inherently about managing people, the customers at one extreme and the sales personnel (by their sales managers) on the other. So people management skills are very important. This contrasts with the other elements where (impersonal ) resource management skills, and sometimes project management skills, are demanded; the consumer marketing manager is judged by how effectively he or she deploys the mass communications resources available to them.

CUSTOMER (ACCOUNT) MANAGEMENT

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, much of the sales professional's role is actually concerned with management. The sales professional is typically solely responsible for his or her territory. 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 also conventionally assumed that sales professionals do not manage people; and, indeed as mentioned earlier, very few do actually have formal responsibility for subordinates. Yet, as you can see from the diagram above, 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!

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 crucial 'goodwill' element of an organisation's work. This demands a great deal of skill; and this is also a role which contains many of the key elements of management in general - and is one from which other managers, perhaps including yourself, could learn some lessons (particularly about communication with other people).

ACTIVITY

Try and spend a day meeting customers with one of your organisation's sales personnel. This will not be easy to arrange, for most sales managers guard their fiefdoms more closely than Fort Knox protects its gold reserves, but, if you can flatter your way through their defences, it will give you an invaluable insight into what makes marketing in general, and selling in particular, tick.

TERRITORY MANAGEMENT

The starting point is usually the salesperson's responsibility for their own small business - their 'territory'. For the past century or so, giving the salesperson (within limits) total responsibility for all activities taking place within that territory has provided the basic building block for customer management by that salesperson, and for sales management of that salesperson. Classically they have been geographically defined, not least because it is easy to define them by a simple line on a map, but they could be by industry or by product type; IBM, for instance, used all three of these. Most recently, as the emphasis on relationship management has developed, they have tended to be nominated (lists of) customers. Whatever the approach, sales people have a defined territory; for which they bear total responsibility, and over which they have almost total authority. Though most sales managers would no doubt challenge this view, I have always found it useful to think of them operating on their territory in much the same way as the CEO operates within the overall organisation.

ACTIVITY

How is the territory of the salesperson (with whom you are hopefully spending a day) defined? How do they then organise their work on it?

CUSTOMERS AND PROSPECTS

As we have seen, customers are, almost without exception, more productive than prospects; and indeed are much more productive than many sales professionals (or their management) allow for. And, if 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 own selling process. In such customers the organisation doesn't have to invest in the whole process of new business recruitment.

Yet too many sales personnel devote relatively less time to customers than to their favourite prospects. They spend their time, unproductively, looking for new business, when they should be defending, and growing, their customer base. Instead, the rule should be to treat all such (marginal) prospects as outcasts.

So the first priority of any sales professional must be to allocate their resources to the existing customers; and, indeed, to differentiate 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 we talked about when we looked at the 80:20 Rule. These investments must be protected; almost at any cost. 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".

At a lower level of priority, the key skill comes in being able to separate out the sheep from the goats amongst the prospects; those which form the ten percent or so of prospects who will bring in at least 50 percent of the new business. No matter how much marginal prospects plead, no matter how they befriend and flatter you, productive sales professionals have to be ruthless and refuse to fritter away resource on unproductive areas. So the true professional must insist that prospects (and customers) prove their good intentions. It is the reverse of what you might expect, but professional selling is as much about managing (and indeed rationing) scarce resources - and walking away from losers - as it is about winning friends and influencing people.

ACTIVITY

How do tour sales personnel allocate their time between the various categories? Are they investing in productive customers, or frittering their efforts away on worthless new prospects?

PEOPLE MANAGEMENT

As we have seen, though, contact with the customer is not limited to that formally undertaken by sales personnel. There are a whole range of other people involved, on both sides. Thus, the salesperson may run a team of support personnel - most likely covering technical support but maybe also promotional and admin support - with the all the (indirect) people and resource management this implies. Above all, the salesperson is (directly) responsible for managing the interface with the customer in general - which involves many others (from the telephone operators through to the workers on the production lines).

ACTIVITY

What contact does your own group have with the organisation's customers? How well are these contacts managed?

TALKING

I have said that this chapter is about 'talking' - telling the customer what you have got to offer - but, as you might by now expect, I will once emphasis that even at this late stage it remains a two-way communication. That is an important lesson in selling, and it is also an important lesson in marketing in general; especially as it is an unexpected one, people think that once they have the sales message all they need to do is shout it as loudly as they can! That couldn't be further from the truth. Even if you are advertising your product you must seek feedback; is the advertising working, is the product (not least as conveyed by the adverts) really what the customers want, how could you do it all better?

But it is especially true for sales personnel, even in the talking phase, if I can call it that, you should probably spend more time listening. After all, the great benefit of selling face to face, denied to mass marketers, is that it is a dialogue! At each stage you should listen to your customer - and this applies just as much to those you deal with in your own job - to first of all establish that they have understood you (and, of course, that you have understood them) and then that they agree with what you are saying. Ultimately, you need to (genuinely) agree with them that what you are offering meets their needs; and, more subtly, that no competitor can meet those needs even better! So, listen, listen, listen!

Classically, sales campaigns have been split into a number of parts - often depicted by sales trainers as happening within just the one sales call needed to get the order. The most important of these parts are the two we have already looked at, listening (finding out what the customer wants) and talking (telling them what you have). I have already hinted at the next, and final, stage, that of agreement; though in sales parlance it is usually referred to as the 'close'. This assumes mythic  proportions for many sales personnel, and is the one part of the overall process which departs from the concepts I have been describing, of dialogue and positive relationships; which in essence focuses entirely on helping the customer.

Before describing this stage, I will, however, throw in one rather strange element of sales training; that of 'objection handling'. This is a set of 'pure' sales skills which encapsulates much of the traditional selling; and, as such, graphically illustrates many of the self-inflicted wounds the 'profession' imposed on itself. It is supposed to enable the top salesmen to get round the objections (to placing the business) of prospects. Regrettably, to achieve this end, it demands much the same skills that a con-artist employs, thus creating the poor image which has haunted salesmen for decades. There is one further problem; there is almost no evidence that most customers actually deploy such objections - they are either confused (in which case you need to help them) or are certain your offer is not for them (in which case you should politely move on to something you can sell). I throw in this information, because - wrong as such techniques may be - they can still loom large in the minds of many sales people. One of my more subversive pleasures was to teach my own customers about these 'objection handling' skills; and then watch them destroy my competitors when they used them!

But back to the close, which is supposedly the subject of yet another set of  pure sales skills. In this case there is some justification, not for the customer - these so-called 'skills' are just as ineffective in persuading them to place an order if they don't want to - but to boost the salesperson's own confidence. Indeed, this is often the one aspect which differentiates really successful sales people from their run of the mill colleagues. The difference at this final stage is that it is no longer sufficient just to be a nice guy and help the customer. At the end of the day you have to positively ask for the order. This is a much more aggressive act; sometimes described, with some truth, as 'going for the jugular'. This is quite difficult for most sales people; indeed, most of them hate this part of selling. Not merely is there the switch from the helpful to the (discretely) aggressive, but their whole future seems to be about to be decided in a matter of minutes! They may often have been working on the sale for months, maybe even years, and then - in a matter of minutes - they will find out whether all that work has been wasted; and whether they have been a success or failure, whether they will be able to face their management, and their families. It is not surprising that the most frequent failure of sales professionals is to avoid asking for the order! But it has to be asked for, and most of the sales techniques - although claiming to influence the customer -  are actually designed to make it easier for the salesperson to take that step and actually ask. Most sales managers quite simply make the threat of what will happen if they don't ask an even more fearful prospect for the salesperson!

This aspect, the element of personal 'danger', is very different to all other forms of promotion. As a marketing manager you never have the same level of fear when you commercials are first aired. Even if they ultimately prove to be a fiasco, the news is brought to you in small increments.

ACTIVITY

How do your sales people go about 'closing' their sales? How do they get over the psychological difficulties?

SALES SUPPORT

Where - as usually happens - a sales campaign runs over a number of months, there can be a wide range of promotional activities involved; the 'promotional mix' is much richer than most people realise. The first stage is the generation of new 'leads' - new business from existing customers or totally new prospects; and the use of mail-shots (or sometimes trade-press advertising) to generate these is fairly normal - and we will look at this later in the chapter, as we will the telesales operations which are often used to follow-up these initial enquiries. Then there are the seminars used to 'process' these qualified leads further, to screen them to see whether they are worth committing face-to-face sales personnel - and at the same time to start a gentle process of persuasion. Prospects will come to a 'neutral' seminar, where they do not feel threatened, even though will studiously avoid any sales contact. All of this leads up to that first call by a sales professional, confident that there is business to be had. All of these steps take time and money, but - as an overall programme of developing new business - they offer a much more productive approach than immediately committing valuable sales personnel - whose time costs far more than most people realise (perhaps as much several hundred pounds for each call).

SALES CALLS

If these preliminaries have taken place, by the time you get into the first face-to-face call you should find that much of the ground-work has already been done. To a degree the positive attitudes are already there - a great confidence booster for sale personnel, and one that can almost carry them through to the close. Even so, despite all that some sales trainers claim, it usually takes a number of calls , often over a number of months, to get the business; and - again against the popular image - much of selling demands a great deal of patience (not least for sales managers). But, whatever the timescales, it is certainly true that the more calls that are made, and more specifically the greater the number of prospects contacted, the greater will be the sales. This is often described in sales circles as the "numbers game".

Thus, reverting to the preliminaries, for every 1000 mail-shots sent out at the start of a campaign, 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.

MAILSHOTS          [10,000]

TELESALES           [1,000]

SEMINARS              [100]

SALES CALLS          [10]

CUSTOMER               [1]

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 numbers of prospects to them into sound business, is just sheer hard work. The more mail-shots sent out, the more tele-selling 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.

On the other hand, one of the secrets of successful selling is based on exactly the opposite proposition; that of discarding unproductive prospects as soon as possible; the good old 80:20 Rule. This is why screening is so important at each level. Surprisingly, selling is a quite intensive investment process; so you need to weed out any prospects that will not justify such an investment before they waste too much of your time. The essence of good selling, in this context, is knowing when to say no; the very reverse of what sales people are usually taught!

ACTIVITY

Which of these aspects of sales support does your organisation engage in? How effectively does it use them? How are they used to filter out unproductive prospects?

RELATIONSHIP MANAGEMENT

Selling has traditionally been seen as a 'zero-sum game', where each of the participants can gain only at the expense of the other. This is now seen to be at odds with the trust needed to build relationships with customers of all types. Indeed,  it is now widely recognised 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. At long last, an increasing number of organisations have, indeed, come to see the relationship as one of interdependence; sometimes described as 'relationship management' - once more managing the investment in the customer, but in this case the investment in the direct relationship involved. It is not, though, the personal relationship between the salesperson and the buyer, though that will make its own contribution, but that between the supplier organisations and the buying organisation. If you rely on personal relationships they can all too quickly follow a salesperson to a competitor!

Probably the most important activity in developing these key relationships is the development of a sound 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. 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. Account management, in its most general sense covering prospects as well as customers, is the essence of professional salesmanship. Customer account management, in particular, is the epitome of this.

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.

ACTIVITY

Does your organisation use account management practices? How effectively does it use them?

SALES PROMOTION

This used to be associated with 'closing', in particular with price reductions as a final incentive to place the order; the sort of approach you have no doubt been on the receiving end of -  '...for today only, I can offer you a special deal on price'! Such devices are now just as frequently used in mass marketing. They are, however, very different to the promotional techniques which have been described so far, in terms of investment, since sales promotions are essentially a short-term activities which can for once be considered an operating cost rather than an investment. They are normally used to stimulate some specific action in the short term, typically offering a powerful additional factor added to the competitive balance to sway current sales in the supplier's favour; and to bring forward sales, or occasionally to generate extra sales. The main benefit, therefore, must usually be the (short term) increase in sales; and the great majority of sales promotions are designed to boost current sales (for a short period of time). But sales promotions can also be targeted to achieve other objectives - to increase repeat purchases, to recruit specific competitors' customers etc. Indeed, it is sometimes argued that even by offering 15% more product for the same price - a typical device (which is much cheaper for the supplier to provide than the seemingly equivalent 15% off the price) - can also produce sales over the longer term by increasing usage; but that is a dubious claim, as are most in this field, backed up by almost no evidence.

The key characteristic of sales promotions is that almost all their effect is immediate. There is rarely any lasting increase in sales and many of the costs, not least the management/sales force time and effort, are typically not accounted for in the reported direct costs. Worse, they can conflict with the main brand messages and confuse the customer as to what the image really is; is it the high quality 'product' shown in the adverts, or is it the cut-price one in the promotion. Indeed, perhaps the most obvious disadvantage, which applies to many types of promotion, is that they in effect offer a price-cut; and this persuades users to expect a lower price in future - as well as, at the same time, potentially damaging any element of 'quality' in the image.

Their greatest practical disadvantage, though, may be their lack of effectiveness; research has show that for many, probably most, promotions the cost of selling an pounds-worth of sales is greater than that one pound received; in other words they actually make a loss, even in the short term! As such, the regular use of sales promotions on a large scale must be questioned. As a general device for promoting brands they are expensive, ineffective and often damaging. The short term sales increases, which undoubtedly do result, are usually bought at the expense of the long term investment in the brand and may eventually lead to its demise.

Just occasionally, promotions may be used very effectively to achieve certain limited objectives. In particular, some are used to induce trial purchases; the classic example being 'money-off coupons' distributed house to house (or in the press), or even samples of the product, at the time of the launch of a new product.

The major problem is that, despite all the above facts, which are well-known and documented, despite the proven ineffectiveness of almost all sales promotions, despite the fact that less than a tenth of markets are price sensitive, in recent years they have come to take more than half of all promotional spending! There surely can be only one reason for this, they generate the sort of the short-term business demanded by companies for whom short-termism is the dominant strategy. The only saving grace of sales promotions is that, being obviously short-term, the price-cutting which they represent may not lead to a long-term price-war; which can be even more debilitating.

ACTIVITY

Does your organisation use sales promotions, especially cut-price offers? How effective are they? Do you (or senior management) know whether they are cost-effective, or possibly even make a loss?

That is all I am going to say about sales promotions, which you may think is all that needs to be said; but remember just how much effort and money is wasted on them! My advice is simple, no matter what anyone else says, do not use sales promotions!

DIRECT MARKETING

As yet, direct marketing is rather a strange animal; lying somewhere between the interaction available with face-to-face selling and the cost-effectiveness of mass market advertising. Thus, it aims to have a type of individual relationship with the customer, but at a distance. Classically, it has been the world of direct mail; and it is indicative of the problems this has faced that it is popularly known as junk mail! Even so, let us examine how it operates for, as we will see, it may become rather more important in future. In the traditional form you simply mail a tightly targeted group of people with the message you want to broadcast, or in the new terminology to narrowcast (which implies a much more tightly defined audience), and then, maybe, you invite them to reply and start a (mail) dialogue.

The elements of this process, which also form the basis of the more recent development we will look at later, are:

The List - the first requirement is that you have a list of the people who are likely to form your target audience, the potential buyers for your product or service. To start with, you will probably have to buy other people's lists; there are mailing houses which specialise in almost every sort of list, from CEOs of multinationals down to trainspotters. But, best of all, is your own list - painstakingly built up over the years - which incorporates all that you have learnt about your customers.

The Letter - then you have something which advertisements cannot aspire to, a personal letter, the writing of which is though a type of art-form; which demands a great deal of skill. Some experts swear by the short letter and some say that the long one is best (and a P.S. at the bottom best of all!). It also demands considerable effort in polishing its every word. Best of all it can be personalised, addressed to the individual; and simply putting their name on it increases the response by a factor of two or three. Then, ideally, the content should be (computer) written with their known needs in mind; but this rarely happens, just adding that you know the town they live in fools nobody.

The Inserts - then it is likely that you will put in the range of advertising material you would like to use in any advertising campaign. The only advice here is to limit it to one or two items; stuffing the envelope full of material - as most companies do - merely confuses the recipient and almost guarantees it will end in the waste-basket, and the essence of direct mail is to find the greatest number of excuses to mail follow-up letters.

The Reply-Paid Card - most of all should you want to get a dialogue started, so you want them to communicate with you - at least with their name and address. Again, personalisation of the reply-paid card - so they only have to put it in the post - wins a much higher response rate.

The Dialogue - the dividends come when you are able to continue a dialogue about the range of products you have to offer. The clubs, record and book (and, of course, Readers Digest), typically make the best (most sophisticated) use of this in general; but the mail order houses - which depend entirely on this for their business - are the biggest (albeit unsophisticated) users.

There are lots of books written about direct mail, but beware the over-enthusiasm of most of these; use your common-sense for, as in all aspects of popular marketing literature, just because their authors believe what they are saying doesn't mean it is true!

ACTIVITY

Try and get a sample of your organisation's mail-shot material. How effective is it for you, and how effective do think it might be with customers?

DATABASE MARKETING

It has always been what you do with the information you gather, previously through direct mail, which has been important. That is why the record and book clubs have been so successful; they have a very clear idea of what they will use it for - and use it again and again. Now, though, two major developments have greatly expanded the opportunities; and forcibly brought it to the attention of mainstream marketers who have, for too long, dismissed direct mail as an inferior medium. The advent of computers means that the technical ability to manipulate the data - held on the new databases (hence 'database marketing') - so that the interaction with the consumer (so far typically, once more, through mail) can be really personalised to take account of all you know about his of her needs.

But this has still had relatively little impact. The real growth in potential has come about because of the rapidly growing number of large databases. Some of these have come about because the organisations have started to recognise the value of their own customer details - as have the banks - or have started to recruit users to their own clubs - as has, for instance, Heinz . Most important of all, perhaps, the supermarkets have started clubs. These may have, so far, simply offered a promotional device to lock in customers (with a rather feeble, but still effective, 1% discount). But the real gold is in the data they are collecting - in 'data warehouses' - about the detailed buying habits of their millions of club members.

The (major) problem turns out to be accessing ('mining') this data in a meaningful way. It is easy enough to put data into the warehouses, and it is easy enough to get data out on a single individual and then (manually) use that data; but how do you do this on the mass scale needed to make this database marketing viable? So far, apart from the traditional users of direct mail, the only well-known example has been Sears which used the data it held on buyers of electrical goods to sell those without warranties separate warranties. But that is hardly a sophisticated example of database marketing; and the more typical example of my 83 year-old mother who is continually sent invitations to join her bank's student loan scheme suggests that we still have a long way to go! The supermarket owners are working hard on the problem, their pre-occupation with the world of higher mathematics (one source of ideas) came as something of a shock to me (when compared with the very mundane problems the previous generation of their managers faced). So, eventually, a way of positively building on the individual relationships with their customers will be found - and that massive potential will be tapped (not least, perhaps, so that their staff can call you by your own name as the corner-shop owners used to do in a more leisurely age) - but don't expect it this century!

ACTIVITY

Try to find out what active 'databases' of information your organisation holds about its customers. What use is made of them? How effective is this use? What more could be done? What 'databases' - in the broadest sense - does your own group hold? Wow well does it maintain, and use, them?

THE INTERNET

This has recently become a fashionable topic in marketing and, once more, it probably will eventually become genuinely important; but, also once more, it will not displace the rest of marketing until the next century. In any case, it follows most of the existing rules of marketing, and almost all of those of direct mail. It will just allow the 'mail' to be much more efficient, and much more interactive. The problems will be for the advertising executives, those who have previously dismissed direct mail as worthless - who will now need to learn a whole set of new tricks!

CUSTOMER SATISFACTION

I will finish this chapter on 'selling' by looking at perhaps the most important element of relationship marketing in general, and that is customer satisfaction. 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! Thus, as a first step, 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 indices, 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.

There are a number of important advantages arising from the use of satisfaction surveys (particularly where any individual problems highlighted can be subsequently dealt with);

1. Like complaints, they indicate where problems are emerging; for rectification before they threaten the organisation's reputation

2. If they cover all customers, they allow the 96% of people who simply do not non-complain but still feel aggrieved about these problems, to communicate their feelings; and vent their anger

3. They positively show, even the satisfied customers, that their supplier is interested in them.

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

 On the other hand, the aspect of customer or client service recognised by most organisations is simply that of customer service levels - the 'product' should be available when and where the customer wants it; or a sale may be lost.  There is a very clear trade-off here between customer service (level) and cost - though, fortunately, it seems that customers are not significantly affected by minor variations, if there are generally high levels of availability.

But customer satisfaction is often much more complex than you might expect. Thus, its effective level can be expressed by the surprising formula: Satisfaction equals perception minus expectation - which takes into account what you feel it should be. Thus, 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. 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. So give good service, but above all do not promise more than you can deliver! This is a lesson which too few marketers recognise, but which - perhaps fortunately for them - their cynical customers have learned well; they already discount much of the hype in advertising/

ACTIVITY

How does your organisation monitor customer satisfaction? How seriously does it take any results? How satisfied are your organisation's customers? How satisfied are those of your own group?

INNER MARKETING

This is a suitable time to talk about one unusual aspect of the subject. Marketing is, by definition, primarily concerned with the world outside the organisation. On the other hand, if it is to maximise customer satisfaction and at the same time 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'.

Inner marketing is a powerful concept. It says quite simply that employees should be 'marketed' to in exactly the same way as customers; after all, it is now widely recognised that they both groups are key 'stakeholders'.  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! Such internal research may have great benefits; '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

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.

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. 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.

ACTIVITY

How does your organisation treat you? This is probably one answer which will come easily - you will likely have discussed it may times with your colleagues! How satisfied are you, and how does this affect your attitude to your work? What does the organisation need to do to better earn your loyalty? What do you need to do to earn the loyalty of your own group?

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