W7 Analysis Assignment
Directions
All posts are expected to demonstrate the use of proper grammar and be free of typographical and spelling errors.
Initial Post
o. Describe 3 selling strategies needed to achieve the desired customer relationship.
o. Respond to every aspect of the discussion prompt with originality.
o. Demonstrate exceptional familiarity with the text and topics being covered, and utilize text/PowerPoint references.
o Your initial post should consist of at least 300 words
Principles of Marketing 4.0
Jeff Tanner and Mary Anne Raymond
©FlatWorld 2018
1
PUBLISHED BY:
FLATWORLD
©2018 BY FLATWORLD. ALL RIGHTS RESERVED. YOUR USE OF THIS WORK IS SUBJECT TO THE LICENSE AGREEMENT AVAILABLE.
NO PART OF THIS WORK MAY BE USED, MODIFIED, OR REPRODUCED IN ANY FORM BY ANY MEANS EXCEPT AS EXPRESSLY PERMITTED UNDER THE LICENSING AGREEMENT.
©FlatWorld 2018
CHAPTER 13
PROFESSIONAL SELLING
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LEARNING OBJECTIVES
Recognize the role professional selling plays in society and in firms’ marketing strategies.
Identify the different types of sales positions.
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WHAT SALESPEOPLE DO
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CREATE VALUE FOR THEIR FIRMS’ CUSTOMERS
MANAGE RELATIONSHIPS
RELAY CUSTOMER AND MARKET INFORMATION BACK TO THEIR ORGANIZATIONS
SALESPEOPLE’S RESPONSIBILITIES
The salesperson has a fiduciary responsibility to the company and an ethical responsibility to the buyer.
At times, however, the two responsibilities conflict with one another.
For example, what should a salesperson do if the product meets only most of a buyer’s needs, while a competitor’s product is a perfect fit?
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CREATING VALUE
Salespeople sell—that’s the bulk of the value they deliver to their employers.
Salespeople aren’t appropriate channels for companies in all situations.
Salespeople can be the best channel to reach customers in situations requiring:
Adaptation
Customer education
Other value-adding activities
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MANAGING RELATIONSHIPS
Sales representatives have to decide which accounts they have the best shot at winning and which are the most lucrative.
Salespeople recognize that business is not about making friends, but about making and retaining customers.
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GETTING INFORMATION
Salespeople are boundary spanners: they operate outside the boundaries of the firm and in the field.
Salespeople interact directly with customers and, in so doing, gather a great deal of useful information about their needs.
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TYPES OF SALES POSITIONS
Using activities as a basis, there are four basic types of salespeople: missionary salespeople, trade salespeople, prospectors, and account managers.
In some discussions, you’ll hear that there are three types:
Order getters
Order takers
Sales support
The four we describe in this book are all types of order getters; that is, they actively seek to make sales by calling on customers.
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MISSIONARY SALESPEOPLE
A missionary salesperson calls on people who make decisions about products but don’t actually buy them.
While they call on individuals, the relationship is business-to-business.
There are salespeople who also work with “market influencers.”
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TRADE SALESPEOPLE
SOMEONE WHO CALLS ON RETAILERS AND HELPS THEM DISPLAY, ADVERTISE, AND SELL PRODUCTS TO CONSUMERS
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PROSPECTORS
Prospectors often knock on a lot of doors and make a lot of phone calls, which is called cold calling.
SALESPERSON WHOSE PRIMARY FUNCTION IS TO FIND PROSPECTS, OR POTENTIAL CUSTOMERS
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ACCOUNT MANAGERS
Account managers also have to identify lead users.
Account managers work closely with these lead users and build relationships across both their companies so that the two organizations can innovate together.
RESPONSIBLE FOR ONGOING BUSINESS WITH A CUSTOMER WHO USES A PRODUCT
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OTHER TYPES
Order takers and sales support do not actively solicit business.
Order takers include:
Retail sales clerks
Salespeople who sell for distributors of products like plumbing supplies or electrical products who sell to plumbers and electricians
Sales support work with salespeople to help make a sale and to take care of the customer after the sale.
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KEY TAKEAWAYS
Salespeople act as representatives for other people, including employees who work in other parts of their companies.
Salespeople create value for their customers, manage relationships, and gather information for their firms.
There are four types of salespeople:
Missionary salespeople
Trade salespeople
Prospectors
Account managers
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LEARNING OBJECTIVES
Understand the types of selling relationships that firms seek.
Be able to select the selling strategy needed to achieve the desired customer relationship.
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CUSTOMER RELATIONSHIPS
Serving one large customer can often be more profitable than serving several smaller customers.
Marketers also want stronger relationships with customers who are innovative, such as lead users.
Salespeople are tasked with maintaining relationships with market influencers who are not their customers.
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TYPES OF SALES RELATIONSHIPS
Transactional relationships: each sale is a separate exchange and the two parties have little or no interest in maintaining an ongoing relationship.
Functional relationships: limited, ongoing relationships that develop when a buyer continues to purchase a product from a seller out of habit, as long as her needs are met.
Affiliative selling relationships: more likely to occur when the buyer needs a significant amount of expertise from the seller and trust is an issue.
Strategic Partnership: buyer and seller commit time and money to expand “the pie” for both parties.
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THE RELATIONSHIP CONTINUUM
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SELLING STRATEGIES
Script-based or canned selling: Salespeople memorize and deliver sales pitches verbatim.
Needs-satisfaction selling: asking questions to identify a buyer’s problems and needs, and then tailoring a sales pitch to satisfy those needs.
Consultative selling: the seller uses special expertise to solve a complex problem in order to create a somewhat customized solution.
Strategic-partner selling: both parties invest resources and share their expertise with each other to create solutions that jointly grow one another’s businesses.
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CHOOSING THE RIGHT SALES STRATEGY
The sales-strategy types and relationship types discussed don’t always perfectly match up.
Different strategies might be more appropriate at different times.
The appropriateness of each method depends on how the buyer wants to buy, and what information the buyer needs to make a good decision.
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THE TYPICAL SALES PROCESS
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PRE-APPROACH AND PLANNING
A salesperson may use a variety of resources to find the right person to call:
LinkedIn
Google
Financial databases (Standard & Poor’s)
Internal data
Such extensive pre-call planning doesn’t always happen, although a lot can be accomplished through judicious use of web-based resources.
In this stage, the salesperson is attempting to convince the buyer to spend time exploring the possibility of a purchase.
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NEEDS IDENTIFICATION
In complex situations, many questions are asked.
These questions will follow the SPIN outline or something similar.
Highly complex situations may require that questions be asked of many people in the buying organization.
In simpler situations, needs may not vary so a canned presentation can be used. Then, instead of identifying needs, needs are simply listed as solutions are described.
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PRESENTATION
Shows how the offering satisfies the needs identified earlier.
One approach to presenting solutions uses statements called FEBAs.
FEBA stands for feature, evidence, benefit, and agreement.
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OBJECTIONS
Concerns or reasons not to buy raised by the prospect, and can occur at any time.
A prospect may object in the approach, for example, saying there isn’t enough time available for a sales call or nothing is needed right now.
Or, during the presentation, a buyer may not like a particular feature.
Salespeople should probe to find out if the objection represents a misunderstanding or a hidden need.
When all the objections are resolved to the buyer’s satisfaction, the salesperson should ask for the sale (close).
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CLOSING
A request for a decision or commitment from the buyer.
There are different types of closes. Some of these include:
Direct request
Minor point
Summary
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KEY TAKEAWAYS
Some buyers and sellers are more interested in building strong relationships with one another than others.
The four types of relationships between buyers and sellers are transactional, functional, affiliative, and strategic. The four basic sales strategies salespeople use are script-based selling, needs-satisfaction selling, consultative selling, and strategic-partner selling.
Different strategies can be used with in different types of relationships. For example, the same questioning techniques used in needs-satisfaction selling might be used in relationships characterized by consultative selling and strategic-partner selling.
The sales process used to sell products is generally the same regardless of the selling strategy used. However, the strategy chosen will depend on the stage the seller is focusing on. For example, if the problem is a new one that requires a customized solution, the salesperson and buyer are likely to spend more time in the needs identification stage. Consequently, a needs-satisfaction strategy or consultation strategy is likely to be used.
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LEARNING OBJECTIVES
Describe the sales cycle.
Understand the selling metrics that salespeople use.
Understand the selling metrics that sales managers and executives use.
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THE SALES CYCLE
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THE SALES CYCLE
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LEADS
Contact information about someone who might be interested in the salesperson’s product
SUSPECTS
A person or organization that has an interest in an offering, but it is too early to tell what or if they are going to buy.
PROSPECTS
Someone with the budget, authority, need, and time (BANT) to make a purchase and will buy such a product of the type the salesperson is selling soon.
CUSTOMER
The person decided to buy the salesperson’s product and became a customer.
METRICS USED BY SALESPEOPLE
The key metric that salespeople are evaluated upon is the revenues they generate.
Conversion ratios: measure how good a salesperson is at moving customers from one stage in the selling cycle to the next.
Activity goals: number of sales calls of each type a representative has to be make in a certain period of time.
Win-loss analysis: an “after the battle” review of how well a salesperson performed given the opportunities she faced.
A bonus is paid at the end of a period of time based on the total amount sold, while a commission is typically thought of as a payment for each sale.
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ACTIVITIES AND CONVERSIONS DRIVING SALES
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METRICS USED BY SALES MANAGERS
Sales managers are interested in the same metrics as the salesperson, plus others.
Sales managers look at other measures such as:
Market share
Sales by product
Sales by customer type
Sales per salesperson
Time is yet another element that sales managers look at.
Customer satisfaction is another important metric.
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KEY TAKEAWAYS
The sales cycle is a basic unit of measurement indicating how long it takes to close a sale. Salespeople examine their performance at each stage of the sales cycle in order to identify specific areas for improvement.
A salesperson who shortens the cycle is able to generate more revenue with the same amount of effort. Salespeople also track their conversion ratios to identify which stages of the sales cycle they need to work on.
Sales executives track the same metrics as individual salespeople but at the aggregate level. If many salespeople are struggling with one stage of the sales cycle, for example, then additional training or marketing may be needed, or a new strategy is necessary.
Sales executives also look at their firm’s sales relative to their forecasts in order to spot possible trends. A firm’s sales trends affect many of the other decisions the company’s executives have to make, including manufacturing and output decisions. Sales managers also have to manage their company’s selling costs. Sales managers are often responsible for a firm’s sales and its profit levels.
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LEARNING OBJECTIVES
Compare and contrast common ethical challenges facing salespeople and sales managers.
Describe steps companies take to ensure ethical sales activities.
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ETHICAL ISSUES FOR SALESPEOPLE
Many of the most common situations you could face as a salesperson involve issues such as:
A customer asks for information about one of their competitors, who happens to be one of your customers.
Deciding how much to spend on holiday season gifts for your customers.
A buyer asks for something special, which you could easily provide, but aren’t supposed to give away.
Deciding to play golf on a nice day, since no one knows if you are actually at work or not.
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COMPANY SAFEGUARDS
The first step is to develop policies, based on the company’s mission and values. Good ethical policies:
List appropriate and inappropriate behaviors
Describe the underlying principle
A good second step is to train all salespeople and sales managers on the policy for several reasons:
To secure greater support and application of the policy.
Should a salesperson engage in an unethical or illegal activity, the company is protected.
The company must also enforce the policy and have procedures in place that make enforcement possible.
Codes of ethics, policies, and procedures affect all employees. They are not created just because of salespeople.
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KEY TAKEAWAYS
Salespeople are, for the most part, caring, ethical professionals. They do face unique ethical challenges because of their job, including how to handle unethical requests from customers and making sure that they know and follow all company policies for interacting with customers.
American salespeople have the added constraint that what’s illegal in the United States is illegal for them in other countries because of the Foreign Corrupt Practices Act, even if the behavior in question is acceptable to those countries’ laws and practices.
Sales managers have all the usual management concerns, such as fair hiring practices. According to the Federal Sentencing Guidelines, managers also have to develop policies and practices that codify ethical behaviors, train salespeople on the ethics policies, and ensure that the policies are followed. In addition, sales managers have to be aware of laws such as the Universal Commercial Code and others that govern sales transactions.
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LEARNING OBJECTIVES
Identify the ways in which the marketing function supports the sales function.
Describe how the sales group of a company can support its marketing efforts.
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MARKETING SHORTENS THE SALES CYCLE
A company’s marketing activities include:
Creating advertising and promotional campaigns
Participating in trade shows
Preparing collateral (printed or digital material salespeople use to support their message).
Lead management: the process of identifying and qualifying leads in order to grow new business.
Closed-loop lead management systems: information systems that are able to track leads all the way from the point at which the marketer identifies them to when they are closed.
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CLOSED-LOOP MANAGEMENT
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MARKETING IMPROVES CONVERSION RATIOS
Lead Scoring: a process by which marketing personnel rate the leads to indicate whether a lead is hot (ready to buy now), warm (going to buy soon), or cold (interested but no immediate plans to buy).
Marketing personnel can also improve salespeople’s conversions by providing materials that help buyers make good decisions.
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WHAT SALES DOES FOR MARKETING
Salespeople talk to customers every day. They are the “eyes and ears” of their companies and know what customers want.
Salespeople communicate market feedback. They are responsible for voicing their customers’ ideas and concerns to other members of the organization.
Salespeople monitor the competition. They also track the actions of their competitors, what customers buy, and enter the information into their firms’ CRM systems.
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KEY TAKEAWAYS
Marketing personnel support a firm’s sales force by shortening the sales cycle and improving conversions. The sales cycle is shortened whenever a marketing activity or marketing communication either eliminates a prospect’s need to take a step in the sales cycle or speeds up the stages in the cycle. Marketing managers also create printed and digital materials called collateral designed to help persuade buyers.
Lead management and lead scoring are two other ways in which marketing professionals help their firm’s salespeople. If a closed-loop lead management is used, marketing managers can determine what tactics and messages works best and make sound marketing investments.
In turn, salespeople support marketing personnel by communicating their customers’ needs and ideas back to them. Salespeople are also the first to spot the actions of competing firms, including which companies and products are the strongest competitors. The marketing department then uses the information to create better marketing messages, sales strategies, offerings, or a combination of the three.
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LEARNING OBJECTIVES
Identify the primary types of outsourcing salespeople.
Characterize the strengths and weaknesses of outsourcing sales groups.
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TYPES OF OURSOURCED SALESPEOPLE
Companies can outsource all or part of the sales cycle.
Independent agents: salespeople who are not employees of the company.
They set their own hours.
They determine their own activities.
They are paid on a straight commission basis.
Independent agents often sell competing products.
Manufacturer’s representatives: agents that sell a manufacturer’s product.
They don’t sell competing products.
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ADVANTAGES AND DISADVANTAGES OF OUTSOURCING
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KEY TAKEAWAYS
Outsourcing the sales function can be done through distributors, independent agents, and manufacturers’ representatives, as well as other types of sales organizations. The entire sales cycle can be outsourced or only parts of it. Outsourcing can cost less and requires less investment than a company-employed sales force. Moreover, independent agents, distributors, and manufacturers’ representatives often have established relationships that make it easier for a company to enter and penetrate new markets.
Outsourcing the sales function(s) means that a company will lose some control over its sales activities. To counteract that loss of control, companies try to devise attractive compensation schemes, as well as effective marketing strategies for the independent sales organizations and people with whom they work. Companies also hire sales managers to manage the relationships with the outsourced sales staff.
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Case Analysis and Questions
Reagan Technologies
Mike Reagan and his brother, Marc, were justifiably proud of their company. What they began as a paint distributor some forty years ago, fresh out of college, had grown into one of the largest specialty painting contractors in the U.S., and likely the world. What their company does is paint ships, which may not sound difficult, but when one considers that every surface on a ship, including some in some very tight places, has to be painted and repainted over time, it becomes easy to see that your average painter wouldn’t be able to do the job. In fact, the company has the best safety record and is known for developing new, safer methods for ship painting. As a result, the company employed 1,200 people, 1,100 of whom were highly trained specialists in marine painting. Now, as Mike just turned seventy and Marc wasn’t far behind, they were discussing the company’s future.
“We need to find another business,” Mike was telling Marc over coffee one morning. “Something that will flourish when times are not so good for shipbuilding. And we need to find it quickly so we can help get it going before we turn this company over to Mike Junior and Addie.” Addie is Marc’s daughter, and the only one of his children who had shown an interest in the family business. She worked with her dad in taking care of the back office functions (accounting, finance, IT, etc.) while Mike Junior worked with his dad to oversee the painting operations.
One truth about shipbuilding is that the industry is highly cyclical—governments don’t build navies during peace, for example. Another truth about shipbuilding is that there is no sales force, because all jobs are put out for bid. Government jobs don’t require a salesperson, just a good proposal, and Reagan Technologies had a solid proposal-writing team. But even with that strong team, the company’s revenue would plummet when the U.S. Navy wasn’t building new ships.
Marc replied, “I think I have an idea. I got a call last week from Shore Insulation and Fireproofing. They want to rent our scaffolds from us on the U.S.S. Bankston job when they do the insulation. And they’re not the only ones. I’ve had several calls from companies in the area asking if we rent scaffolding. There’s a lot of companies in construction, maintenance, and building repair that rent scaffolding.”
Mike had a quizzical look on his face as he said, “But we don’t know anything about that business.”
“We know how to put up and take down scaffolding safely, and safety is a big issue. With our safety record, we should be able to win a lot of business,” Marc responded. “Plus, this should be relatively steady income, in addition to the painting business. With our locations in the shipyards all across the Gulf and up and down the east coast, we should be able to serve just about anything east of the Mississippi River.”
“Yeah, but how do we get the business? We’ll need salespeople because right now, you and I are the only ones in this company with sales experience, and I don’t have time for that!”
Discussion Questions
1. What would marketing do for the new division? What would its role be, and what would you consider success for marketing?
2.
What type of sales position would they need, and what are several sales strategies they might could
Principles of Marketing 4.0
Jeff Tanner and Mary Anne Raymond
©FlatWorld 2018
1
PUBLISHED BY:
FLATWORLD
©2018 BY FLATWORLD. ALL RIGHTS RESERVED. YOUR USE OF THIS WORK IS SUBJECT TO THE LICENSE AGREEMENT AVAILABLE.
NO PART OF THIS WORK MAY BE USED, MODIFIED, OR REPRODUCED IN ANY FORM BY ANY MEANS EXCEPT AS EXPRESSLY PERMITTED UNDER THE LICENSING AGREEMENT.
©FlatWorld 2018
CHAPTER 14
Customer Satisfaction, Loyalty, and Empowerment
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CUSTOMER EMPOWERMENT
PROVIDING TOOLS THAT ENABLE CUSTOMERS TO TAKE CONTROL OR INFLUENCE MARKETING
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LEARNING OBJECTIVES
Understand strategies involving online and personal forms of influencer marketing.
Relate influencer marketing to other forms of social communities and marketing strategies.
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CUSTOMER COMMUNITIES
Word of Mouth: the passing of information and opinions verbally.
Word of mouth has a powerful influence on purchasing decisions.
Buzz: refers to the amount of word of mouth going on in a market.
Companies try to create buzz about their products by:
Sending press releases
Holding events
Offering free samples
Writing blogs
Releasing podcasts.
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CUSTOMER COMMUNITIES
Some companies consider customer service to be a marketing channel and train their customer service representatives to identify sales opportunities and pitch products.
AOL
Some airlines
Banks
Other companies consider customer service to be a marketing channel only for generating positive word of mouth.
Do a great job with tough customers and encourage a positive review on a website.
This latter perspective recognizes that when customers want service, they don’t want to be sold, but it also recognizes that empowered customers can help market a product.
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Influencer marketing
Targeting people known to influence others.
community
Social group that centers its attention on a particular brand or product category.
Social network
Another term for a community.
IDENTIFYING MEMBERS OF INFLUENCER PANELS
Characteristic Definition
Active Influencer Willing to tell others, but more important, others listen and act on the influencer’s opinion.
Interested Has a greater intrinsic interest in the product category than the average user.
Heavy User Actually uses or consumes the offering regularly, preferably more than the average user.
Loyal Sticks to one brand when it works. Note, however, that this category could include someone who isn’t loyal because the right offering meeting his or her needs hasn’t yet been created.
Lead User Willing to try new products and offer feedback. In some instances, modifies an offering to suit their own needs; you want lead users to suggest the modifications so you can see how and why they do so.
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HOW TO FIND INFLUENCERS
They have to be actively recruited.
Ask a customer to take a survey.
Send random surveys to identify good panel participants.
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THREE QUESTIONS TO ASK BEFORE ACTIVATING A PANEL
What results are expected from the influencer panel?
How much are the panel members willing to do?
What’s in it for the panel members?
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SOCIAL MEDIA
Social Networking Sites: Facebook and LinkedIn are used to create communities.
Viral Marketing: The spread of the company’s message (like a computer virus) through the community.
Blogs: A form of online communication that help spread viral marketing messages.
Social media: A catchall phrase for the online channels of communication that build communities
Social media includes social networking sites, blogs, podcasts, wikis, vlogs (video blogs), and other Internet-based applications that enable consumers to contribute content.
Social media spending for marketing purposes doubled in 2008 and continued to rise through 2011 despite the poor economy. In fact, Forester, a respected research company, estimated spending to top over $3 billion in 2014!
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KEY TAKEAWAYS
Customer communities form around social networks, which marketers can use to both promote offerings and gather market information.
Companies create influencer panels that provide insight into effective offerings and provide word of mouth.
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LEARNING OBJECTIVES
Understand the value of customer loyalty.
Distinguish attitudinal loyalty from behavioral loyalty.
Describe the components of a successful loyalty program.
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LOYALTY MANAGEMENT
Early research on loyalty showed that loyal customers were:
Less expensive to market to,
More willing to pay a premium for a particular brand,
More willing to try new products under the brand name,
More likely to recommend the brand to their friends,
More willing to overlook a problem related to the brand.
Loyalty has two dimensions
Behavioral loyalty: The customer buys the product regularly and does not respond to competitors’ offerings.
Attitudinal loyalty: The degree to which the customer prefers or likes the brand.
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LOYALTY PROGRAMS
Data collected from loyalty programs can be useful for designing and improving the company’s offerings.
Cross-Promotion: A method in which two or more groups act together to reach potential customers.
MARKETING EFFORTS THAT REWARD A PERSON OR ORGANIZATION FOR FREQUENT PURCHASES AND THE CONSUMPTION OF OFFERINGS
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POSITIVE EFFECTS OF LOYALTY PROGRAMS
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CRITERIA FOR SUCCESSFUL LOYALTY PROGRAMS
Good Performance by a company.
Responsiveness by a company.
Shared identity among participants.
Clear benefits.
Community development.
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KEY TAKEAWAYS
Customer loyalty is both behavioral and attitudinal. Habitual purchases are a form of behavioral loyalty.
Cause-related marketing can foster attitudinal loyalty among a company’s community of customers, as can loyalty programs.
Loyalty programs can have four positive effects:
Increase the longevity, or lifetime value, of customers
Block competitors’ marketing efforts
Encourage customers to buy related offerings
Accelerate their purchases
Loyalty programs don’t automatically create loyalty among customers, though. Loyalty is created when a company performs well, responds to its customers, identifies its loyal customers, makes the benefits of its loyalty program transparent (obvious), and when the firm builds a community among its customers.
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LEARNING OBJECTIVES
Understand satisfaction and satisfaction strategies.
Design a customer satisfaction measurement system.
Describe complaint management strategies.
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CUSTOMER SATISFACTION
Improving customer satisfaction is a goal sought by many businesses.
Customer satisfaction scores have been relatively stable for the past few years.
A company’s performance on key factors is critical both in terms of the loyalty and satisfaction it generates among its customers.
FEELING THAT A PERSON EXPERIENCES WHEN AN OFFERING MEETS THEIR EXPECTATIONS
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CUSTOMER SATISFACTION STRATEGIES
Two critical ways to improve customer satisfaction
Establish appropriate expectations in the minds of customers.
Deliver on those expectations.
Another customer satisfaction strategy involves offering customers warranties and guarantees
Postpurchase dissonance: A form of dissatisfaction; is more likely to occur when an expensive product is purchased, the buyer purchases it infrequently and has little experience with it and there is a perception that it is a high-risk purchase.
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MEASURING CUSTOMER SATISFACTION
Effective customer satisfaction measures have several components:
Customer’s expectations
Whether the organization performed well enough to meet them
Degree of satisfaction
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COMPLAINT MANAGEMENT STRATEGIES
Verbal terrorists: people who use every Internet site possible to bash a company.
Net promoter score: the number of recommenders an offering has minus the number of complainers.
When a complaint is made, the process for responding to it is as important as the outcome.
A company that outsources its service nonetheless has to make sure that customer complaints are handled as diligently as possible so that customers are not left with a poor impression.
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HANDLING THE COMPLAINT PROCESS
Listen carefully to the complaint.
Acknowledge the customer’s feelings.
Determine the root cause of the problem.
Offer a solution.
Gain agreement on the solution and communicate the process of resolution.
Follow up, if appropriate.
Record the complaint and resolution.
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OFFERING FAILURE
Failures can be attributed to one (or more) of the following four gaps:
The communication gap: Overstating the offering’s performance level, thereby creating unrealistic expectations on the part of customers.
The knowledge gap: Not understanding the customer’s expectations or needs, which then leads a company to create a product that disappoints the customer.
The standards gap: Setting performance standards that are too low despite what is known about the customers’ requirements.
The delivery gap: Failing to meet the performance standards established for an offering.
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KEY TAKEAWAYS
Measuring customer satisfaction is an important element of customer empowerment. But satisfaction alone is a minimal level of acceptable performance. It means that the customer’s expectations were met.
Getting positive word of mouth requires exceeding those expectations. To minimize the number of complaints a company needs an effective process of both handling complaints and understanding their causes so any problems can be corrected.
Because the complaint process itself is subject to complaints, monitoring your firm’s customer satisfaction levels also means you must monitor how satisfied customers are with your company’s complaint handling system.
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LEARNING OBJECTIVES
Apply general ethical principles and concepts to online marketing.
Explain the laws that regulate online and other types of marketing.
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ETHICS
Sugging: Selling under a guise or phony front. While sugging isn’t illegal, it isn’t fair.
Caveat emptor: “let the buyer beware” or “it’s your own fault if you buy it and it doesn’t work!”
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LEGAL REQUIREMENTS
Currently, there are no regulations regarding sugging.
The CAN-SPAM Act prohibits the use of e-mail, faxes, and other technology to randomly push a message to a potential consumer.
Spam: unwanted commercial emails similar to junk mail.
Permission marketing: a term that was created to suggest that marketers should always ask for permission to sell or to offer buyers marketing messages.
Because of trust issues and the overuse of permission marketing, many consumers create dump accounts, or e-mail addresses they use whenever they need to register for something online.
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PRIVACY LAWS
U.S. privacy laws apply to both Internet marketing and other forms of commerce.
The Gramm-Leach-Bliley Act of 1999 requires financial institutions to provide written notice of their privacy policies.
Privacy policies: statements regarding how a company will use and protect a consumer’s private data.
Privacy policies and privacy laws apply to both business customers and individual consumers.
The Uniform Commercial Code (UCC): a group of laws that govern commercial practices in the United States.
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WARRANTY
Expressed warranty: an oral or written statement regarding how the product should perform and the remedies available to the consumer in the event the offering fails.
Implied warranty: an obligation for the seller to provide an offering of at least average quality, beyond any written statements.
A PROMISE BY THE SELLER THAT AN OFFERING WILL PERFORM AS THE SELLER SAID IT WOULD
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PROTECTING YOUR COMPANY
As marketer, you have an obligation to protect your company from consumers who might not have honest intentions.
A bot, which is short for robot, is a kind of program that performs automatic functions online.
Phishing: soliciting personal information in order to steal an identity and use it to fraudulently generate cash.
It is very difficult to protect against phishing, so making sure your customer contact policies protect your customers can also protect them against phishing from someone pretending to be you or your company.
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KEY TAKEAWAYS
Sugging is selling under any phony type of front. It includes posting fake reviews about products online. Sugging damages a seller’s trust among buyers and should never be done.
U.S. laws govern how products can be marketed, both those that are sold electronically and through more traditional channels.
Companies must have permission before they can send you spam, and they have to tell you how they will gather and use your personal information.
Warranties—expressed and implied—are binding no matter how companies deliver them.
Good marketers anticipate less-than-honest activities by individuals and take steps to prevent them.
Bots are online robots that some people use to take advantage of marketers.
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