Personal Selling: Two Approaches

Personal Selling: Two Approaches

Many American companies do not put nearly enough effort into direct, personal communication. Japanese success in displacing the US as Saudi Arabia’s leading supplier is instructive. Japanese exporters and small teams to meet with Saudi importers: Japanese exporters; they go to Saudi workshops, travel to secondary towns, and meet with sub-agents. The Americans, on the other hand, invite all their Saudi agents together for a luncheon, do not have private meetings, do not get their hands dirty, and never travel to secondary towns—they tend to stick to the three market centers. Saudis complain that US effort is misdirected: American personnel devote infinitesimal detail to making advance arrangements for visiting executives, going so far as to specify rooms overlooking a certain view from the hotel.

Japanese firms supplement their direct, personal efforts with heavy local advertising. They use gifts generously in product introductions, and warrantees on Japanese consumer electronics range up to three years. To carry out this business, Japanese trading companies have large staffs of professional international marketers who have been cultivated since graduation from a Japanese international trading university, schooled in English and Arabic, and rotated worldwide as international trading specialists.

Compared to most other cultures, particularly non-Western. Americans are extraordinarily preoccupied with the tangible aspects of a product. They round up all their sales agents and give a product presentation instead of putting their energies into the more important component of international marketing—people. In American and only a few other countries it is normal to do business from a distance, between strangers, by mail or telephone.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

External Sources of Information

Much of the information for the firm’s MIS comes from external data—data generated outside the firm. This information is of two types—primary and secondary. Primary data consist of data being collected for the first time during a research study. In contrast, secondary data are previously published information. Although the researcher will typically exhaust all likely sources of secondary data before deciding to begin the collection of primary data, both types offer specific benefits for the decision maker.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The Characteristics of Diversity

When managers speak of diverse workforces, they typically mean differences in gender and race. While gender and race are important characteristics of diversity, others are also important. We can divide these differences into primary and secondary characteristics of diversity. Age, gender, race, ethnicity, abilities, and sexual orientation represent primary characteristics of diversity which are inborn and cannot be changed. Eight secondary characteristics of diversity—work, background, income, marital status, military enterprise, religious beliefs, geographic location, parental status, and education—which can be changed. We acquire, change, and discard them as we progress through our lives.

Defining characteristics of diversity as either primary or secondary enhances our understanding, but we must remember that each person is defined by the interrelation of all characteristics. In dealing with diversity in the workforce, managers must consider the complete person’s differences.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Changing Company’s Culture

A short list of mechanisms leaders can use to establish, embed, and reinforce organizational culture. There are five:

1. Make it clear to your employees what you pay attention to, measure, and control.
2. React appropriately to critical incidents and organizational crises.
3. Deliberately role model, teach, and coach the values you want to emphasize.
4. Communicate your priorities by the way you allocate rewards and status.
5. Make your HR procedures and criteria consistent with the values you espouse.

Don’t stop there. Use secondary mechanisms—such as redesigning physical space—to further reinforce the desired cultural changes. These secondary mechanisms are just that secondary, because they work only if they are consistent with the five primary mechanisms:

1. What leaders pay attention to, measure, and control
2. Leader reactions to critical incidents and organizational crises
3. Deliberate role modeling, teaching and coaching
4. Criteria for allocation of rewards and status
5. Criteria for recruitment, selection, promotion, retirement, and communication.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Customer Retention

Most companies spend a majority of their time, energy, and resources chasing new business. While it is important to find new customers to replace lost business, grow the enterprise, and expand into new markets, this goal should be secondary in importance to the main objective – keep your customers and enhance customer relationships. Customers leave service organizations primarily due to service reasons, but it is important to realize that these issues are controllable from the firm’s perspective.

Emphasize employee retention and customer retention in business. Service companies must retain the best personnel to win and keep good customers (realize that the average company loses about half of its employees in 4 years). It’s impossible to build a loyal bank of customers without a loyal employee base. Note that:

• On average US corporations lose half of their customers in 5 years.
• A typical company has a customer defection rate of 10 to 30 percent per year.
• Raising the customer retention rate by 5 percent can increase the value of an average customer (lifetime profits) by 25 to 100 percent.
• Lexus has repurchase rates more than 20 percent higher than Infiniti. While Lexus only accounts for 3 percent of Toyota’s sales, it contributes 30 percent toward their profits.

Invest at least 75 percent of your marketing budget on customer retention and relationship marketing activities. Research by American Management Association has demonstrated that it costs five times more to get a new customer than keep an existing one. The key to customer retention is customer satisfaction. Satisfied customers stay loyal longer, talk favorably about the organization, pay less attention to the competition, are less price sensitive, offer service ideas to the organization, and cost less to serve than new customers.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Corporation and its Stakeholders

The people, groups, and organizations that interact with the corporation and have an interest in its performance are its stakeholders. Those most closely and directly involved with a business are its primary stakeholders; those who are indirectly connected are secondary stakeholders.

Stakeholders can exercise their economic, political, and other powers in ways that benefit or challenge the organization. Stakeholders may also act independently or create coalitions to influence the company.

Six key forces are affecting the business-society relationship: strategic refocusing and restructuring of businesses; changing ethical expectations and public values; global economic change; a global trend toward rethinking the role of government; ecological and natural resource concerns; and the transformational role of technology.

To deal effectively with globalization, ecological concerns, and ethical issues, a corporate strategy must take into account the interests, needs, and expectations of all of the company’s stakeholders. Companies should have a strategy that combines business goals and broad social interests.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Planning a Research Strategy

If you plan your research strategy carefully, the whole project will flow smoothly. Follow these steps:

1. Work out a schedule and budget for the project that requires the research. When is the deliverable—the document or the presentation—due? Do you have a budget for phone calls, database, or travel to libraries or other sites?

2. Visualize the deliverable. What kind of document will you need to deliver: a proposal, a report, a Website? What kind of oral presentation will you need to deliver?

3. Determine what information will need to be part of that deliverable. Draft an outline of the contents, focusing on the kinds of information that readers will expect to see in each part. For instance, if you are going to make a presentation to your supervisors about the use of e-mail in your company, your audience will expect specific information about the number of e-mails written and received by company employees, as well as the amount of time employees spend reading and writing it.

4. Determine what information you still need to acquire. Make a list of the pieces of information you don’t have. For instance, for the e-mail presentation, you might realize that you have anecdotal information about employee use of e-mail, but you don’t have any specifics.

5. Create questions you need to answer. Make a list of questions, such as the following:

1. 1. How many e-mails are written each day in our company?
   2. How many people receive each mail?
   3. How much server space is devoted to e-mails?
   4. How much time do people in each department spend writing and reading e-mail?

Writing the questions in a list forces you to think carefully about your topic. One question suggests another, and soon you have a lengthy list that you need to answer.

6. Conduct secondary research. For the e-mail presentation, you want to find out about e-mail usage in organizations similar to yours and what policies these organizations are implementing. You can find this information in journal articles and from Web-based sources, such as online journals, discussion groups, and bulletin boards.

7. Conduct primary research. You can answer some of your questions by consulting company records, by interviewing experts (such as the people in the Information Technology department in your company), and by conducting surveys and interviews of representative employees.

8. Evaluate your information. Once you have your information, you need to evaluate its quality: is it accurate, comprehensive, unbiased, and current?

9. Do more research. If the information you have acquired doesn’t sufficiently answer your questions, do more research. And, if you have thought of additional questions that need to be answered, do more research. When do you stop doing research? You will stop only when you think you have enough high-quality information to create the deliverable. For this reason, you will need to establish and stick to a schedule that will allow for multiple phases of research.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The Group and the Team

When interacting in a common cause, people can become a cohesive group. Understanding one another as individuals, being consciously sensitive to one another, and knowing how to aapt to individual peculiarities are what make a functioning group that will hold together. Common regard and the psychological benefits that group members derive from the association make group activity desirable and reasonable to achieve. Such a group, however, is not a team.

 A team is built primarily on the technical capabilities of its members working in pursuit of specific goals, only secondarily on attraction among the members as individuals.. the members of a team must be able to tolerate one another enough to work closely together. Beyond this, all the members must be committed to a common goal and the same set of procedures for achieving that goal.

 An athletic team does not wqin a game because the bunbers like to be together. It wins because it plays smart, knows how to play the game better than the opposition, avoids unnecessary errors, and pulls together as a coordinated unit. Camaraderie may grow out of mutual respect for one another’s abilities, but this is usually the result, not the purpose, of the team. Most certainly it is not the mechanism that makes the team succeed. The overall goal of a team is to win, and every member keeps this firmly in mind. But when you analyze how a game is won, you discover that it happens because all the players know what to do and how to coordinate their efforts.

 My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Customer Retention Program

To develop an effective customer retention (CR) program, organization can follow this five-step process:

1. Determine your current CR rate. It is surprising how few companies know the percentage of customers that leave (the defection rate) or the percentage of customers that they are able to retain annually (the retention rate). There are many ways to measure customer retention. Choosing an appropriate measure provides a starting point for assessing a firm’s success in keeping customers.
2. Analyze the defection problem. This is a three-pronged attack. First, we must identify disloyal customers. Second we need to understand why they left. There are six types of defectors. Customers go elsewhere because of lower price, superior products, better service, alternative technologies, market changes (they move or go bankrupt), and “political” considerations; (switching motives) can also provide insight here. Third, strategies must be developed to overcome the non-loyal purchasing behavior.
3. Establish a new CR objective. Let’s assume that your company is currently retaining 75% of its customers. A realistic goal may be to improve client retention annually by at least 5%, to 80%, and to keep 90% of your clients within 5 years. Customer-retention objectives should be based on organizational cabalities (strengths, weaknesses, resources, etc.), customer and competitive analyses, and benchmarking with the industry or sector, comparable firms, and high performing units in your company.
4. Invest in targeted CR plan to enhance customer loyalty. The cost (potential lifetime value) of a single lost customer can be substantial. This is magnified exponentially when we realize the overall annual cost of lost business.
5. Evaluate the success of the CR program. As an iterative process, the final phase in designing a solid customer retention plan is to ensure that it is working. Careful scrutiny is required to assess the program’s impact on keeping existing customers. Upgrading current customer relationships may be a secondary business objective. At this point, we gather new information to learn to what extent our CR rate improved. We may need to revisit our benchmarks and further probe isolated causes of defection. CR strategies and tactics will be closely analyzed to determine which methods worked best and those that had little or no impact on keeping customers.

 My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight