How organizations can leverage commercial success through utilization of the characteristics of modern selling
Conduct an in-depth analysis of how global organizations can leverage commercial success through the utilization of the characteristics of modern selling.
Support each theory with real organization example. Where real organization examples are not available, you may hypothesize.
This part of the paper is to analyze how global organizations can leverage commercial success through the utilization of the characteristics of modern selling. The requirements for a salesforce have completely changed as only presentational and closing skills in the highly competitive world are not sufficient and salespeople have to possess a wide range of skills and be able to apply characteristics of modern selling. Nowadays consumers are better educated and more sophisticated. Salaries have increased continuously in the past years and therefore consumers are able to use their spending power to allocate between an increasingly wide range of product and services. Too many companies own a superior product and efficient production and extensive promotion so that they must be able to offer to customers more than this to increase their chance of success, customer needs must be placed at the very center of business planning (Jobber and Lancaster 2015).
1.1 Modern selling characteristics
This chapter describes and analyses the modern selling characteristics that effective salespeople need to understand in order to tackle their jobs.
1.1.1 Customer retention and deletion
In regards to customer retention and deletion, according to the Pareto Principle, companies find that 80 percent of their sales come from 20 percent of their customers. This indicates that it is vital to dedicate the most effort to retaining existing high volume, high potential, and highly profitable customers. (The Pareto Principle)
Customer retention is generally defined as the percentage of long-term clients of a company and it plays a vital role for the company’s success as the loyal clients are likely to spend more as they are already familiar with the product, it reduces advertisement cost and the current customers are a bridge to new potential customers through references that can be found in companies like Booking.com that offers a reward in form of credit if you refer a friend and that might be very motivating for some of the existing customers and therefore brings new business to the organization.
On the other hand, short time clients might purchase product only once and will never buy it again, for example website such as Groupon where companies can offer discounted products or services for a certain period to attract new customers, however, some people just purchase for the low price, but would never pay the full price or return again. According to Bain & Company, it is six to seven times more costly to acquire a new customer than to retain an existing one. That is the main reason why the retention of current customers is really important. In order to retain customers, a company can provide discounts to long-term clients to show them appreciation for their loyalty. For instance, the Boots Advantage card offers to to cover the cost of a desirable product to permanent customers once they collect enough points. Companies might use customer survey in order to measure customer satisfaction and identify what will contribute to customer retention.
Loyal customers are arguably the most important factor in achieving business success and increasing customer loyalty can be achieved by keeping it personal and always following up when for instance ASOS sends email after the purchase to encourage the customers to ask them to share their opinion about the item. Key Account Management plays a vital role in retention as it not just about selling but it is focused to create the everlasting business relationships with the key customers. According to the Harvard Business Review, customer satisfaction increases 20% within a few years of starting a key account management program. Profits and revenue, meanwhile, can increase by 15%.
In retail banking if an ordinary customer has a query or issue they might be directed to solve their problem online or to call a helpline, however highly potential customer would be served directly by a Specialist, that looks after just a few major customers.
1.1.2 Database and Knowledge Management
A Knowledge Management System can not only help you to train new staff and conduct their orientation but also to promote sales. It allows Sales Representative to reach the required information in the right time rather than waiting for a response from someone from the company so the customer does not need to wait longer than is necessary and therefore provide a better experience for the customer and enhance the probability of successful sales. The Knowledge management platform can be also used for tracking the questions that the salesperson ask the most and which activities the top salesperson perform to achieve good results and therefore it can be leveraged further for training new hires. Recording customer information to the database is also a significant tool for increasing the sales and knowing the customer’s behavior, for example retails shops such as ASOS, a clothing online retailer, records customer’s order history to help them to identify the customer’s preferences based on what they might send emails suggesting purchase of similar types of products which leads to another sale.
1.1.3 Customer Relationship Management
Research conducted by Google and CEB indicates that customers that are emotionally connected to a brand are twice as likely to purchase a product or service, and are four times as likely to defend their purchase decisions. A wine producer organization Bespoke Collection builds deep customer relationships by offering loyalty programs and memberships, and by understanding their customer’s behaviour and through CRM solutions they are able to provide personal attention to their customers. The president of Bespoke Collection Paul Leary states, “When someone makes a purchase with us, the next morning at ten o’clock, they get an automated, personalized email... By placing emphasis on relationship-based sales instead of transaction based, we’re able to increase customer retention and satisfaction, referrals, and order value.” (Salesforce.com)
1.1.4 Marketing The Product
The Salesperson in most companies is now fully integrated into different activities such as marketing and they are involved in product development, maker development and the segmentation of markets. For instance, the opinion of salespeople is now valued as they know the customer most so they would be asking for suggestions when developing a new product so that provides an opportunity for gaining views from different perspectives.
1.1.5 Problem Solving and System Selling
Nowadays in times of highly competitive market, organizations aim to transform their business from a product-driven to a solution-led sales so that they invest in training their salesperson on “solution selling”, therefore the salesperson is able to help the customers to identify their problems, determine their needs and propose and implement effective solutions. This means, for instance, when a customer comes to the bank ask for a credit card, the customer advisor should not only end up making one transaction and applying for the bank product, but they should analyze customers’ needs and problems in order to provide a comprehensive financial solution in form of various products such as credit card, loan, investment products, saving account and even identify potential for mortgage.
1.1.6 Adding Value and Satisfying Needs
Organizations cannot rely on competing on price in the current market as the products and services are comparable, therefore they must focus on the value of the product or service when the price becomes less important. The salesperson has to explain how much they will benefit from the product, for example offering new software that would decrease customer’s cost for additional staff, paperwork or just simplify process within the company so that will increase overall performance. Tesla produces an electric vehicle with the mission to add value to the world by removing the need for fossil fuel, which means a lot for most of the customers.
All things considered, in today’s highly competitive world organizations should make sure that they hire the right salespeople that would understand the characteristics of modern selling and should invest in effective training their sales personnel in the art of selling in order to be successful. Moreover, the salespeople are the first point of contact with customers and building relationships does not happen from day to day, so it is really vital to retain the top performers within the company and aim to share their knowledge and skills with new hires. One of the crucial aspects of modern selling strategy is building strong relationships with current clients and transform them into key strategic accounts as current customers provide the organization much more profit and it is easier to predict their behaviour rather than acquiring new customers (Richerston).
Question 2: Select two (2) global organizations with different selling platforms. Assess the different sales platforms on the basis of their success, effectiveness and reach
This part of the paper is to assess different sales platforms on the basis of the organization’s success, effectiveness and reach. The B2B customer buying journey has been forever transformed by the Internet, and this has a major impact on the whole selling proposition
There are many ways to sell a product to customers such as through traditional Brick-and-Mortar Stores, catalogues or even using sales agents or through digital channels such as e-commerce websites, social media, Online ads, smartphone, and online catalogues. In the following section, the author compares two global organizations Zappos and Primark that use different sales platform.
History of Organisations
Zappos is a shoe and clothing retailer based in Las Vegas, Nevada that uses an exclusively online platform to sell their products. The company was founded in 1999 by Nick Swinmurn after he failed to find the right pair of shoes in a mall. This inspired him to launch an online shop with shoes with the initial idea of selling an absolute selection of shoes so everyone can find what they are looking for (Zappos). Today, Zappos is a wholly owned subsidiary of Amazon (having been acquired for $1.2 billion in 2009), has roughly 1,500 employees and makes at least $2 billion in revenues annually (Forbes).
On the other side, there is Primark that uses traditional retailing via bricks and mortar and has no e-commerce functionality on their website in contrast with the increasing number of competitors. Primark is a fast fashion retailer headquartered in Dublin and a subsidiary of Associated British Foods plc. (Abf.co.uk, 2019). Their first shop was opened in 1969 under the name, Penneys, and today, the company operates over 350 shops in eleven countries across Europe and America (Primark.com, 2019). Primark offers a wide range of products from clothes, footwear, cosmetics to bedding sets or decoration for extremely affordable prices, tempting their customers with the slogan amazing fashion, amazing prices. The company sells clothes below average market prices.
E-Commerce versus Brick-and-Mortar Stores
The retail industry has been tremendously affected by globalization and new modern technologies. Moreover, the disruptive force of digitalization has led a vast majority of retailers to expand their transactions online as e-commerce provide the retail industry with more competitive advantage. The retailers now can see the value of having physical stores as well as online presence giving them a bigger opportunity to reach more potential customers.
As of 2017, global e retail sales reached $2.3 trillion making online shopping one of the most online popular activities globally. The e-commerce share globally in 2017 was 10.2 % of all retail sales, a number that is forecast to increase to 17.5 % in 2021 (Statista, 2019). The number of shoppers who begin their product search on digital channels grew from 71% a year before to 87% with 28% starting out on market places such as Amazon and e bay, a number that grew by 22% from a year before (Sapient).
This is due to the fact that most people find online shopping very efficient and time-saving since it doesn’t involve waiting in a queue or frustration of not finding what a customer is looking for. Some customers thus prefer online shopping to save time and avoid stress since they can easily access different online shops and an endless range of products at their convenience. The mobile phone has become another powerful tool that allows customers to address their shopping needs anytime and anywhere, therefore another aspect that the retailers have to consider when developing a business strategy.
According to a report by Drapers Online (2018), only 40% of businesses that are likely to expand internationally by 2022 have physical stores, suggesting that online presence will be the key driver to international expansion in the retail industry (Busby 2018). In fact online pure-play retailers grew by 281% between 2012 and 2017 while bricks and mortars only grew by 11.8% in the same period (Busby 2018). The author further notes that despite physical stores still being relevant, the whole physical store experience is evolving as many purchases now start in-store and end up online. A trend that is forecast to grow further, boosted by the rapid growth of virtual personal assistants, same day deliveries and more shopping taking place through in pocket devices (Busby 2018).
According to a 2018 retail dive report, 46% of shoppers still prefer physical store shopping experiences, 35% prefer shopping via laptops and 18% via mobile phones.
In recent years, a number of stores have chosen an omnichannel approach that helps customers buy more by offering them in-store pickup after they have made online purchases, they also offer efficient home delivery and options for customers to check product availability between stores, making their shopping experience more efficient and less time consuming (Google, 2016). Other than boosting sales, the omnichannel approach also creates a better shopping experience for customers as they can access and make purchases anywhere, at any time (Piotrowicz & Cuthbertson, 2014). This flexibility means that the retail industry has to adapt to these new shopping behaviours to survive.
Shoppers are often left frustrated due to lack of in-store information, as per survey two-thirds of those were not able to find the details during their store visit. As a result, disappointed customers then look for alternative solutions in their smartphones which offer them immediate information. The research also indicates that of the 42% who research online stores, nearly half would use the retailer’s own site or application and one in three customers prefer to use their smartphone to search for information rather than interaction with a store employee looking for help (Google, 2016).
The customer’s shopping behavior has changed with the technology and they use omnichannel channels when making their buying decisions, therefore the retailers have to adopt an omnichannel approach in order to remain with a competitive advantage (journal). Alton (2018) has noted that, even if bricks and mortars will survive through the tech trend, they need to undergo drastic changes in order to compete with e-commerce giants like Amazon who have become major disrupters in current years. Bricks and mortar retailers need an online presence in order to survive and remain competitive.
Over the last decade, Primark has successfully grown its share of the UK apparel market by more than 2.5 percent and as of 2018, it is considered as the second largest clothing retailer in the UK, generating a revenue nearly 7.1 billion pounds in 2017 (Statista 2019). Zappos has expanded the range of products from shoes to clothing and accessories and that resulted in annual sales of $1 billion.
In conclusion, customers have different preferences for channels through which they do purchases, but online presence is inevitable for an organization to be effective, reach a high volume of customers and increase profit. Therefore, using multiple sales platforms or channels will likely increase the possibility of additional sales as well as can be beneficial to brand equity. However, the future would most likely require blending the channels through adopting omnichannel approach so as to provide a good customer experience.
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