Maximizing Customer Value Goes Beyond Delivering a Great Product

In the competition for customers, companies pull ahead by attaining levels of customer satisfaction exceeding that of competitors, and that means having a strategically designed, trained and supported sales force.

Value to customers includes the people and capabilities a company provides to address customers’ needs and requirements, and not just the product itself.

“A customer may not fully understand the problem he wants to solve, so a lot of the real value comes from communicating and collaborating with the sales force,” said William L. Cron, the J. Vaughn and Evelyne H. Wilson Professor of Marketing at TCU’s Neeley School of Business.

“The sales team and the product almost become indistinguishable from each other,” he added. “Sales, service and maintenance often blend into a single package.”

Cron’s research on sale force strategy is featured in the Wiley International Encyclopedia of Marketing.

“Designing an effective sales force strategy involves prioritizing customers,” Cron explained. “This is done by determining the three relationship categories, developing the capabilities to serve the relationship categories, and maintaining a strong sales support system.”

The first step is customer prioritization for the sake of sales efficiency. That means categorizing customers with similar characteristics, needs and marketing responses.

Companies must determine which of the three categories of customer relationship — transactional, consultative or enterprise — is most appropriate to pursue, whether one or more.

“The company must make this decision, or the marketplace will make it for them,” Cron said.

Transactional relationships occur when customers know what they want and are ready to buy. With consultative relationships, sales professionals and customers collaborate on determining and meeting customer needs. Enterprise relationships, the most complex, are close alliances between businesses when a firm dedicates resources and capabilities to meet the needs of another.

The second step in a strategic sales force is developing the capabilities to serve the relationships. This step involves brand awareness, number of sales offices and personnel, and the skills of the sales professionals. The sales force must have portfolios of capabilities, including generating new customers, retaining existing ones, building customer trust and forging deeper customer relationships.

The third step is developing and maintaining a strong sales support system, including organizational structure and hiring, directing, motivating, evaluating, compensating and rewarding the sales force to achieve optimum performance.

Cron’s research supports that sales professionals should be involved in developing marketing strategies from the beginning, instead of implementing marketing plans designed solely by top management.

“The company learns how to serve the customer by bringing the sales force into the planning stages,” Cron said. “The sales team collaborates with the company’s product development experts to extend possible solutions to the customer.”

Cron and other TCU Neeley marketing experts teach “Strategic Marketing Essentials” through TCU Neeley Executive Education, to help sales managers navigate the complexities of designing effective sales force strategies. For more information: http://neeley.tcu.edu/ExecutiveEducation.