Sales Management-UNIT 4

Here are the main steps to developing a lead scoring model:

(1) determine customer characteristics, (2) define the characteristics of an ideal customer, (3) develop a point system, and (4) score your leads based on the point system.

How does a customer relationship management (CRM) system promote a customer-centric culture in an organization? Choose three answers.

-Improving customer satisfaction through optimized business processes -Valuing the customer as a business asset -Directing customized solutions toward a customer's needs or desires Correct! A CRM system places the customer at the center of the organization's operations.

As in all levels of analytics, following a proper workflow is essential for getting the best results from prescriptive analytics. Adopting a consistent workflow ensures that the available data are fully processed and analyzed, and nothing falls through the cracks. The workflow for prescriptive analytics is as follows:

-The data are acquired and processed. -Hypotheses are formed after running the data through analytical software. -Initial actions are taken while hypotheses are being tested. -Hypotheses are proven or disproven, and prescribed actions are driven by the results.

Placing the customer at the center of the organization's operations, CRM supports and promotes a customer-centric culture in the organization by

-implementing a relationship business model with shared rewards and risk management; redesigning the sales position to provide personal consultation and solutions directed toward customers' needs and wants; -streamlining, formalizing, and re-engineering customer analysis processes; -committing to customer satisfaction and loyalty by investing in continuous refinement and improvement; and -informing and educating customers about the benefit of building a business relationship, utilizing all aspects of the organization's value chain.

Enhanced accountability

A CRM system can improve workflows and communication between teams and employees, defining roles and responsibilities in an organization.

Customer focus

A CRM system increases a favorable customer experience and improves communication through tracking the connection of an organization with customers on all touchpoints

Improved efficiency

A CRM system organizes information, records, and reports and automates, streamlines, and monitors workflows and activities quickly. CRM systems are also intended to integrate with a broad range of company and office platforms in order to provide superior flexibility.

ideal customer profiles (ICP)

A categorical description of a customer that would benefit immensely from a company's offerings and provides significant value in exchange

database marketing

A form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes

360-degree customer view

A process of collecting aggregated data from various customer touchpoints for complete understanding of the customer and to guide interactions with the customer

A win-loss analysis

A review of how well a salesperson performed given the opportunities he or she faced

linear regression model

A set of statistical processes for estimating the relationships between a dependent variable and one or more independent variables

customer lifetime value (CLV).

CLV is the net profit of a future relationship with a customer. In other words, CLV is a monetary value representing the amount of revenue a customer will bring to the business over the lifetime of the relationship.

Salespeople are a primary

CRM touchpoint, as they act as the "eyes and ears" of the organization.

What are four goals of customer relationship management (CRM) systems? Choose four answers.

Centralizing information to improve efficiency Supporting relationships with existing customers Moving new leads through the sales process Automating tasks to lower business costs

Sales analytics distinguishes data from several perspectives, such as understanding which customer segments to serve, scoring and prioritizing sales leads according to the likelihood of closing a deal, measuring the likelihood that a customer account will generate revenue, and determining customer retention. Regardless of the type of analytics being performed, you will follow the same general process or workflow:

Collection processing analysis interpretation

Which business practice is essential to creating one-to-one marketing?

Creating a marketing database with customer information Correct! The information contained in a marketing database helps an organization know and understand existing customers and potential customers on an individual basis.

Analytics helps decision makers determine risk, weigh outcomes, and quantify costs and benefits associated with decisions.2 There are four levels of data analytics an organization can implement.

Descriptive analytics Diagnostic analytics Predictive analytics Prescriptive analytics

Which business practice does relationship marketing focus on?

Emphasizing customer retention and satisfaction Correct! Relationship marketing differs from other forms of marketing in recognizing the long-term value of relationships and extending communication beyond intrusive promotional messages.

The data captured in a 360-degree customer view come from external sources and internal sources. External sources can include social media and website usage, whereas internal sources could be ordering information, service calls, or sales call history. The data captured to create a 360-degree view of the customer can be categorized into the following types:

Fit data are attributes about the customer, demographic data for B2C customers and firmographics for B2B customers. Demographic data capture measurable consumer information such as age and income levels. Behavioral data capture what the consumer has done with the company. This type of data fits into three categories: intent, engagement, and relationship. Intent is about what the customer is doing, such as conducting web searches and liking posts on social media

Goals and Benefits of CRM

Improved efficiency Customer focus Data accessibility Enhanced accountability

A better understanding of the ROI from both sales and marketing activities is achieved by tracking the various customer engagement points and sales interactions. Additional benefits from lead scoring include the following:

Improved sales productivity Increased conversion rate Fewer missed opportunities Improved revenue and sales ROI Lead scoring is possible given the data captured with CRM, and it provides numerous opportunities for marketing automation and customized selling.

Diagnostic analytics

In this process, historical data are measured against one another to answer the question, "Why did something happen?" This analysis can give insights into dependencies and help identify patterns. For example, in a social media sales and marketing campaign, diagnostic analytics can be used to determine why certain advertisements resulted in increased conversion rates. Diagnostic analytics provides valuable insights for organizations because it helps them understand which decisions impact performance.

Collection

In this step, you determine the business objective (what you want to measure, what question you want to answer, or what methods will be used to collect the data) and perform the actual data collection using the prescribed methods. Collection methods can be simple, as in surveys and online forms, or more complex, as in organizational databases where customer information is entered. There should be an emphasis on gathering factual and accurate data so that decisions based on these data are valid.

Data accessibility

Integrated CRM systems have instruments for collecting, analyzing, and making sense of customers' and prospects' information, so an organization can gather ideas to enhance its services and offerings.

How is distributed computing used in sales and marketing?

Integrating data across multiple file systems Correct! Distributed computing is the integration of data across multiple file systems. It involves components of a software system that are shared among multiple computers.

Which part of the customer relationship management (CRM) process involves gathering insight about why a customer purchases a specific product?

Knowledge discovery Correct! The knowledge discovery phase involves the extraction of market information from all customer segments and from all sources to gather insights about customers.

Product performance

Managers can track sales by product or product line. They can make recommendations to divest underperforming products or invest additional sales resources if products should have a competitive advantage.

Sales target

Managers can track the extent to which performance goals were met. Goals may include measures such as revenue, number of active accounts, units sold, and sales by region. Sales managers can adjust sales quotas for salespeople and teams, reward high-performing salespeople and teams, or assign more sales force resources to customer segments or underperforming product lines.

Most importantly, organizations are doing all this to make customers happier. The upsides to this from the customer point of view are fairly significant:

Marketing and sales messages are individualized to be of interest to the consumer. Quality of products is constantly assessed and, if necessary, improved based on customer behavior. Customer support assistance is integrated across a wide variety of media channels.4

Analysis

Now that the data have been sorted and separated into relevant information, they can be further organized into charts and graphs to facilitate visualization and analysis. In this step, you may realize that you need more data or that the data you pulled are not useful and other data should be extracted.

Interpretation

Once the data analysis is completed, it is time to interpret the results. At this point, data can be used to guide business decisions, to provide information as to the next steps, or to inform a best course of action. The interpretation phase is where the data are used to answer the questions posed at the beginning of the process.

The sales department is informed that there will be delays with merchandise deliveries for the next month due to a change in the company's delivery carrier. The sales manager takes this into account as she forecasts performance for the next month. Which factor does the delivery delay represent for the sales forecast?

Planning issue Correct! The delay in deliveries will affect the sales department's ability to get product to customers in a timely manner, which will likely affect sales figures for the coming month. The sales manager will take this factor into account when creating the sales forecast.

Predictive analytics

Predictive analytics uses data to identify past patterns to predict the future. From trends or patterns in existing data sets, predictive algorithms calculate the probability that a certain event will occur. For example, some companies are using predictive analytics for lead scoring—a method that ranks sales prospects against a scale that indicates the perceived value of each lead to the organization. The score is then used to decide which leads will be engaged and in what order of priority. Predictive analytics help decision makers to predict the outcomes of a decision before it is implemented. Using these probabilities, decision makers can calculate the expected value of alternatives once risks and benefits are taken into account. Predictive analytics is particularly useful when there is a high degree of uncertainty.

What are two types of tools that are part of the predictive analytics process? Choose two options.

Sales performance monitoring Predictive lead scoring

What are conversion ratios used to measure?

The ability of a salesperson to change a prospect into a purchaser Correct! Conversion ratios measure the ability of a salesperson to change a prospect to a purchaser. Salespeople can track conversion ratios to identify which stages of the sales funnel could be improved.

win rate

The actual revenue versus the revenue estimate

Processing

The collected data are usually unstructured and can contain irrelevant information. Thus, these data must be sorted and organized for analysis. Usually, this is done by using spreadsheets or data models that separate the data into categories in columns and rows so that the relevant data can be identified.

Which type of data is used for market segmentation?

The demographics of a company's customer base Correct! Market segmentation relates to the demographics of a company's customer base. Organizations can analyze patterns and trends in the data to segment the demographics of their customer base.

Close rate

The number of deals closed versus the number of opportunities in the pipeline

Operational CRM

These include the primary activities of CRM that are or result in actual interactions with customers. Operational CRM relates to integrating sales, marketing, and customer support to ensure that customer satisfaction is as high as possible. Operational CRM focuses on automation efforts. A CRM system can automate repetitive tasks to allow the sales team to pursue more deals.

Sales to date

This KPI compares current sales to that of the same time last year. Sales managers can take corrective action when sales are behind anticipated levels. Sales incentives can be identified to make improvements before the end of a quarter. This metric is typically shared with public relations and investor relations departments.

Sales growth

This KPI measures change in sales units or revenues over a period of time, such as by month, quarter, or year over year. Sales managers can revise sales plans when sales growth has fallen below targets for growth. Also, given growth estimates, a sales manager can change orders and inventory on hand.

Lead response time

This KPI measures the amount of time it takes a salesperson to respond to an identified qualified lead.

Quote-to-close rate

This KPI measures the average time to close sales deals. This helps the sales manager advise salespeople on whether stages of the selling cycle should be shorter or longer to enhance the closing rate.

Lead conversion rate and new accounts open

This KPI measures the percentage of leads that are converted to customers and may be compared by salesperson, sales tactic, product line, customer category, or other points of comparison. Sale managers can use this metric to calculate ROI and customer acquisition costs. They can also realign sales force focus on stages of the sales funnel where prospects are lost.

Customer acquisition cost

This is the average cost to convert a lead to a paying customer. Managers can determine which customers' profitability does not warrant acquisition costs and eliminate similar prospects from sales initiatives.

Average purchase value

This is the average dollar value of purchases. It may be calculated by customer type, product line, and sales representative. Sales managers can identify the most valuable customers and target them with a loyalty and retention program.

Average profit margin

This is the average profit (revenues minus costs) across sales categories by sales representative, sales team, product line, and customer type. Sales managers can identify whether costs are too high for the achieved profit margin and take steps to reduce costs, such as providing incentives offered in closing negotiations.

Cannibalization rate

This measures the relationship between sales gains of one product and sales losses of a substitute product. With this KPI, sales managers can determine whether a cannibalized product is still relevant in the product line.

Sales opportunities

This metric Identifies underperforming accounts with potential for additional sales, and non-customer accounts that are similar to existing customer accounts. This KPI can direct sales managers to assign sales force resources (number of sales representatives, travel budget, promotional resources) to top sales opportunities identified, set the size of sales force to assigned territories, and set sales quotas.

Sell-through rate

This metric measures sales as a percentage of total inventory. This measure can assist management in making adjustments in inventory levels, orders placed, and other supply chain management decisions.

Why does an organization use key performance indicators (KPIs) in customer relationship management?

To assess success in dealing with customers Correct! Key performance indicators (KPIs) are used to evaluate the success of an organization and can be used to improve customer retention.

How should a sales organization compare a salesperson's performance to the opportunities the salesperson faces?

Using a win-loss analysis Correct! A win-loss analysis analyzes the efficacy of a salesperson's performance given the opportunities the salesperson faces. This can be beneficial because it can help a sales team work together more effectively in the future.

The challenge is managing these massive amounts of data. Big data are characterized by the three Vs:

Volume is associated with the amount of data available Velocity is the speed at which data are being sent and collected. Variety is the various data forms. Data have moved from traditional structured data forms found in relational databases to new unstructured data forms.

Descriptive analytics

answers the question, "What happened?" This process juggles raw data from multiple data sources to give valuable insights into the past. In other words, it looks at historical data. However, these findings simply signal whether something when wrong or right, without explaining why. Consequently, descriptive analytics is at the bottom of the big data value chain, but it can be valuable for uncovering patterns that offer insight. A simple example of descriptive analytics would be reviewing the number of people who visited the company's website over the past few months. Descriptive analytics can be useful in the sales cycle, for example, in order to spot seasonal trends and to adjust purchasing decisions accordingly.

touchpoints

are interactions taking place through various channels and media. call center, social media, email, websites, and interactive online chats with the organization's customer service representatives. Other touchpoints may include online and retail stores, billboards, video conferencing, ratings and reviews, and all forms of advertisements.

Sales analytics tools

assist with upselling and cross-selling efforts. can help the enterprise identify and target potential clients and generate leads for the sales team.

CRM relies on

comprehensive and up-to-date data. Data integrity is vital to capitalize on the value of CRM.

Sales managers can refine

critical sales objectives and strategies by tracking the customer's buying journey

Sales forecasts and metrics can

direct budgeting and planning based on revenue and other returns.

Market segmentation allows marketers to adapt their message to specific groups. Target markets can be separated into five main types of segmentation:

geographic, demographic, cultural, psychographic, and behavioral.

Analytical CRM

has a substantial data-oriented side as well, particularly with the rise of useful CRM data-gathering tools. Utilizing the benefits of big data (where available), organizations can accurately assess who their core consumers are, how they behave, what they are looking for, and how satisfied they are.

In addition to behavioral and demographic information of prospects and customers, a range of data is included in predictive sales models:

historical data transactional data data from the Web social media third-party databases real-time data feeds

sales analytics

intended to define what group of customers is anticipated to provide the highest return on investment (ROI). Sales analytics allows companies to focus a more substantial part of their advertising, marketing, and sales efforts on their predicted most valuable customers, ensuring increased revenue over time.

Collaborative CRM

involves many parties, including the customer; other internal departments such as finance, sales, and service; and other interaction points with external vendors. From a customer perspective, collaborative CRM involves the integration across customer interactions and channels with the purpose of engaging with the customer in a consistent and meaningful way.

One-to-one marketing

is a CRM strategy where service is personalized for every customer in order to foster customer loyalty. One-to-one marketing has become even more prevalent with the increase in online shopping. EX: Netflix/amazon

CRM analytics

is a general term used to describe the various applications and methods devised to capture and analyze all available relevant customer data and present the findings in easily understandable ways. The main goal is to use these analyzed data to make informed customer-centered business decisions. One specific use of CRM analytics is to collect and analyze sales data. This is called sales analytics

Prescriptive analytics

is the most valuable level of analytics. It is a framework that moves data all the way from collection—when it first enters the organization's systems—to interpretation and decision-making, or to the point where the data drive action. While big data analytics in general sheds light on a subject, prescriptive analytics gives you a laser-like focus to answer specific questions. For example, in the retail industry, you can better manage customers by using prescriptive analytics to measure the number of customers who are within a certain age range, then add filters for factors such as city of residence to determine where to focus sales efforts. The same prescriptive model can be applied to almost any industry target group or problem.3 In this example, a firm can use prescriptive analytics to identify the best actions to achieve a desired outcome.

The primary functions of CRM are

operational, analytical, and collaborative.

Big data can help organizations address a variety of business activities, such as

product development, customer experience, operational efficiency, and fraud and compliance, to name a few.