Marketing Strategy and Competitive Positioning pdf ebook

Figure 14.2 
Pressures on sales capabilities
More
demanding
customer
relationships
Escalating
customer
sophistication 
and complexity
Trends to 
commoditisation
Corporate
expenditure
constraints
The need for
strategic sales
capabilities in
supplier
organisations

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CHAPTER 14 STRATEGIC CUSTOMER MANAGEMENT AND THE STRATEGIC SALES ORGANISATION
maintains both account executives in the field as well as internal salespeople in branches, 
because the view is that the technology exists to free salespeople to sell and develop cus-
tomer relationships, not to process orders (which the technology generally does better and 
cheaper). As Dell struggles to rebuild its weakened market position, its multichannel sales 
capabilities are critical to success.
There is a substantial business and competitive risk in underestimating the role of 
the salesforce in defending and sustaining a competitive position. Consider the case of a 
$210-million manufacturer of speciality industrial lubricants, based in Atlanta. Expecting, 
in an Internet-enabled world, that the 400-person salesforce would be increasingly irrel-
evant, the company spent $16 million on its website, e-portals, call centres and an integrated 
CRM system. When the new sales model went live, the anticipated 35 per cent sales increase 
in sales turned out to be an 18 per cent decline, with falling margins (largely because of the 
cost of the new Internet infrastructure). In addition, nearly a third of the salesforce resigned 
in just over a year (including 17 of the top 20 salespeople), because there was a general 
feeling that there was no point in staying to compete with the new website, after spending 
years developing personal relationships with their customers. There had been no customer 
involvement in developing the new sales model – the company had not bothered to ask 
customers how they wanted to do business. When asked, customers identified this com-
pany’s only real competitive advantage as the expertise of its salesforce and their ability to 
design solutions to solve technical problems for customers. A new sales model now deploys 
salesperson expertise in the specification and design phases, and in negotiating prices and 
terms, and uses the Web for routine repeat purchases and order tracking; the competitive 
situation is being retrieved (Friedman, 2002).
Understanding and enhancing the ways in which sales resources add value and pro-
tect customer relationships is becoming of strategic importance in markets being driven 
towards commoditisation. To the extent that a marketing strategy depends upon strong 
and sustained customer relationships, there is an implicit reliance on sales capabilities. To 
the extent that a salesforce has built and sustains strong customer relationships by creat-
ing value for customers, this provides a strategic resource for the company, which should 
impact on its strategic choices.