Network Marketing Lead Generation Secrets
Relationship marketing is not effective in all situations. Transaction marketing, which focuses on one sales transaction at a time, is more appropriate than relationship marketing for customers that have short time horizons and can switch from one supplier to another with little effort or investment. This situation often occurs in 'commodity' markets, such as steel, where various suppliers oifer largely un differentia ted products. A customer buying steel can buy from any of sever* steel suppliers and choose the one offering the best terms on a purehase-by-purchase basis. The fact that one steel supplier works at developing a longer-term relationship with a buyer does not automatically earn it the next sale its price and other terms still have to be competitive. In contrast, relationship marketing can pay off handsomely with customers that have long time horizons and high switching costs, such as buyers of office automation systems. Such major system buyers usually research conipetinj...
As we have seen, relationship marketing is aimed at increasing customer loyalty, which has a number of benefits. As Reicheld (1996) explained, loyalty or retention within a current customer base is a highly desirable phenomenon since not only does it result in more transactions from each customer, but these transactions are more profitable. This occurs for several reasons
From the mid-1980s, there has been a move away from traditional, transaction marketing approach towards a longer-term, enduring relationship with the client and the sectoral infrastructure. This has been called relationship marketing. The primary concern of relationship marketing is the linkage of quality, customer service and marketing (see Fig. 4.3). 'Traditional marketing has been about getting customers. Relationship marketing addresses the twin concerns getting and keeping customers' (Christopher et al. 29 ). 'Relationship marketing strategies are concerned with a broader scope of external market relationships which include suppliers, business referral and 'influence sources'.' In this book Regis McKenna's term 'sectoral infrastructure' has been used to describe these external relationships. 'Relationship marketing also focuses on the internal (staff) relationships critical to the success of (external) marketing plans. Internal marketing' aims to achieve continuous improvement in...
Relationship marketing involves creating, maintaining and enhancing strong relationships with customers and other stakeholders. Increasingly, marketing is moving away from a focus on individual transactions and towards a focus on building value-laden relationships and marketing networks. Relationship marketing is oriented more towards the long term. The goal is to deliver long-term value to customers and the measure of success is long-term customer satisfaction. Relationship marketing requires that all of the company's departments work together with marketing as a team to serve the customer. It involves building relationships at many levels - economic, social, technical and legal - resulting in high customer loyalty. Figure 11.3 shows that a company's relationship marketing strategy will depend on how many customers it has and their profitability. For example. companies with many low-margin customers will practise basic marketing. Thus Hem eke n will not phone all of its drinkers to...
If you want to leverage your profits, as well as reduce the frustration of money and time wasted on not-so-profitable marketing techniques (such as cold calling or banner ads), then referral marketing is worth considering as a buzz strategy. Referral marketing sets into motion a A steady stream of referrals does not just happen -- magically, out of thin air. But that's not to say that referral marketing is complicated -- the process is simple and very doable. Amazingly, few companies realize the upside potential. Perhaps that's because very few understand how referral marketing really works.
TABLE 1 COMPARISON OF TRANRACTIONAL, RELATIONSHIP AND NETWORK MARKETING TRANSACTIONS MARKETING RELATIONSHIP MARKETING NETWORK MARKETING Sources Andrew Edgecliff ohnson, 'TI and French Aerospace link up'. Financial Timen (11 December 1996), jr. 23-, Roderick J BriiiM Miedle E. Gov dlo, Richard W. Brohner and Victoria Little, 'Towards a paradigm shiit in marketing An examination oi current marketing practices'. Journal of Marketing Management, 13, 5 (1997), pp. 383406 Lars-Gunnar Mattson, 'Relationship marketing' and 'The markets-as-networks approach - a comparative analysis o two evolving streams of research', Journal of Marketing Management, 13, 5 (1997), pp. 447-61 Michael Shspirho, 'Go-ahead expected with new airbus'. Financial Timen (6-7 December 1997), p. 2 'Farewell to arms', The Economist (22 November 1997), Wefc pages Adam Jones, 'i erospiice industry consolidation cleared for rake-off in Europe'. The Times (10 December 1997), p. 29. The main steps in establishing a...
Relationship marketing Relationship marketing is best understood within the context of the historical development of marketing. The Industrial Revolution, the large-scale production of more widely distributed, standardised products changed the nature of marketing. Whereas marketing had previously been largely by word of mouth and based on personal relationships, it became an impersonal mass-marketing monologue. During the twentieth century, differentiation of products and services became more important, and this highlighted the need for feedback from customers about the type of product features required. Sharma and Sheth (2004) have stressed the importance of this trend from mass marketing to what is now widely known as 'one-to-one' or 'customer-centric marketing' (although many would regard the latter as a tautology since the modern marketing concept places the customer at the heart of marketing activity). These authors give the example of the Dell model where each PC is manufactured...
Gurus who investigated the phenomenon call the technique multi-level marketing, but this really is a dressed-up name for pyramid selling by a hierarchy of enclaves or a sequence of Internet chain letters. Success depends on nearly doubling sales at each rung. The method goes in and out of vogue but often reappears when some eager beaver firm with a hot product and dreams of instant wealth reinvents it to kick-start sales. Multi-level marketing in theory can have an infinite number of layers. In practice, there is rarely enough money to spread further than four levels and barely enough customers to go beyond seven. Even then, success depends on recruiting strongly motivated people in the initial layers and falters the moment they appoint people less effective than themselves. The more levels there are, the more difficult it becomes to exercise control. To have a good spring and early summer with multi-level selling you need a peerless product, a thoroughly ethical approach, and a...
The content and structure have been changed to meet the needs of the user and take in new market developments. Chapter 3 is shortened to give a tighter introduction to strategic marketing planning while introdueing the concepts developed in subsequent chapters. Other chapters reflect recent marketing developments. Two related changes are the coverage of key account management in chapter 8 and an extended coverage of relationship marketing in chapter 11. Competitive strategy is expanded upon in chapter 12 paying particular attention to making more money from markets.
If you look around the web or in your local bookstore you're going to find a ton of hype about how you can become a millionaire with nothing more than a keyboard and a mouse. There are people out there who will say you can get rich with no effort, no work and no investment. There are even some who will try to sell you pyramid schemes, get-rich-quick plans and every other kind of scam you can imagine. And people actually buy them. At the first sign of a chance to pick up fast cash, people whip out their wallets and give away their life savings. You're smarter than that, right
So reputation management needs to be based on a sound assessment of one's operating context but also on what makes it tick internally. Reputation management is not to be confused with customer relationship marketing. Reputation management is much broader and includes sets of audiences who may not have any direct commercial relationship with the business (e.g. client supplier) but who still have a stake in the company. In this sense, a local government department would not have a direct commercial relationship with your business, but it is still key to the health of your business - particularly when it comes to planning permission for expansion of a facility, for example (see Chapter 10).
Ninety-nine point nine percent (99.9 ) of merchants don't charge a fee to join their affiliate programs. If they do, watch out It's not an affiliate program - it's MLM, or a Multi-Level Marketing scheme. An example of an MLM network marketing 'affiliate program' is My thoughts on the subject are that MLM (network marketing) programs should refer to themselves as such, and leave the term 'affiliate program' for those that are free to join.
At the start of business hype about the Internet in the mid-1990s there was much speculation that widespread disintermediation would see the failure of many intermediary companies as direct selling occurred. While many companies have taken advantage of disintermediation, the changes have not been as significant as predicted. Since purchasers of products still require assistance in the selection of products this led to the creation of new intermediaries, a process referred to as reintermediation. In the UK Screentrade (www.screentrade.co.uk. Figure 2.8) was established as a broker to enable different insurance companies to sell direct. While it was in business for several years, it eventually failed as online purchasers turned to established brands. However, it was sold to an existing bank (Lloyds TSB) which continues to operate it as an independent intermediary.
The multiple-channel strategy refers to a situation in which two or more different channels are employed to distribute goods and services. The market must be segmented so that each segment gets the services it needs and pays only for them, not for services it does not need. This type of segmentation usually cannot be done effectively by direct selling alone or by exclusive reliance upon distributors. The Robinson-Patman Act makes the use of price for segmentation almost impossible when selling to the same kind of customer through the same distribution channel. Market segmentation, however, may be possible when selling directly to one class of customer and to another only through distributors, which usually requires different services, prices, and support. Thus, a multiple-channel strategy permits optimal access to each individual segment.
And direct selling are two methods of personal selling (others will be discussed in Chapter 18). Nonprofit organizations like charities often use telemarketing to solicit funds. As you will see, for-profit companies are also using telemarketing with much greater frequency to screen and qualify prospects (which reduces selling costs) and to generate leads. Direct-mail pieces are often used to invite prospective customers to visit auto showrooms to test-drive new cars the salesperson then assumes responsibility for the selling effort. The GM and BMW examples cited earlier in this text demonstrate effective use of this approach.
As a matter of fact, the majority of the high-technology companies use their own sales forces to sell products directly to customers. However, the most successful organizations also count on other distribution channels in order to reach all the customers of a targeted market segment in the most efficient way 6 . Today, for instance, value-added resellers, system integrators, and distributors are becoming more prominent in the distribution of electronic and telecommunication solutions. For instance, Cisco Systems depends on its 35,000 partner channels for more than 90 of its revenues 7 .
The main difference between pyramid selling and multi-level marketing (MLM) is that pyramid schemes make money from bringing more people into the scheme whereas MLM concentrates on selling product. This is only an option where your product has a universal, emotional, or sensual appeal.
Someone asked this question the day the first piece of software was sold electronically. That was in the era of the bulletin board, long before the Internet reared its public head. I ran an extremely successful dealership for almost a decade. The most cynical thing that happened year in and year out was that hardware and software suppliers would come up and court you. Together, over a couple of years, you'd build up the sales, gradually growing some large and valuable accounts. Then suddenly, without notice, the manufacturer would switch to direct selling and keep all the money for himself.
In addition to offering the opportunity for one-to-one marketing, the Internet can be, and still is widely, used for one-to-many advertising. On the Internet the brand essence and key concepts from the advertiser arguably becomes less important, and typically it is detailed information and independent opinions the user is seeking. The web site itself can be considered as similar in function to an advertisement (since it can inform, persuade and remind customers about the offering, although it is not paid for in the same way as a traditional advertisement). Berthon et al. (1996) consider a web site as a mix between advertising and direct selling since it can also be used to engage the visitor in a dialogue. Constraints on advertising in traditional mass media such as paying for time or space become less important. Consumers are looking for information online all the time, so advertising in search engines in short campaign-based bursts is inappropriate for most companies - continuous...
Managers have expressed the need for integrated marketing communication. The increased emphasis on the integration of marketing communications stems from a realization that there has been a shift from transactions marketing to relationship marketing accompanied by the requirement to build
Strategic decisions in business markets can benefit from the development and use of analytical approaches derived from industrial organization economics theory (Sashi and Kudpi, 2001). B2B markets have fewer partners, closer buyer-seller relationships, better technology and better information exchange than B2C markets (Hutt and Speh, 1998). Gummesson (2004) argued the comparison of B2B and B2C relationship marketing. Wouters (2004) investigated the development of customer service strategies deployed by industrial organizations and the impact this has on their marketing strategy in B2B situations.
The origiriEil and oldest form Of direct marketing is the field sales call, Today most industrial companies rely heavily on a professional sales farce to locate prospects, develop them into customers, and grow the business or they hire manufacturers' representatives and agents to carry (jut the direct-selling task. In addition, many en nsutner companies use a direct-selling force insurance agents, stockbrokers., add distributors work for direct-sales organizations such as Avon, Antway, Mary Kay, anttTuppciware,
In a marketing context, the literature has specifically focused on trust in an organizational context, with organizations as trustor and trustee as the two parties necessary for trust to occur. Morgan and Hunt (1994) suggested the importance of trust and commitment in the development of long-term exchange partner relationships. Like much of the research in the area of relationship marketing, Morgan and Hunt's (1994) work is based upon social relations theory. Just as two individuals need trust as the basis of an interpersonal relationship, so do two organizations (or in this case two units of the same organization) need to trust each other in order to develop a commercial relationship.
Today, Fallon is building on this success, and has realized similar projects with other high-profile brands, the latest being Amazon.com, with its Amazon Theatre. Five short films, made by respected directors and featuring some better known actors, not only serve as entertainment on Amazon's website but also as a direct selling channel since they display direct links to areas of the site where you can buy products featured in the film.33 (Justin Kirby's DMC has a long track record of successful campaigns with viral advertising films. His contribution to this book (Chapter 6 Viral marketing) describes in much more detail the viral marketing approach and how it works.)
First of all, many connected marketing approaches can be part of both your advertising and relationship marketing activities. If a company develops a highly interactive and involving online advergame but doesn't track its most vocal advocates, identify their locations, nor try to engage with them in a connected dialogue, it's throwing away massive potential for successful marketing.
The concepts of relationship marketing. Particularly through data mining - the extraction of hidden predictive information from large databases - organizations can identify valuable customers, predict future behaviours and generally be better placed to make knowledge-driven decisions.
Direct marketing is much more than direct mail and mailorder catalogs. It involves a variety of activities, including database management, direct selling, telemarketing, and direct-response ads through direct mail, the Internet, and various broadcast and print media. Some companies, such as Tupper-ware, Discovery Toys, and Amway, do not use any other distribution channels, relying on independent contractors to sell their products directly to consumers. Companies such as L.L. Bean, Lands' End, and J. Crew have been very successful in using direct marketing to sell their clothing products. Dell Computer and Gateway have experienced tremendous growth in the computer industry by selling a full line of personal computers through direct marketing.
Combining Direct Marketing with Advertising Obviously, direct marketing is in itself a form of advertising. Whether through mail, print, or TV, the direct-response offer is an ad. It usually contains a toll-free or 900 number or a form that requests mailing information. Sometimes the ad supports the direct-selling effort. For example, Victoria's Secret runs image ads to support its store and catalog sales. Both Marlboro and Benson & Hedges advertise their cigarettes, achieving a carryover effect of their image to their direct-response merchandise catalogs. Direct-response ads or infomercials are also referred to in retail outlet displays. Sometimes an advertisement will be sent through direct mail. CBS has tied into a Blockbuster video mailer to advertise its new fall lineup and offer a sneak-preview CD.
Relationship Marketing 483 When to Use Relationship Marketing 488 Setting Sales Force Objectives 848 Designing Sales Force Strategy and Structure 849 Recruiting and Selecting Salespeople 853 Training Salespeople 855 Supervising Salespeople 856 Evaluating Salespeople 861 Principles of Personal Selling 864 The Personal Selling Process 864 Steps in the Selling Process 864 Relationship Marketing 869
The total of activities by which the seller, in effecting the exchange of goods and services with the buyer, directs efforts to a target audience using one or more media (direct selling, direct mail, telemarketing, direct-action advertising, catalogue selling, cable TV selling, etc.) for the purpose of soliciting a response by phone, mail, or personal visit from a prospect or customer.2
When it comes to opening a sale, there are only three approaches sell directly, indirectly, or both. Direct selling is where the producer's sales force makes direct contact with consumers so there is no middleman. Indirect selling is where the producer enlists an intermediate to sell to consumers and deploys a sales force to sell to distributors. This is best suited to products with which customers are already familiar and where success hinges on volume. When all is said and done, direct selling from a manufacturer is ideally suited for high value, custom-made products that require a high caliber salesperson to make personal contact with prospects. Where the economics are borderline, you may find yourself selling both directly and indirectly.
Finally, the adapter builds on the leader's products and marketing programmes, often improving them. The adapter may choose to sell to different markets to avoid direct confrontation with the leader. Many IBM PC look alikes did this - Atnstrad was one of the earliest selling its ready and running machines through conventional electrical goods retailers. Js'ow Dell and dan Technologies combine direct selling with excellent customer support. Often the adapter grows into -A future challenger, as many Japanese firms have done after adapting and improving products developed elsewhere.
Many direct marketers see direct marketing as playing a broader role these days, that of building a long-term relationship with the customer (direct relationship marketing).1 In building relationships, some direct marketers send out birthday cards, information materials, or small premiums to select customers in their customer base. On the service side, airlines, hotels, and other businesses are strengthening customer relationships through frequency award programs and club programs.
At one time I saw the implementation of that mission limited to the mail-order marketing of books, cassettes, and courses. Then it expanded to include speaking and seminars. Then television. Then developing products for other publishers. Then consulting with publishers, direct marketers, even multilevel marketing companies. And, in the last few years, I've probably been responsible for selling success education materials to well over a million people, and exposing many more to the ideas.
An organisation can use Figure 6.4 to plan their relationship marketing strategy. The symbols Xj to X3 show a typical path for an organisation. At Xj information collected about customers is limited. At X2 detailed information is available about customers, but it is in discrete databases that are not integrated with the web site. At X3 the strategy is to provide mass customisation of information and offers to major segments, since it is felt that the expense of full personalisation is not warranted.
Transaction marketing is part of a larger idea called relationship marketing. Relationship marketing aims to build long-term mutually satisfying relations with key parties customers, suppliers, distributors in order to earn and retain their long-term preference and business.10 Effective marketers accomplish this by promising and delivering high-quality products and services at fair prices to the other parties over time. Relationship marketing builds strong economic, technical, and social ties among the parties. It cuts down on transaction costs and time. In the most successful cases, transactions move from being negotiated each time to being a matter of routine. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, university scientists, and others) with whom it has built mutually profitable business...
McKenna, Regis (1991) Relationship Marketing Own the Market Through Strategic Customer Relationships, Century Business. 29. Martin, Christopher, Payne, Adrian and Ballantyne, David (1991) Relationship Marketing Bringing Quality, Customer Services and Marketing Together, Butterworth Heinemann.
3 Arndt, Johan (1967) Word of Mouth Advertising A Review of the Literature. New York Advertising Research Foundation Buttle, Francis A. (1998) 'Word of mouth understanding and managing referral marketing', Journal of Strategic Marketing, 6 (Sep.) 241-254 Gelb, Betsy and Johnson, Madeline (1995) 'Word of mouth communication causes and consequences', Journal of Health Care Marketing, 15 (Fall) 54-58 Price, Linda L., Feick, Lawrence F and Higie, Robin A. (1987) 'Information sensitive consumers and market information', Journal of Consumer Affairs, 21 (Winter) 328-341 Richins, Marsha L. (1984) 'Word of mouth communication as negative information', Advances in Consumer Research, 11 (1) 697-702 Rogers, Everett M. (1962) Diffusion of Innovations. New York Free Press.
Entrepreneurial marketing Most companies are started by individuals who visualize an opportunity and knock on every door to gain attention. Jim Koch, founder of Boston Beer Company, whose Samuel Adams beer has become a top-selling craft beer, started out in 1984 carrying bottles of Samuel Adams from bar to bar to persuade bartenders to carry it. For 10 years, he sold his beer through direct selling and grassroots public relations. Today his business pulls in nearly 200 million, making it the leader in the U.S. craft beer market.2
Outlets analysis of sales by different types of outlet will indicate their relative importance, trends and the mix, for demand analysis. The growth of direct selling through mail order and other direct methods, and the changing role of the garage forecourt as an outlet for products from food and drink to audio and video products, indicate a possible need for reorganization of the marketing effort to take account of different outlets for the company's products. Statistics on the regional distribution of outlets may have implications for other marketing activity such as sales and advertising, or for reorganizing the regional outlet pattern.
This is online Multi-Level Marketing (MLM), which is perfectly legal. Do your due diligence to make sure, of course, that a multi-tier program is not an illegal pyramid scheme. If the game is to earn income by signing up others, you are most likely dealing with a pyramid. Many people confuse honest, legal MLM with dishonest, scammy pyramid schemes. With MLM (also known as Network Marketing), it becomes as important to build a strong downline as it does to sell product. Also, MLM companies are subject to numerous regulations (to prevent them from becoming pyramids, basically). Not all online companies are complying (or even know about this ). If you are a Network marketing representative who is using Site Build It , go like crazy You have a big edge over 99 of Network marketers who are mostly failing online. Be sure to join the 5 Pillar Program before you tell your entire downline about how much Site Build It has built your online business.
Discuss the role integrated marketing communications plays in relationship marketing. How might the mass customization of advertising and other forms of marketing communication be possible relationship marketing, 7 mass customization, 7 marketing mix, 8 integrated marketing communications (IMC),9
Of course, likening customer relationship building to social behaviour is not new, as O'Malley and Tynan (2001) point out the analogy of marriage has been used since the 1980s at least, particularly for B2B marketing. They also note that this concept also rests uneasily with the customer. Many do not want a continuous relationship with their supplier. They may prefer a discontinuous relationship based more on exchanges. They perceive the B2C relationship quite differently from that with friends or family. O'Malley and Tynan debunk much of the relationship marketing mythology by stating that
Advertising and personal-selling efforts vary depending on the type of market being sought, and even firms in the same industry may differ in the allocation of their promotional efforts. For example, in the cosmetics industry, Avon and Mary Kay Cosmetics concentrate on direct selling, whereas Revlon and Max Factor rely heavily on consumer advertising. Firms also differ in the relative emphasis they place on advertising and sales promotion. Companies selling high-quality brands use advertising to convince consumers of their superiority, justify their higher prices, and maintain their image. Brands of lower quality, or those that are hard to differentiate, often compete more on a price or value for the money basis and may rely more on sales promotion to the trade and or to consumers.
When the subject of 2-tier programs comes up, the question often arises as to whether two-tier affiliate programs are MLM - multi-level marketing schemes. Also known as network marketing, MLM is essentially any business where payouts occur at two or more levels. For example, any company that compensates you for the sales you make, and also pays you a small percentage of the sales made by those you've recruited as sellers, is an MLM company. According to that definition, 2-tier affiliate programs are MLM programs. Don't let the MLM association scare you or put you off. There are many reputable MLM organizations including Avon, Mary Kay Cosmetics and PartyLite Gifts, Inc.
The Internet also offers the opportunity to sell directly to customers in both the consumer market and the business-to-business market. This direct selling of goods and services has been labeled e-commerce. Many of the sites already mentioned in this chapter have a sales compo-nent either as a primary or secondary goal.
Complementary channels is to reach market segments that cannot otherwise be served. For example, Avon Products, which had sold directly to consumers for 100 years, broke the tradition in 1986 and began selling some perfumes (e.g., Deneuve fragrance, which sells for as much as 165 an ounce) through department stores. The rationale behind this move was to serve customer segments that the company could not reach through direct selling.10 Samsonite Corporation sells the same type of luggage to discount stores that it distributes through department stores, with some cosmetic changes in design. In this way the company is able to reach middle-and low-income segments that may never shop for luggage in department stores. Similarly, magazines use newsstand distribution as a complementary channel to subscriptions. Catalogs serve as complementary channels for large retailers such as J.C. Penney.
Thousands of small businesses of all kinds -- auction sellers, service-sellers, local businesses with local clients, affiliates, information-publishers , those with existing online businesses e-commerce sites, network marketers, etc. -- have used SBI to build a Web site that works See the proof at.
If you're a marketing professional in the 21st century, word of mouth seems to be one of those buzzwords you can't live without.Trade books and articles often tout word of mouth as one of the 'next big ideas' for the troubled marketing communication industries. The main reason is that traditional advertising just doesn't seem to work that well anymore. Advertising experts and their clients are becoming more and more concerned with audience fragmentation, ad clutter, consumer annoyance and avoidance of advertising. Industry prophets talk about the need for a paradigm shift in marketing communications permission marketing instead of intrusive advertising, pull instead of push, one-on-one instead of mass messages, relationship marketing instead of isolated communication events, integration of promotional and entertainment content instead of a clear identification of the advertiser. In the midst of these cataclysmic changes, word of mouth seems to represent hope and one of the guiding...
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