The sales and marketing context
In this chapter, we will look at the context for knowledge management within sales and marketing and at the types of knowledge that should be addressed.
We need to state up front that there is more than one sales and marketing context. The work of the lone salesperson in a one-to-one relationship with a buyer is very different from that of a marketing team working together on a global campaign based on the latest market research. As we look at the different contexts, we will focus on three main areas:
the distributed salesforce, working with buyers and customers, delivering to sales targets;
the bid team, developing and delivering large-scale bids, often in response to an invitation to tender;
the marketing team, responsible for planning, delivering and evaluating marketing campaigns.
For each of these, we will look at the way they work and at the knowledge they need. There are other contexts as well of course – the store-based salespeople, door-to-door selling, the traders who buy and sell commodities, telesales and many others – but these three probably cover between them most of the KM issues for sales and marketing.
The sales force
The sales force usually work as individuals, but often these individuals can be grouped into teams covering specific regions and specific products or product ranges for their organisation. They may be selling FMCGs (fast-moving consumer goods) such as clothing or pharmaceuticals to buyers in high street chains (such as Mars in Chapter 9), they may be selling IT solutions to blue-chip businesses (like BT in Chapter 7) or they may be selling cars to fleet buyers in major multinationals. They work to sales targets and are often highly motivated and incentivised to meet those targets. They spend a lot of their time with the buyers and customers and relatively little time at ‘head office’ with the rest of the team.
The sales force needs the following knowledge:
Knowledge of how to sell – They need the basic knowledge of the sales process, such as relationship-building, negotiation and closing. This can be taught in theory, but the knowledge is really only acquired through practice, for example through role-play and coaching, as well as on-the-job learning. As one sales director told us, ‘we always do a lot of scenario planning. Before reviews I sit with my team and I plan what is the worst that might happen and how do we combat it? What is the most likely case and how do we combat this? What is the best case and how do we maximise the outcome?’
Knowledge of pricing – Sometimes the price of an item is flexible, with the potential for offers and promotions such as ‘buy one, get one free’. The sales force need to know the pricing strategy, the pricing options and how to sell the benefits of the pricing approach to the buyer. This knowledge needs to be provided to the sales force by the experts in the sales organisation, who themselves rely on input from the sales force. Pricing strategies can usefully be shared between sales forces in different regions and different countries.
Knowledge of product – The sales force need to know the details of the product and to be rapidly briefed about any new products that are developed. In the conversation with the buyer, the sales person has to be the product expert. This knowledge comes from the product development unit and may also be informed by feedback from customers and consumers. One firm producing motor oil products actually delivers regular training (‘Motoroil 101’) to its sales and marketing departments to bring them up to speed in new products.
Knowledge of the consumers and their behaviour – This includes knowledge of consumer wants and buying habits and how to influence them, through display, through promotions and through education. The sales person selling to a retailer, for example, must be the recognised category expert and understand the category shopper better than the buyer and better than the competing companies. ‘One thing that we offer is our understanding of the local consumer and we need to use that knowledge to advise the retailer,’ said one sales manager. This knowledge can be used to sell the products and brands better, to build more ‘shoppable’ displays and help grow sales for the retailer and thus for the sales force. The sales rep starts to act as an expert consultant, offering a knowledge-based service.
Knowledge of their sales to that buyer and the overall market (or competition?) – They need to know the sales data, the margins and the trend. This knowledge will be delivered by the central sales organisation, based on studies and on aggregated sales data from across the firm. One sales manager told us, ‘We have to know our data and information much better than the buyers do. They will use a set of information on how much they buy and sell from us; we need to know these data far better than they do.’ If the buyer understands the data better than the seller, the seller is at a disadvantage. This knowledge needs to cover the buyer’ s competitors’ data as well, if possible. The sales rep selling to a retailer will probably have data for all of the retailer’ s competitors and although they cannot give away any specifics, they can talk about trends and share insights in terms of what is going on across the overall marketplace. This knowledge is much appreciated by the buyer and becomes an added service the sales force can offer.
Knowledge of the buyers and the buying companies – The best sales work through mutual advantage, so that both the buyer and the seller benefit from the deal. Therefore the sales force need knowledge of the buying organisation and its goals and objectives, as well as those of the individual buyers. The sales organisation needs to seek to understand their big customers, their game plan and drivers, and develop and define a customer profile and a unique customer strategy based on that profile, which is shared with and understood by the entire sales force. Although much of this knowledge comes from the sales force themselves, it will again be aggregated by the central organisation.
Knowledge of the production capacity of the organisation – There is no point in selling something that can’ t be delivered, so the sales force need to know what can be produced for and delivered to the client. Again, this knowledge needs to be delivered to the sales force by knowledge transfer along the internal supply chain, and needs to be incorporated into sales targets.
A knowledge management framework for a sales organisation will probably contain the following elements:
Processes
The processes and technologies marked below in bold are described in detail in Chapters 3 and 5:
coaching and training (including role-play and scenario planning);
regular knowledge exchanges and mini-peer assists during meetings of the regional team and the wider sales community;
creation of knowledge assets on pricing, consumer insights and dealing with buyers (especially major accounts). These knowledge assets will have been developed through interviews with key successful sales staff.
The bid team
A bid team is also involved in selling, but selling in a very different context to that of the field sales force. The task of compiling a modern bid document should not be underestimated. The cost of tendering can run into very substantial figures. The bid team works as a team. Some organisations have a full-time team to work on all bids, while others create new teams to service each bid. We have worked with bid teams in the nuclear industry selling services for decommissioning nuclear power stations, bid teams in the service industry bidding for major private finance initiative (PFI) contracts, such as new schools and hospitals, and oil and gas teams bidding for the right to explore acreage. In each case, the team is looking to sell its service to the client, in competition with rival companies. Bidding is not a continuous operation; it is episodic and each bid can be considered to be a project. The metric for the bid is simple – win or lose (although the magnitude of the win is also important, as the service needs to make a profit. As one bid manager told us, ‘If we get it wrong on a major bid, we can get it wrong for the next 25 years.’ ) However, the best bid team has a high conversion ratio – the ratio of won bids to lost bids – and will convert more bids to contracts than other teams.
A bid team needs the following knowledge:
Knowledge of the bidding and procurement process – They have to know how to tender, how prequalification works, how bids are awarded and so on. This is fairly basic knowledge, but needs tailoring for each specific market and each specific bid process. Does the client have a preferred contract style, for example? Do they require certain prequalification conditions? What aspects of the bid document are most important and will be awarded most points in the bid evaluation process? The bid team needs to acquire this knowledge from previous teams operating in this market or with this client.
Knowledge of the client – They need to understand the needs of the client and their business drivers. The successful bid will be one that speaks directly to the client’ s needs and that uses examples and references that the client will understand and appreciate. This knowledge will come from those who interact with the client – maybe the sales force, maybe staff with a history of working with that client or people already delivering a service to the client.
Knowledge of which bids may be coming up in the future – There is huge advantage in being networked into the market, so that you have advance notice of forthcoming projects before the request for tender is issued. You can gain some advance notice and do some research before the bid even begins. Again, this knowledge comes from your colleagues already working in the market.
Knowledge of how to construct a bid document – Creating a bid document is a complex project requiring collaboration between many people and the cost can be considerable. There is huge value to the organisation in being able to construct bids quickly, effectively and efficiently, perhaps reusing powerful content from previous bids. Again, the bid team needs to acquire this knowledge and content from previous teams operating in this market.
Knowledge of the product or service – This is crucial and this knowledge provides the core of the document. Very often, the knowledge and experience of the bidder is a strong selling point and this experience needs to be clear in the document. You also need to make it clear that you have a good knowledge management system in place and that you can therefore guarantee that the service or product you are offering will include the best knowledge of your company. This knowledge comes from those already delivering that product or service.
Knowledge of pricing – This is crucial for a big bid. If the pricing is too low, the company may make a loss for a long time. If the pricing is too high, they may not win the bid at all. This knowledge comes from past history of bidding and from teams already delivering the service (and who can therefore warn of hidden costs and hidden risks), as well as any market intelligence that might be available.
A knowledge management framework for bid teams will therefore contain the following elements:
Processes
The processes and technologies marked below in bold are described in detail in Chapters 3 and 5:
knowledge capture (retrospects) at the end of each bid;
after action reviews during bid preparation;
peer assist at the start of each new bid, involving previous bid teams, people currently involved in delivering the service that is being bid and anyone with detailed knowledge of the client;
creation of knowledge assets on bidding;
creation of a bidding community of practice, which may meet on a regular basis for knowledge exchange.
The marketing team
Marketing is about successful brand-building for a product or service and so generating the conditions for sale. Marketing can be done on a variety of scales. At one end of the scale, an account manager working with a client should always be on the lookout for opportunities to market new products and new services to that particular client. At the other end of the scale lies mass marketing, where the marketers seek to build brands that address specific consumer wants. For knowledge management purposes, we will focus on mass marketing in this section and refer you to the Ordnance Survey case study in Chapter 10 for a discussion of the role of the account manager in the marketing/sales pipeline.
Mass product marketing is a team task, delivered through marketing projects and campaigns. As in a bid, a marketing project has a beginning, a middle and an end, and often in a global organisation multiple marketing projects are going on all over the world, marketing the same or similar brands across multiple markets. Marketing is fertile ground for the creation of communities of practice, and marketing communities are seen in many organisations, such as Siemens, Coca-Cola, BP, Unilever and Mars (Chapter 9).
A marketing team needs the following knowledge:
Knowledge of the marketing process – They have to know how marketing works and how the marketing process and the marketing cycle are applied within their particular organisation. This is often codified centrally within the organisation; for example, SABMiller have codified their marketing approach in their ‘Marketing Way’,which they describe as ‘a toolkit for helping businesses to “own the growth” by sharpening their skills in analysing and segmenting their markets, identifying the profitable opportunities and deciding where and how to concentrate their efforts’.1
Knowledge of the market – They need to understand the characteristics of the particular market, including the number of consumers – current and potential; the types of consumer (consumer segmentation); the trends in market size in terms of value and volume; the market share of each major competitor and brand (including their own); the market segments (premium, mid-price, economy); the routes to market, and the regulatory framework (where applicable).
Knowledge of how to market to a particular segment – They need to know what strategy and approach to take to improve the standing of their brand in the market. For example, do they invest in trade marketing, TV advertisements, print advertisements, promotions such as ‘buy one, get one free’ or online marketing? This knowledge can easily be shared between different markets around the world through the marketing community of practice.
Knowledge of agencies – Much of the market research and the creation of marketing materials are done through agencies. The marketing teams need to know how to choose an agency and how best to manage the interaction between the marketing team and the agency. This knowledge comes through experience.
Knowledge of the product or service – Marketing needs a good understanding of the product and its unique selling points. With technical products, this understanding has to come from the product development department and generally they will document details of the product, to be stored in the product database.
Knowledge of how the consumer perceives the product or service – Marketing needs to understand whether or not consumers like their product and why. Marketing needs feedback from the consumers, either through market research, from sales, from technical support, from their consumer hotline or from consumer forums and consumer communities.
Knowledge of specific activities, such as product launch – Product launch is a major milestone in the life of a new product, which can have a significant positive or negative impact on product sales, depending on how well it has been planned and executed. It’ s therefore essential to develop knowledge in the team of how to do this. This knowledge will come from lessons from previous product launches and analysis of lessons from previous product launches. The starting point of these lessons will be the careful tracking and analysis of sales after product launch.
A knowledge management framework for marketing teams will therefore contain the following elements:
Processes
peer assist at the start of new marketing campaigns in new markets or for a very new and different product;
knowledge capture (retrospects) at the end of each marketing campaign (perhaps once the uplift in sales has been measured);
after-action reviews after major milestones, such as product launch;
creation of knowledge assets on the marketing process (such as the SABMiller Marketing Way mentioned above);
creation of a marketing community of practice or communities of purpose (or a number of communities, each focusing on a product category or a specific brand), for the exchange of knowledge and good practice in marketing and for exchanging marketing materials that others can adapt and reuse;
creation of product-based communities, where knowledge of specific products can be exchanged along the supply chain.
Technology
a knowledge library of marketing materials (see Chapter 5);
a market database, containing data on market size and shares, sales figures and data from consumer research;
a product database containing information and/or data on specific products;
a forum for the marketing community of practice;
forums or a mechanism for discussion among the product communities;
a yellow pages, to allow the marketing team to identify the experts and members of other marketing teams from around the world.
The interface between product development, manufacturing, marketing and sales
Chapter 10 discusses a case history of knowledge exchange at the Ordnance Survey along the marketing/sales supply chain, which is in itself a subset of a longer process of product development, marketing and sales. Knowledge needs to flow in many directions along the whole supply chain:
Product development needs to understand the market and so needs knowledge from marketing and sales in order to develop products that fill a market need.
Marketing and sales both need knowledge from product development of new products and forthcoming products.
Marketing, sales and product development all need knowledge about the customer regarding what the customers do, will and would buy.
Other departments, such as technical support and manufacturing, also need to be in the knowledge loop (see Figure 2.1).
Finally and most importantly, the entire supply chain needs to develop knowledge about ‘how to develop, launch, market and sell new products’.
As Graeme Smith says in Chapter 10, ‘As an intense human activity, customer supply chains are wholly dependent on knowledge and require social network activity to transfer that knowledge to the point of need.’ The knowledge that he is referring to is knowledge of the supply chain activity, namely ‘how to create, market and sell products and services for maximum company return’.
This knowledge is a fundamental requirement for any manufacturing and selling organisation. This knowledge is difficult to manage because it needs to cross organisational discipline silos, unlike any of the other examples given above, which operate within individual disciplines.
A knowledge management framework for the entire supply chain will therefore contain the following elements:
Processes
peer assists at the start of new development projects, by a multidivisional new product development team, which would include R&D, supply, marketing, finance and sales;
knowledge capture (retrospects) some time (for example one or two years) after product launch, when the real products sales can be compared with the predicted product sales, in order to draw out lessons for the entire supply chain. In some organisations this is part of the product launch review;
creation of a knowledge asset on product development;
creation of product-based communities, where knowledge of specific products can be exchanged along the supply chain. In some organisations the product-based community would be part of marketing.
Summary
Although sales, marketing and indeed the entire supply chain need different knowledge, the knowledge management framework that can fulfil their needs, i.e. the processes and technologies within that framework, are essentially the same.
In the next three chapters we will describe these processes and technologies in more detail and also discuss the communities and knowledge roles that need to be in place.