Example Of Omnico Inc Case Study

Statement of Problem

Omnico Inc was found to be trailing in the industry with regard to customer retention. The market research study indicated that the company was below the industry average as far customer retention is concerned. Buddy Towers, the new sales manager, believes that the cause of the problem is their sales people’s poor customer relationship management. The company thus has to identify which is the most effective approach to customer relationship management the company should adopt—the very friendly and personal approach that the manager has known or the more impersonal and technical approach.

Summary of the Facts

A market research study has shown that Omnico Inc was performing below average as regards its customer retention. Buddy Towers, the newly appointed sales manager and formerly one of the top salesmen of the company, foresees that the company will continue to decline in sales as a result in the next few years and eventually fold up. He assumes that the reason for this decline is the poor relationship building efforts of the sales people. In particular, he thinks that the sale people do not play enough golf with their clients and wants his sales people to pursue this direction. After all, Buddy has been the top salesman of Omnico for the last 20 years. His success is largely the result of his specific approach to relationship building—playing golf with clients.

Analysis

Laura is also correct about the importance of product and service knowledge. In a highly competitive environment and with high product and service knowledge, it is important that the sales person is more knowledgeable about these things than the customer is. This is particularly important in technological industries. However, this is not always the basis for decision-making. After all, decision-makers are humans with feelings. Again, in a situation where all things are equal especially with regard to product or service quality, other things—like friendship—would matter.

An approach to customer relationship-building based solely on Buddy’s or Laura’s model does not seem to work for Omnico. Both are top performers in the company. So everyone in sales would be doing something in-between their two approaches. Unfortunately, the market research findings indicate otherwise. Omnico is below average as far as customer retention is concerned. So, the two extreme ways may not really be that effective. This is a serious threat that the company—especially the sales team—should be concerned about.

Recommendations

Omnico should also do further investigation into the research findings, specifically into how the top companies in their industry did right. Omnico is below average in customer retention and it should use as benchmark the performance of those who were above average. While Buddy and Laura were among the top in Omnico, given the company’s performance in the research findings, they might just be mediocre in the industry. So, they cannot benchmark themselves.

Conclusion

In the end, what Omnico may need is a sales approach that is a balance between that of Buddys’ and that of Laura’s. It may something that is referred to as consultative selling (Rackham and De Vincentis, pp. 125–130). The sales person will have to be both a friend and a consultant to the client. To be effective in presenting everything best about the company’s products and services, he or she must be able to get the client to listen well. Good knowledge of products and services is not enough. Good and intimate knowledge of the customers is also very helpful. After all, if all things are equal among competitive companies, other things—like relationships—would matter more.

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