Chapter 20 Personal Selling and Sales Management, Class Notes (2024)

Content List

• Scope and Importance of Personal Selling
• Nature of Personal Selling
• Types of Sales People
• Elements of the Personal Selling Process
• Prospecting and Evaluating
• Preapproach
• Approaching the Customer
• Making the Presentation
• Closing the Sale
• Following Up
• Management of the Salesforce
• Establishing Salesforce Objectives
• Organizing the Salesforce
• Recruiting and Selecting the Salesforce
• Training the Salesforce
• Compensating Sales People
• Motivating Sales People
• Please Email alex@udel.edu any comments
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Scope and Importance of Personal Selling

Nature of Personal Selling

• The greatest freedom to adjust a message to satisfy customersinformational needs, dynamic.
• Most precision, enabling marketers to focus on most promisingleads. vs. advertising, publicity and sales promotion
• Give more information
• Two way flow of information, interactivity.
• Discover the strengths and weaknesses of new products andpass this information on to the marketing department.
• Highest cost. Businesses spend more on personal selling thanon any other form of promotional mix.
• Goals range from
  • finding prospects
  • convincing prospects to buy
  • keeping customers satisfied--help them pass the word along.

Types of Sales Persons

• Order Takers

  Seek repeat sales, make certain that customers have sufficientproduct quantities where and when they need it. Do not requireextensive sales effort. Arrange displays, restocks them, answerphone calls. Low compensation, little training required. Highturnover of personnel. 2 types:
  • Inside Order Takers receive orders by mail/phone, sales person ina retail store.
  • Field Order Takers travel to customers. Use laptop computers to improve tracking of inventory and orders etc.

• Order Getters

  Sell to new customers and increase sales to present customers,sometimes called creative selling.
  Generate customer leads, provide information, persuading customersand closing sales. Required for high priced, complex and/or newproducts. High pressure, requires expensive, time consumingtraining.

• Support Personnel

  Facilitate the selling function. Primarily business to businessproducts.
  • Missionary Salespeople Distribute information regarding new goodsor services, describes attributes and leaves materials, does notclose sales. Assist producers' customers in selling to their owncustomers. IE call on retailers and persuade them to carry theproduct. Pharmaceuticals may go to doctors offices and persuadethem to carry their products.
  • Trade Salespeople May perform order taking function as well. Spendmuch time helping customers, especially retail stores, to promotethe product. Restock the shelves, set up displays.Technical Salespersons Offer technical assistance to currentcustomers. Usually trained engineers etc.
  • Service Salespeople interacts with customers after sale iscomplete.
  Team selling...entire team of selling professionals in selling toand servicing major customers, especially when specializedknowledge is needed to satisfy different interests in customers'buying centers.

Elements of the Personal Selling Process

1. Prospecting and Evaluating

   Seek names of prospects through sales records, referrals etc., alsoresponses to advertisem*nts. Need to evaluate if the person isable (Undergraduate degree to attend a graduate program), willing and authorized to buy. Blind prospecting-rely on phone directory etc.
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2. Preapproach (Preparing)

   Review key decision makers esp. for business to business, but also family
   • assess credit histories
   • prepare sales presentations
   • identify product needs.
   Helps present the presentation to meet the prospects needs.

3. Approaching the Customer

   Manner in which the sales person contacts the potential customer. First impression of the sales person is Lasting and thereforeimportant.
   Strive to develop a relationship rather than just push the product.
   Can be based on referrals, cold calling or repeat contact.
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4. Making the Presentation

   Need to attract and hold the prospects Attention to stimulateInterest and stir up Desire in the product so the potential customer takes the appropriate Action. AIDA
   Try to get the prospect to touch, hold or try the product. Must beable to change the presentation to meet the prospect needs.
   Three types of presentations:
   • Stimulus Response Format:Appropriate stimulus will initiate a buy decision, use one appeal after another hoping to hit the right button...Counter Clerk @ McDonald's "Would you like fries with your burger?"
   • Formula Selling Format: (Canned Sales Presentation) memorized, repetitive, given to all customers interested in a specific product.
     Good for inexperienced sales people.
     Better with heavily advertised items that are presold.
     Telemarketing a credit card!!
     
   • Need Satisfaction Format: Based on the principal that each customer has a different set of needs/desires., therefore the sales presentation should be adapted to the individual customer's needs, this is a key advantage of personal selling vs. advertising.
     Sales person asks questions first, then makes the presentationaccordingly.
     Need to do homework, listen well and allow customers to talk etc.
     Must answer two types of questions:
     • for more information
     • overcome objections.

   Overcoming Objections

   Seek out objections and address them.
   Anticipate and counter them before the prospect can raise them.
   Try to avoid bringing up objections that the prospect would nothave raised.
   Price objection is the most common
   Need to provide customers with reasons for the $s, build up thevalue before price is mentioned
   Must be convinced of price in own mind before you can sell tocustomer.
   Get budget info. on buyer before you try to sell, and must knowwhat they want, must sell service on top of product augmented product--to create value!!
   Must know value of product, provide warranties etc.!!
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5. Closing

   Ask prospect to buy product/products. Use trial closes, IE askabout financial terms, preferred method of delivery.
   20% sales people generally close 80% sales., Avon, over 1/2 US $1.4bn business from 17% of 415,000 SRs.
   Need to be prepared to close at any time. The following are popular closing techniques:
   • Trial Close (Minor decision close)
   • Assumptive close (Implied consent close)
   • Urgency close
   • Ask for the sale close
   If prospect says no, they may just need more reasons to buy!!
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6. Following Up

   Must follow up sale, determine if the order was delivered on time,installation OK etc. Also helps determine the prospects futureneeds.Accomplishes four objectives:
   • customer gain short term satisfaction
   • referrals are stimulated
   • in the long run, repurchase
   • prevent cognitive dissonance
   Old school, sell and leave!!--Quickly before customer changes hermind!!
   Now:
   • Stay a few minutes after sale--reinforce, make them feel good,made wise choice, leave small gift (with co. name on it!!), calloffice at any time etc!!
   • Follow up, reinforce, know birthdays, new year etc, friendlycorrespondence...relationship building!!

   Handout...Toyota Calling In Japan's Car Market

   Half of cars are sold door-to-door. This is shrinking due toenvironmental changes. Toyota has more than 100,000 door-to-doorsales people.
   Developing Long-term relationships is key, Keiretsu, do businesswith only those you know and trust. Face-to-face meetings beforebusiness to establish trust, the approach stage.
   Follow up is key to relationship:
   After sales:
   • call inquiring on car's immediate performance
   • hand written greeting cards
   • written invitations for low cost oil changes
   Prospecting includes:
   • Driving schools for people to obtain licenses = prospects
   • Also referrals from existing customers is very important
   • Curtesy calls to clients who referred new customers.
   Timing of presentation:
   • To housewife in the middle of the day
   • Just before 3 year "Shaken", following 2 years
   "At first I had no intention of buying a new car, but Mr. Saito isvery good at proposing reasons why I should change" = $1,600shaken.
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   Management of Salesforce

   Sales force is directly responsible for generating sales revenue.
   Eight general management areas:

   1. Establish Salesforce objectives

      Similar to other promotional objectives
      Demand oriented or image oriented.
      Major objective is persuasion, converting consumer interest into sales.
      Sales objectives; expected to accomplish within a certain period oftime.
      Give direction and purpose and act as a standard for evaluation.
      Set for total salesforce and each individual salesperson.
      Can be $s, units sold, market share to achieve, for individualsalespersons, also include ave. order size, ave. # of sales/timeperiod, and ratio orders/calls.
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   2. Organizing the Salesforce

      • In-house vs. independent agents (manufacturer's sales agents).
      • Organize by:
        • Geography (simplest, but not suitable if product(s) are complex orcustomers require specialized knowledge)
        • Customer: Different buyers have different needs
        • Product: Specific knowledge re: products is needed
      • Size. Marginal analysis, or determine how many sales calls/year areneeded for an organization to effectively serve its customers and divide this total by theaverage # of sales calls that a person makes annually. Also use subjective judgement.
        MBNA estimates how many calls to expect, one year in advance, and then determines the sizeof the salesforce at any given time.
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   3. Recruiting and Selecting Salespeople

      Need to establish a set of required qualifications before beginningto recruit. Prepare a job description that lists specific tasksthe salesperson should perform and analyze traits of the successfulsalespeople within the organization.
      May use assessment centers--intense training environment thatplaces candidates in realistic problem settings in which they givepriorities to their activities, make and act on decisions.
      Recruitment should be a continual activity aimed at reaching thebest applicants.
      Applicants that most match the demographics of the target market.Changing demographics, may be wise to hire hispanic sales people ifyour territory is in Florida!!
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   4. Training Sales Personnel

      Use formal programs, or Informal on-the-job training. Can be complex or simple.
      Training should focus on:
      • the company
      • products
      • selling techniques.
      Aimed at new hires and experienced personnel.
      Can be held in the field, educational institutions or companyfacilities.
      Oldsmobile spent $25 million last year to teach its dealershow to better treat its customers.
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   5. Compensating Sales People

      To attract, motivate and retain sales people, that facilitate andencourage good treatment of the customers.Need to understand personalities of sales people. Strive forproper balance of freedom, income and incentives.
      Need to determine the best level of compensation required, and thebest method of calculating it.
      • Straight salary
      • straight commission (selling insurance)--single percentage of sales or sliding rate
      • Combination plan
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   6. Motivating Sales People

      Need a systematic approach, must also satisfy non-financial needs:
      • Job security
      • Working Conditions
      • Opportunities to succeed
      Sales contests increase sales.
      Symbolic awards--plaques, rings etc.
      Can also use negative motivational methods for under performers.
      Due to burn out--even the best need motivating!!
      Ongoing process...keep reps. hungry
      Need a motivational program.
      Spend time with reps, personal attention!!
      Take interest in them and the sales goals
      
      1. Compensation packet that rewards quality salesmanship andextra effort
      2. Recognition of extra effort of sales force
      3. Make sure SR feel important
      4. Keep SR informed of company activities
      5. Make certain reps. believe in the company
      6. Goals must be realistic and achievable and changeable
      7. Determine what they want and give it to them
      8. Controlling and Evaluating Salesforce performance
      Rely on information from call reports, customer feedback andinvoices. Performance is determined by objectives.May compare with predetermined performance standards or with othersales people working under similar conditions.

      Handout Avon....

      $4 billion business, relied solely on personal selling untilrecently, environmental changes have changed this...no longer isthe wife expected to be at home...model is dual income earningparents with children in day care.
      Need to develop more efficient ways to reach customers.
      Salespeople earn pure commission, 10%...50% for top sellers (over$32,750)
      Strategies tried:
      • Avon Select.
        Direct mail catalog and toll free number, attract those that didn'tknow an "Avon Lady", or didn't want to deal with one. Also usednational TV and print campaign in conjunction.Problems =
        • Salesperson creates confidence in the brand, delivering much morethan advertising is able to do. When you take away the sellingrelationship, you're left with a brand that's relatively naked.
        • Key is not to undercut the field salesforce, similar to dual distribution creating channel conflict.
        Mary Kay Corp has also tried this strategy but differently and moresuccessfully:
        • Catalogs carry different merchandise
        • Forward commission to sales rep. in customer's area"Never have a grey area regarding competing with sales force."
        Other demotivational concerns:
        • Restructured commissions
        • Dropped awards, trips and other incentives
      • Leadership Program.
        A Multi-level marketing (MLM) concept. Rewarded for products soldas well as people you recruit as a sales rep....by getting some oftheir commission and a portion of the commission of reps.they recruit etc. Created a hard sell environment and wasconsequently scrapped.
      To remotivate:
      New CEO
      • Reinstate Birthday presents
      • Anniversary plates
      • Annual Pins
      • Phone Blitzs to indicate appreciation
      "Gifts [and recognition] are part of the magic"
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