Kerin Chapter 20 - Personal Selling & Sales Management

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Chapter 20
Personal Selling & Sales Management

I.Scope & Significance Of Personal Selling & Sales Management
A. Scope & Significance Of Personal Selling & Sales Management
Personal selling
Two-way flow of communication between buyer & seller Often face-to-face Can influence a purchase decision.	Other Personal Selling media
	telephone video teleconferencing Internet/Web-enabled links .
377 Definition	Seeking out people who have a particular need. Assisting them recognize the existence of needs they have that could be met by buying your product. Demonstrating how your product satisfies a prospect’s need. Persuading qualified prospects that your product will fill their needs.
Sales management
Managing a Sales Force Involves	Setting Objectives recruiting, hiring, training, supervising compensating motivating
B. Pervasiveness of Selling
Every job with customer contact has a selling element. Almost 16 million work in sales positions (U.S.) About 20% of the chief executive officers in the top 1,000 U.S. corporations have significant sales experience.
C. Personal Selling in Marketing
Salespeople are the critical link between the firm and its customers. Salespeople are the company in a consumer's eyes. They represent what the company is or attempts to be and Often the only personal contact a customer has. Selling may be dominant in marketing program, especially with a push strategy
D. Creating Customer Value through Salespeople: Relationship and Partnership Selling
Salespeople can create customer value by:
Identifying creative solutions to customer problems Easing the customer buying process Following through after the sale is made.
Relationship Selling
Building ties to customers based on a salesperson's attention to customer needs commitment to customer needs over time.

II. The Many Forms Of Personal Selling
A. Order Taking
Preserve an ongoing relationship with existing customers and maintain sales.
Outside order takers	visit customers replenish inventory stocks.
Inside order takers	Answer questions Take orders Complete transactions Often employed in inbound telemarketing
B. Order Getting
Tasks	Involves
identifies prospective customers provides information presents persuasively closes sales follows up .	a high degree of creativity and customer empathy product knowledge sales training
Time-consuming (outside order getters work about 48 hours per week) Expensive. Sales call costs about $170, (compensation, benefits, and expenses.)
C. Customer Sales Support Personnel
Missionary salespeople
do not strictly solicit orders Perform promotional activities Introduce new products.
Sales engineers
Specializes in identifying, analyzing, and solving customer problems Brings know-how and technical expertise to the selling situation Often does not actually sell products and services.
D. Cross-Functional Team Selling
Team of professionals selling to and servicing major customers. Specialized knowledge used to satisfy different interests of individuals in a buying center.
Some Types of Team Selling
Conference selling	Team meets with buyers to discuss problems and opportunities.
Seminar selling	Team conducts educational program for a customer's technical staff

III. The Personal Selling Process: Building Relationships

A. Prospecting

Three types of prospects
Lead	Name of a person who may be a possible customer.
Prospect	Person who wants or needs the product.
Qualified prospect	Person who Wants or needs the product Can afford to buy it Is the decision maker.
Lead sources	Advertising Coupon Toll-free Trade shows Professional meetings Conferences Lists and directories. Cold canvassing in person Telephone canvassing Networking Referrals Center of influence
B. Preapproach

Obtaining further information on the prospect Deciding on the best method of approach. Important in international selling (customs dictate protocol). Failure to learn as much as possible about the prospect is unprofessional and can ruin a sales call.
C. Approach

The approach stage involves the initial meeting between the salesperson and prospect, where the objectives are to gain the prospect's attention, stimulate interest, and build the foundation for the sales presentation itself and the basis for a working relationship. First impressions are critical. The approach stage is very important in international settings. In many societies, considerable time is spent establishing a rapport between buyers and sellers. Besides a different pace, different actions may be required-for example, it is important to know how to exchange business cards and when to shake hands-as well as when not to.
D. Need Discovery
E. Presentation

Stimulus Response Format	Assumes that the appropriate stimulus by a salesperson, the prospect will buy. Salesperson tries one appeal after another. Often for simple situations
Formula Selling Format	Information must be provided in a manner that is accurate thorough step-by-step Canned sales presentation Memorized, standardized message Conveyed to every prospect. Lacks flexibility Lacks spontaneity Does not provide much feedback
Need Satisfaction Format	Emphasizes probing and listening identify needs and interests of prospective buyers. Presentation is then tailored to the prospect Product benefits valued by the prospect are highlighted.
Adaptive Selling	Adjusting the presentation to fit the selling situation Knowing when to offer solutions and when to ask for more information.
Consultative Selling	Focuses on problem identification Salesperson serves as an expert on problem recognition and resolution. Novel solutions often arise Creating unique value for the customer.
E. Handling Objections
Acknowledge and convert the objection. Postpone, when the objection will be addressed later in the presentation. Agree and neutralize. Accept the objection. Probe for the reasons behind it, and attempt to stimulate further discussion on the objection. Denial. When an objection is clearly untrue, it is wise to meet it head on with a firm denial. Ignore the objection when it is a stalling mechanism or is clearly not important to the prospect.
F. Closing

Trial Close	Asking the prospect to make a decision on some aspect of the purchase
Assumptive Close	Asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized.
Urgency Close	Used to commit the prospect quickly by making reference to the timeliness of the purchase.
Buying Signals	Knowing when the prospect is ready to buy More difficult in cross-cultural buyer-seller negotiations where societal customs and language play a large role
G. Follow-up

Making certain that the purchase has been delivered installed any difficulties are addressed. Solidifies the buyer-seller relationship. Cost and effort to obtain repeat sales from a satisfied customer is half of obtaining a new sale.

IV. The Sales Management Process

A. Sales Plan Formulation
1. Setting Objectives
Specifies what is to be achieved. Objectives can be output related input related behaviorally related. Objectives must be precise measurable time specific Objectives serve as performance standards for salesforce evaluation
2. Organizing the Salesforce
Should the company use its own salesforce, or should it use independent agents such as manufacturer's representatives? Should they be organized according to geography, customer type, or product or service? How many company salespeople should be employed?
In-House or Independent?
Economic analysis examines the costs of using both types of salespeople in a form of break-even analysis. Behavioral analysis should focus on issues related to control flexibility effort availability

Types of Structures
Geographical Structure	Simplest organization Country or the world is first divided into regions Region is divided into districts or territories. Salespeople are assigned to each district call on all customers represent all products sold by the firm. Minimizes travel time expense duplication of efforts

Customer Structure	Different types of buyers have different needs. Different salesforce calls on each separate type of buyer or marketing channel. Higher administrative costs Some duplication of selling effort.
	Major (key) account management
	Variation of customer organizational structure Using team selling on important customers Build long-term, cooperative relationships. "customer specialists" provide exceptional service.

Products Structure	When specific knowledge is required to sell certain types of products Salespeople develop specific product expertise with technical characteristics applications selling methods High administrative costs Duplication of selling effort

How many salespeople should be employed
workload method	NS = NC * CF * CL / AST
	NS = number of salespeople NC = number of customers CF = call frequency necessary to service a customer each year CL = length of an average call AST = average amount of selling time available per year

Developing Account Management Policies
Whom salespeople should contact Kinds of selling and service activities to conduct How these activities should be carried out
C. Sales Plan Implementation
1. Salesforce Recruitment and Selection
Create a job analysis Write a clear job description Develop job qualifications

2. Salesforce Training
Ongoing process for new and seasoned salespeople Covers more than selling practices On-the-job training is the most popular Individual instruction taught by experienced salespeople.
3. Salesforce Motivation and Compensation
Straight salary compensation plan,	a salesperson is paid a fixed fee per week, month, or year.
Straight commission compensation plan,	a salesperson's earnings are tied directly to the sales or profit generated.
Combination compensation plan contains	a specified salary plus a commission on sales or profit generated.
D. Salesforce Evaluation and Control
Quantitative Assessments
Typical Quota Bases	Number of calls made Selling expenses per sale Reports submitted Dollar sales volume Last year/current year sales ratio Number of new accounts Sales of specific products
Behavioral Evaluation
Subjective & often informal assessments	Attitude Attention to customers Product knowledge Selling and communication skills Appearance Professional demeanor About 60 U.S. companies now include customer satisfaction as a behavioral measure of salesperson performance.
E. Salesforce Automation and Customer Relationship Management
Salesforce Automation (SFA)	Use of technology to make the sales function more effective and efficient. SFA applies to a wide range of activities Each stage in the personal selling process Management of the salesforce.
Salesforce Computerization	Valuable in sales presentations Used in sales training Allows salespeople to process orders plan time allocations forecast sales communicate with customers communicate with company
Salesforce Communication	Facsimile, electronic mail, and voice mail are the three most common communication technologies used by salespeople. Growth of Home Offices Advances in communication have made possible the mobile and home sales office. Savings from closed regional sales offices and staff salaries often more than pay for setting up home offices. Salesforce communication is even better with the availability of Internet/Web-based technology.
Sales force automation (SFA) has become a competitive necessary Changing how selling is done Changing how salespeople are managed Applications promise to boost productivity improve customer relationships decrease selling cost. SFA combines automated sales support integration of sales data SFA encompasses technologies, both hardware and software, tailored to the sales function CRM is the next step up from SFA

Chapter 20 Personal Selling & Sales Management

Chapter 20
Personal Selling & Sales Management