discussion
Welcome to Personal Selling! When was the last time you sold something? Think about it. You don’t need to work in a sales position to be selling. You sell every day. You sell concepts, ideas, perspectives, and opinions. You may be in a sales job where you are selling a product or a service. The important thing to understand is that you SELL YOURSELF every time you interact with someone else – face‐to‐face, via email or even on the phone.
And we’ve all been doing it since we were born. You and I both sold our caregiver every time we were hungry. We sold our parents on going out or buying us something. Sales is one of the most important skills in life and in your professional careers.
The purpose of this first chapter is to provide you with an introduction to personal selling and the trust‐based relationship selling model. We will also briefly discuss the history of sales and the value that sales provides to the market, to the economy and to businesses. Without sales, a company and an economy would not survive.
Our undergraduate school of business was named after R. Kirk Landon, former CEO for American Bankers Insurance Group. Mr. Landon would always say “The most important person in the Company is the one who makes the sale.” These are very wise words to live by.
1Chapter 1 Lecture Notes
MAR 4400 Personal Selling
2
By the end of this chapter, the student should successfully achieve the following learning outcomes:
1. Define personal selling and describe its unique characteristics as a marketing communications tool. Remember the 4Ps in your basic marketing class? Personal selling falls under the PROMOTION piece of the marketing mix.
2. Distinguish between transaction‐focused traditional selling and trust‐based relationship selling, with the latter focusing on customer value and sales dialogue. Today’s business‐savvy customers need someone they can trust, not someone to ‘sell’ them something. This is not a course where we are going to learn to be one of those pushy, self‐centered salespeople.
3. Understand sales professionalism as a key driver in the continued evolution of personal selling. Sales has changed so much in the last several decades.
4. Explain the contributions of personal selling to society, business firms, and customers. As mentioned before, selling generates revenues and revenues are important to our existence.
5. Discuss five alternative approaches to selling: stimulus response, mental states, needs satisfaction, problem solving and consultative. You’ll also read about ADAPTIVE Selling, which means adjusting or modifying your sales messages based on your audience or buyer.
6. Understand the sales process as a series of interrelated steps.
7. Describe several aspects of sales careers, types of selling jobs, and the key qualifications needed for sales success
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
3
While there are many different styles of personal selling, your text focuses on trust‐based relationship
selling which recognizes the value of building long‐term mutually beneficial relationships with customers.
Trust‐based relationship selling requires that salespeople earn customer trust and that the selling strategy
meets customer needs and contributes to the creation, communication and delivery of customer value.
You can be the greatest and most eloquent speaker, but that doesn’t guarantee sales success. A good talker
or a salesperson with a great personality is not enough. He or she has to build trust. The more costly a
buyer’s purchase, the more the buyer needs to trust the salesperson because there’s more risk. Think about
the last time you bought something. How did that salesperson create value for you? What did they do
specifically to build trust with you? Most importantly, how did they make you feel?
Take a few minutes to review Exhibit 1.1 which compares the transaction‐focused sales approach to the
trust‐based one. The text reviews the following characteristics for each:
• Typical skills required, where trust based requires a lot more listening and questioning, strategic problem solving.
• Primary focus , where trust based is focused on the customer, not the salesperson’s agenda.
• Desired outcomes, where trust based looks at what’s in it for the customer and mutual benefits.
• Role of salesperson is different – from a closer to a business consultant and ally.
• Communications – from one‐way to two‐way dialogue.
• Salesperson is more involved in decision‐making of the buyer with the trust based approach.
• Knowledge required, where in the trust based, the salesperson has to be much more prepared and ready to deliver more value.
• Follow up after sales – relationship continues; it doesn’t just end with the sale.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
Trust‐based relationship selling focuses on the creation, communication and delivery of customer value. It's important to understand the concept of customer value. We define customer value as the customer’s perception of what they get or what they have to give up, for their investment of time or money. It’s the assessment of the perceived value gained, relative to the perceived cost of the buyer. When we talk about cost, it’s much more than money. It includes other factors such as the perceived stress associated with making a change, the time invested in a transaction or decision, or the perceived risk.
EXAMPLE – What’s important to me? Time versus cost. Customer value for me means being able to save time and get my needs met as quickly and efficiently as possible. For some people, it could be the ambience or look and feel of a store. Different strokes for different folks.
4Chapter 1 Lecture Notes
MAR 4400 Personal Selling
Personal selling is highly dependent upon interpersonal communication that fosters trust and builds a shared sense of mutual gain. The interpersonal communication directed at building relationships with customers is referred to as sales dialogue. Sales dialogue is basically a series of business conversations between buyers & sellers that occur as salespeople attempt to initiate, develop, & enhance customer relationships. Sales dialogue means that there are two or more people involved; there’s a two‐way exchange of information that requires both listening and questioning. These conversations are important for the following reasons:
• Determining the need for further attention (qualification process) • Clarifying the situation and buying processes • Discovering unique needs • Determining priorities • Communicating how the sales organization can create and deliver customer value • Negotiating a business deal and earning a commitment from the customer • Making the customer aware of additional opportunities to increase the value received • Assessing sales organization performance to ensure continuous improvement
5Chapter 1 Lecture Notes
MAR 4400 Personal Selling
6
Chapter 1 provides a broad overview of the evolution of personal selling and as you can see from this diagram, professional selling has grown from its origins: from the peddler (dealer, supplier) trading from village to village or town to town, to more formally recognized as a business function, then to the modern era of professional selling that focuses on customer relationship management through trust‐based relational behaviors. We’ve gone from transaction focused selling to trust‐ based selling. And customers have demanded it!
The main thing you should take away from the evolution of personal selling is that it has grown in its degree of professionalism. Although some still don’t recognize sales as a true profession, it is a fact that B2B salespeople are becoming more professional each day. Sales is so important now that close to 90% of marketing majors end up in sales jobs. A very high % of CEOs and company presidents started in sales. Professional selling, both for B2B and even B2C, includes more formalized training programs and the greater use and acceptance of ethical codes of conduct guiding sales behavior.
Make sure to review Exhibit 1.2 in the text for more information on the continued evolution of personal selling. This exhibit summarizes the changes in the market and environment which have influenced and have molded what sales is today: • Today’s intense competition requires a sales professional that is an ASSET to a company. • There’s a lot more emphasis on productivity, and we see an increased use of technology, such as sales and CRM software, and mobile devices to make salespeople for efficient. We also see salespeople more focused on closing more profitable business versus just closing to meet a quota. • There are so many more distribution channels available to customers today; more fragmentation; more globalization. • Customers are more demanding and educated today; they dictate greater quality standards. • Much more knowledge required – customers know more and expect more knowledge.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
To put it another way, B2B selling has moved from a reliance on canned sales presentations to a greater focus on sales professionalism. Canned sales presentations are those that include scripted sales calls, memorized presentations, and automated presentations. There is no customization at all. There’s also very little dialogue and the salesperson does most of the talking.
Sales professionalism refers to a customer oriented approach that uses truthful non‐ manipulative tactics to satisfy the long‐term needs of both the customer and the selling firm. We want to build sales professionals this semester!
MAR 4400 Personal Selling
Chapter 1 Lecture Notes 7
Now let's talk a little bit about the contributions of personal selling. First, let's look at how salespeople help contribute to society. One of the primary ways that salespeople contribute to society is that they help to stimulate the economy. “Nothing happens until something is sold” somewhat describes the impact of salespeople on the economy. This is especially important when the economy is in a downturn, like we are experiencing now. The efforts of the salespeople help get the economy moving again as they help stimulate buying behavior. Often times, it is salespeople who help organizations discover ways to increase productivity, profits, or other measures of performance, through an investment in the goods and services the salespeople offer.
This leads us to our second way in which salespeople contribute to society salespeople help with the diffusion of innovation. In other words, they help their markets discover and learn about emerging technology and innovations. It’s not uncommon for businesses to rely on salespeople as sources of information about new products or improvements to existing products. While they may not always end up making a sale, salespeople help educate the marketplace. In one of companies I worked at, salespeople were given an incentive for bringing new products ideas to the R & D department.
MAR 4400 Personal Selling
Chapter 1 Lecture Notes 8
So how do salespeople contribute to the firm that employs them? First and perhaps foremost, salespeople generate revenue. They are the frontline of the company working with their target markets to generate sales revenue.
Salespeople also provide market research and customer feedback in their role as boundary spanners, who serve as a boundary between the organization and the markets they serve. Salespeople rapidly get to know the competitive landscape, including the competition, the customers, and the dynamics of the market. The expertise they developed along with the constant exposure to changing market conditions makes them vital knowledge resources.
Salespeople also become future leaders of the organization because of their strong awareness of the customers, the markets, and the competitive environment. This knowledge about the external environment, combined with their strong interpersonal communication skills, helps to make them natural choices for leadership within the organization. However, not all salespeople will do well when they take on non‐selling positions. These positions often involve less flexibility and increased administrative work and potentially less income than salespeople are used to. These differences may lead to dissatisfaction and/or keep salespeople from wanting internal leadership positions.
MAR 4400 Personal Selling
Chapter 1 Lecture Notes 9
Salespeople add value to their customers in a variety of ways. First, salespeople provide solutions to problems. They help their customers by helping to fix what isn't working or helping to make what is working work even better.
Salespeople also provide expertise and serve as information resources for their customers. For example, restaurant owners may not have the time or energy necessary to become an expert in restaurant oriented computer systems. Instead, they rely on computer systems salespeople to provide that expertise and help them make wise decisions.
Salespeople serve as advocates for the customer when dealing with the selling organization. Customers will sometimes have special needs and expect the salespeople to coordinate the selling organization's resources to meet those needs. Ultimately it comes down to the idea that customers expect salespeople to deliver value.
MAR 4400 Personal Selling
Chapter 1 Lecture Notes 10
11
Your textbook talks about five approaches to personal selling: stimulus response selling, mental state selling, needs satisfaction selling, problem‐solving selling, and consultative selling. The book also discusses adaptive selling which refers to the ability of salespeople to alter their sales messages and behaviors during a sales presentation as they encounter different sales situations and different customers. Very important concept, which we will talk about more in coming weeks.
Our focus this semester, throughout the textbook, will be on needs satisfaction selling and problem‐solving selling. We will also weave in adaptive selling into our studies, as it is crucial to be flexible in our approach.
MAR 4400 Personal Selling
Chapter 1 Lecture Notes
Be sure to review this approach and be familiar with it, as noted here in Figure 1.1. In the stimuli response approach, the salesperson relies on information overload to stimulate the buyer. The salesperson assumes that buyer reactions are favorable and keeps going until the buyer makes a purchase decision. This can be seen as an aggressive approach. This is the approach many of us are familiar with when a salesperson BOMBARDS us with information – information overload.
Salespeople using this approach apply continued affirmation, which means that the salesperson uses a series of questions to get the buyer to answer “yes” time after time. This assumes that eventually, the buyer will say “yes” to the sales proposition.
12Chapter 1 Lecture Notes
MAR 4400 Personal Selling
13
In this approach, the salesperson assumes that the buyer will go through a series of mental states. The salesperson then tailors his/her message based on these assumptions. As with the previous model, it’s risky and unreliable because it doesn’t promote listening and questioning, both important in building relationships.
And we know that a relationship is based on TRUST. Trust can’t be built on one‐way communications. We seldom buy from someone we don’t trust.
It is important to note, however, that we must be familiar with the AIDA model and realize that customers do go through a series of stages. The key is to be flexible enough to adapt the customer’s mental stages. When you look at the handout Parallel Dimensions of Selling, you will see that the sales process can track with the stages of the buyer. This is a guide. Sales cannot be treated as a sequential, perfect process because we are dealing with people and perceptions.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
14
In the needs satisfaction approach to selling, the salesperson interacts with buyers to determine existing needs then presents relevant and meaningful solutions to those needs and continues related sales dialogue until the buyer makes a purchase decision. This approach is popular with salespeople and customers alike because it focuses on the customer and not the salesperson. Salespeople need good questioning and listening skills in order to uncover needs.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
15
The problem‐solving approach to selling is an extension of the needs satisfaction approach. In problem‐solving selling, the salesperson interacts with the buyer to determine existing and potential needs then presents multiple solutions not limited to just the seller’s products. This approach is more involved and requires greater commitment to the process from both the salesperson and the customer.
This approach can lead buyers to discovering problems they didn't know they had and can lead salespeople to presenting solutions other than the ones they provide. Regardless if successful or not, the salesperson is likely to earn the trust and respect of the buyer which may lead to future opportunities. Again, listening and questioning are crucial!
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
16
Consultative selling refers to the process of helping customers reach their strategic goals by using the products, services and expertise of the selling organization. Consultative selling is a step beyond the problem‐solving approach to selling. The salesperson may employ multiple assets belonging to the sales organization in order to help the customer reach his or her strategic goals.
For example, an agrochemical salesperson may provide his or her customers with assistance when the customer is thinking about purchasing capital equipment such as spray rigs and tractors. This is well outside the scope of the salesperson's products, but it is within the scope of the salesperson's capability by creating and delivering value for the customer. This sort of consultative selling insulates the salesperson from price and other forms of competition and can help ensure a profitable long‐term relationship with the customer.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
17
Figure 1.4 illustrates the trust‐based sales process. Here we see how the textbook and course are structured. Chapters 2 through 4 discuss the selling foundations, the basics of sales. Chapters 5 through 8 cover the actual steps in the sales process, like initiating and developing customer relationships. And Chapter 9 deals with enhancing customer relationships. Each of these chapters, along with Chapter 10, will assist the salesperson in learning how to develop effective selling strategies. Please take a moment to become familiar with this process. Doing so will help you develop and maintain a process perspective as you learn about the individual components while reading the text.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
18
Please be sure to listen carefully to the e‐lecture.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
Please be sure to listen carefully to the e‐lecture.
19
20
Please be sure to listen carefully to the e‐lecture.
21
Please be sure to listen carefully to the e‐lecture.
22
Please be sure to listen carefully to the e‐lecture.
23
Please be sure to listen carefully to the e‐lecture.
Please be sure to listen carefully to the e‐lecture.
24Chapter 1 Lecture Notes
MAR 4400 Personal Selling
25
Please be sure to listen carefully to the e‐lecture.
Chapter 1 Lecture Notes
MAR 4400 Personal Selling
26
Please be sure to listen carefully to the e‐lecture.