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PeterPreface14e_PPT_Ch091.pptxChapter 9 Personal Selling, Relationship Building, and Sales Management
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
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Personal Selling
Two-way flow of communication between a potential buyer and a salesperson
Designed to accomplish specific needs
Identify the potential buyer’s needs
Match those needs to one or more of the firm’s products or services
On the basis of this match, convince the buyer to purchase the product
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Importance of Personal Selling
Personal selling is used when goods are:
New and different
Technically complex
Expensive and require negotiation
Can be used to develop long standing relationship with customers
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Sales Process
Objectives the salesperson is trying to achieve while engaged in selling activities
Sequence of stages the salesperson should follow to achieve the objectives
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Objectives of the Sales Force
Revenue and sales
Helps gain competitive advantage in the marketplace
Information provision
Salesperson needs to:
Explain all attributes of the product or service
Answer questions and probe for additional questions
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Objectives of the Sales Force
Persuasion
Salesperson needs to:
Distinguish firm’s products from those of competitors
Maximize the number of sales as a percent of presentations
Convert undecided customers into first-time buyers
Convert first-time customers into repeat purchasers
Sell additional or complementary items to repeat customers
Tend to the needs of dissatisfied customers
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Objectives of the Sales Force
After sales service
Salesperson needs to ensure:
Delivery or installation of the product or service that meets or exceeds customer expectations
Immediate follow-up calls and visits to address unresolved or new concerns
Reassurance of product or service superiority through demonstrable actions
Relationships are built
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Figure 9.1 - The Sales Relationship-Building Process
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Prospecting
Process of locating potential customers
Required because customers:
Switch to other suppliers
Move out of the organization’s market area
Go out of business because of bankruptcy
Are acquired by another firm
Have only a onetime need for the product or service
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Prospecting
Location of prospects
Random lead generation - Names and addresses of prospects are randomly generated
Lead: Potential prospect that may or may not have the potential to be a true prospect
Selected-lead generation - Existing contacts and knowledge are used to generate new prospects
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Prospecting
Screening - Gathering information
Does the lead have a want or need that can be satisfied by the purchase of the firm’s products or services?
Does the lead have the ability to pay?
Does the lead have the authority to pay?
Can the lead be approached favorably?
Is the lead eligible to buy?
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Planning the Sales Call
Key areas of knowledge for salespeople
Thorough knowledge of representative company, including past history
Thorough knowledge of products and product line
Good working knowledge of competitor’s products
In-depth knowledge of the market for their merchandise
Accurate knowledge of prospect
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Presenting
Essentials to make a good impression
Be well prepared in all the knowledge areas
Develop a checklist of items for discussion
Develop good interpersonal skills
Adapt their style to the prospect
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Responding to Objections
Expect objections to occur at any time
Do not challenge the customer in response to an objection
Make the necessary presentation in order to help the client make an intelligent decision
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Obtaining Commitment
Not all sales end in a successful closing
Salespeople should analyze the reasons and determine whether:
More sales calls are necessary to obtain commitment
There exists a good match between customer needs and seller offerings or not
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Building Long-Term Relationships
Important goal for salespersons
Aftermarketing: Focuses the organization’s attention on providing continuing satisfaction and reinforcement to individuals or organizations that are past or current customers
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Aftermarketing Activities
Establishing and maintaining a customer information file
Monitoring order processing
Ensuring initial proper use of product or service
Providing customers ongoing guidance and support
Analyzing customer feedback
Continually conducting customer satisfaction research
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Relationships Can Lead to Partnerships
Functional relationships - Close personal relationship between buyer and seller where they work together to solve problems
Strategic partnerships: Long-term, formal relationships in which both parties make significant commitments and investments
Aim is to pursue mutual goals and to improve the profitability of each other
Known as strategic alliances
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People Who Support the Sales Force
Focus solely on promoting existing products and introduction of new products
Missionary salespeople
Support the sales staff by providing training or other technical assistance
Technical sales specialists
Used when the product is extremely high priced and is being sold to the whole organization
Cross-functional sales teams
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Managing the Sales and Relationship-Building Process
Company’s part of the sale involves:
Efficient and effective sales tools
Efficient delivery and reorder system
Equitable compensation plan to reward and motivate performance
Adequate supervision and evaluation of performance for continual improvement
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Sales Management Task
Individual salespeople are assigned geographic territories
Geographic structure
Salesperson is assigned customers and prospects for a particular product or product line
Product structure
Assigns a salesperson or team to serve a single customer or type of customer that has large or significant needs
Customer structure
Company may assign a salesperson or a team to focus on major customers to foster long-term relationships
Major account management
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Figure 9.2 - Organizing the Sales Force
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Controlling the Sales Force
It is critical that the sales force be properly controlled because personal selling:
Can be the largest marketing expense component in the final price of the product
Is likely to be less efficient unless the sales force is directed, motivated, and audited on a continual basis
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Sales Forecast
Estimate of how much of the company’s output can be sold during a specified future period under:
Proposed marketing plan
Assumed set of economic conditions
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Forecasting Sales: Goals
Establish sales quotas
Plan the personal selling efforts and other types of promotional activities
Budget selling expenses
Plan and coordinate production, logistics, inventories, personnel, and so forth
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Forecasting Methods
Jury of executive opinion method
Sales force composite method
Customer expectations method
Analyzing past sales data and the impact of factors that influence sales
Time-series analysis
Measuring the relationship between the dependent variable, sales, and independent variables to explain increases or decreases in sales volume
Correlation analysis
Other quantitative techniques
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Establishing Sales Territories and Quotas
Represents management’s need to match personal selling effort with sales potential
Sales territories can be segmented on the bases of:
Geography
Product specialization
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Sales Quotas
Provide incentives for salespeople
Provide a quantitative standard for performance measurement
Evaluate and control the efforts of the sales force
Activity quotas - Allow monitoring of whether salespersons are engaging in activities to the extent desired
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Sales Quotas
Represent specific sales goals assigned to each territory or unit over a designated time period
Factors in establishing sales factors
Compensation must be adjusted since all territories will not have equal potential
All salespeople will not have equal ability and assignments may have to be made accordingly
Sales task in each territory may differ from time period to time period
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Analyzing Expenses
Sales expense budget should be included in sales forecast
Steps
Sales expense budgets are developed
Developed for a period of a year and then broken down into quarters and months
Estimates of expenses and forecasted sales quotas are submitted to the sales manager fro review
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Motivating and Compensating Performance
Important task for the sales manager
Major determinants of sales force productivity
Types
Salary - Specific amount of monetary compensation at an agreed rate for definite time periods
Commission - Monetary compensation is provided for each unit of sales and expressed as a percentage of sales
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Motivating and Compensating Performance
Bases for computing commission
Volume of sales in units of product
Gross sales in dollars
Net sales after returns
Sales volume in excess of a quota
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Figure 9.4 - Types of Sales Force Incentives and Some Possible Performance Outcomes
Source: Some of the material was adapted from Gilbert A. Churchill Jr., Neil M. Ford, and Orville C. Walker, Sales Force Management, 5th ed. (Burr
Ridge, IL: Irwin/McGraw-Hill, 1997), p. 490
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