CH 18 - PERSONAL SELLING AND SALES MANAGEMENT
Determining the sales force structure
Because personal selling is so costly, no sales department can afford to be disorganized. Proper design helps the sales manager organize and delegate sales duties and provides direction for salespeople. commonly organized geographically
step 3 - approaching the customer and probing needs
Before approaching customers, the salesperson should learn as much as possible about the prospect's organization and its buyers.
buying power
Buying power involves both authority to make the purchase decision and access to funds to pay for it. To avoid wasting time and money, the salesperson needs to identify the purchasing authority and his or her ability to pay before making a presentation. Organizational charts and information about a firm's credit standing can provide valuable clues.
advertising offers the consumer a reason to buy
sales promotion offers an incentive to buy
Relative Amount of Time Spent in the Key Steps of the Selling Process
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comparison of personal selling and advertising/sales promotion
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consumer centric approach for managing customer interactions
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key differences between traditional selling and relationship selling
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leverage customer information: common CRM marketing database applications
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lead qualification
determination of a sales prospect's (1) recognized need, (2) buying power, and (3) receptivity and accessibility
campaign management
developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships
lead generation (prospecting)
identification of those firms and people most likely to buy the seller's offerings
Web-based interactions
increasingly popular touch point for customers to communicate with companies on their own terms. Web users can evaluate and purchase products, make reservations, input preferential data, and provide customer feedback on services and products. Data from these Web-based interactions are then captured, compiled, and used to segment customers, refine marketing efforts, develop new products, and deliver a degree of individual customization to improve customer relationships.
As part of the needs assessment, the consultative salesperson must know everything there is to know about the following:
product/service customers and their needs the competition industry
step 1 - generating leads
Initial groundwork must precede communication between the potential buyer and the salesperson. Lead generation, or prospecting, is the identification of those firms and people most likely to buy the seller's offerings. These firms or people become "sales leads" or "prospects."
the industry
Knowing the industry requires active research by the salesperson. This means attending industry and trade association meetings, reading articles published in industry and trade journals, keeping track of legislation and regulation that affect the industry, being aware of product alternatives and innovations from domestic and foreign competition, and having a feel for economic and financial conditions that may affect the industry. It is also important to be aware of economic downturns, as businesses may be looking for less expensive financing options.
step 4 - developing and proposing solutions
Once the salesperson has gathered the appropriate information about the client's needs and wants, the next step is to determine whether her company's products or services match the needs of the prospective customer. The salesperson then develops a solution, or possibly several solutions, in which the salesperson's product or service solves the client's problems or meets a specific need.
the impact of personal selling and sales managment
Will the increasingly sophisticated technology now available at marketers' fingertips eliminate the need for salespeople? Experts agree that a relationship between the salesperson and customer will always be necessary. Technology, however, can certainly help to improve that relationship. Cell phones, laptops, pagers, e-mail, and electronic organizers allow salespeople to be more accessible to both clients and the company. Moreover, the Internet provides salespeople with vast resources of information on clients, competitors, and the industry.
step 2 - qualifying leads
When a prospect shows interest in learning more about a product, the salesperson has the opportunity to follow up, or qualify, the lead. Personally visiting unqualified prospects wastes valuable salesperson time and company resources. Many leads often go unanswered because salespeople are given no indication as to how qualified the leads are in terms of interest and ability to purchase.
needs assesment
a determination of the customer's specific needs and wants and the range of options the customer has for satisfying them
cold calling
a form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects' needs or financial status
sales presentation
a formal meeting in which the salesperson presents a sales proposal to a prospective buyer
sales proposal
a formal written document or professional presentation that outlines how the salesperson's product or service will meet or exceed the prospect's needs
customer-centric
a philosophy under which the company customizes its product and service offering based on data generated through interactions between the customer and the company
networking
a process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations
preapproach
a process that describes the "homework" that must be done by a salesperson before he or she contacts a prospect
personal selling
a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other
referral
a recommendation to a salesperson from a customer or business associate
relationship selling (consultative selling)
a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnership
quota
a statement of the salesperson's sales goals, usually based on sales volume
Point of Sale Interactions
a touch point in stores or information kiosks that uses software to enable customers to easily provide information about themselves without feeling violated
touch points
area of a business where customers have contact with the company and data might be gathered
follow up
the final step of the selling process, in which the salesperson ensures delivery schedules are met, goods or services performed as promised, and the buyers' employees are properly trained to use the products
interaction
the point at which a customer and a company representative exchange information and develop learning relationships
knowlege management
the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization
negotiation
the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement
step 6 - closing the sale
At the end of the presentation, the salesperson should ask the customer how he or she would like to proceed. If the customer exhibits signs that he or she is ready to purchase, all questions have been answered, and objections have been met, then the salesperson can try to close the sale. Customers often give signals during or after the presentation that they are ready to buy or are not interested. Examples include changes in facial expressions, gestures, and questions asked. The salesperson should look for these signals and respond appropriately.
Key Concept: Describe customer relationship management
Companies that have a CRM system have a customer-centric model, learn ways to enhance their product and service, and often use knowledge management systems to centralize customer information. When managing interactions between customers, companies manage touch points. Interactions between the company and the customer facilitate the collection of large amounts of data. Companies can obtain contact information and data pertaining to the customer's current relationship with the organization. Companies that leverage customer information use that information for campaign management, retaining loyal customers, cross-selling other products and services, and designing targeted marketing communications.
Although the sales manager's basic job is to maximize sales at a reasonable cost while also maximizing profits, he or she also has many other important responsibilities and decisions:
Defining sales goals and the sales process Determining the sales force structure Recruiting and training the sales force Compensating and motivating the sales force Evaluating the sales force
Defining sales goals and the sales process
Effective sales management begins with a determination of sales goals. Without goals to achieve, salesperson performance would be mediocre at best, and the company would likely fail. Like any marketing objective, sales goals should be stated in clear, precise, and measurable terms and should always specify a time frame for their completion.
compensating and motivating the sales force
Only good planning will ensure that compensation attracts, motivates, and retains good salespeople. Generally, companies and industries with lower levels of compensation suffer higher turnover rates, which increase costs and decrease effectiveness. Therefore, compensation needs to be competitive enough to attract and motivate the best salespeople. Although the compensation plan motivates a salesperson to sell, sometimes it is not enough to produce the volume of sales or the profit margin required by sales management. Sales managers, therefore, often offer rewards or incentives, such as recognition at ceremonies, plaques, vacations, merchandise, and pay raises or cash bonuses
selling in the technology age
Personal selling has taken a technological turn in the last decade. Younger shoppers tend to research styles and prices before setting foot in a store. Some even browse other stores' Web sites while trying on clothes in competitors' stores. This type of shopper pushes salespeople away, but stores that embrace this love of technology and independence can gain loyal customers.
Key Concept: Describe personal selling
Personal selling is direct communication between a sales representative and one or more prospective buyers in an attempt to influence each other in a purchase situation. Broadly speaking, all businesspeople use personal selling to promote themselves and their ideas. Personal selling offers several advantages over other forms of promotion. Personal selling allows salespeople to thoroughly explain and demonstrate a product. Salespeople have the flexibility to tailor a sales proposal to the needs and preferences of individual customers. Personal selling is more efficient than other forms of promotion because salespeople target qualified prospects and avoid wasting efforts on unlikely buyers. Personal selling affords greater managerial control over promotion costs. Finally, personal selling is the most effective method of closing a sale and producing satisfied customers.
personal selling advantages
Personal selling provides a detailed explanation or demonstration of the product. This capability is especially needed for complex or new goods and services. The sales message can be varied according to the motivations and interests of each prospective customer. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. By contrast, advertising and sales promotion can respond only to the objections the copywriter thinks are important to customers. Personal selling can be directed only to qualified prospects. Other forms of promotion include some unavoidable waste because many people in the audience are not prospective customers. Costs can be controlled by adjusting the size of the sales force (and resulting expenses) in one-person increments. On the other hand, advertising and sales promotion must often be purchased in fairly large amounts. Perhaps the most important advantage is that personal selling is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer.
product/service
Product knowledge is the cornerstone for conducting a successful needs analysis. The consultative salesperson must be an expert on his or her product or service, including technical specifications, features and benefits, pricing and billing procedures, warranty and service support, performance comparisons with the competition, other customers' experiences with the product, and current advertising and promotional campaign messages.
step 5 - handling objections
Rarely does a prospect say "I'll buy it" right after a presentation. Instead, the prospect often raises objections or asks questions about the proposal and the product. The potential buyer may insist that the price is too high or that the good or service will not satisfy the present need.
Key Concept: Discuss the key differences between relationship selling and traditional selling
Relationship selling is the practice of building, maintaining, and enhancing interactions with customers to develop long-term satisfaction through mutually beneficial partnerships. Traditional selling, on the other hand, is transaction focused. That is, the salesperson is most concerned with making a one-time sale and moving on to the next prospect. Salespeople practicing relationship selling spend more time understanding a prospect's needs and developing solutions to meet those needs.
recruiting and training the sales force
Sales force recruitment should be based on an accurate, detailed description of the sales task as defined by the sales manager. Aside from the usual characteristics such as level of experience or education, what traits should sales managers look for in applicants? Ego strength: Great salespeople should have a strong, healthy self-esteem and the ability to bounce back from rejection. Sense of urgency and competitiveness: These traits push their sales to completion as well as help them persuade people. Assertiveness: Effective salespeople have the ability to be firm in one-to-one negotiations, to lead the sales process, and to get their point across confidently without being overbearing or aggressive. Sociable: Wanting to interact with others is a necessary trait for great salespeople. Risk takers: Great salespeople are willing to put themselves in less-than-assured situations, and in doing so, often are able to close unlikely sales. Capable of understanding complex concepts and ideas: Quick thinking and comprehension allow salespeople to quickly grasp and sell new products or enter new sales areas. Creativity: Great salespeople develop client solutions in creative ways. Empathetic: Empathy—the ability to place oneself in someone else's shoes—enables salespeople to understand the client.
step 7 - follow up
Salespeople's responsibilities do not end with making the sales and placing the orders
evaluating the sales force
The final task of sales managers is evaluating the effectiveness and performance of the sales force. To evaluate the sales force, the sales manager needs feedback—that is, regular information from salespeople. Typical performance measures include sales volume, contribution to profit, calls per order, sales or profits per call, or percentage of calls achieving specific goals such as sales of products that the firm is heavily promoting.
recognized lead
The most basic criterion for determining whether someone is a prospect for a product is a need that is not being satisfied. The salesperson should first consider prospects who are aware of a need but should not disregard prospects who have not yet recognized that they have one. With a little more information about the product, they may decide they do have a need for it. Preliminary interviews and questioning can often provide the salesperson with enough information to determine whether there is a need.
receptivity and accessibility
The prospect must be willing to see the salesperson and be accessible to the salesperson. Some prospects simply refuse to see salespeople. Others, because of their stature in their organization, will see only a salesperson or sales manager with similar stature.
Key Concept: Describe the functions of sales management
The sales manager's basic job is to maximize sales at a reasonable cost while also maximizing profits. The sales manager's responsibilities include (1)defining sales goals and the sales process, (2)determining the sales force structure, (3)recruiting and training the sales force, (4)compensating and motivating the sales force, and (5)evaluating the sales force.
the competition
The salesperson must know as much about the competitor's company and products as he or she knows about his or her own company. Competitive intelligence includes many factors: who the competitors are and what is known about them, how their products and services compare, advantages and disadvantages, and strengths and weaknesses.
customers and their needs
The salesperson should know more about customers than he knows about himself. That's the secret to relationship and consultative selling, where the salesperson acts not only as a supplier of products and services but also as a trusted consultant and adviser. The professional salesperson brings each client business-building ideas and solutions to problems.
Key Concept: List the steps in the selling process
The selling process is composed of seven basic steps: (1)generating leads, (2)qualifying leads, (3)approaching the customer and probing needs, (4)developing and proposing solutions, (5)handling objections, (6)closing the sale, and (7)following up.
SOCIAL CRM
To use social CRM effectively, companies must understand which sites customers use, whether they post opinions, and the major influencers in the category. They can then marry this information with behavioral data like purchases and purchase frequency.
learning
an informal process of collecting customer data through customer comments and feedback on product or service performance