Chapter 14: Personal Selling and Customer Service

Advantages of Personal Selling

-Provides detailed explanation/demonstration of product -Message can be varied according to motivations of each customer -Can be directed only to qualified prospects -Can purchase personal selling in small increments -Most effective promotion form in obtaining sale and satisfying customer

The Importance and Role of Personal Selling

-requires strategy decisions -helping to buy is good selling -salespeople represent whole company & customers -sales force provides market information -salespeople can be strategy planners

Basic Sales Tasks (Personal Selling)

1. Order-getting 2. Order-taking 3. Supporting One person may do two or all three tasks in some situations.

Sales Territory

A geographic area that is the responsibility of one salesperson or several working together. A territory might be a region of a country, a state, or part of a city, depending on the market potential. An airplane manufacturer like Boeing might consider a whole country as part of a sales territory for one salesperson. Carefully set territories can reduce travel time and the cost of sales calls. Assigning territories can also help reduce confusion about who has responsibility for a set of sales tasks. Sometimes simple geographic division doesn't serve customers' best interests. When companies sell different products that require very different knowledge or selling skills, it can make sense to have salespeople specialized by product line.

Sales Task Handling

A sales manager must organize the sales force so that all the necessary tasks are done well. Organizations are often structured to have different salespeople specialize in different sales tasks and by the target markets they serve. Sales tasks may be handled by a team.

Relationship (Consultative) Selling

A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships

3. Selling Formula Approach

A sales presentation that starts with a prepared presentation outline, then leads the customer through some logical steps to a final close. The prepared steps are logical because we assume that we know something about the target customer's needs and attitudes.

Sales Presentation

A salesperson's effort to make a sale or address a customer's problem Three types: 1. Prepared approach 2. Consultative approach 3. Selling Formula (mix of the two previous)

2. Consultative Selling Approach

A type of sales presentation in which the salesperson develops a good understanding of an individual customer's needs before trying to close the sale. Involves developing a good understanding of the individual customer's needs before trying to close the sale. This name is used because the salesperson is almost acting as a consultant to help identify and solve the customer's problem. With this approach, the sales rep makes some general benefit statements to get the customer's attention and interest. Then the salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs and to close the sale. This is a problem-solving approach—in which the customer and salesperson work together to satisfy the customer's needs. That's why it's sometimes called the need-satisfaction approach. Take skill and time. More likely to build real trust and more sales opportunities over the life of the relationship with the customer.

Commissions

Can both motivate and direct. If personal supervision would be difficult, a firm may get better control with a compensation plan that includes some commission, or even a straight commission plan, with built-in direction. Commissions reduce the need for working capital: Small companies that have limited working capital or uncertain markets often prefer straight commission, or combination plans with a large commission element. When sales drop off, costs do too. Such flexibility is similar to using manufacturers' agents who get paid only if they deliver sales. This advantage often dominates in selecting a sales compensation method.

Customer Service

Customer Service is Not the Product. Our focus here is on the service that is required to solve a problem that a customer encounters with a purchase. Customer service ***promotes*** the next purchase. Customer Service is part of Promotion. Firms should view customer service reps as a key part of personal selling. They are not just fixing the customer's problem, but rather fixing the company's problem, which is the risk of losing customers. There are companies that try to solve customers' problems even when the customers don't ask for help. They are monitoring the web and using big data and predictive analytics to provide ***proactive*** customer service. These companies reach out to unhappy customers before their frustration boils over.

1. Order Getters

Getters: Salespeople concerned with establishing relationships with new customers and developing new business's Getting: the act of seeking possible buyers within a well-organized sales presentation designed to sell a good, service, or idea. Getters are used to locate new prospects, open new accounts, see new opportunities, and help establish and build channel relationships. They help the customer identify ways to solve problems; then they sell concepts and ideas, not just physical products. The goods and services they supply are merely the means of achieving the customer's end. They should cater to top level customers who are more interested in way to save or make more money in the technical details of their business. Wholesale: almost hand it to the customer-once the order-getting is done and the customers become established and loyal, producers may try to eliminate the agents and save money with their own order takers. Retail: Influence consumer behavior. The order getter helps bring products out of the introduction stage into the market growth stage. Order getters are also helpful for selling heterogeneous shopping products. Consumers shop for many of these items on the basis of suitability and value.

Salary

Gives control- but needs supervision. A salesperson on straight salary earns the same amount regardless of how he or she spends time. So the salaried salesperson is expected to do what the sales manager asks—whether it is order-taking, supporting sales activities, solving customer service problems, or completing sales call reports. However, the sales manager maintains control only by close supervision. As a result, straight salary or a large salary element in the compensation plan increases the amount of sales supervision needed.

Inside Sales Force

Inside salespeople who conduct business from their offices via telephone, the internet, or visits from prospective buyers. Meets with customers in a manner that is NOT face to face. Inside salespeople are often used with small or hard-to-reach customers a firm might otherwise promote to with mass selling or just ignore. Many firms find an inside sales force to be more efficient and effective than a traditional face-to-face sales force. The big advantage of telephone selling by an inside sales group is that it saves time and money for the seller and it gives customers a fast and easy way to solve a purchasing problem. For example, many customers just call into the inside sales force for assistance or to place an order. Telephone contact may supplement a good website; the website provides standard information and an inside salesperson answers specific questions on the phone.

Prospecting

Involves following all the leads in the target market to identify potential customers. Finding live prospects who will help make the buying decision isn't as easy as it sounds. In business markets, for example, the salesperson may need to do some hard detective work to find the real purchase decision makers.

AIDA and Sales Presentations

Most sales presentations follow the AIDA sequence: Attention, Interest, Desire, Action. The time a sales rep spends on each of the steps varies depending on the situation and the selling approach being used. But it is still necessary to begin a presentation by getting the prospect's attention and, hopefully, to move the customer to action.

Software and Hardware

Provide competitive advantage in Sales. Software for customer relationship management, spreadsheet sales analysis, digital presentations, time management, sales forecasting, customer contact, and shelf-space management is at the salesperson's fingertips—most of it available right online. Commonplace hardware includes everything from smartphones and tablet computers to personal videoconferencing systems. In many situations, these technologies give sales reps new ways to meet customers' needs while achieving the objectives of their jobs.

Salespeople

Represent a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building. A sales rep is often the link between the firm and its customers. They are expected to be marketing managers in their own territories. The salesperson may have choices about (1) which customers to target, (2) which particular products to emphasize, (3) which intermediaries to rely on for help, (4) what message to communicate and how to use promotion money, and (5) how to adjust prices.

Local vs International

Sales approaches can be applied equally to domestic and international markets, but any good salesperson knows that personal selling techniques must be adjusted for cultural influences and other factors.

3. Supporting

Sales people who help the order-oriented salespeople but don't try to get orders themselves. Their activities are aimed at enhancing the relationship with the customer and getting sales in the long run. For the short run, however, they are ambassadors of goodwill who may provide specialized services and information. 3 Types of Supporting Salespeople: 1. Missionary 2. Technical 3. Customer Service Reps

Technology and Personal Selling

Sometimes technology substitutes for or complements personal selling Some sales tasks that have traditionally been handled by a person can now be handled effectively and at lower cost by an e-commerce system or other technology. Best in situations where there is a low level of personal relationship building needed and a low level of standardized information exchanged on a recurring basis (Orders, invoices, delivery status, product info, prices, etc) There would be an emphasis on digital self service or artificial intelligence. Because customers want problems resolved quickly, many firms rely on the Internet to deliver rapid and low-cost customer service. Websites can list FAQs (Frequently Asked Questions—with answers), provide copies of instructions, and show video demonstrations. Some firms even set up online communities where customers help one another with problems. The searchable communities make it easy to find someone else who has experienced the same problem—and see how it was fixed. New sales technology tools also change how sales tasks and responsibilities are planned and handled. Today, Technology is thoroughly integrated into the day of the modern salesperson.

2. Technical Specialists

Supporting Salespeople who provide technical assistance to order-oriented salespeople. Technical specialists are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. They are usually more skilled in showing the technical details of their product than in trying to persuade customers to buy it. Before the specialist's visit, an order getter probably has stimulated interest. The technical specialist provides the details.

1 Missionary Salespeople

Supporting salespeople who work for producers by calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. Missionary salespeople are sometimes called merchandisers or detailers. Producers who rely on merchant wholesalers or e-commerce to obtain widespread distribution often use missionary salespeople. The sales rep can give a promotion boost to a product that otherwise wouldn't get much attention because it's just one of many. Missionary sales jobs are often a route to order-oriented jobs.

3. Customer Service Reps

Supporting salespeople who work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. Unlike other supporting sales activities, which are needed only in certain selling situations, every marketing-oriented company needs good people to handle customer service. Customer service is important to both business customers and final consumers. There are times when a customer's problem simply can't be resolved without a personal touch. Customer service is the key to building repeat success; customer service reps are the salespeople who promote a customer's next purchase by being sure that the customer is satisfied with a previous purchase

2. Order Takers

Takers: Salespeople who sell to regular or established customers, complete most sales transactions, and maintain relationships with their customers. After a customer becomes interested in a firm's products through an order getter, supporting salesperson, or through advertising or sales promotion, an order taker usually answers any final questions and completes the sale. Taking: The routine completion of sales made regularly to target customers. Usually requires ongoing follow up to make certain that the customer is totally satisfied. Takers work on improving the whole relationship with their accounts, not just on completing a single sale. They do a variety of jobs within the business: explain details, make adjustments, handle complaints, explain new prices or terms, place sales promotion materials, and keep customers informed of new developments. An order taker who fails to meet a customer's expectations on any of these activities might jeopardize the relationship and future sales. Wholesale: The main job of wholesalers' order takers is to maintain close contact with customers, place orders, and check to be sure the company fills orders promptly. Order takers also handle any adjustments or complaints and generally act as liaisons between the company and its customers. Retail: Generally Salesclerks. Customers expect prompt and friendly service. They will find a new place to shop, or do their services, rather than deal with a salesclerk who is inept or rude or acts annoyed by having to complete a sale.

Sales Quota

The specific sales or profit objective a salesperson is expected to achieve. Often a salesperson receives a bonus for meeting the sales quota. The incentive portion of a sales rep's compensation should be large only if there is a direct relationship between the salesperson's efforts and results.

Compensation for Salespeople

Two basic decisions must be made in developing a compensation plan: (1) the level of compensation and (2) the method of payment. A Salesperson's compensation level should compare, at least roughly, with the pay scale of the rest of the firm. Normally, salespeople earn more than the office or production force but less than top management. Given some competitive level of compensation, there are three basic methods of payment: (1) straight salary, (2) straight commission (incentive), or (3) a combination plan. A straight salary offers the most security for the salesperson. Commission pay, in contrast, offers the most incentive and is tied to results actually achieved. A commission is often based on a percentage of dollar sales, but it may be a financial incentive based on other outcomes—such as the number of new accounts, customer satisfaction ratings, or customer service problems resolved in some time period. Most salespeople want some security, and most companies want salespeople to have some incentive to do better work, so the most popular method is a combination plan that includes some salary and some commission. Bonuses, profit sharing, pensions, stock plans, insurance, and other fringe benefits may be included, too.

1. Prepared Sales Presentation Approach

Uses a memorized presentation that is not adapted to each individual customer. This approach says that a customer faced with a particular stimulus will give the desired response. AKA "Canned" approach. Practical when only a short presentation is practical or the salesperson isn't very skilled. It treats all potential customers alike. It may work for some and not for others. A prepared approach may be suitable for simple order-taking—but it is no longer considered good selling for complicated situations.

Telemarketing

Using the telephone to call on customers or prospects: some firms have a group of salespeople who specialize in telemarketing. The National Do Not Call Registry in the United States and similar laws in other countries have largely eliminated telemarketing to consumers. Registered users cannot be called except by nonprofits and a few other select groups. However, the reception to telephone selling in business markets is often quite different.

Major Accounts Sales Force

Very large customers often require special sales efforts—and relationships with them are treated differently. Big accounts get special treatment. Salespeople who sell directly to large accounts such a major retail chain stores.

Team Selling

When different sales people work together on a specific account. Sometimes members of a sales team are not from the sales department at all. If improving the relationship with the customer calls for input from the quality control manager, then that person becomes a part of the team, at least temporarily. Different specialists handle different parts of the job—but the whole team coordinates its efforts to achieve the desired result.

Job Descriptions and Training

Written statement of what a salesperson is expected to do. It might list 10 to 20 specific tasks—as well as routine prospecting and sales report writing. Each company must write its own job specifications. And it should provide clear guidelines about what selling tasks the job involves. This is critical to determine the kind of salespeople who should be selected—and later it provides a basis for seeing how they should be trained, how well they are performing, and how they should be paid. Good Salespeople are Trained, not born: A salesperson needs to be taught about the company and its products, giving effective sales presentations, using appropriate sales technology, and building relationships with customers Sales training should be modified based on the experience and skills of the group involved. But the company's sales training program should cover at least the following areas: (1) company policies and practices, (2) product information, (3) how to build relationships with customer firms, and (4) professional selling skills.

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

Close

the salesperson's request for an order