Chapter 13

Personal Selling

-higher value -custom made, specialty -fewer customers -technically complex -customers more concentrated -more often used in B2b

Advertising or Direct Marketing

-lower value -standardized value -large # of customers -simple to understand -customers geographically dispersed

Evaluating Salespeople

-sales reports -profitability -customer satisfaction -contact or call reports

Key Decisions When Developing Sales Promotion Program

-size of the incentive -conditions for participation -promotion and distribution of the actual sales promotion program -length of the promotional program -evaluation --> surveys and experiments can be used

Training Salespeople

-Average training period is 4-6 months. -Training is expensive, but yields strong returns. -Training programs have many goals. -Many companies are adding Web-based sales training programs.

Advantages of Personal Selling in Business

-Flexibility -Detailed explanations -Variable Sales Message -Direct at Qualified Prospects -Variable/Adjusted Sales Costs -Effective at gaining customer relationship, sale, customer satisfaction

Advantages of a Sales Profession

-Flexibility in sales activities. -Extrinsic Rewards such as high potential compensation. Pay based on performance. -Intrinsic Rewards are gained in helping customers -Some People love the lifestyle. -High Visibility- Step into Management. -Some positions frequent travel opportunities. -Work with people.

Careful recruiting can

-Increase overall sales force performance -Reduce turnover -Reduce recruiting and training costs

Drawbacks of Sales Profession

-Long Hours -Pay based on performance -Role Conflict- Customer & Business -Role Ambiguity -Job Anxiety- High Pressure -Working with People

Types of Sales Jobs

-Order taker -Technical specialist -Missionary salesperson (stimulate clients to buy) -New-business salesperson and order getter -Team selling and cross-functional team

Transactional Selling

-Putting on the hard sell. -High-pressure process that focuses on making an immediate sale with no concern for developing long-term customer relationship.

The Role of Sales Force

-Two-way personal communicating. -More effective than advertising in complex selling situations. -The sales force plays a major role in most companies. -The sales force works to produce customer satisfaction and company profit.

Objectives-- Trade Promotions: B2B

-Usually between resellers and wholesalers or manufacturers. -Encourage distribution and shelf space. Trade promotion tools: -discounts (also called "price-off", off-list, and off-invoice). -allowances: advertising and display allowances -free goods -push money -specialty advertising items

Personal Selling is More Important:

1. When firm uses push strategy. 2. in B2B contexts. 3. With inexperienced consumers who needs hands-on assistance. 4. For products bought infrequently (houses, cars, computers). 5. Product has high value. 6. Product is custom made. 7. Product is technically complex. 8. There are few customers. 9. Customers are concentrated. 10. Cost per contract rate is very high.

Territorial Sales Force Structure

A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company's full line. Clearly defines each salesperson's job and fixes accountability. Limited geographic area= small travel expenses. One product to one industry with customers in many locations. Often supported by many levels of sales management: An individual territory sales rep may report to area managers, who in turn report to regional managers who report to a director of sales.

Product Sales Force Structure

A sales force organization under which salespeople specialize in selling only a portion of the company's products or lines. ex: GE employs different sales forces within different product and service divisions of its major businesses. Within GE infrastructure, the company has separate sales forces for aviation, energy, transportation, and water processing products and technologies. No single salesperson can become expert in all of these product categories, so product specialization is required.

Customer (or Market) Sales Force Structure

A sales force organization under which salespeople specialize in selling only to certain customers or industries. Separate sales forces may be set up for different industries, serving current customers versus finding new ones, and serving major accounts versus regular accounts.

Sales Quota

A standard that states the amount a salesperson should sell and how sales should be divided among the company's products.

Salesperson

An individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building. Wide range of positions: At one extreme they might be largely an order taker, such as the department store salesperson standing behind the counter. At the other extreme are order getters, whose positions demand creative selling, social selling, and relationship building for products and services ranging from appliances, industrial equipment, and airplanes to insurance and IT services.

Presentation and Demonstration

Benefits of the product are presented/demonstrated-- product story, benefits. Understanding prospect is key. The sales step in which a salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems: - part of the selling process - sell what will benefit the customer the most. Customers want answers, not smiles. They do not just want products. They want to know how products will add value to their business. - good listening, honesty, dependability, thoroughness, dependability, follow through. - hate pushy salespeople.

Partnership Selling

Buyers and sellers work together to create customized solutions.

Compensating Salespeople

Compensation plans should direct the sales force toward activities that are consistent with overall marketing objectives. -Gain market share -Solidify market leadership -Maximize profitability Compensation elements: -salary, bonuses, commissions, expenses, and fringe benefits. Basic compensation plans: -straight salary -straight commission -salary plus bonus -salary plus commission

Event Marketing

Creating a brand-marketing event or serving as a sole or participating sponsor of events created by others - to be effective you must link events and sponsorships to a brand's value proposition.

Supervising Salespeople

Effective supervisors provide direction to the salesforce: -annual call plans and time-and-duty analysis can help provide direction. -sales force automation systems assist in creating more efficient sales force operations. -the internet is the fastest growing sales technology tool. Effective supervisors also motivate salespeople: -organizational climate -sales quotas -positive incentives: sales meetings, sales contests, honors, etc.

Inside Sales Force

Inside salespeople who conduct business from their offices via telephone, the internet, or visits from prospective buyers.

Question Based Selling

Listen and learn. Ask a minimum of five questions. Personalize the relationship.

Outside Sales Force

Outside salespeople who travel to call on customers in the field.

Personal Selling

Personal presentations by the sales force for the purpose of making sales and building customer relationships. - this is the interpersonal arm of the sales force. Involves interactions between salespeople and individual customers - several names: salespeople, sales representatives, agents, district managers, account executives, sales consultants and sales engineers.

Relationship Selling

Process of building long-term customers by developing mutually satisfying, win-win relationships with customers.

Agent/Broker Channel

Producer --> Agents/Brokers --> Wholesalers --> Retailers --> Consumers

Direct Channel

Producer --> Consumer

Retailer Channel

Producer --> Retailer --> Consumer

Wholesaler Channel

Producer --> Wholesaler --> Retailer --> Consumer

Consumer Promotions

Sales promotion tools used to boost short-term customer buying and involvement or to enhance long-term customer relationships -includes samples, coupons, cash refunds (rebates), premiums, patronage rewards, contest games and sweepstakes, advertising specialties, price packs and point-of-purchase displays to contests, sweepstakes, and event sponsorships.

Business Promotions

Sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. - Conventions and trade shows and sales contests. Show the product at the trade show. Business Promotion Tools: -Includes many of the same tools used in trade and consumer promotions PLUS conventions & trade shows, and sales contests.

Trade Promotions

Sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to customers. -shelf space is scarce and so you have to fight for it. Manufacturers use several tools.

Qualifying

Screening leads

Sales Promotion

Short-term incentives to encourage the purchase or sales of a product or a service. - advertising offers reasons to buy a product, this offers reasons as to why to buy it now. - coupons for a limited time - Can be targeted at final buyers, retailers and wholesalers, business customers, and members of the sales force. - Use of sales promotion is growing rapidly.Ob

Sales Force Management

The analysis, planning, implementation, and control of sales force activities. It includes designing sales force strategy and structure and recruiting, selecting, training, supervising, compensating, and evaluating the firm's salespeople.

Closing

The sales step in which a salesperson asks the customer for an order. - part of the selling process - some are bad at this because they lack confidence, feel guilty asking for an order, or fail to recognize the right moment for a sale. - the salesperson may offer special reasons for the customer to buy now such as a lower price or an extra quantity.

Follow-Up

The sales step in which a salesperson follows up after the sale to ensure customer satisfaction and repeat business. - part of the selling process - schedule a follow-up call and make sure everything worked properly

Preapproach

The sales step in which a salesperson learns as much as possible about a prospective customer before making a sales call. - part of the selling process - a successful sale begins long before a salesperson sets foot in a prospects office. - Good research and preparation.

Approach

The sales step in which a salesperson meets the customer for the first time--> knowing how to get the relationship off to a good start. - part of the selling process - Involves a salespersons appearance, opening lines, and follow-up remarks - listening to the customer is crucial - attract the buyers attention.

Prospecting

The sales step in which a salesperson or company identifies qualified potential customers. - Part of the selling process - they want to call on those that are most likely to respond to the company's value proposition - a salesperson must attract many prospects in order to get a only a few sales - they can ask current customers for referrals, they can look in directories or in the Internet, or they can drop unannounced efforts.

Handling Objections

The sales step in which a salesperson seeks out, clarifies, and overcomes any customer objections to buying. - part of the selling process - salesperson should use a positive approach. They should turn the objections into reasons for buying.

Selling Process

The steps that a salespeople follow when selling, which include prospecting and qualifying preapproach, approach, presentation, and demonstration, handling objections, closing and following up.

Team Selling

Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large complex accounts.