Chapter 9: Personal Selling
The changing selling environment has led to the rethinking of the strategic nature of the salesperson's role. The dominant view has been:
(1) The mission of the sales force was to enhance firm cash flow by communicating value to customers about basic goods and services (2) Value creation was largely the domain of marketing (3) Primary emphasis on increasing volume of sales transactions (4) "Numbers game" -- revenue targets reached by the amount of effort made by sales personnel
How are companies using social selling techniques?
1. Create a professional brand 2. Focus on the right prospects 3. Engage with insights 4. Build trusted relationships
What is the feature-advantage-benefit (FAB) approach?
A method for communicating the value of the product to prospects and clients using features, advantages, and benefits
What is a prospect?
A sales prospect is an individual (or group) capable of making the decision on a good or service a salesperson is selling. Identifying and qualifying these people is important for step 1 of the PS process.
Describe customer advocacy.
A specific form of customer service in which companies focus on what is best for the customer Is part of the salesperson that builds credibility with the customer
What are some of the sales support roles?
Technical specialists Sales engineers
What is the role for new-business salespeople?
They are responsible for finding new customers and securing their business. They try and convince the customer to drop one or more competitors. Channel sales representative look to win, maintain, and expand relationships with channel partners. Secure new distribution intermediaries and are order-getters.
What are sales engineers?
They are specialists in high-tech sectors like aerospace and enterprise software. Have high educational backgrounds in fields like engineering, comp sci and physics
What is the role of order-taker salespeople?
They process orders that a customer initiates, commonly found within retail and inbound call-center settings Delivery salespeople check inventories, stock shelves, and write up new orders.
What is customer-oriented selling?
Viewed as the adoption of the marketing concept at the level of the individual salesperson and customer Are most effective with a positive self-concept, market-related knowledge, and sales-related knowledge
Describe a summary close
Work say repeating what has already been agreed to in the course of the presentation. Summarizes key benefits and how they meet the customer's stated needs before asking for the sale (eg. lets summarize: in addition to getting the basic service, you will be receiving free installation. How does that sound?)
Describe alternative close
Works by offering more than one clearly defined alternative to the customer (eg. would you prefer to red or yellow one?)
What is a CRM system
a set of software tools used for contact management, sales management, productivity, and supports implementation of CRM-based strategies
What are sales territories
are the customer groups district to which an individual salesperson or a sales team sells, defined by basis of geography
Relationship selling
at the core of all modern selling strategies. involves building and maintaining customer trust over a long period of time
What does BANT stand for?
budget, authority, need, time. most common objections fall into these four things
How are sales compensation plans distinguished
by fixed and incentive components
What are the two types of quota-based incentive compensation plans
commission and bonus
Personal Selling
consists of the two-way flow of communication between a buyer and a seller, one that is paid for by the seller and seeks to influence the buyer's purchase decision helps companies create and maintain strong customer relationships
Incremental productivity method
cost-based. compares the additional cost of one new salesperson to expected additional sales revenue. the company will continue adding more salespeople as long as additional sales revenue is greater than additional selling costs
What is the role of consultative sellers?
focus on developing long-term relationships, concentrated within traditional industrial settings (machinery, electronic) and strive to become trusted advisors to customers
Customer lifetime value (CLV)
focuses on the net present value of a customer's business over the span of his/her relationship with an organization
what is a sales quota
incentive pay is based upon achievement of sales goals. these goals represent the minimum desired sales level for an individual or team for a specified period of time
The three types of sales force size
incremental productivity method, equalized workload method, and competitive benchmarking
What is sales force management?
involves the planning, direction, and control of personal selling activities. Includes recruitment, selection, training, motivating, compensation, and evaluation as they apply to the sales force
What is social selling
is the art of using social networks to find, connect with, understand, and nurture relationships with sales prospects
what is a bonus
lump sum paid out to salespeople for the achievement of their respective sales quota
equalized workload method
market-based. sales management first determines the segment's market potential and tallies the average number of sales calls needed to close each individual sale. Sales managers use those sales-activity calculation to determine the proper staffing levels for each segment or product line
competitive benchmarking
market-based. sales management seeks to match the competitors' sales force size, to ensure competitive coverage
Factors that influence personal selling
new-to-the world (self-driving vehicle) infrequently purchased (new home) highly technical or complex (satellite for navy) risky (investing in a mutual fund) customizable (university medical center implementing a new info system)
Describe the sales force structure's significant decisions
optimal size of sales force, optimal mix of generalists versus product/market/activity specialists, design of sales territories, and sales force compensation and incentivization
what is a commission
per-unit payout on sales beyond the salesperson's quota
what is a base salary
the fixe amount, stable income
Describe assumptive close
the salesperson acts as if the buyer has already decided to purchase (eg. what date would you like the product delivered?)
How does the team selling approach work
the salesperson works with experts from across the extended form to support new-customer acquisition and ongoing customer relationship management
What do technical specialists do?
they are sales representatives who work in complex sales settings and contribute expertise in the form of product demonstrations and trials, offer recommendations for complex equipment and the setup of machinery, and provide systems integration support
Describe lead scoring
Analytics-based application. company numerically rates it best prospective customers. they develop these ratings by running various internal and external data through statistical models that identify those traits that make the customer more likely to purchase
How is personal selling for B2B?
B2B sales are much larger financially and take longer to complete Involve multiple decision makers Buyers possess extensive info about the product
What is Customer Relationship Management (CRM)
CRM is a strategy and set of processes used for better managing an organization's relationships and interactions with customers and potential customers
What do highly customer-oriented salespeople do?
Engage in behaviors likely to lead to long-term customer satisfaction Avoid actions that sacrifice customer interest for the sake of short-term benefit to the salesperson or the firm See things from the buyer's perspective Recognize the social landscape under which large, complex sales are typically made Understand that the impact on a customer of a bad buying decision is usually greater than the impact on a salesperson of a lost deal
What is the greatest enemy for human potential in sales?
Fear and self doubt
Describe features, advantages, and benefits.
Features are attributes or facts relating to the product being sold or demonstrated. Advantages are general statements about what the features do. Benefits are the individual values attached to the advantages offered by various features of the product
What is the role of key-account sellers?
Focus on establishing and maintaining partnership relationships with a small set of three to five named accounts. Add value to the relationship and engage in joint planning and guiding investments.
What is the difference between generalists and specialists
Generalists - are charged with selling all of the company's market offerings within their assigned territory, often cover small geographic territories Specialists -- grouped along three dimensions
What is the role of missionary salespeople?
Generate sales by promoting the firm and encouraging demand for its goods and services. Do not get or take orders from customers
What is the role of a sales manager?
Have oversight of selling efforts at varying levels. Establish sales objectives, and forecast and develop annual sales quotas Work with HR to recruit sales employees Work directly in the field with their reps Serve as a conduit for info received from the front lines to senior management about market trends and competitors
What is market-related knowledge
Includes both understanding the goods and services, and processes within their own firm, and of key business issues that affect the customer's success
What is selling-related knowledge?
Includes sales abilities and an understanding of selling techniques
What is qualifying and what stage is it under in the PS process?
Involves identifying potential customers within the firm's target market who have a desire for the product, the authority to purchase it, and the resources to pay for it. Involves talking with the target customer and doing market research to better understand the customer's needs, wants, and ability to pay. Stage 1
What is prospecting and what stage is it under the PS process?
Involves the search for potential customers-- those who want or need a product and fit into a firm's target market. Can be found by customer referrals, trade shows, industry directories, websites, and networking. Stage 1
What is the personal selling process?
It is a sequence of seven steps that salespeople follow to acquire new customers and obtain orders: prospecting and qualifying; pre-approach; approach; presentation; handling objections; gaining commitment; and follow-up
What are the types of salespeople?
New-business Order-takers Consultative Sellers Missionary Salespeople Key-Account Sellers Sales Management and Support
What are the foundations of sales success?
Positive self concept Market-related knowledge Selling-Related Knowledge
What are the three dimensions for specialists sales force
Product specialization: most effective when vast knowledge is required to sell the good or service you are taking to market Specialization be selling activity: hunters and farmers... hunters focus on acquiring account that are new to the selling firm, farmers cultivate existing accounts and relationships to drive revenue growth and minimize churn Specialization by industry: approach that calls for the creation of a separate sales operation for each major industry a company is selling into
What is adaptive selling
Refers to the altering of sales behaviors during a customer interaction or across customer interactions based on perceived info about the selling situation
What is SPIN and what does it stand for?
SPIN is an acronym that refers to the questions that feature most prominently in successful sales calls. Situations questions, problem questions, implication questions, need-payoff questions
What is the pre-approach stage?
Stage 2; the salesperson does research and preparation before contacting the customer. They should identify key decision makers, review account histories, ascertain customer needs, and prepare sales presentations
What is the approach stage?
Stage 3; the sales rep meets the customer for the first time. Key is to gain a sufficient level of customer interest in order to schedule an appt.
Describe the presentation stage.
Stage 4; Sales person prepares a sales presentation. They should: - actively convey the products major features - describe its advantages - detail how it will provide benefits for the potential customer They use feature-advantage-benefit (FAB) approach
Describe the handling objections stage
Stage 5; objections are the concerns or reasons customers offer for not buying a product. Salespeople should either acknowledge, postpone, or deny the objections.
Describe the gaining commitment stage.
Stage 6; occurs at the point when the salesperson asks the prospect for agreement to move forward with the sales process, ultimately leading to a purchase. Will use trial closes: sales reps ask questions throughout the sales presentation that test the buyer's readiness to commit
Describe the follow up stage in the PS process.
Stage 7; critical step in creating customer satisfaction and building long-term relationships with customers. Checking in, positive word of mouth, customer testimonials, and direct referrals.
What are the three different types of closes?
Summary, alternative, assumptive