02. PERSONAL SELLING Personal Selling is the art of face-to face or other interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders. Personal selling is a personal (face-to-face, telephone, or Internet chat) presentation for the purpose of making sales and building relationships. Personal selling is an ancient art. It is also a scientific process because there are clear cut and well defined steps which, if followed sincerely and meticulously, would lead to a sale. Effective salespersons have more than instincts; they are trained in methods of analysis and customer management. Three major aspects of personal selling are: Professionalism, Negotiation and Relationship Marketing. Professionalism: Today’s companies spend a lot of money to train sales people in the art of selling. All sales-training approaches try to convert a sales person from a passive order taker into an active order getter. Most sales-training programs agree on the following steps involved in any effective sales process.

Negotiation: Much business to business selling involves negotiating skills. The two parties need to reach agreement on the price and the other terms of sale. Sales persons need to win the order without making deep concessions that will hurt profitability. Although Price is the most frequently negotiated issue, other issues include Contract Completion Time; Quality of Goods and Services Offered;, Purchase Volume; Responsibility of Financing, Risk Taking, Promotion and Title; & Product Safety. Relationship Marketing: The principles of Personal Selling and Negotiation are transaction oriented because there purpose is to close a specific sale. But, in many cases, the company is not seeking an immediate sale but rather to build a long-term supplier-customer relationship. Many companies today are moving their emphasis from transaction marketing to relationship marketing. Relationship marketing is based on the premise that that important customers need focused and continuous attention. Sales people working with key customers must do more than call when they think customers might be ready to place orders. They should call or visit at other times, take customers to dinner and make useful suggestions about their business. They should monitor key customers, know their problems and be ready to serve them in a number of ways. When a relationship management program is properly implemented, the organization will begin to focus as much on managing its customers as on managing its products. PERSONAL-SELLING SITUATIONS Considerable diversity exists among personal selling situations. Different sales positions require different amounts and kinds of service and developmental selling. Service selling aims to obtain sales from existing customers whose habits and patterns of thought are already conductive to such sales. Developmental selling aims to convert prospects into customers. Developmental selling seeks to create customers out of people who do not currently view the salesperson’s company favourably, and who likely are resistant to changing present sources of supply. The job of a salesperson ranges from order takers to order getters. An order taker interacts with customers placing an order. Order takers include most retail sales workers. These job titles include: Cashiers, Counter and rental clerks, Insurance agents and brokers, Manufacturers' and wholesale sales representatives, Real estate agents, brokers, and appraisers, Retail sales workers, Securities and financial services sales representatives, Services sales representatives. An order getter engages in creative selling of products and is responsible for the entire ordering and relationship-building process. Order takers include sales representatives. Many of those working directly for manufacturers are referred to as manufacturers' representatives and those employed by wholesalers generally are called sales representatives. In addition to those employed directly by firms, manufacturers' agents are self-employed sales workers who contract their services to all types of companies. Those selling technical products, for both manufacturers and wholesalers, are usually called industrial sales workers or sales engineers. Many of these titles, however, are used interchangeably.

1. Prospecting and Qualifying 2. Pre-Approach & Approach 3. Presentation and Demonstration

4.Overcoming Objections 5. Closing 6. Follow-Up and Maintenance

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 2 of 13 McMurry and Arnold classify sales positions on a spectrum ranging from the very simple to the highly complex. They categorize sales positions into three mutually exclusive groups each containing subgroups, a total of nine subgroups in all. The easiest sales are self-service sales: customers know their needs, know the products capable of satisfying these needs, sell themselves, and go through the checkout line. The most difficult sales require developmental selling and creativity – where the sales must sometimes be made on something other than the product’s merit, or multiple sales are necessary to get the order, and where continual effort is required to keep the account. Personal Selling Situations or Sales Positions GroupA (Service Selling) 1. Inside Order Taker ‘waits on’ customers 2. Delivery Salesperson engages in delivering the product 3. Route or Merchandising Salesperson operates as an order taker but works in the field 4. Missionary Salesperson aims only to build goodwill or to educate users, and is not expected to take

order 5. Technical Salesperson emphasizes technical knowledge GroupB (Developmental Selling) 6. Creative Salesperson of Tangibles aims to convert prospects into customers of tangible goods 7. Creative Salesperson of Intangibles aims to convert prospects into customers of intangible goods GroupC (Developmental Selling Requiring Unusual Creativity) 8. ‘Political’, ‘Indirect’ or ‘Backdoor’ Salesperson

sales are consummated through rendering highly personalized services which have little or no connection with the product

9. Salesperson Engaged in Multiple Sales

salesperson must make presentations to several individuals in the customers organisation

BUYER-SELLER DYADS Sociologists use the term ‘dyad’ to describe a situation in which two people interact.. Fundamental to understanding salesmanship is recognition that it involves buyer-seller interactions. The salesperson and the prospect, interacting with each other, constitute one example of a ‘buyer-seller dyad’. Another is the interaction of a seller using advertising with a particular prospect in the reading, listening or viewing audience. In both advertising and personal selling, the seller seeks to motivate the prospective buyer to behave favourably toward the seller. Whether or not the buyer reacts as the seller desires depends upon the nature of the interaction. The opportunity for interaction is less in the advertising case than in personal selling. However, advertising and personal selling often supplement or support each other, and the buyer reacts to their combined impact. Franklin Evans researched buyer-seller dyads in the life insurance business. Evans’s findings have significance for sales management. Whenever possible, sales personnel should be assigned to prospects whose characteristics are similar to their own, thus improving the chance of successful dyadic relationships. Henry Tosi studied dyads of wholesale drug salespeople and retail pharmacists who made buying decisions. Tosi concluded that, in addition to the physical characteristics and personality and objective factors cited by Evans, the customer’s perception of what that behavior should be is a necessary condition for the continuation of dyadic interactions. Another factor influencing buyer-seller dyadic interactions is the buyer’s initial conditioning with respect to selling. People are taught from childhood to beware of the tricky salesperson. The following figure is a conceptual model of salesperson-buyer dyadic relationship. This model, developed after an extensive literature survey, views the sales process as being influenced by both salesperson and the buyer and each in turn being influenced by personal characteristics and role requirements. Personal characteristics include personality, values, attitudes, past experiences etc. Role set requirements include formal authority and organizational autonomy. Role set requirements interact with personal characteristics to shape needs and expectations.

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 3 of 13 The salesperson and the buyer are each considered as focal persons. The focal person’s perceptions of each other’s needs may lead to adjustments of their own. Based on individual needs and expectations, each focal person develops a strategy aimed to negotiate a favourable exchange. If the strategies are compatible, an exchange takes place. Otherwise, either or both may adapt by altering strategies, attempting to adjust needs and expectations or modifying role requirements. In extreme cases, where in spite of adjusting the strategies do not match, the salesperson and the buyer may stop interacting.

THEORIES OF SELLING The fact that selling is considered an art by some and a science by others has produced two contrasting approaches to the theory of selling. In this section we examine four theories. The first two, the ‘AIDAS’ theory and the ‘right set of circumstances’ theory, are seller oriented. The third, the ‘buying formula’ theory of selling, is buyer oriented. The fourth, the ‘behavioural equation’ theory, emphasizes the buyer’s decision process but also takes the salesperson’s influence process into account. AIDAS Theory of Selling This theory – popularly known as the AIDAS theory – is the basis for many sales and advertising texts and is the skeleton around which many sales training programs are organized. According to this theory, during any successful sales presentation, the prospect’s mind passes through five successive mental states: attention, interest, desire, action and satisfaction. The prospect goes through these five stages consciously, so the sales presentation must lead the prospect through them in the right sequence if a sale is to result. The salesperson follows the AIDAS formula of gaining attention, holding interest, arousing desire, obtaining action and building satisfaction.

Feedback Feedback

Customer Salesperson

Start Salesperson-Customer

Relationship

Exchange

Personal Affiliation

Choice of Strategy

Needs and Expectations

Personal Characteristics

Role Requirements & Characteristics

Choice of Strategy

Needs and Expectations

Personal Characteristics

Role Requirements & Characteristics

Negotiation

Adapt Adapt

Adjustment

Stop Experience Experience

Model of Buyer-Seller Dyadic Relationships

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 4 of 13 Securing Attention: The goal is to put the prospect in a receptive state of mind. The prospect’s guard is naturally up, since he realizes that the caller is bent on selling something. A salesperson must possess considerable mental alertness, and be a skilled conversationalist, to survive the start of the interview (presentation). He needs an ample supply of conversation openers in order to establish good rapport. A good conversation opener causes the prospect to relax and sets the stage for the total presentation. Gaining Interest: The goal is to intensify the prospect’s attention so that it evolves into strong interest. Throughout the interest phase, the hope is to search out the selling appeal that is most likely to be effective. Salespersons do considerable probing, usually of the question-and-answer variety, in order to identify the strongest appeal. The prospect’s interests are affected by their mood, motivation levels, closeness of the subject to current problems, and the timeliness of the subject being presented – and the salesperson must take all of these into account in selecting the appeal to emphasize. Kindling Desire: The goal is to kindle or stimulate the prospect’s desire to the ready-to-buy point. The salesperson must keep the conversation running along the main line toward the sale. The salesperson should always try to link the features and attributes of the product with the customer needs so that the gap and level of customer objection can be reduced in the subsequent stages. Obstacles need answering to the prospect’s satisfaction. Obstacles need to be identified and ways found to get around them. Chances of making a sale improve if objections are anticipated and answered before the prospect raises them. Inducing Action: The goal is to induce the prospect to act – that is, to buy. If the presentation has been perfect, the prospect is ready to buy. However buying is not automatic and must be induced. It is up to the salesperson to sense when the time is right. The trial close and other different closing techniques are used to test the prospect’s reactions. The desired action is to make the prospect give consent for the sale, sign on the dotted lines of the order pad, and pay for the good or service that was being showed to him. Building Satisfaction: The goal is to reassure the customer that the decision was correct. Most human beings tend to love buying but hate to be sold to. The customer should be left with the impression that the act of buying was his decision and that the salesperson merely helped in the deciding process. Building satisfaction includes thanking the customer for the order and following up on promises made during the presentation. It also includes building up a long term relation with the prospect. ‘Right Set of Circumstances’ Theory of Selling This theory, sometimes called the ‘situation-response’ theory may be summed up by the statement “Everything was right for that sale”. It holds that the particular circumstances prevailing in a given selling situation cause the prospect to respond in a predictable way. If the salesperson succeeds in securing the attention and gaining the interest of the prospect, and if he presents the proper stimuli or appeals, the desired response, that is the sale, will result. The more skilled the salesperson is in handling the set of circumstances, the more predictable is the response. This is a seller-oriented theory: it stresses the importance of the salesperson controlling the situation. It does not handle the problem of influencing factors internal to the prospect, and fails to assign appropriate weight to the response side of the situation-response interaction. ‘Buying Formula’ Theory of Selling This theory emphasizes the buyer side of the buyer-seller dyad. The buyer’s needs or problems receive major attention, and the salesperson’s role is to help the buyer find solutions. Reduced to their simplest elements, the mental processes involved in a purchase are: need (or problem) → solution → purchase. Since nearly all sales organisations are interested in continuing relationships, it is necessary to add a fourth element: need (or problem) → solution → purchase → satisfaction. Whenever a need is felt, or a problem recognized, the individual is conscious of a deficiency of satisfaction. The solution will be a product or service or both, and they will belong to a potential seller. In purchasing, then, the element ‘solution’ involves two parts: 1. product and/or service and 2. trade name (name of manufacturer or company). In buying anything, the purchaser proceeds mentally from need or problem, to product or service, to trade name, to purchase, and, upon using the product or service, experiences satisfaction or dissatisfaction. To ensure purchase, the product or service as well as the trade name must be considered adequate, and the buyer must experience a pleasant feeling of anticipated satisfaction when thinking of the product/service and the trade name. The buying formula, therefore, is:

Adequacy need (or problem) → product/service and/or trade name → purchase → satisfaction/dissatisfaction

Pleasant feelings

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 5 of 13 ‘Behavioural Equation’ Theory Using a stimulus-response model, and incorporating findings from behavioural research, J.A. Howard explains buying behaviour in terms of purchasing decision process, viewed as phases of the learning process. Four essential elements of the learning process included in the stimulus-response model are:

1. Drives: Strong internal stimuli that impel the buyer’s response. They could be innate drives (physiological needs) as well as learned drives.

2. Cues: Weak stimuli that determine when the buyer will respond. 3. Response: what the buyer does. 4. Reinforcement: Any event that strengthens the buyer’s tendency to make a particular response.

Howard incorporates these four elements into an equation: B = P x D x K x V where,

B = response or the internal response tendency P = predisposition, force of habit D = drive level (amount of motivation) K = incentive potential (potential satisfaction to the buyer) V = intensity of all cues SCIENTIFIC SELLING PROCESS Most sales-training programs agree on the following steps involved in any effective sales process.

Pre-Sale Preparation Some authors feel this should precede every other step and be considered as the first step of the scientific selling process. Others, who consider ‘Prospecting’ as the first step, prefer to club this step as a part of ‘Pre-Approach’. In a planned scientific process, any sale is preceded by the pre-sale planning. In this stage, the salesperson prepares himself with adequate knowledge about the product he will sell, the company he will represent, the market in which he will sell, the competitor products and prices, the categories of customers or segments he will target, and the various selling techniques he will apply during the sale. Pre-sale preparation helps the salesperson to present a much credible picture to the customer. A salesperson with adequate knowledge about the industry, the technology involved in making the product, and the target segment of each customer is well placed to provide valuable information to the customers so that they can make an informed decision. The salespersons knowledge universe should, among many things, include: Product knowledge: Features, Benefits, Styles, Price etc. Company knowledge: History, Management, Policies & Procedures etc. Competitors’ knowledge: Industry structure, Market share, Market behaviour etc. Prospecting and Qualifying The most important step in selling is to identify and qualify prospects. Prospecting and qualifying is the process of identifying potential buyers who have a need for the products and services offered by the company, the ability to pay for it and the adequate authority to buy it. A prospect list or pool, which consists of a group of names, gathered from various sources like a telephone directory or mailing list etc., needs to be created. Identifying prospects is also referred to as lead generation and prospects are referred to as leads. Qualified prospects are also known as potential or prospective customers. Prospecting can be done by the salesperson himself or by the company where he is employed. More and more companies are taking up this responsibility for finding and qualifying leads so that the salespeople can concentrate on the actual selling.

1. Prospecting and Qualifying 2. Pre-Approach & Approach 3. Presentation and Demonstration

4. Overcoming Objections 5. Closing 6. Follow-Up and Maintenance

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 6 of 13 Steps in Prospecting 1. Formulating prospect definition: Prospect definition is dependent upon the nature and type of

product. Different product categories may have different prospect definitions. A person who has the need for a particular type of product satisfies the definition of a prospect for that product.

2. Searching out potential accounts: Using the prospect definitions, the salesperson combs different sources for the names of probable prospects. There are several conventional and non-conventional sources of prospecting and every salesperson innovates over these existing sources.

3. Qualifying prospects and determining probable requirements: Prospective customers must have the willingness, the financial capacity, and the authority to buy and they must be available to the sales person. The leads are qualified by contacting them over mail or phone. Their level of interest and financial capacity is assessed. As information is assembled on each tentative prospect, it is easier to estimate the probable requirements of each for the types of products sold by the company.

4. Relating company products to each prospect’s requirements: From the information assembled, it is usually possible to determine each prospect’s probable needs. From what the salesperson knows about the company’s products, their uses, and applications, he now selects those that seem most appropriate for a particular prospect.

Sources of Prospecting A salesperson combs different sources for the names of probable prospects. There are numerous sources from which a prospect list may be created. Salespeople follow various methods of prospecting. Some of these methods are discussed below: 1. Friends, Relations and Acquaintances: This is, probably, the most fertile source for those who have

newly entered the selling field. These are the people whom the salesperson knows. They, in turn, know many other people.

2. Referrals – Endless Chain: A referral is a prospect recommended by an existing customer or acquaintance who is familiar with the product. It is easy to get an appointment and to sell to a referral.

3. Cold Calling: It is an approach in which the salesperson goes from door to door and tries to find out the prospects. Cold calling is calling on a group of strangers who may or may not be prospects. This method is the only alternative when referrals are difficult to come.

4. Observation: In this method the salesperson looks around for the types of prospects that he requires. E.g. EPBAX sellers look for construction sites & newly coming up office spaces to prepare a list of prospects.

5. Non Competing Sales Force: Salespeople of non-competing products are a rich source of getting prospect names. Non-competing sales-personnel can strike agreements to exchange information. E.g. A salesperson selling copiers can provide information about the prospects for computers.

6. Telemarketing: Prospects are telephonically contacted. At times telemarketing is also used to verify sales leads generated by advertisements or direct mailers. E.g. Credit card issuers, Personal and home loan providers use telemarketing to qualify prospects for follow-up.

7. Lists and Directories: There are directories of telecom companies,, trade associations, chambers of commerce, professional associations etc. There are yellow pages, regional and local directories some free and some bought at a price.

8. Direct Mail, Direct response Advts., Sales Letters: Advertisements carry coupons where interested people request for additional information, catalogue and direct queries. Some companies provide self-addressed postage-paid envelopes. Sales letters are also sent to prospects. There is a follow-up call and an appointment is sought.

9. Educational Seminars: The prospects are invited to seminars. The contents and delivery of the seminars are carefully planned.

10. Trade Publications: There are trade publications giving a detailed report about a particular industry. E.g. ORG report for pharmaceutical industry.

11. Tradeshows and Demonstrations: These are tradeshows and exhibitions either for industry in general or for one particular industry. The prospects walk into the stalls at such shows. It is easy to identify the prospects and close the sale here. Sometimes, prospects are qualified at the show, and a follow-up sales call is needed to close the sale. E.g. Annual Book Fair at Kolkata or the Auto Expo at Pragati Maidan, Delhi.

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 7 of 13 12. Database: Data processing enables a company to match products and buyer needs. Some companies

maintain their own database while others buy them from marketing research organisations. There are databases available for specific segments.

13. Internet: Many companies maintain a web-site on the internet. They are frequently used for lead generation.

14. Prospecting by Non-Sales Employees: Many organisations also involve non-sales people in prospecting. They are made sensitive to selling opportunities and are, sometimes, given incentive to identify prospects. E.g. A receptionist at the bank may be trained to identify prospects and pass on the leads to the sales team.

15. Networking: A salesperson has to be social and interactive to develop a network. Creating contacts and nurturing them is an art referred to as networking.

16. Centres of Influence: An influential individual in either social, business, religious or political spheres, who himself may not take a buying decision but influences others to do so. A referral from a centre of influence is effective as it carries a certain level of authority.

17. Combination Approaches: Organisations, usually, use a combination of all the above methods or sources to get the prospects. E.g. Prospects may be identified at a trade show and later are subjected to telemarketing or are chosen to receive mailers or sales letters.

Qualifying the Prospects The leads generated in prospecting are qualified through the salespersons intuitions as well as by contacting them over mail or phone. Their level of interest and financial capacity is assessed and ascertained. As information is assembled on each tentative prospect, it is easier to estimate the probable requirements of each for the types of products sold by the company. Even after tapping all readily available information sources, additional information may be required to qualify certain prospects and personal visits by salespersons may be the only way to obtain it. These visits may not bring in sales, but they save time, as prospects are separated from non-prospects. The leads are qualified on the following parameters: need for the product, ability to pay, and authority to take a decision. After qualifying, the leads become qualified prospects. Qualified prospects are also known as potential or prospective customers. The leads can be categorized as ‘hot’ prospects and ‘warm’ prospects. Hot prospects are thought to be ready to buy and these leads are given to the field sales force so that they can go out and clinch the sales. Warm prospect leads are handed over to the telemarketing unit for follow-up. Eventually, with repeated telemarketing efforts, these warm leads may turn hot. Pre-Approach & Approach At the end of successful prospecting and qualifying, constructing the salesperson’s presentation becomes easy. It is now tailored to fit the individual prospect. The salesperson should have clear ideas about specific objections the prospect may raise and other obstacles to the sales that may be encountered. At this stage the salesperson is ready to contact the prospect. The only tasks remaining are making an appointment, deciding how to open the presentation, and determining how to persuade the prospect to becoming a customer. The salesperson follows the AIDAS formula of gaining attention, holding interest, arousing desire, obtaining action and building satisfaction. AIDAS theory of selling has been separately discussed at the end of the steps of scientific selling process. A salesperson also uses the FABV (Features, Advantages, Benefits and Value) approach. Features describe physical characteristics of the product or offering. Advantages relate the features to an advantage for the customer. Benefits describe the economic, technical, service and social benefits delivered by the market offering. Value describes the worth of the offering, often in monetary terms. The salesperson should always try to link the features and attributes of the product with the customer needs so that the gap or conflict and level of customer objection can be reduced in the subsequent stages.

Prospect (Lead)

Qualifying Criteria Existence of Need for the product Existence of Ability to pay

Existence of Authority to buy

Qualified Prospect (Potential or Prospective Customer)

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 8 of 13 Pre-Approach Since the initial contact made with the customer is referred to as the approach, anything that a salesperson does before this initial contact may be considered as pre-approach. Pre-approach is concerned with spelling out pre-sale objectives and developing a pre-sale presentation plan. A salesperson is expected to know about his company, its products and about competitors. [These, we have discussed under the heading Pre-Sale Preparation.] The salesperson is also required to gather sufficient information about the prospect. Before a salesperson approaches the prospect for a sale, it is necessary to develop a sales strategy by collecting customer data and combining them with the product attributes as a fit for satisfying the individual and organisational needs. A salesperson needs to learn as much as possible about the prospect. He should have a fair idea about what the buyer needs, his buying style and his overall personal characteristics. The more homework one carries out, the more is the chance of a successful presentation that would lead to a sales. Objectives of Pre-approach

To get personal and business related information of the customer. Assess the needs of the customer to see whether the product suits these needs. Involve the prospect in product demonstration. Make an appointment with the decision making prospect. Get referrals.

All these multiple objectives make the pre-approach a confidence building exercise for the salesperson. Even when a few objectives are realised, a salesperson gets a feeling of accomplishment. Approach The initial contact made with the customer is called approach. Approaching a customer can be looked at from two different angles – approach in order to get an appointment, and approach in order to make a presentation for sales. It is very important to remember that they are distinctly different. When approaching for an appointment, you are actually selling an appointment. A salesperson needs to remember that while approaching for getting an appointment, he should not loose focus and start selling the product instead. An important task is to decide on the approach style while approaching to make a presentation for sales. Initial impressions can cloud later perceptions, so it is important to consider the ways in which a favourable initial response can be achieved. Buyers expect salespeople to be business like in their personal appearance and behaviour. Further, a salesperson should respect the prospects busy schedule and keep the conversation crisp and to the point so that he does not generate irritation on the buyers part. Salespeople, typically, should open with a smile, a handshake, and introduce themselves and the company they represent. Common courtesies should be followed. One has to pay attention to the opening remarks as well. After establishing the objectives for the sales presentation, it is time to develop the presentation plan. Sales presentation must consider the relationship strategy, product strategy and customer strategy at the same time. Objectives of Approach Creating a favourable impression Arresting the attention of the prospect Creating an interest for the product Various Approach Styles Consumer Benefit Approach: Focuses on consumer benefit. Referral Approach: Focuses on a third party’s recommendation. Introductory Approach: Focuses on the selling company and the salesperson. Features Approach: Focuses on the physical elements of the product.

Breaking-the-ice (Putting the prospect at ease) Probing to find out the needs of the prospect Planning and designing the presentation

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 9 of 13 Presentation and Demonstration This is the stage where the salesperson tells the ‘story’ of the product to the prospective buyer. In a sales presentation, the salesperson presents his products and services before the prospect and makes effort to create and modify their interest into sales realisation for the company. A salesperson usually makes use of printed sales aids materials (brochures, prospectus, information literature, pamphlets or fliers, visual aids, charts, slides, movie clips etc) to ‘paint a picture’ in the mind of the prospect. There is a need for two-way communication between the salesperson and the prospect during a presentation. Here the salesperson presents his products and services before the prospect and makes effort to create and modify their interest into sales realisation for the company. While giving a sales presentation, the salesperson should always try to link the features and attributes of the product with the customer needs. This helps in reducing the gap or conflict and level of customer objection in the subsequent stages. If the customer agrees with the opening idea, the salesperson goes for a trial closure. If the customer looks for more information, the salesperson delivers additional benefits. If the customer has some doubt regarding the product performance, the salesperson demonstrates a proof to the customer during the presentation. If the customer is indifferent and the response cannot be classified, the salesperson should probe for further information. Probing helps in confirming the fit between the stated needs and promised brand benefit. Types of Presentation The three categories of sales presentation based upon the structure of presentation are: Canned presentation: Prepared by the company and there is little scope of modification for each prospect. Companies prepare printed as well as audiovisual materials to support the sales presentation. New salespersons can confidently use the presentation that addresses all the relevant issues for the customers. Organised presentation: Salespeople have enough scope to word the presentation, but on the lines of the company policy and systems. This brings more flexibility and encourages participation of the prospects. Tailored presentation: It is a customer-specific approach and the presentation is developed from the detailed evaluation of a prospective customer’s business and is specifically designed for that specific customer. This is the most common method of business-to-business selling. Sales presentations based upon the number of sales personnel involved in the sales presentation may be Single Personnel Presentation or Group Sales Presentation. Sales presentations based upon the number of visits to the prospect could take the forms: Single Call Presentation and Multiple Calls Presentation. Two types of sales presentation based on the form of presentation are: oral presentation and the written presentation. Written proposals, also known as Sales Proposals are used for selling high value industrial products and for selling to the government. This is combined with oral presentations in solution and software selling. Less expensive business-to-business selling and all other consumer selling involve only oral presentation. Sales Proposal In many organisations, selling happens in a formal way, where the salesperson is required to give a written sales proposal. This is mostly applicable in complex selling. Written proposals are used for selling high value industrial products and for selling to the government. This is combined with oral presentations in solution and software selling. Salespersons submit a written sales proposal when the buying needs approval of more than one person, when the product addresses a complex solution to a business problem, when sales teams are involved, and when the benefits of the product are not apparent immediately. The following are the five qualities a sales proposal should convey: Tangibility: The proposal should enhance and support the salesperson’s message and invite readership. Assurances: The proposal should build trust and confidence in your ability to deliver, implement and result in substantial benefits. Responsiveness: The proposal should invite purchase proposals from the customers in a timely manner. Reliability: The sales proposal should identify solutions to customer problems and strategies to achieve the customer’s demand. Empathy: The proposal should confirm the salesperson understands the customer’s business and needs.

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 10 of 13 Components or Stages of Sales Presentation A normal presentation style covers summarisation of the situation, statement of the idea, description of how the idea works, statement of the promised benefits, and the recommended action for buying. A sales presentation may be complete in one call only. Then a salesperson goes through all the four stages during a single call. In a multi-call approach, the first call is generally utilised mainly for information gathering. The subsequent visits see the other stages taking the main focus. The four components of sales presentation are: Need Discovery, Product Selection, Informing, Persuading and Reminding, and Servicing the Sales. Need Discovery: Salespeople need to be adept in recognizing the needs of the consumers. They have

to utilise their problem solving capabilities in order to get orders, repeat orders and referrals. Selling, today, has shifted from being product-centric to customer-centric. As a consultant and advisor, the salesperson makes a prospect realise his real needs. In order to know what the prospect needs and wants it is necessary to set him talking. A professional salesperson uses the following types of questions in order to assess the needs of the prospect – Information-gathering questions, Probing questions and Confirmation questions.

Product Selection: A product is configured to meet the needs of the customer. A salesperson helps in product selection and recommendation that would give maximum satisfaction. He should do this competently like a consultant or an advisor and this is where his knowledge about the product and competitor’s products comes in handy. A sales call is successful to the extent the customer needs and the product benefits are effectively matched with each other.

Informing, Persuading and Reminding: It is necessary to communicate with the customer verbally and non-verbally about the want satisfying capabilities of the product. More and more statements need to be used at this stage so as to inform, persuade and remind the customer of the best possible product choice fitting to his needs.

Servicing the Sales: It is the substantial dimension of any sales presentation. These activities are post sale and they ensure satisfaction and establish a long term relationship with the customer. These service activities include credit extension, suggestions, complaint redressal etc.

Sales Demonstration If presentation is ‘telling a story’ about a product, demonstration is ‘showing and telling’. Sales demonstration is an effective communication tool that invests the product with the sensory appeal. It attracts attention, creates interest and stimulates desire. This cannot be achieved through verbal presentations alone. A salesperson usually makes use of printed sales aids materials and, if possible, the product or at least a sample of the product to ‘paint a picture’ in the mind of the prospect. Tools for Effective Demonstration Product Itself: Product itself is the most widely used sales aid. Videos can be shown to illustrate the

working of products. Demonstration rides are common for vehicles. Models: It may not always be possible to use the product itself in demonstrations due to constraints like size and mobility problems. Demonstration, then, is restricted to small miniature models of the product which give an idea about the actual working of the product. Photographs/Illustrations: Photographs/Illustrations are used to pass on relevant information. Portfolio: It is a loose-leaf binder or ca portable case containing promotional materials. Reprints: Reprints of articles and write-ups about the product in media are effective selling aids. Graphs/Charts, Test Results: Graphical and chart-wise information are of great help. Test results from reliable agencies are convincing. Laptops and Demonstration Software: A laptop loaded with presentation software can assist the salesperson in giving his presentation more convincingly and in a more organised manner.

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 11 of 13 Benefits of a Sales Demonstration Demonstrations have a positive contribution to make to the selling process. It is mutually beneficial to both the prospect and the salesperson. It makes product evaluation easier for the prospect and the salesperson gets an opportunity to prove the worth of the product. Better Communication: Words are, at times, inadequate to explain a point. Sight and sound are

helpful in mastering new concepts. Tables are used to explain things. Visual communication also reduces the time taken to put the concept across.

Proof of Benefits: Demonstrations are proof enough. For example, in the case of a sale of computer printers, printing quality is a matter of demonstration.

Feeling of Ownership: A prospect can be given a feeling ownership temporarily by a demonstration. It urges him to buy the product. It provides an opportunity of assessment.

Other Benefits: Demonstrations infuse a sense of confidence in salespeople. Overcoming Objections Customers generally come up with objections during the presentation, or typically, when asked for the order. The steps or mechanism for handling objections successfully are: To handle the objections, the salesperson has to maintain a positive approach, ask the buyer to clarify the objection, deny the validity of the objection, turn the objection into a reason for buying or question the buyer in such a way that the buyer himself answers his own objection. It is always advantageous for any salesperson to be prepared with objection handling techniques of typical objections that may crop up. Typical objections include psychological resistances (like predetermined ideas, reluctance to giving up something, dislike for making a decision, preference for established brands etc.) as well as logical resistances (like objections related to price, delivery schedule, certain product or company characteristics etc.). Handling and overcoming objections is a part of the broader skills of negotiations. Obstacles and Objections Prospects show sales resistance by pointing out obstacles and voicing objections. Obstacles can be real or imaginary and objections can be sincere or insincere. In analysing sales resistance, the salesperson needs skill in the accurate and rapid appraisal of people and their motivations. Obstacles are real or apparent reasons that the prospect has for not buying. Whenever an obstacle arises, the salesperson determines whether or not there is a way to go around it. If the salesperson recognises the specific obstacle and knows a way to circumvent it, the next move is to present the solution to the prospect. A prospect says a temporary shortage of cash prevents buying – an obstacle – and the salesperson helps the prospect to circumvent it by explaining a method for financing the purchase. Objections are never good reasons for failing to complete the sale, but they divert the salesperson’s presentation from its main course. Sincere objections trace to incompleteness, inaccuracy or vagueness in the sales presentation. Sincere objections are overcome by patient and thorough explanations. Prospects raise insincere objections as false excuses for not buying. Salesperson should not permit an insecure objection to provoke an argument. Objection should be treated with utmost courtesy. Some Common Excuses Yes… But It’s a fantastic idea but it will not work here.

We would like to buy but not now. Blaming It is not my responsibility to make a decision. I don’t mind buying, but my wife won’t like it.

Denial I don’t need this new product. There is no reason for changing now. Alibi I don’t have the money to buy.

I don’t have the authority. Reframing reality

Our purchasing system is not unfair, but we are limiting our number of suppliers.

Justification We do have a need for the product but presently we are busy with our internal reorganisation.

I’ve no choice

I tried my best but I have to go along with the majority. Based on the offer from your competitor, I have to decide in their favour.

Helplessness It is out of my hands, I can’t do anything now. If only I could convince my spouse.

Minimizing I don’t see anything great in this. There is little value in spending money on this.

Derogation You don’t enjoy a good reputation in this area. Nobody will be around when it comes to providing service.

Smile Agree Turn the excuse into a reason to buy/ Handle the Objection Close Differently Show more Value

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 12 of 13 Common Methods of Handling Excuses Superior feature method: Salesperson accepts the objection and persuades through providing

additional advantages of his product, which may compensate the objection raised. Yes… but method: Salesperson agrees with the objection at the beginning and then slowly

removes it from the customer’s mind by tactful handling of arguments. Reverse English method: Salesperson changes customer’s objection into the basis of buying. Indirect denial method: Salesperson denies the objection indirectly Pass out method: Salesperson does not pay any attention to the customer’s objection and

expresses neutral opinion. Comparison method: Salesperson demonstrates similar products of different producers and

removes the objection by comparing the benefits of his products with those of others. Direct denial method: Salesperson rejects the customer’s objection outright. Another angle method: Salesperson advices the customer to look from another (positive) angle. Narrative method: Salesperson uses a story to remove customer objection. Testimonial method: Salesperson presents the sales message by referring to celebrities and

persons of importance as users of the product. Question method/ Why method: Salesperson asks questions, one after the other, to the customer

against his objection and tries to get suitable answers to that objection from the customer himself. Closing Closing is referred to as the task of asking for the order. It is, typically, referred to as an attempt to make the customer sign on the dotted lines of the order pad and making him pay for the product. This stage signifies that the prospect, having gone through the demonstration process, has been convinced enough to make a buying decision. A salesperson must ask for the order in order to make the presentation a successful one. Typically, objections do crop up at the first few closes. If these objections are handled properly and demonstration or presentation carried out systematically the final close faces no resistance and sales take place. It is very rare that the first close would yield an order; therefore the salesperson needs to be prepared with objection handling techniques and keep on trying multiple closes in any demonstration. Salespeople also need to know how to recognize closing signs (or buying signals) from the buyer including physical actions, statements or comments, and even questions. Methods for Closing There is no one best method for closing the sale. One has to use a method that is appropriate. At times, a combination is used. What matters is not only the close, but also the relationship one establishes after the close. Some common methods of closing a sale are as follows: Trial Close: The customer may be ready to buy or may be not. The opportune time to close is to

judge his readiness or otherwise. A probing or confirmation question may be put across. o Which colour would you prefer – the blue or the orange? o Where would like the delivery to be made – at your office or at your residence? o We can have the goods delivered in January. Will this be OK with you?

Summary-of-Benefits Close: The salesperson needs to summarise the entire presentation in terms of benefits to bring about a favourable decision. Benefits which address the personal concerns of the buyer are highlighted.

Assumption Close: It is assumed that the customer is going to buy. It comes at the end of the presentation. The salesperson starts writing the order and expects the prospect to sign on the dotted line.

Special Concession Close: An additional incentive is given to close the sale. It could be in the form of a low price, credit plan or added feature.

Multiple Options Close: Several options are put before the customer in terms of configuration, delivery and price. The customer examines these. When the close comes near, some of the options are eliminated to reduce confusion. Such closes are very common while selling office equipments.

Direct Appeal Close: The order is sought directly. Once a direct appeal is made, the salesperson leaves it to the customer to decide.

Combination Closes: Two or more closing methods can be used in certain situations, e.g. say a summary of benefits and a special combination.

MM301Sales & Distribution Management Chapters 02. Personal Selling Page 13 of 13 Follow-Up and Maintenance Immediately after the close, the salesperson needs to thank the customer and reassure him on his decision to buy. He has to restate and clarify necessary details (like the delivery time, purchase terms and other matters that may be important to the customer). The salesperson should, also, schedule a follow-up call for a time after the delivery would have taken place so as to ensure proper installation, instructions and servicing. Follow-up and maintenance takes care of reducing any cognitive dissonance or post-purchase remorse. These steps, if carried out with sincerity and earnest, may also generate good leads in the form of referrals. If the salesperson wants to ensure customer satisfaction and repeat business follow-up and maintenance is a must. Steps of Follow-Up and Maintenance Thank the Customer for the order. Congratulate him over his decision. The customer should be left with the impression that the act

of buying was his decision and that the salesperson merely helped in the deciding process. Summarize the Deal. Write down in clear terms the salient features of the deal. Mention what he

is getting against what he is paying. Highlight the features and the benefits. Reinforce the Deal. Equip the customer with sufficient literature and materials to fall back upon

once the salesperson leaves his premises. Follow-Up on promises made during the presentation. Maintain a good relationship with the prospect. Customer satisfaction also includes building up a

long term relation with the prospect. Customer service is defined as all the activities which enhance and facilitate the sale and use of the product. It facilitates the buying and using the product. It paves the way for customer loyalty. These days the focus is on retaining customers. Customer service has become a distinguishing feature for many organisations. Objectives of Follow-Up Actions After-sales service is an important part of the selling process. It assures that the order will not be cancelled and it paves the way for building confidence and establishing relationship with customers for future revenues. It is generally believed that it costs five times as much to get a new customer as it costs to retain an existing one for an additional sale. Some of the benefits and objectives of a service call or follow-up action are as follows: Helps the salesperson generate additional leads from satisfied customers. Gives the salesperson an opportunity of cross-selling and suggestion-selling. Helps in building up customer’s interest and in generating repeat sales. Helps in maintaining goodwill. Helps in finding out any discrepancies regarding non-fulfilment of promises made and subsequent

corrective measures can be initialised. Customer Service Methods The sale is serviced by suggestion selling, follow-ups on promises and customer satisfaction. The salesperson assumes the responsibilities of delivery, installation and warranty interpretation. Some of the customers servicing methods are as follows: Suggestion Selling: An item or service related to the main item sold is suggested so as to add to

the customer satisfaction. Suggestions should be positive and thoughtful. In automobile selling, several accessories – like car stereo and central locking systems – are suggested.

Cross-Selling: It involves selling unrelated products to the existing customer. An equity purchaser may be asked to buy a mutual fund or a cellular subscriber can be asked to get a credit card.

Follow Through: A salesperson makes several promises during his presentation. Assurances in the form of prompt delivery, credit facility, installation, training, service etc. needs to be followed through. An organisation must have good dispatch people. The installation people must do a sincere job. Credit department must have a professional approach.

Follow Ups: Immediately after the close, the salesperson needs to thank the customer and reassure him on his decision to buy. A few days later he should be contacted again for his feedback regarding performance of the product. Follow ups can be done through personal visits, telephone calls, e-mails etc.