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Chapter 02
Principles of Personal Selling
Students to Start-UpsEntrepreneurial Skills Series
Selling is only the tip of the iceberg
“There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be
needed is to make the product or service available.”
Peter Drucker
Principles of Personal Selling
Personal selling is an ancient art that has spawned many principlesSales professionalismNegotiationRelationship marketing
Sales Professionalism
All sales-training approaches try to convert a salesperson from a passive order taker into an active order getter
Order takers :That customers know their own needsResent attempts to influence them Prefer courteous and self-effacing salespersons
Two basic become a order getters :Sales-oriented approach
Stresses high pressure techniquesCustomer-oriented approach
Stresses customer problem solving No approach works best in all circumstances
Major Steps in Effective Selling
Prospectingand Qualifying
Pre approach
Approach
Presentationand Demonstration
Overcomingobjections
Closing
Follow upand Maintenance
Prospecting and Qualifying
The first step in selling is to identify and qualify prospects.Companies can generate leads by :
Examining data sources (newspapers, directories, CD-ROMs, Web sites)
Exhibiting at trade shows to encourage drop-bysInviting customers to suggest the names of prospectsCultivating referral sources (suppliers, dealers, and bankers)Contacting organizations and associationEngaging in speaking and writing activities that will draw attentionTelecommunications (phone, mail, Internet)Dropping in unannounced (cold canvassing)
Pre approachThe sales person needs to learn :
Prospect companyNeedsInvolved in the purchase decision
BuyersPersonal characteristicsBuying styles
The sales person should set call objectives :To qualify the prospectGather informationMake an immediate sale
The best approachPersonal visitPhone call or letterBest timing
Finally, the salesperson should plan an overall sales strategy for the accountFinally, the salesperson should plan an overall sales strategy for the account
Approach
The salesperson decides how to get the relationship off to a good start
The salesperson might consider :Wearing clothes similar to what the buyers typically wearShow courtesy and attention to the buyerAvoid distracting mannerisms
When meeting with the prospect :Open with a positive statementConcentrate on understanding the buyer’s needs (questioning and
active listening)
Presentation and Demonstration
Tells the product “story” to the buyerFollowing the AIDA formula :
Gaining attentionHolding interestArousing desireObtaining action
To presentation use FABV :Features : physical characteristics of market offeringAdvantages : why the features provide an advantage to customerBenefits : the economic, technical, service, and social benefits
delivered by the offeringValue approach : the summative worth (monetary term) of the offering
Presentation and Demonstration
Spend too much on product features ( a product orientation) than the
offering’s benefits and value ( a customer orientation)
3 different style of sales presentation :
Canned approach (oldest presentation)
Formulated approach
Need-satisfaction approach
Presentation and Demonstration
Canned approachMemorized sales talk covering the main pointsBased on stimulus-response thinking
The buyer is passiveCan be moved to purchase by the use of the right stimulus (picture, word, term,
and actions)
Formulated approachBased on stimulus-response thinkingIdentifies the buyer’s needs and buying style
Need-satisfaction approachSearch the customer’s real needs (encouraging)Use role of a knowledgeable business consultant
Overcoming Objections
• Customers almost always pose objections during the presentation or when asked for the order
• To handle these objections : – maintains a positive approach
– asks the buyer to clarify the objection
– asks questions that lead the buyer to answer his or her own objection
– denies the validity of the objection
– turns the objection into a reason for buying
Closing
Salespersons need to know how to recognize closing sign from the buyerPhysical actionsStatements or commentsQuestions
Closing techniquesAsk for the orderRecapitulate the points of agreement, Offer to help the buyer write up the order Ask whether the buyer wants A or BGet the buyer to make minor choices such as the color or size Indicate what the buyer will lose if the order is not placed now
Follow-up and Maintenance
After closingSalesperson should cement any necessary details :
Delivery timePurchase termsOther matters
Salesperson should schedule a follow-up call To detect any problemAssure the buyer interestReduce any cognitive dissonance
Sales person should develop a maintenance and growth plan for the account
Negotiation
My father said: "You must never try to make all the money that's in a deal. Let the other fellow make some
money too, because if you have a reputation for always making all the money, you won't have many
deals.” J. Paul Getty
Negotiation
Much business-to-business selling involves negotiating skills
The two parties need to reach agreement
Price
Others term of sale
Salesperson need to win without making deep concessions that will hurt profitability
There are 2 exchange in marketing
Routinized exchange : administered program of pricing and distribution
Negotiated exchange : price and others term area set via bargaining behavior
To continued in chapter 03 Negotiation………..
Relationship Marketing
The principles of personal selling and negotiation thus far described are transaction oriented because their purpose is to close a specific sale
The company must build a long-term supplier customer relationship by demonstrating that it has the capabilities to serve the account’s needs in a superior way over the long run
The company must build relationship marketing rather than transaction marketing, because larger customers are often global and prefer suppliers that can :sell and deliver a coordinated set of products and services to many
locationsquickly solve problems that arise in different locationswork closely with customer teams to improve products and processes
Relationship Marketing
To succeed in winning and maintaining accounts in today’s demanding environment, company must :Encourage sales teamwork Reward it with appropriate compensation for work on shared
accountsEstablish better goals Measures for their sales force Reinforce the importance of teamwork in their training programs
The organization will begin to focus as much on managing its customers as on managing its products
Relationship Marketing
Neil Rackham has developed a method to raise 4 types of question with the prospect
SPIN sellingSituationProblemImplicationNeed-Payoff
Relationship Marketing
Situation question Ask about factExplore the buyer’s present situation
Problem question Deal with problem, difficulties, and dissatisfactions the buyer’s is
experiencing
Implications questionAsk about the consequences or effects of a buyer’s problem, difficulties,
and dissatisfactions
Need-payoff question Ask about the value or usefulness of a proposed solution
Relationship Marketing
Neil Rackham suggest if selling complex product or services, sales person should have move from preliminaries to :
Investigating problem and needs
Demonstrating the supplier’s superior capabilities
Obtaining a long-term comitment
Notes
1. For an excellent summary of the skills needed by sales representatives and sales managers, see Rolph Anderson and Bert Rosenbloom, “The World Class Sales Manager: Adapting to Global Megatrends,” Journal of Global Marketing 5, no. 4 (1992): 11–22.
2. Some of the following discussion is based on W. J. E. Crissy, William H. Cunningham, and Isabella C. M. Cunningham, Selling: The Personal Force in Marketing (New York: John Wiley, 1977), pp. 119–29.
3. For additional reading, see Howard Raiffa, The Art and Science of Negotiation (Cambridge, MA: Harvard University Press, 1982); Max H. Bazerman and Margaret A. Neale, Negotiating Rationally (New York: Free Press, 1992); James C. Freund, Smart Negotiating (New York: Simon & Schuster, 1992); Frank L. Acuff, How to Negotiate Anything with Anyone Anywhere Around the World (New York: American Management Association, 1993); and Jehoshua Eliashberg, Gary L. Lilien, and Nam Kim, “Searching for Generalizations in Business Marketing Negotiations,” Marketing Science 14, no. 3, pt. 1 (1995): G47–G60.
4. See Donald W. Dobler, Purchasing and Materials Management, 5th ed. (New York: McGraw- Hill, 1990).
5. Adapted from Roger Fisher and William Ury, Getting to Yes: Negotiating Agreement Without Giving In, rev. ed. (Boston: Houghton Mifflin, 1992), p. 57.
6. See Frank V. Cespedes, Stephen X. Doyle, and Robert J. Freedman, “Teamwork for Today’s Selling, Harvard Business Review, March–April 1989, pp. 44–54, 58. Also see Cespedes, Concurrent Marketing: Integrating Product, Sales, and Service (Boston: Harvard Business School Press, 1995).
Questions
To be continued in the next chapter………