MK0001-Unit-01-Personal Selling & Sales Management OverviewUnit-01-Personal Selling & Sales Management Overview

Structure

1.1 Introduction

Learning Objectives

1.2 Competition

1.3 Sales Management, Personal Selling & Salesmanship

Role & Definition of Sales Management

Personal Selling

Salesmanship

Self Assessment Questions I

1.4 Setting Personal Selling Roles & Objectives

Activities in the Selling Process

Personal Selling Roles

Personal Selling Objectives

Setting Personal Selling Objectives

Performance Measurement

Determining Sales related Marketing Policies

1.5 Formulating Personal Selling Strategy

Personal selling strategies

Implementing Personal Selling Strategies

Procedures for improving effectiveness of personal selling strategies

Self Assessment Questions II

1.6 Summary

1.7 Terminal Questions

1.8 Answers to SAQ’s & TQ

1.1 Introduction

The new millennium has been a very exciting time to be in sales and sales management. Many organisations are finding that sales force changes are needed for more demanding customers in an increasingly competitive world. Giant retailers such as Big Bazaar, More, Spencer’s, Food World, Reliance Retail, etc. are leveraging electronic data technology and are requiring manufacturers sales forces to assume responsibility for “just-in-time” inventory control, ordering, billing, sales and promotion. Many companies now rent an office in a key customer’s headquarters building and station an account manager there.

These innovations in the way suppliers and customers interact have necessitated changes in the way sales forces are organised, compensated, developed, and evaluated. Our goal in this course is to explain how the sales team operates in this new environment and how they may be supervised for maximum efficiency and effectiveness. We begin by defining personal selling and describing its role within a firm’s promotion mix. We then explain some of the changes taking place that have had an important impact on the sales function. Next, we describe the sales management function by elaborating the activities they perform, a process of sales management, and the competencies needed to successfully perform these activities and the sales management process.

Learning Objectives:

After studying this unit you should be able:

· To describe & define what is Sales Management, Personal Selling & Salesmanship

· To understand how the role of Sales Management is changing in the current millennium

· To explain the activities in the selling process

· To understand Personal Selling Roles & Objectives

· To implement the procedure to set & evaluate Personal Selling Objectives

· To describe how to formulate & implement Personal Selling Strategies

· To list out the procedures to improve Personal Selling Strategies

1.2 Competition

The 1980s and early 1990s were generally a seller’s market. Today, the number of competitors in most markets has literally exploded. There are three key reasons for this development – globalisation of markets, shorter product cycles, and a blurring of market boundaries.

i. Globalisation: Companies that compete only in India or even in a region of the country are feeling the effects of globalised competition. It is not unusual to compete with companies from other countries, to use suppliers located in other parts of the world, or to sell to customers that are selling in other countries. Any of these situations may result in intensified competition and require that the sales force adjust from a local to a global focus.

ii. Shorter Product Cycles: The rate of technology transfer is increasing. Processes and products that were once proprietary & patented are quickly becoming available to competitors. As a result of the porousness of technology and the increasing number of competitors, product cycles are shorter, imitation is more rapid, and as a consequence, the window of product differentiation has narrowed considerably. Sales and customer relationship skills are most important when a product is new and again when it is late in its life cycle. The sales force’s task is to help customers understand that the benefits of the new product outweigh the risks and costs associated with the requisite business changes. In the late stages of the life cycle, the

salesperson again becomes very important. With very few important differences in competing products, the personal relationship and intimate customer knowledge of the sales force become the primary point of differentiation and leverage for a supplier.

iii. Blurred Boundaries: Contributing importantly to increased competition is the phenomenon of boundary blurring. Unlike earlier, indirect competitors are entering each other’s businesses. Steel, aluminum, plastic, paper, and glass, for instance, compete for the same application. Banks, insurance companies, mutual funds, new Internet companies, and credit-card companies all compete for the same consumer savings and investment rupees. Developments in information and communication technology are often at the heart of boundary blurring. These developments have made it more difficult and complex to sell effectively against a broader set of competitors.

1.3 Sales Management, Personal Selling, Salesmanship

· Role & Definition of Sales Management:

Marketing is the wide range of activities involved in making sure that you’re continuing to meet the needs of your customers and getting value in return. Marketing is usually focused on one product or service. Thus, a marketing plan for one product might be very different than that for another product. Marketing activities include "inbound marketing," such as market research to find out, for example, what groups of potential customers exist, what their needs are, which of those needs you can meet, how you should meet them, etc. Inbound marketing also includes analysing the competition, positioning your new product or service (finding your market niche), and pricing your products and services. "Outbound marketing" includes promoting a product through continued advertising, promotions, public relations and sales.

Sales involves most or many of the following activities, including cultivating prospective buyers (or leads) in a market segment; conveying the features, advantages and benefits of a product or service to the lead; and closing the sale (or coming to agreement on pricing and services).

Personal selling involves the delivery of a specially designed message to a prospect by a seller, usually in the form of face-to-face communication, personal correspondence, or a personal telephone conversation. Unlike advertising, a personal sales message can be more specifically targeted to individual prospects and easily altered if the desired behavior does not occur.

Personal selling, however, is far more costly than advertising and is generally used only when its high expenditure can be justified. For example, the marketing of a sophisticated computer system may require the use of personal selling, while the introduction of a new product to millions of consumers would not. Two other forms of personal selling that are not used with high-end products are door-to-door selling and home demonstration parties. These two personal selling methods are primarily used for personal care products, cosmetics, cookware, encyclopedias, books, toys, food, and other items of special interest to homemakers. Ideally, personal selling should be supported by advertising to strengthen its impact.

The person responsible for management of the field sales operation is the sales manager. He or she may be a first-line manager, directly responsible for the day-to-day management of salespeople, or may be positioned at a higher level in the management hierarchy, responsible for directing the activities of other managers. In either case, sales management focuses on the administration of the personal selling function in the marketing mix. This role includes the planning, management, and control of sales programs, as well as the recruiting, training, compensating, motivating, and evaluating of field sales personnel.

Sales Management can thus be defined as:

“The planning, organising, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm.”

· Personal Selling:

Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and techniques for building personal relationships with another party (e.g., those involved in a purchase decision) that results in both parties obtaining value. In most cases the “value” for the salesperson is realised through the financial rewards of the sale while the customer’s “value” is realised from the benefits obtained by consuming the product. However, getting a customer to purchase a product is not always the objective of personal selling. For instance, selling may be used for the purpose of simply delivering information.

Because selling involves personal contact, this promotional method often occurs through face-to-face meetings or via a telephone conversation, though newer technologies allow contact to take place over the Internet including using video conferencing or text messaging (e.g., online chat).

Personal selling is one part of a company’s promotion mix, along with advertising, sales promotion, and public relations. Advertising is any form of paid sales presentation that is not done face-to-face. Television and radio commercials, newspaper and magazine advertisements, and direct mail inserts are well-known forms of advertising. Sales promotion is the use of incentives – such as coupons, discounts, rebates, contests, or special displays – to entice a customer to buy a product or service. Public relations are the act of building up a company’s image in the eyes of the community in the hopes of translating the feelings of goodwill into sales. An example of public relations might include a company sponsoring a charity event.

a) Advantages of Personal Selling

One key advantage personal selling has over other promotional methods is that it is a two-way form of communication. In selling situations the message sender (e.g., salesperson) can adjust the message as they gain feedback from message receivers (e.g., customer). So if a customer does not understand the initial message (e.g., doesn’t fully understand how the product works) the salesperson can make adjustments to address questions or concerns. Many non-personal forms of promotion, such as a TV or radio advertisement, are inflexible, at least in the short-term, and cannot be easily adjusted to address audience questions.

The interactive nature of personal selling also makes it the most effective promotional method for building relationships with customers, particularly in the business-to-business market. This is especially important for companies that either sell expensive products or sell lower cost but high volume products (i.e., buyer must purchase in large quantities) that rely heavily on customers making repeat purchases. Because such purchases may take a considerable amount of time to complete and may involve the input of many people at the purchasing company (i.e., buying center), sales success often requires the marketer develop and maintain strong relationships with members of the purchasing company.

Finally, personal selling is the most practical promotional option for reaching customers who are not easily reached through other methods. The best example is in selling to the business market where, compared to the consumer market, advertising, public relations and sales promotions are often not well received.

b) Disadvantages of Personal Selling:

Possibly the biggest disadvantage of selling is the degree to which this promotional method is misunderstood. Most people have had some bad experiences with salespeople who they perceived were overly aggressive or even downright annoying. While there are certainly many salespeople who fall into this category, the truth is that salespeople are most successful when they focus their efforts on satisfying customers over the long term and not focusing on their own selfish interests.

A second disadvantage of personal selling is the high cost in maintaining this type of promotional effort. Costs incurred in personal selling include:

· High cost-per-action (CPA) – CPA can be an important measure of the success of promotion spending. Since personal selling involves person-to-person contact, the money spent to support a sales staff (i.e., sales force) can be steep. This cost is incurred whether a sale is made or not! These costs include compensation (e.g., salary, commission, bonus, etc.), providing sales support materials, allowances for entertainment spending, office supplies, telecommunication and much more. With such high cost for maintaining a sales force, selling is often not a practical option for selling products that do not generate a large amount of revenue.

· Training Costs – Most forms of personal selling require the sales staff be extensively trained on product knowledge, industry information and selling skills. For companies that require their salespeople attend formal training programs, the cost of training can be quite high and include such expenses as travel, hotel, meals, and training equipment while also paying the trainees’ salaries while they attend.

A third disadvantage is that personal selling is not for everyone. Job turnover in sales is often much higher than other marketing positions. For companies that assign salespeople to handle certain customer groups (e.g., geographic territory), turnover may leave a company without representation in a customer group for an extended period of time while the company recruits and trains a replacement.

c) Selling Process changes

Selling Process changes are rapidly affecting the traditional sales attitude of “I can sell anything to anyone.” The financial stakes are too high and the problems too complex for a single salesperson to handle. Several important changes are taking place in many companies’ selling efforts in following areas: relationship selling, sales teams & inside selling.

i. Relationship Selling. The traditional selling model emphasises selling products in the short term. The value added by the sales force is in communicating the benefits of the product or service to the customer, helping customers make a purchase decision, and making the whole process convenient and easy for the buyer. However, many buyers and sellers are finding that this selling model does not work for all customers, particularly those that are most important. This has led to the development of an alternative selling model referred to as relationship selling.

ii. Relationship selling involves creating customer value by addressing important customer problems and opportunities through a supplier-customer relationship that is much more intimate than that of traditional transactional selling. Perhaps the best way to understand what is meant by relationship selling is to see an example of it.

Until the late 1980s, Procter & Gamble’s (P&G) sales focus was very transactional. Multiple P&G divisions serviced the same retail accounts. As a result, buyers and P&G salespeople operated at an arm’s-length buying-selling environment. Sellers took orders and aggressively pursued shelf space in big retail outlets like Wal-Mart, while buyers negotiated fiercely for lowest prices and sought the highest shelving allowances in the form of fees for premium shelf facings. In contrast, relationship selling involves a collaborative effort to create added value from this synergy. P&G has reorganised into Customer Business Development Teams composed of a variety of functional areas and organisational levels focusing on individual customer needs.

For example, P&G is able to manage the stock inventory for the retailer or wholesaler in certain high-volume categories like Wal-Mart through its continuous inventory replenishment system. This system has increased customer product turnover by 20 to 30 percent, and the retailer often sells the inventory before paying for it. Of course, for this program to be successful, customers must share critical inventory data with P&G and trust that P&G will operate in the customer’s best interest.

As this example illustrates, relationship selling requires a greater level of trust and commitment by both parties. The focus is not on the individual transaction. A long-term focus is necessary. It should be noted that P&G had to reorganise its sales force in order to implement a relationship selling model. In fact, virtually every aspect of their sales program had to be adjusted to foster a relationship selling orientation.

iii. Sales Teams: As the P&G experience suggests, the importance of the single salesperson winning and losing on the strength of his or her own efforts and skills is likely to diminish in the future. In the case of relationship selling, no one person possesses the necessary knowledge and resources to address the bigger opportunities to create value that go beyond selling the product. Under the traditional buyer-seller interface model, all of P&G’s capabilities and communications with the retailer were funneled through one salesperson whose customer contact was a purchasing executive. With sales teams, the model is reversed, with multiple contacts being established between P&G and retailers. This model allows for a broader transfer of capabilities and communications. The seller and buyer must change, so the degree and extent of interaction expand dramatically. The switch to sales teams incorporating a relational sales orientation produces a number of critical consequences in a firm’s sales program and management processes. Certainly, teams will require changes in the organisation, selection, training, compensation, supervision, and evaluation of the sales force. Even with strong top management commitment and support, it took P&G 5 years to transition relationship selling and sales teams, and there is still a commitment to constantly examine progress and make further changes.

iv. Inside Selling: As a consequence of the changes noted so far – relationship selling and sales teams – salespeople are spending more of their time arranging resources and coordinating efforts within their own organisations to address customer problems. Companies are beginning to realise that in many cases sales success depends as much on successful inside selling as it does on external customer-focused selling. Salespeople will need to work with a number of functions across an organisation if they are to develop successful long-term relationships with clients.

· Salesmanship:

Salesmanship is an art of influencing another person for the object of persuading him to buy a specific product. It may be regarded as the process of winning the confidence of consumer. Salesmanship may also refer to convincing a customer by certain technique and he is really persuaded for buying the particular product.

Salesmanship is important due to following reasons:

· Salesmanship helps to create demand for new products or new brands. It influences to change in patronage from one source of supply to another which results concentration of purchases of specific product.

· As it wins the buyer’s confidence so it helps to make regular and permanent customers.

· The person who is engaged in convincing the public desirability of a specific product is called salesman. He informs the customers about the usefulness of commodity with a view to inducing him to buy the goods.

· He establishes the good will of his firm in the market. So the sales volume may easily be increased.

· He constantly observes the fashions, tastes, likes and dislikes of customers and informs the superiors about their choice.

· He helps to establish close relationship between the manufacturer and consumer.

Self Assessment Questions I

Fill in the blanks:

1. Many organisations are finding that _____ _____changes are needed for more demanding customers in an increasingly competitive world.

2. Companies that compete only in India or even in a region of the country are feeling the effects of ________ competition.

3. Sales and customer relationship skills are most important when a product is _______ and again when it is late in its _____ _____.

4. Personal selling is far more costly than _______.

5. Relationship selling involves creating customer value by addressing important customer problems and opportunities through a ________-___________relationship.

6. Salesmanship helps to create _________ for new products or new brands.

1.4 Setting Personal Selling Roles & Objectives

· Activities in the Selling Process:

The selling process is a set of activities undertaken to successfully obtain an order and begin building long-term customer relations.

The selling activities undertaken by professional salespeople include:

1. Generating Sales Leads

2. Qualifying Leads

3. Preparation for the Sales Call

4. The Sales Meeting

5. Handling Buyer Resistance

6. Closing the Sale

7. Account Maintenance

i. Generating Sales Leads

Selling begins by locating potential customers. A potential customer or “prospect” is first identified as a “sales lead”, which simply means the salesperson has obtained information to suggest that someone exhibits key characteristics that lend them to being a prospect.

For salespeople actively involved in generating leads, they are continuously on the lookout for potential new business. In fact, for salespeople whose chief role is that of order getter, there is virtually no chance of being successful unless they can consistently generate sales leads.

Sales leads can come from many sources including:

· Prospect Initiated – Includes leads obtained when prospects initiate contact such as -when they fill out a website form, enter a trade show booth or respond to an advertisement.

· Profile Fitting – Uses market research tools, such as company profiles, to locate leads based on customers that fit a particular profile likely to be a match for the company’s products. The profile is often based on the profile of previous customers.

· Market Monitoring – Through this approach leads are obtained by monitoring media outlets, such as news articles, Internet forums and corporate press releases.

· Canvassing – Here leads are gathered by cold-calling (i.e., contacting someone without pre-notification) including in-person, by telephone or by email.

· Data Mining – This technique uses sophisticated software to evaluate information (e.g., in a corporate database) previously gathered by a company in hopes of locating prospects.

· Personal and Professional Contacts – A very common method for locating sales leads uses references. Such references may come at no cost to the salesperson or, to encourage references, salespeople may offer payment for references. Non-paying methods including asking acquaintances (e.g., friends, business associates) and networking (e.g., joining local or professional groups and associations). Paid methods may include payment to others who direct leads that eventually turn into customers including using Internet affiliate programs.

· Promotions – The method uses free gifts to encourage prospect to provide contact information or attend a sales meeting. For example, offering free software for signing up for a demonstration of another product.

ii. Qualifying Sales Leads:

Not all sales leads hold the potential for becoming sales prospects. There are many reasons for this including:

· Cannot be Contacted – Some prospects may fit the criteria for being a prospect but gaining time to meet with them may be very difficult (e.g., high-level executives).

· Need Already Satisfied – Prospects may have already purchased a similar product offered by a competitor and, thus, may not have the need for additional products.

· Lack Financial Capacity – Just because someone has a need for a product does not mean they can afford it. Lack of financial capacity is major reason why sales leads do not become prospects.

· May Not Be Key Decision Maker – Prospects may lack the authority to approve the purchase.

· May Not Meet Requirements to Purchase – Prospects may not meet the requirements for purchasing the product (e.g., lack other products needed for seller’s product to work properly).

The process of determining whether a sales lead has the potential to become a prospect is known as “qualifying” the lead. In some cases, a sales lead can be qualified by the seller prior to making first contact. For instance, this can be done through the use of research reports, such as an evaluation of a company’s financial position using publicly available financial reporting services.

i. Preparation for the Sales Call:

A salesperson’s next task is to prepare for an eventual sales call. This activity in the selling process has two main objectives:

· Learn More About the Customer-While during the lead generation and qualifying portion of the selling process a seller may have gained a great deal of knowledge about a customer,

invariably there is much more to be known that will be helpful once an actual sales call is made. The salesperson will use their research skills to learn about such issues as:

- Who is the key decision maker?

- What is the customer’s organisational structure?

- What products are currently being purchased?

- How are purchase decisions made?

Salespeople can attempt to gather this information through several sources including: corporate research reports, information on the prospect’s website, conversations with non-competitive salespeople who have dealt with the prospect, and by asking questions when setting up sales meetings. Gaining this information can help prepare the salesperson for the sales presentation. Having more information about a prospect allows the salesperson to be more confident in his/her presentation and, consequently, come across as more knowledgeable when meeting with the prospect.

· Arranging Prospect Contact-With some information about the prospect in-hand, the salesperson must then move to make initial contact. In a few cases a salesperson may be fortunate to have the prospect contact her/him but in most cases salespeople will need to initiate contact. In many ways arranging for contact is as much as selling effort as selling a product.

There are two main approaches to arranging contact:

- Cold Calling for Presentation – A challenging way to contact a prospect is to attempt to conduct a sales meeting through a straight cold call. In this approach the intention is to not only contact the prospect but to also give a sales presentation during this first contact period. This approach can be difficult since the prospect may be irritated by having unannounced salespeople interrupt them and take time out of their busy work schedule to sit for a sales meeting.

- Cold Calling for Appointment – A better approach for most salespeople is to contact a prospect to set up an appointment in advance of the sales meeting. The main advantages of making appointments is that it gives the salesperson additional time to prepare for the meeting and also, in the course of discussing an appointment, the salesperson may have the opportunity to gain more information from the prospect. This way also has the added advantage of having the prospect agree to sit for the meeting, which may make them more receptive to the product than if the salesperson had followed the Cold Calling for Presentation approach.

ii. The Sales Meeting:

The heart of the selling process is the meeting that takes place between the prospect and the salesperson. At this stage of the selling process the salesperson will spend a considerable amount of time presenting the product.

Additionally, the meeting is not just about the seller discussing the product, rather much more takes place during this part of the selling process including:

· Establishing Rapport with the Prospect – Successful salespeople know that jumping right into a discussion of their product is not the best way to build relationships. Often it is important that, upon first greeting the prospect, the salesperson spends a short period of time in a friendly conversation to help establish a rapport with the potential buyer.

· Gaining Background Information – The salesperson will use questioning skills to learn about the prospect and the prospect’s company and industry.

· Access Prospect’s Needs – Taking what is learned from the prospect’s response to questions, the salesperson can determine the prospect’s needs. To accomplish this task successfully, sellers must be skilled at listening and understanding responses.

· Presenting the Product – The salesperson will stimulate a prospect’s interest by discussing a product’s features and benefits in a way that is tailored to the needs of the customer. Part of this discussion may include a demonstration of the product.

· Assess the Prospect – Throughout the presentation the seller will use techniques, including interpreting non-verbal cues (e.g., body language), to gauge the prospect’s understanding and acceptance of what is discussed.

iii. Handling Buyer Resistance:

It is a rare instance when a salesperson does not receive resistance from a prospect. By resistance we are referring to a concern a prospect has regarding the product (or company) and how it will work for their situation. In most cases the resistance is expressed verbally (e.g., “I don’t see how this can help us.”) but other times the resistance presents itself in a non-verbal fashion (e.g., prospect’s facial expression shows disinterest).

To overcome resistance, salespeople are trained to make sure they clearly understand the prospect’s concern. Sometimes prospects say one thing that appears to be an objection to the product but, in fact, they have another issue that is preventing them from agreeing to a purchase. Salespeople are rarely able to make the sale unless resistance is overcome.

iv. Closing the Sale:

This part of the selling process is the most difficult. Closing the sale is the point when the seller asks the prospect to agree to make the purchase. It is also the point at which many customers are unwilling to make a commitment and, consequently, respond to the seller’s request by saying no.

Closing the sale is actually fairly easy if the salesperson has worked hard in developing a relationship with the customer. Unfortunately some buyers, no matter how satisfied they are with the seller and their product, may be insecure or lack confidence in making buying decisions. For these buyers, salespeople must rely on persuasive communication skills that help assist and even persuade a buyer to place an order.

The use of persuasive communication techniques is by far the most controversial and most misunderstood concept related to the selling process. Many people think that the act of persuasion is an attempt to manipulate someone into doing something they really do not want to do. However, for sales professionals persuasion is a skill for assisting someone in making a decision. Many times buyers take the lead in closing a sale since they are convinced the product is right for them.

For salespeople, understanding when it is time to close a sale and what techniques should be used takes experience. In any event, the close is not the end of the selling process but is the beginning of building a relationship.

v. Account Maintenance:

While account maintenance is listed as the final activity in the selling process, it really amounts to the beginning of the next sale and, thus, the beginning of a buyer-seller relationship. In selling situations where repeat purchasing is a goal (compared to a one-time sale), following up with a customer is critical to establishing a long-term relationship.

After a sale, salespeople should work hard to ensure that the customer is satisfied with the purchase and determine what other ways the salesperson can help the customer be even more satisfied with the purchase. The level and nature of after-sale follow-up will often depend on the product sold. Expensive, complex purchases that require installation and training may result in the salesperson spending considerable time with the customer after the sale while smaller purchases may have the seller follow-up with simple email correspondence.

By maintaining contact after the sale the seller is in a position to become more accepted by the customer, which invariably leads to the salesperson learning more about the customer and the customer’s business. With this knowledge the salesperson will almost always be presented with more selling opportunities.

· Personal Selling Roles:

There are four major types of selling roles: order getters, order takers, order influencers, and sales support. It should be noted that these roles are not mutually exclusive and that a salesperson can perform more than one and possibly all activities.

· Order Getters-The role most synonymous with selling is a position in which the salesperson is actively engaged in using their skills to obtain orders from customers. Such roles can be further divided into:

- New Business Development – A highly challenging yet potentially lucrative sales position is one where the main objective is to find new customers. Sales jobs in this category are often in fields that are very competitive, but offer high rewards for those that are successful. The key distinguishing factor of these positions is that once a sale is made new business salespeople pass customers on to others in their organisation who handle account maintenance. These positions include:

- Business Equipment Sales – These salespeople are often found in industries where a company’s main profits come from the sale of supplies and services that come after an initial equipment purchase. The key objective of business equipment salespeople is to get buyers to purchase the main piece of equipment for which supplies and service are needed in order for the equipment to function. For instance, in the xerox machine industry certain salespeople only seek out new accounts and once a xerox machine sale is made they pass along the account to other sales personnel who handle the sales of maintenance and supply products.

- Telemarketing – This category includes product sales over the phone, whether aimed at business or consumer. While in some countries, laws restrict unsolicited phone selling, the practice is still widely used in the business market.

- Consumer Selling – Certain companies are very aggressive in their use of salespeople to build new consumer business. These include: retailers selling certain high priced consumer products including furniture, electronics and clothing; housing products including real estate, security services, building replacement products (e.g., PVC windows); and in-home product sellers including those selling door-to-door and products sold at “Kitty party” events such as cosmetics, kitchenware and decorative products.

· Account Management – Most people engaged in sales are not only involved in gaining the initial order, but work to build and maintain relationships with clients that are intended to last a long time. Salespeople involved in account management are found across a broad range of industries. Their responsibilities involve all aspects of building customer relationships from initial sale to follow-up account servicing. These include:

- Business-to-Business Selling – These salespeople sell products for business use with an emphasis on follow-up sales. In many cases, business-to-business salespeople have many different items available for sale (i.e., broad and/or deep product line) rather than a single

product. So while the initial sale may only result in the buyer purchasing a few products, the potential exists for the buyer to purchase many other products as the buyer-seller relationship grows.

- Trade Selling – Sales professionals working for consumer products companies normally do not sell to the final user (i.e., consumer). Instead their role is focused on first getting distributors, such wholesalers and retailers, to handle their products and once this is accomplished, helping distributors sell their product by offering ideas for product advertising, in-store display and sales promotions.

· Order Takers-Selling does not always require a salesperson use methods designed to encourage customers to make a purchase. In fact, the greatest number of people engaged in selling are not order getters, rather they are considered order takers. In this role, salespeople primarily assist customers with a purchase in ways that are much less assertive than order getters. As might be expected, compensation for order takers is generally lower than that of order getters. Among those serving an order taker role are:

- Retail clerks – While some retail salespeople are involved in new business selling, the vast majority of retail employees handle order taking tasks, which range from directing customers to products to handling customer checkout.

- Industrial Distributor Clerks – Industrial purchase situations, such as distributors of building products, will also have clerks to handle customer purchases.

- Customer Service – Order taking is also handled in non face-to-face ways through customer service personnel. Usually this occurs via phone conversations, though newer technologies are allowing for these tasks to be handled through electronic means such as online chat.

· Order Influencers-Some salespeople are not engaged in direct selling activities at all. That is, they do not sell directly to the person who is the ultimate purchaser for their product. Instead these salespeople concentrate on selling activity that targets those who influence purchases made by the final customer. The primary example of an order influencer is the missionary salesperson:

- Missionary – These salespeople are used in industries where customers make purchases based on the advice or requirements of others. Two industries in which missionary selling is commonly found are pharmaceuticals, where salespeople, known as Medical Representatives, discuss products with doctors (influencers) who then write prescriptions for their patients (final customer) and higher education, where salespeople call on college professors (influencers) who make requirements to students (final customer) for specific textbooks.

· Sales Support – A final group involved in selling mostly assist with the selling activities of other sales professionals. These include:

- Technical Specialists – When dealing with the sale of technical products, particularly in business markets, salespeople may need to draw on the expertise of others to assist with the process. This is particularly the case when the buying party consists of a buying center. In business selling many people from different functional areas may be involved in the purchase decision. If this buying center includes technical people, such as scientists and engineers, a salesperson may seek assistance from members of their own technical staff, who can help address specific questions.

- Office Support – Salespeople also may receive assistance from their company’s office staff in the form of creating promotional materials, setting up sales appointments, finding sales leads, arranging meeting space or organising trade shows exhibits.

· Personal Selling Objectives:

Personal selling is used to meet the five objectives of promotion in the following ways:

· Building Product Awareness – A common task of salespeople, especially when selling in business markets, is to educate customers on new product offerings. In fact, salespeople serve a major role at industry trades shows where they discuss products with show attendees. But building awareness using personal selling is also important in consumer markets. The advent of controlled word-of-mouth marketing is leading to personal selling becoming a useful mechanism for introducing consumers to new products.

· Creating Interest – The fact that personal selling involves person-to-person communication makes it a natural method for getting customers to experience a product for the first time. In fact, creating interest goes hand-in-hand with building product awareness as sales professionals can often accomplish both objectives during the first encounter with a potential customer.

· Providing Information – When salespeople engage customers a large part of the conversation focuses on product information. Marketing organisations provide their sales staff with large amounts of sales support including brochures, research reports, computer programs and many other forms of informational material.

· Stimulating Demand – By far, the most important objective of personal selling is to convince customers to make a purchase.

· Reinforcing the Brand – Most personal selling is intended to build long-term relationships with customers. A strong relationship can only be built over time and requires regular communication with a customer. Meeting with customers on a regular basis allows salespeople to repeatedly discuss their company’s products and by doing so helps strengthen customers’ knowledge of what the company has to offer.

· Setting Personal Selling Objectives:

Personal selling objectives are established in accordance with organisational procedures. There are various elements for setting these objectives.

These objectives may include but are not limited to –

- sales volume,

- market share,

- profit,

- product or brand recognition,

- customer relationships,

- new business,

- repeat business,

- coverage,

- targets

The establishment of these objectives may include data which is –

- specific;

- measurable;

- achievable;

- results focused;

- time-bound;

- linked to organisation’s strategic marketing, production, management, team, territory or centre objectives

Personal selling goals and objectives are agreed to and documented in accordance with organisational procedures.

- Performance Measurement:

Personal selling objectives are identified and evaluated in accordance with organisational procedures.

Historically, sales performance measurement was simple—increase revenue over the previous year. Sales managers typically rewarded and compensated salespeople by evaluating sales volume over a certain period of time. Although sales volume is still important, companies are discovering that not all sales are equally profitable.

Profitability often depends on the following:

• The amount of time necessary to complete the sale

• The gross margins associated with the sale

• The level of price discounting

• The amount of promotional support

• The amount of post-sale support

• The impact of future product sales

The sales force has an important influence on all these issues through their account selection, account penetration, account retention, pricing, and servicing decisions. In effect, salespeople are resource allocators. First, they decide on which customers and prospects they will spend time selling and how much time they will allocate to each customer.

Second, the sales force also has an important role in the allocation of marketing resources to individual customers. For example, sales forces for large food product manufacturers selling through provision stores are responsible for trade promotion spending decisions, such as coupon promotions, newspaper advertising, display racks, and price promotions. Studies find that trade promotion spending consumes approximately 50 percent of the marketing budgets of these companies and represents about 12 percent of sales.

Spending this money effectively is critical to these firms’ profitability. As a result, salespeople are being evaluated on a wider array of performance metrics, which places greater emphasis on gathering more and better performance data.

The processes for measuring effectiveness of personal selling objectives are identified in accordance with organisational procedures.

This may include the following procedures: –

· observation;

· monitoring of sales;

· self-evaluation;

· feedback from clients, manufacturers, suppliers, staff

Determining Sales related Marketing Policies:

Marketing Policy refers to the process of making important organisational decisions in Marketing, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies can be understood as management, financial, and administrative mechanisms arranged to reach explicit goals.

Marketing programs & policies are designed around four elements of the marketing mix: products to be sold, pricing, promotion, and distribution channels. The promotion component includes advertising, public relations, personal selling, and sales promotion (point-of-purchase displays, coupons, and sweepstakes/lotteries).

Advertising and sales promotions are non personal communications, whereas salespeople talk directly to customers. Thus, where advertising and sales promotion “pull” merchandise through the channel, personal selling provides the “push” needed to get orders signed. With public relations, the message is perceived as coming from the media rather than directly from the organisation.

Personal selling involves two-way communication with prospects and customers that allows the salesperson to address the special needs of the customer. It is often the job of a salesperson to uncover the special needs of the customer. When customers have questions or concerns, the salesperson is there to provide appropriate explanations.

Furthermore, personal selling can be directed to qualified prospects, whereas a great deal of advertising and sales promotions is wasted because many people in the audience have no use for the product.

Perhaps the most important advantage of personal selling is that it is considerably more effective than advertising, public relations, and sales promotion in identifying opportunities to create value for the customer and gaining customer commitment.

In general, if a product has a high unit value and requires a demonstration of its benefits, it is well suited for personal sales. For example, an encyclopedia is a high-priced item and most people do not feel they need one. After a demonstration, however, most people agree it would be a useful item to have. Therefore, encyclopedias are well suited to a promotion mix that emphasises personal selling. Highly technical products, such as computers and copiers, are also primarily sold through personal sales methods. Products that involve a trade-in, like automobiles, are usually handled through personal selling to help facilitate the trade-in process.

Finally, a company that cannot afford a mass-advertising campaign might consider personal selling as an alternative to advertising. Since sales force compensation is largely based on actual sales, personal selling may require less money up front than other parts of the promotion mix.

1.5 Formulating Personal Selling Strategies

· Personal selling strategies:

A Strategy is a long term plan of action designed to achieve a particular goal. Strategies are used to make the problem easier to understand and solve. Strategies for personal selling may be worked out in the following areas:–

- direct marketing,

- campaigning,

- direct mail,

- personal contact,

- internet selling,

- telephone selling,

- creating a suitable environment,

- timeliness,

- building rapport,

- building relationships,

- clarifying requirements,

- understanding customer perspectives,

- identifying product gaps,

- use of sales aids,

- identification of needs and motivation,

- meeting needs,

- handling unrealistic expectations,

- negotiating,

- overcoming objections,

- overcoming resistance,

- solving problems,

- resolving conflicts,

- use of closing strategies,

- maintaining a win-win attitude,

- reaching agreement,

- confirming requirements,

- documentation,

- giving and receiving feedback,

- follow-up,

- compliance with organisational procedures,

- building client loyalty,

- developing partnerships,

- complying with law

· Implementing Personal Selling Strategies:

Personal selling strategies are implemented consistent with agreed goals and objectives. The implementation may include the following areas: –

- sales volume,

- market share,

- profit,

- product or brand recognition,

- customer service,

- customer relationships,

- new business,

- repeat business,

- coverage,

- motivation,

- professionalism,

- achievement of targeted results

· Procedures for improving effectiveness of personal selling strategies:

Procedures for improving effectiveness of personal selling strategies are implemented in accordance with organisational procedures. These may include the following:–

- setting development objectives;

- up skilling;

- training;

- coaching;

- motivating;

- encouraging;

- providing resources;

- changing strategies;

- adjusting procedures;

- providing incentives;

- seeking feedback;

- providing professional advice and assistance;

- Linking with mentor.

Self Assessment Questions II

State whether the following statements are true or false:

1. The establishment of personal selling objectives may include data which is specific & measurable.

2. Profitability often depends on the amount of time necessary to complete the sale & the gross margins associated with the sale.

3. The sales force has no role in the allocation of marketing resources to individual customers.

4. Marketing programs & policies are designed around four elements of the marketing mix.

5. Personal selling strategies are implemented by excluding the sales volume, market share & profit.

6. Some of the procedures for improving effectiveness of personal selling strategies include setting development objectives, up skilling, training & coaching.

1.6 Summary

In this unit we learnt what is the concept & definition of Sales Management, Personal Selling & Salesmanship & how the role of Sales Management is changing in the current millennium. We also understood how to set & evaluate Personal Selling Roles & Objectives & how to formulate & implement Personal Selling Strategies. We also touched upon the procedures to improve Personal Selling Strategies.

1.7 Terminal Questions

1) Explain the three key reasons for increased competition viz.—globalisation of markets, shorter product cycles, and a blurring of market boundaries?

2) Describe the role of Sales Management in the Marketing Mix & define Sales Management.

3) Explain the concept of relationship selling, sales teams & inside selling.

4) What are the various elements in establishing Personal Selling Roles & Objectives & what are the criteria in including data in such an exercise?

5) How are the Personal Selling Objectives identified & evaluated?

6) Describe the areas in which the personal selling strategies are worked out.

7) Explain the procedures for improving effectiveness of personal selling strategies.

1.8 Answers to SAQ’s & TQ

SAQI

1. sales force

2. globalized

3. new, life cycle

4. advertising

5. supplier-customer

6. demand

SAQ II

1) True

2) True

3) False

4) True

5) False

6) True

Terminal Questions

1. Refer to Section 1.1.3

2. Refer to Section 1.2.2

3. Refer to Section 1.2.3

4. Refer to Section 1.3.2 & 1.3.3

5. Refer to Section 1.3.4 & 1.3.5

6. Refer to Section 1.5.1

7. Refer to Section 1.5.3

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