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Managing the Personal Selling Function

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Chapter Questions
What is the role of personal selling in business marketing? What is the selling process followed by an industrial sales person? What are various types of sales organisations? How the sales force is managed and deployed? How the major, national, or key accounts are managed? What are the ethical issues in personal selling?

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Role of Personal Selling in BM

Major roles are: 1)Part of problem solving ability of the company

2)Part of the communication mix. 3) Building a long-term relationship with key customers.

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The Selling Process

Transactional salesperson follows the process:
1. 2. 3. 4. 5. 6. 7. Prospecting and qualifying Pre-approach or Pre-call planning Approach Presentation and demonstration Overcoming objections Trial close / closing the sale Follow-up and service

Prospecting
It is identifying or finding prospects i.e. prospective or potential customers. Methods of prospecting or sales lead generation are: (1) referrals from existing customers, (2) company sources (website, ads., tradeshow, teleprospecting), (3) external sources (suppliers, intermediaries, trade associations), (4) salespersons networking, (5) industrial directories, (6) cold canvassing

Qualifying
Companies qualify sales leads by contacting them by mail or phone to find their interests (or needs) and financial capacity. Leads are categorized as: Hot, Warm, and Cool

Preapproach
Information gathering about the prospect. Sources of information: the Internet, industrial directories, government publications, intermediaries, etc. Precall planning Setting call objectives Tentative planning of sales strategy: which products, features and benefits may meet the customer needs

Approach
Make an appointment to meet the prospect Make favourable first impression Select an approach technique: Introductory Customer benefit Product Question Praise The approach takes a few minutes of a call, but it can make or break a sale

Presentation and Demonstration

There are four components:
Understanding the buyers needs Knowing sales presentation methods / strategies Developing an effective presentation Using demonstration as a tool for selling

We will examine each of the above points

Understanding the buyers needs

Firms and consumers buy products / services to satisfy needs To understand buyers needs, ask questions and listen In business situations, problem identification and impact questions are important E.G. Have you experienced any problems on quality and delivery from the existing supplies? What impact the quality and delivery problems will have on your costs and customer satisfaction?

Knowing Sales Presentation Methods/Strategies

Firms have developed different methods / styles / strategies of sales presentation Stimulus response method / canned approach. It is a memorised sales talk or a prepared sales presentation. The sales person talks without knowing the prospects needs. E.G. Used by tele-marketing people Formula method / formulated approach. It is also based on stimulus response thinking that all prospects are similar. The salesperson uses a standard formula AIDA (attention, interest, desire, and action). It is used if time is short and prospects are similar. Shortcomings are: prospects needs are not uncovered and uses same standard formula for different prospects.

Sales Presentation Methods (Continued)

Need satisfaction method
Interactive sales presentation First find prospects needs, by asking questions and listening Use FAB approach: Features, Advantages, Benefits Effective method, as it focuses on customers

Consultative approach

selling

method

Problem-solving

Salespeople use cross-functional expertise Firms adopt team selling approach It is used by software / consulting firms

Developing an Effective Presentation

Some of the guidelines are:
Plan the sales call Adopt presentation to the situation and person Communicate the benefits of the purchase Present relevant and limited information at a time Use the prospects language Make the presentation convincing give evidence Use technology like multi-media presentation

Using Demonstration
Sales presentation can be improved by demonstration Demonstration is one of the important selling tools EGs: Test drive of cars; demonstration of industrial products in use Benefits of using demonstration for selling are:
Buyers objections are cleared Improves the buyers purchasing interest Helps to find specific benefits of the prospect The prospect can experience the benefit

Overcoming Sales Objections / Resistances

Objections take place during presentations / when the order is asked Two types of sales objections: Psychological / hidden Logical (real or practical) Methods for handling and overcoming objections: (a) ask questions, (b) turn an objection into a benefit, (c) deny objections tactfully, (d) third-party certificate, (e) compensation

Trial close and Closing the sale

Trial close checks the attitude or opinion of the prospect, before closing the sale (or asking for the order) If the response to trial close question is favourable, then the salesperson should close the sale Some of the techniques used for closing the sale are: (a) alternative-choice, (b) minor points, (c) assumptive, (d) summary-of-benefits, (e) T-account, (f) special-offer, (g) probability, and (h) negotiation

Follow-up and Service

Necessary for customer satisfaction Successful salespeople follow-up in different ways: For example,
Check order details Follow through delivery schedule Visit when the product is delivered Build long-term relationship Arrange warranty service

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Types of Sales Organisations

Geographic organisation

Product organisation
Market oriented organisation

Combination organisation

Major selection criteria

(1)Size and resource of the firm (2)Nature of product sold in the market

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Management of Sales Force

Management / administration of sales force includes: Recruitment and selection of salespersons Training the salespeople

Supervision and motivation of sales force

Compensation of salesforce

Evaluation and control of salespersons

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Recruitment of the Sales Force

After planning the needed number and type of

salespeople, recruitment starts by:

Identifying prospective candidates, using

internal and external sources.

Evaluating and selecting effective sources of

recruitment.

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Selection of the Sales Force

Tools or steps in selection process: Screening resumes Application blank Initial interview Intensive interview Testing Reference check Physical examination Each company decides selection criteriae.g. knowledgeable, high energy, reliable, helpful.

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Training the Salespeople

The training process has three phases:
Assess Sales Training Needs Design and Execute Sales Training Programme Evaluation and Reinforcement of Sales Training Programme

Assess training needs of (1) newly hired sales trainees, and (2) experienced / existing salespeople. Design and execute sales training programme using ACMEE Method: Aims, Content, Methods, Execution, Evaluation.

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Designing & Executing Sales Training Programme

Aims / Objectives (Vary from company to company)
Examples Prepare new sales trainees Increase sales, profits, or both Increase sales productivity

Content of training programme

1) Initial training for new sales trainees (Broader) Company, product, customer, competitor knowledge Selling skills or sales techniques. 2) Continuing training for existing salespeople (specific) Depending on training needs Examples: New product, negotiating skills.

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Sales Training Methods

Grouped into five categories:
Class room / conference training: Lectures, group discussion. Behavioral learning: Case studies, role-playing Online training : Distance learning, interactive multimedia. Absorption training: CD-ROM, audio cassettes, manuals, books. On the job training: Mentoring, job rotation.

Execution of Sales Training programme

First, make decisions on : 1. Who will be the trainees and trainers? 2. When and where the training take place? 3. What would be the budgeted expenditure?

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Execution / Implementation of Sales Training Programme

Arranging internal / external trainers Arranging conference hall, teaching aids, travel, etc. Prepare time table, communication, etc. Evaluation of Sales Training Programme Sales performance against targets before and after training Written tests before and after the training Trainees evaluate training programme Reinforcement training methods Web based or online training Refresher training and retraining

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Supervision of Sales Force

Supervision is directing and controlling daily activities of salespeople: Responsibilities of sales supervisor /manager: Communicating & implementing sales policies & strategies Counseling on deficiencies of salespeople Setting goals or targets Creating a favourable work environment & relationship. Training and development of sales persons. Methods used for supervising salespeople Direct : Phone, e-mail, sales meeting, personal contact, coaching. Indirect: Sales report, sales analysis, expense report, compensation plan.

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Motivation of Sales Force

Motivation is the effort salesperson makes to complete activities of the job. Categories of motivational methods / tools : Financial & Nonfinancial

Financial tools / methods:

(1)salary, (2) commission, (3) bonus, (4) fringe benefits, (5) combination, (6) sales contests

Non- financial tools / methods:

(1)Promotion, (2) sense of accomplishment, (3) personal growth opportunities, (4) recognition, (5) job security, (6) training, (7) sales meetings, (8) job enrichment, (9) supervision

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Compensation of Sales Force

Purpose : Attract and motivate salespeople. Methods / plans of salesforce compensation:
Straight salary straight commission combination Salary plus commission Salary plus bonus Salary plus commission plus bonus

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Evaluate and Control of Sales Force Performance

Purposes :
To decide payment increment, promotion, training needs To find strengths and weaknesses

Procedure

Set policies on performance evaluation and control

Decide bases of (or criteria for) performance evaluation Establish performance standards / goals / targets. Compare actual performance with the standards. Review performance evaluation with salespersons Decide sales management actions.

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Deployment of Sales Force

It includes the following
Setting - up sales territories Determining size of the sales force Allocating salespeople to territories

Setting up or Designing Sales Territories

Steps involved are : Select a control unit Find location and potential of customers Use build up method to decide basic territories

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Determining Size of the Sales Force

Three alternative methods available
1)Workload method 2)Sales potential or Break down method

3)Incremental method

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Allocating Salespeople to Territories

Criteria / factors considered for allocation: 1)Relative abilities of salespeople Based on product & market knowledge, past performance, selling and communication skills. link salespeople abilities to territory potentials. 2) Effectiveness of salesperson in a territory Relate salespersons social & cultural characteristics with those of territory customers.

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Management of Major / Key / National Accounts

Major, national, or key accounts are high sales and profit potential customers. Difference between major and national accounts:
Large Major Account Transactional Account National Account Minor Account

Sales and Profit Potential of customers

Small

Simple Complex Complexity of Customers

Complexity of national account due to geographically dispersed customers operating units. Major accounts are simple to serve as customers operating unit is at one place.

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Managing Key Accounts

Objective: Become a preferred or sole supplier. Strategy / Tasks: Team selling headed by a senior manager. Relationship marketing-long term, mutually beneficial. Support from top management and other functional executives. Provide superior value, after identifying key accounts needs.

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Ethical Issues in Personal Selling

Ethical situations involving salespeople: Relations with the company Relations with customer main issues: Gifts Misrepresentation Business entertainment

Ethical guidelines
Develop and enforce a code of ethics