Personal Selling, Sales Management and Direct Marketing Chapter 14 Personal Selling, Sales Management and Direct Marketing

Chapter Objectives Understand the important role of personal selling and how it fits into the promotion mix Explain how technology enhances the personal selling effort Identify the different types of sales jobs Describe two approaches to personal selling List the steps in the creative selling process Explain the role of sales management Understand the elements of direct marketing Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Real People, Real Choices: Decision Time at Woodtronics Which strategy should Jeffrey pursue? Option 1: Push the original solution, even though it is not the best thing for the client Option 2: Convince the client of Evolution’s price and functionality superiority Option 3: Attempt to raise the architect’s comfort level with Evolution and hope he will recommend it to the client Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Personal Selling Personal selling: Occurs when a company representative interacts directly with a prospect or customer to communicate about a good or service “Personal touch” helps develop relationships Salespeople are the eyes and ears of the firm Selling/sales management jobs provide high mobility, especially for college grads with marketing background Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Role of Personal Selling Personal selling is more important: When a firm uses a push strategy In business-to-business contexts With inexperienced consumers who need hands-on assistance For products bought infrequently When goods/services are complex or costly Cost per contact is very high In business-to-business selling, personal selling is critical when the product is highly complex or technical, and when the nature of the purchase represents a “new task” buy situation for the customer. Personal selling is often undertaken by sales engineers—individuals degreed in areas other than business—when the product being sold must be custom-designed for the buyer (such as when a manufacturing facility purchases a conveyor belt system for a production line). Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Technology and Personal Selling Numerous technologies help enhance the selling effort: Customer relationship management (CRM) software and partner relationship management (PRM) Teleconferencing, videoconferencing, and improved corporate Web sites Voice-over Internet protocol Assorted wireless technologies Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

CRM Systems CRM systems such as GoldMine are very popular because they help the sales force organize and utilize information about their customers, thus making salespeople better prepared to make a sales presentation The Goldmine link lands at the main page promoting the various GoldMine products. A flash-based demo of GoldMine’s capabilities can be accessed from: www.frontrange.com/common/files/downloads/productdemos/smrm_demos/demo/default.htm. The flash demo defaults to the INTRO segment. To save valuable class time, instructors may wish to stop the introduction and go directly to the FIELD SALES tab demo instead. GoldMine Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Types of Sales Jobs Sales positions vary considerably: Order taker Technical specialist Missionary salesperson (stimulate clients to buy) New-business salesperson and order getter Team selling and cross-functional teams Order takers include in-store salespeople and catalog sales order takers who essentially wait for the customer to initiate a transaction or to place the phone call to a 1-800 number. Order takers then assist consumers with the paperwork or other transactional aspects of the sale. Order takers typically exhibit little initiative—they do not actively pursue new accounts and rarely exhibit any creative selling techniques. Technical specialists assist or support in the selling effort. For example, a technical specialist may set up a new piece of equipment when delivered to the customer. Retail demonstrators—such as the “food ladies” in the grocery store who prepare and offer food samples to shoppers—are another form of technical specialist. Missionary sales people include pharmaceutical sales representatives who visit physicians for the purpose of educating them about the benefits and side effects of prescription drugs, in the hope that the doctors will prescribe their brand to patients as appropriate. Missionary sales people are sometimes called detail sales representatives. New-business salespeople is a broad term for any sales representative that is responsible for creating new customers. Several specific forms of new business salespeople exist, include account representatives, who service many existing accounts while attempting to attract new business; industrial sales representatives who sell non-technical products such as lubricants that are used in manufacturing; service salespeople who sell ISP or Web design services, long-distance service, or any of a host of other services, and sales engineers, who sell highly technical customized solutions to customers problems. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to Personal Selling Transactional selling: A form of personal selling that focuses on making an immediate sale with little or no concern for developing long-term customer relationships Associated with high-pressure, hard sell tactics Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to Personal Selling Relationship selling Process of building long-term customers by developing mutually satisfying, win-win relationships with customers Builds customer loyalty and satisfaction Business Week magazine’s online “Savvy Selling” section offers weekly podcasts that feature tips on how to improve sales performance. As many students own iPods or have access to Apple Tunes, it might be nice to visit the site below if you feel some students would be interested in subscribing to the podcast series: www.businessweek.com/mediacenter/podcasts/savvy_selling/savvy_selling_11_16_06.htm Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 14.1 Steps in the Creative Selling Process Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 1: Prospecting and qualifying Prospecting: Developing a list of potential customers Qualifying: Determining how likely potential customers are to become customers Inc. magazine has long been a respected source of information for entrepreneurs. The sales resource section on the Inc.com Web site offers: How-to Guides (such as “How To Make Cold Calls”), available by navigating from the landing page linked to the PPT, or via direct link at www.inc.com/guides/sales/index.html. Inc. TV features video segments that can be accessed from the landing page linked to our PPT, most of which are between 2- and 4-minutes long and cover topics such as “Getting Client Referrals” and “Expanding into New Territories.” Articles arranged by topic. Access to a blog and “ask the experts” advice column. Similarly, SalesResources.com has compiled several sales related short tutorial videos, articles, RSS feeds related to sales, and many other resources. Either of the Web sites could provide current information or videos that could be used to enhance any part of the “creative selling process” lecture. However, instructors with bandwidth constraints will most likely wish to avoid playing video in class. Inc. Sales Resources SalesResources.com Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Lead Response Programs Many leads come from visits to a firm’s Web site. Companies like Accela Communications work with sales organizations to put in place Web response programs that can effectively develop these leads and hopefully turn them into customers Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 2: The preapproach Compiling background information about prospective customers and planning the sales interview Purchase history, current needs, customer’s interests Information is gathered from informal sources, CRM system, customers’ Web sites, and/or business publications Salespeople who sell non-competing products are an excellent source of information about prospective customers (as well as the problems that they may be experiencing with existing equipment). Very often these individuals can provide valuable insights into the personality or communication style of the prospective buyer, or offer other valuable information that sales representatives typically attempt to learn during the preapproach. Many times salespeople who sell non-competing but complimentary products will create an informal association (sometimes called a sales club or swapping club) for the purpose of sharing leads, perhaps by meeting for breakfast every other Friday morning. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 3: The approach Contacting the prospect Learning even more about the prospect’s needs, creating a good impression, and building rapport “You never get a second chance to make a good first impression” Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 4: The sales presentation Laying out the benefits and added value of a firm’s product/service and its advantages over the competition Invite customer involvement in conversation by encouraging questions and feedback Listening skills are critical for salespeople Sales representatives must take the time to question the prospect BEFORE launching into the sales presentation, so that the sales representative thoroughly understands the prospects’ needs, how users in the firm will use the product or service, and any problems that they might be experiencing with their current equipment or vendor. Obtaining this information is critical, as it allows the sales representative to customize their presentation in a manner that grabs the buyer’s attention and keeps their interest. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Presentation Software Preparing demonstrations and video presentations for use in sales calls has been made more user-friendly by new software such as Visual Communicator, produced by Serious Magic Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 5: Handling objections Anticipating why a prospect is reluctant to make a commitment and responding with additional information or persuasive arguments Welcome objections Objections must be successfully dealt with to move prospect to decision stage Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 6: Closing the sale Gaining the customer’s commitment in the decision stage using a variety of approaches: Last-objection close Assumptive or minor-points close Standing-room-only or buy-now close Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Creative Selling Process Step 7: The follow-up Arranging for delivery, payment, and purchase terms Making sure customer received delivery and is satisfied Bridging to next purchase Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Sales management Process of planning, implementing, and controlling the personal selling function of an organization Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 14.2 The Sales Management Process Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Process Setting sales force objectives Objectives state what the sales force is expected to accomplish and when May be stated in terms of customer satisfaction, loyalty, retention/turnover, new-customer development, new-product suggestions, training, reporting on competitive activity, community involvement Individual objectives may be performance- or behavior-based Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Process Creating a sales force strategy Establishing structure and size of a firm’s sales force Setting sales territories is a major responsibility; several forms exist Geographic sales force structure Product-class sales territories Industry specialization Key/major accounts The textbook states that “A key contributor to the success of a sales force is to keep salespeople in front of customers as much of the time as possible,” and points to video conferencing as an example of how technology has actually helped to cut down on non-selling activities. A nice way of generating discussion could be to ask students for other examples of how technology is helping sales people become more efficient, thereby making more time available for selling activities. Hopefully, students will recall earlier discussions of CRM software and relate this tool to time savings that result from more efficient recordkeeping, client database management, and report generation for supervisors. Another example could include e-mail (less time spent playing telephone tag). Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Process Recruiting the right people Good listening and follow-up skills Ability to adapt style from situation to situation Tenacity High level of personal organization Sales training: Teaches salespeople about firm, its products, how to develop skills, knowledge, and attitudes to succeed Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

It’s Debatable Class Discussion Question Put yourself in the position of a sales manager for a moment. Sales recruits come from a variety of educational backgrounds, and often have a wide range of experience. Will sales training and developmental needs vary based on how long salespeople have been in the business? Is it possible (and feasible) to offer different training programs for salespeople at different career stages? Where do you stand? Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Process Rewarding sales people Paying salespeople well to motivate them Straight commission plan Commission-with-draw plan Straight salary plan Running sales contests for short-term sales boost Call reports aid supervisors Get the scoop on sales salaries! Visit the Occupational Outlook Handbook! The Occupational Outlook Handbook link lands on a page listing a number of different types of selling positions. Instructors can ask students which type of position they would like to explore, make that selection, then use the links at the top of the resulting page to quickly find the salary information. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Management Process Evaluating the sales force Is the sales force meeting its objectives? What are possible causes of failure? Individual performance is measured against quotas or other quantitative factors Qualitative factors may also be used Expense accounts for entertainment and travel may also be monitored Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Evaluating Sales Programs Improving sales force performance is a common goal among many organizations Synergy boasts a 173% ROI for clients that invest in its services and software Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Direct Marketing Direct marketing Any direct communication to a consumer or business recipient designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product Updated statistics regarding the direct marketing expenditures can usually be found in the press release portion of the DMA’s Web site (www.the-dma.org/cgi/presslist). According to a press release dated October 18, 2008, investment in direct marketing is still growing at a slightly faster rate than are investments made in general advertising media. However, the recession of 2008 did slow growth in advertising spending across the board. Updated statistics and forecasts as discussed in this press release: Direct Marketing Advertising Expenditures: Actual DM expenditures for 2007 totaled $ 171.7 billion. DM expenditures for 2008 are forecast to hit $176.9 billion. DM expenditures for 2009 are forecast at $183.1 billion. Direct Marketing Sales: 3.7% revenue growth is forecast for 2008. Actual sales in 2007 were $1,985 billion. Forecast sales for 2008 are $2,058 billion. 4.5% increase is forecast for 2009, for total anticipated sales of $2,150 billion. Source: (http:// www.the-dma.org/cgi/presslist). Direct Marketing Association Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Direct Marketing Mail order Catalogs: Collection of products offered for sale and described in book form, usually consisting of product descriptions and photos Direct mail: A brochure/pamphlet offering a specific good/service at one point in time Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Direct Marketing Telemarketing: Direct marketing conducted over the telephone More profitable for business than consumer markets In 2003, FTC established National Do Not Call Registry Do Not Call Registry Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Direct Marketing Direct-response advertising: Allows consumer to respond by immediately contacting the provider with questions or an order Direct-response TV (DRTV): short commercials, 30-minute-plus infomercials, and home shopping networks Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Infomercials Justin Leonard’s Fitness Infomercial Review invites consumers to post reviews of the infomercials they see on TV and their experiences with the products they buy Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Direct Marketing M-Commerce: Promotional and other e-commerce activities transmitted over mobile phones/devices Short-messaging system marketing (SMS) Spim: instant-messaging version of spam Adware: software that tracks Web habits/interests, presenting pop-up ads and resetting home page Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

It’s Debatable Class Discussion Question With marketers becomingly increasingly reliant on personalized methods of communications, Microsoft is attempting a new level of extreme personalization that will use credit card transaction data, physical location (via cell phone tracking), and TV viewing habits to determine which customized ad would be sent to a specific consumer’s cell phone. Although location-based advertising (sending ads for localized businesses in area of consumer’s cell phone signal) already exist, how do you feel about this new level of personalization? Invasion of privacy? Smart marketing? Where do you stand? Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Real People, Real Choices: Decision Made at Woodtronics Jeffrey chose option 2 Jeffrey felt that his job as a sales representative was to uncover customer needs and provide the correct solutions Implementation: Showed client a mock-up of the Evolution platform; told architect only when client was satisfied with product. Client purchased the product Measuring success: Sales Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Keeping It Real: Fast-Forward to Next Class Decision Time at Darden Meet Jim Lawrence, Sr. VP Supply Management and Purchasing Darden Restaurants is the world’s largest casual dining operator The decision to be made: What steps should be taken to ensure that Darden restaurants have access to the volume and quality of food needed? Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc.   Publishing as Prentice Hall Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall