Personal Selling, Sales Management, and Direct Marketing

Chapter Objectives Understand the important role of personal selling within the context of the promotion mix List the steps in the personal selling process Explain the role of the sales manager Understand direct marketing

Real People, Real Choices IBM (Esther Ferre) IBM must prioritize investment of resources to achieve revenue and profit targets. Option 1: reduce sales and support resources for a specific customer or business segment. Option 2: maintain current level of resources. Option 3: evaluate lower-cost ways to provide sales and support resources.

Personal Selling Occurs when a company representative interacts directly with a (prospective) customer to communicate about a good or service “Personal touch” is more effective than mass-media appeal. Selling/sales management jobs provide high mobility, especially for college grads with marketing background.

The Role of Personal Selling Personal selling is more important: --when firm uses push strategy. --in B2B contexts. --with inexperienced consumers who need hands-on assistance. --for products bought infrequently (houses, cars, computers). Cost per contact is very high.

Technology and Personal Selling Customer relationship management (CRM) software and partner relationship management (PRM) Teleconferencing, videoconferencing, and improved corporate Web sites Voice-over Internet protocol Assorted wireless technologies SALESFORCE.COM

Types of Sales Jobs Order taker Technical specialist Missionary salesperson (stimulate clients to buy) New-business salesperson and order getter Team selling and cross-functional team

Approaches to Personal Selling Transactional selling: Putting on the hard sell High-pressure process that focuses on making an immediate sale with no concern for developing long-term customer relationship

Discussion Professional selling has evolved from hard-sell to relationship selling. --Is hard-sell still used? If so, in what types of organizations? --Can hard-sell still succeed –is transactional selling still appropriate? --If so, when?

Approaches to Personal Selling (cont’d) Relationship selling Process of building long-term customers by developing mutually satisfying, win-win relationships with customers

Figure 14.1: Steps in the Creative Selling Process

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 LINKEDIN.COM

The Creative Selling Process (cont’d) Step 2: Preapproach Compiling background information about prospective customers and planning the sales interview --Purchase history, current needs, customer’s interests --From informal sources, CRM system, customers’ Web sites, and/or business publications

The Creative Selling Process (cont’d) Step 3: Approach Contacting the prospect Learning even more about prospect’s needs, create a good impression, and build rapport --“You never get a second chance to make a good first impression.”

The Creative Selling Process (cont’d) Step 4: Sales presentation Laying out benefits and added value of product/firm and its advantages over the competition Inviting customer involvement in conversation

Group Activity Your group are field salespeople for a firm that markets university textbooks. As part of your training, your sales manager asks you to outline what you’ll say in a typical sales presentation. --Write that outline.

Step 5: Handling Objections Anticipating why prospect is reluctant to make a commitment Welcoming objections Handling objections successfully to move prospect to decision stage

Step 6: Closing the Sale Gaining the customer’s commitment in the decision stage --Last-objection close --Assumptive or minor-points close --Standing-room-only or buy-now close

Step 7: Follow-Up Arranging for delivery, payment, and purchase terms Making sure customer received delivery and is satisfied Bridging to next purchase

Individual Activity What are the pros and cons of personal selling as a career choice for you? --List them in two columns, and be as specific as you can in explaining each.

Figure 14.2: The Sales Force Management Process

Sales Management Setting sales force objectives What sales force is expected to accomplish and when Customer satisfaction, loyalty, retention/turnover, new-customer development, new-product suggestions, training, reporting on competitive activity, community involvement

Creating a Sales Force Strategy Establishing structure and size of a firm’s sales force Sales territory: a set group of customers Geographic sales force structure Product-class sales territories Industry specialization and key/major accounts

Recruiting, Training, and Rewarding the Sales Force 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

Discussion Will sales training and development needs vary based on how long salespeople have been in the business? Why or why not? Is it possible (and feasible) to offer different training programs for salespeople at different career stages? Why or why not?

Recruiting, Training, and Rewarding the Sales Force (cont’d) 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: which customers were called on and how call went

Discussion Based on the compensation figures in the chapter, do you think professional salespeople are appropriately paid? Why or why not? What do salespeople do that warrants the compensation indicated?

Discussion What is a sales manager’s best approach for determining the appropriate rewards program? What issues are important in developing the program?

Evaluating the Sales Force Is sales force meeting its objectives? What are possible causes of failure? Measuring individual salesperson performance Monitoring salesperson’s expense account for travel and entertainment

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 DIRECT MARKETING ASSOCIATION

Direct Marketing (cont’d) 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

Discussion Some experts think consumer catalog shopping has increased because of poor service in retail stores. Evaluate the quality of most retail salespeople you meet. How can retailers can improve the quality of their sales associates? LANDSEND.COM

Direct Marketing (cont’d) Telemarketing: direct marketing conducted over the telephone More profitable for business than consumer markets In 2003, FTC established National Do Not Call registry FEDERAL DO NOT CALL REGISTRY

Direct Marketing (cont’d) Direct-response advertising: allows consumer to respond by contacting the provider with questions or an order Direct-response TV (DRTV): short commercials, 30-minute-plus infomercials, and home shopping networks

Direct Marketing (cont’d) 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

Discussion M-commerce allows marketers to pinpoint where consumers are and send them messages about a local store. --Do you think consumers will respond positively to m-commerce? --What benefits do you think it offers them?

Real People, Real Choices IBM (Esther Ferre) Esther chose option 3: evaluate lower-cost ways to provide sales and support resources. Minimized impact to customer and improved cost structure of sales team. Maintained customer satisfaction with lower cost. Resulted in increased revenue over time. IBM.COM

Marketing Plan Exercise In developing her marketing plan, Esther Ferre at IBM must use marketing communication mix elements (1) in an integrated way that (2) best invests her promotional dollars. --Should personal selling be a high priority in Esther’s marketing plan? Why or why not? --Is there a role for direct marketing in her plan? If so, what is it?

Marketing in Action Case: You Make the Call What is the decision facing Eli Lilly? What factors are important in understanding this decision situation? What are the alternatives? What decision(s) do you recommend? What are some ways to implement your recommendation?

Keeping It Real: Fast-Forward to Next Class, Decision Time at Darden Restaurants Meet Jim Lawrence, Vice President, Supply Management & Purchasing. Volatility in the supply chain threatened food supplies to restaurants. The decision: A new model for supply chain management?