Personal Selling, Sales Management, & Direct Marketing

2 Chapter Objectives role of personal selling  within the promotion mix steps in personal selling process role of the sales manager direct marketing

SELLING

4 Personal Selling when a company representative interacts directly with a (prospective) customer to communicate about a good or service

5 Personal Selling Personal touch” is more effective  than mass-media appeal. Selling/sales management jobs provide high mobility,  especially for college grads  with marketing background.

6 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.

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

8 Types of Sales Jobs Order taker Technical specialist Missionary salesperson  (stimulate clients to buy) New-business salesperson  Cold calls, breaking in new territory order getter Team selling & cross-functional team

9 Approaches to Personal Selling Transactional selling: Putting on the hard sell  High-pressure process  focuses on immediate sales  no concern for developing long-term customer relationship

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

11 Creative selling Process Makes positive transactions happen Series of activities

12 Figure 14.1: Steps in Creative Selling Process

13 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

14 The Creative Selling Process (cont’d) Step 2: Pre-approach  Compiling prospective customers’ background information  planning the sales interview

15 The Creative Selling Process (cont’d) Step 2: Pre-approach  Purchase history,  current needs,  customer’s interests  From informal sources, CRM system, customers’ Web sites, and/or business publications

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

17 The Creative Selling Process (cont’d) Step 4: Sales presentation  benefits & added value of product/firm  advantages over competition  Inviting customer involvement in conversation

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

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

20 Step 7: Follow-Up Arranging for delivery,  Ensuring sure customer received delivery  and is satisfied Payment  Credit, factors, etc. purchase terms Bridging to next purchase

21 Figure 14.2: The Sales Force Management Process

22 Sales Management: 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 competition Community involvement

23 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  key/major accounts

24 Recruiting, Training, & Rewarding Recruiting the right people  Good listening and follow-up skills  adaptive style from situation to situation  Tenacity  High level of personal organization

25 Recruiting, Training, & Rewarding Sales training : teaches salespeople about firm, its products, how to develop skills, knowledge, and attitudes to succeed

26 Recruiting, Training, and Rewarding Paying salespeople well to motivate them  Straight commission plan  Commission-with-draw plan  Straight salary plan

27 Recruiting, Training, and Rewarding Running sales contests  for short-term sales boost Call reports:  which customers were called on and  how call went

28 Evaluating the Sales Force Is sales force meeting its objectives? What are possible causes of failure ? Measuring performance Monitoring expense accounts for travel and entertainment

DIRECT MARKETING

30 Direct Marketing Any direct communication  to a consumer or business recipient designed to generate a response DIRECT MARKETING ASSOCIATION

31 Direct Marketing Response : in the form of an  order,  request for further information,  a visit to a store other place of business for purchase of a product DIRECT MARKETING ASSOCIATION

32 Direct Marketing: MAIL ORDER Catalogs:  collection of products offered for sale  described in book form,  product descriptions and photos

33 Direct Marketing: MAIL ORDER Direct mail:  brochure/pamphlet  offering a specific good/service  at one point in time

34 Direct Marketing: telemarketing 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

35 Direct Marketing (cont’d) Direct-response advertising : allows consumer to respond by contacting the provider with questions or an order

36 Direct Marketing (cont’d) Direct-response TV (DRTV): short commercials, 30-minute+ infomercials, home shopping networks –HSN –QVC –Jewelry television –ShopNBC –Gemtv

37 Direct Marketing (cont’d) M-Commerce: promotional & other e-commerce activities transmitted over mobile phones/devices

38 Direct Marketing (cont’d) M-Commerce:  (SMS) Short-messaging system marketing  Spim : instant-messaging version of spam  Adware : software that tracks Web habits/interests, presenting pop-up ads resetting home page

39 THE END

40 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?

41 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?

42 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?

43 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.

44 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

45 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?

46 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.

47 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.

48 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?

49 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?

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

51 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

52 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?