© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Marketing Management, 8e Chapter Nine Personal Selling, Relationship Building, and Sales Management Key Words / Outline Information provision, Persuasion, After-sale service, Prospecting, Planning the sale calls, Random lead generation, Long-term relationship, Obtaining commitment, Strategic partnership, Missionary sales person, Major account management, Cross- functional teams, Forecasting sales, Time-series analysis, Correlation analysis, Salary, Commission

9 - 3 Personal Selling - Definition Use of personal selling depends partially on the nature of product Use personal selling when products are -New and different -Customizable -Technically complex -Expensive and require negotiation -Installable

9 - 4 Sales Process Two basic factors -The objectives the salesperson is trying to achieve while engaged in selling activities -The sequence of stages or steps the salesperson should follow to achieve the objectives

9 - 5 Sales force Objectives Information provision – especially in the case of new products Persuasion – distinguishing attributes, creating repeat customers, maximizing sales as a percent of presentations, etc. After-sale service – delivery, installation, resolve concerns Assure customer satisfaction Maximize benefits and margin

9 - 6 Building Relationships with Sales

9 - 7 Sales Force Objectives

9 - 8 Prospecting – Locating Potential Customers Lead – a candidate to whom a sale can be made – target of prospecting process Random lead generation – mass appeals that require a high number of contacts to generate qualified leads Selected-lead searching – uses existing contact to generate new ones – often called referrals

9 - 9 Prospecting – A Screening Process Does the lead have a want or need that can be satisfied by the purchase of the firm’s products or services? Does the lead have ability to pay? Does the lead have authority to pay? Can the lead be approached favorably? Is the lead eligible to buy?

Common Sources Of Sales Leads Satisfied customers Endless chain Center of influence Promotional activities List and directories Canvassing Spotters Telemarketing Sales letters Other sources

Planning the Sales Call Research and know your prospect Know your product and product line thoroughly Know your competitor’s products and product line Know the market for your product(s) and the needs they satisfy Schedule time with the prospect

Presenting Be well prepared and set a goal for your presentation Develop a checklist of items for discussion Schedule an appointment Put your contacts at ease Strive to make a good impression Adapt your style to the prospect Work toward your goal Schedule follow-up to achieve a sale

Overcoming Objections Expect objections to occur at any time -During efforts to secure appointments -During the presentation -During attempts to obtain a commitment -During the after-sale follow-up In response to an objection, a sales person should not challenge the customer Make the necessary presentation in order to help the client make an intelligent decision

Obtaining Commitment Moving toward commitment begins with a scheduled presentation Know why a purchase will benefit your prospect Ask for commitment (the order)– some trainers say, “Ask early and often” An experienced salesperson knows when and how to ask for commitment Follow-up with a clear, mutually acceptable action plan Be persistent

Long-term Relationships Establish and maintain a prospect and customer database Monitor orders to deliver on-time, on-budget Ensure appropriate use of your product Provide customers ongoing guidance and support Analyze customer feedback and respond to anticipate needs and problems Assure customer satisfaction through attention and response

Cross-Functional Teams Improved sales productivity More flexible and quicker decisions Better decisions Increased customer satisfaction

Relationships Lead To Partnerships Functional Relationships: A relationship where the buyer and the sales person start relying on each other and communicate honestly Strategic partnerships/alliances: Long term relationships where both the parties make significant commitments and investments in each other in order to pursue mutual goals and improved profits

Sales Specialists Missionary salespeople – focus on detailing existing products and introducing new ones. (e.g.: pharmaceuticals) Technical sales specialists – support the field sales staff by providing technical assistance and client counsel, when appropriate Cross-functional sales team – blend the talents and knowledge of functional areas to better meet client needs

Supporting Selling Efficient and effective sales tools, continuous training, and adequate advertising support Efficient follow-up, delivery and reorder systems Equitable compensation to reward performance Adequate supervision and evaluation of performance for continual improvement

Organizing The Sales Force

Organizing The Sales Force

Supporting Selling

Sales Force Control Forecasting sales accurately Establishing territories and quotas that benefit the firm and the sales person mutually Analyzing expenses and realigning to improve sales results Motivating individual sales persons Compensating performance for satisfaction and improvement

Sales Force Control Used to establish quotas Used to plan the personal selling efforts and other types of promotional activities Used to budget expenses Used to plan and coordinate production, logistics, inventories, personnel and so forth

Forecasting Methods Jury of executive method – combines and averages view of top management from various departments Sales force composite –the sales force becomes the jury Customer expectations – asking customer how much they expect to purchase and by what date Time-series analysis – using past data to forecast future sales Correlation analysis – analyzing dependent and independent variables driving sales volume Other quantitative functions – growth functions and simulation models

Sales Territories And Quotas Provide incentives for salespeople Provide a quantitative standard for performance measurement Evaluate and control the efforts of the sales force Assist individuals with personal goal setting

Sales Force Technology Selected technology can improve performance These elements top the list -Cell phones - 89% - – 85% -Presentation Software – 85% -Desktop PCs – 68% -Notebook Computers – 63% -Contact Management Software – 55%

Sales Force Technology – Tangible Benefits Better business results Increased time spent with customers / clients Increased customer satisfaction Increased number of promising projects Consistent and prompt follow up correspondence Increased revenue per salesperson Improved customer service Better time management Improved internal communication

Sales Force Technology – Intangible Benefits Improved employee motivation and satisfaction Better trained personnel Most recent and pertinent information with easier access Increased customer service Improved control and understanding of selling expense

Performance Evaluation: Effort-Oriented Measures Number of sales call made Number of MRO calls made Number of complaints handled Number of checks on resellers stocks Uncontrollable lost job time Number of inquiries followed up Number of demonstrations completed

Performance Evaluation: Results Oriented Measures Sales volume Sales volume as a percentage of quota Sales profitability Number of new accounts Number of stock outs Number of distributors participating in programs Number of lost accounts Number of customer complaints Distributor sales-inventory ratios

Performance Incentives Positive feedback Company praise Bonus Salary increase Pay for performance for specific new ideas Paid educational allowance Earned time off Stock options Fringe benefits Vested Retirement Plan Profit Sharing

Performance Outcomes Sell a greater dollar volume Increase sales of more profitable products Push new products Push selected items at designated seasons Higher degree of market penetration Increase the number of calls made

Performance Outcomes Secure large average orders Secure new customers Service and maintain existing business Reduce turnover of customers Achieve full-line (balanced) selling Reduce direct-selling costs Submit reports and other data promptly