1. Marketing for Hospitality and Tourism
Kotler, Bowen, Makens and Baloglu
Professional Sales
Chapter 15

2. Learning Objectives
Explain the role and nature of personal selling and the role of the sales force.
Describe the basics of managing the sales force, and explain how to set sales force strategy, how to pick a structure—territorial, product, customer, or complex—and how to ensure that sales force size is appropriate.
Identify the key issues in recruiting, selecting, training, and compensating salespeople.

3. Learning Objectives (cont.)
Discuss supervising salespeople, including directing, motivation, and evaluating performance.
Apply the principles of the personal selling process, and outline the steps in the selling process: prospecting and qualifying, preapproach and approach, presentation and demonstration, negotiation, overcoming objections, closing, and follow-up.

4. Managing Professional Sales
Nature of Hospitality Sales
Sales Force Objectives
Sales Force Structure and Size
Organizing the Sales Department
Nature of hospitality sales (See Slide 5)
Sales force objectives (See Slides 6-7)
Sales force structure and size (See Slides 8-9)
Organizing the sales department (See Slide 10)
Recruiting and training a professional sales force (See Slides 11-12)
Managing the sales force (See Slides 13-16)
Recruiting and Training a Professional Sales Force
Managing the Sales Force

5. Nature of Hospitality Sales
Prospecting
Targeting
Communicating
Selling
Servicing
Information
Gathering
Allocating
Maintaining
Strategic
Partnerships
Sales personnel serve as the company’s personal link to customers
The sales representative is the company to many customers and in turn brings back much needed customer intelligence
Personal selling is the most expensive contact and communication tool used by the company
Sales representatives perform one or more of the following tasks for their companies
Prospecting
Sales representatives find and cultivate new customers
Targeting
Sales representatives decide how to allocate their scarce time among prospects and customers
Communicating
Sales representatives communicate information about the company’s products and services
Selling
Sales representatives know the art of salesmanship: approaching, presenting, answering objections, and closing sales
Servicing
Sales representatives provide various services to the customers—consulting on their problems, rendering technical assistance, arranging financing, and expediting delivery
Information gathering
Sales representatives conduct market research and intelligence work and fill in call reports
Allocating
Sales representatives decide which customers to allocate scarce products to during product shortages
Maintaining strategic partnerships
Senior salespeople including the sales manager provide valuable planning assistance to clients

6. Sales Force Objectives
Product-Specific Objectives
Upselling
Sales Volume
Market Penetration
Sales Force
Objectives
Hospitality companies typically establish objectives for the sales force
Sales objectives are essential for two reasons
Objectives ensure that corporate goals are met
Objectives assist sales force members to plan and execute their personal sales programs
Although sales objectives are custom designed, there are general objectives commonly employed by members of the hospitality industry
Sales Volume
Bring in as many customers as possible (See Slide 7)
Upselling and Second-Chance Selling
Excellent profit opportunities exist for hospitality companies, particularly hotels and resorts, to upgrade price and profit margins by selling higher-priced products such as suites through upselling
A related concept is second-chance selling, in which the sales department contacts a client who has already booked an event such as a two-day meeting
Opportunities exist to sell additional services such as airport limousine pickup and delivery or to upgrade rooms or food and beverage from chicken to prime rib
Market Share or Market Penetration
Airlines, cruise lines, major fast-food chains, and rental car companies are highly concerned with market share and market penetration
Evidence indicates that hotel management companies are increasingly held accountable for clearly defined performance standards
Among these is the level of market penetration
Product-Specific Objectives
Occasionally, a sales force is charged with the specific responsibility to improve sales volume for specific product lines

7. Sales Volume Sales Volume Price / Margin Mix Selected Segments
Sales Volume by Selected Segments
The concept of establishing sales objectives by specific market segment is feasible and basic to effective sales
Sales Volume and Price/Margin Mix
Establish sales volume objectives by product lines to ensure a desired gross profit
This system is the basis for revenue management

8. Combination Structured
Sales Force Structure
Territorial
Market Segment
Market Channel
Customer Structured
The diverse nature of the hospitality industry means that different sales force structures and sizes have evolved
Territorial-Structured Sales Force
In the simplest sales organization, each sales representative is assigned an exclusive territory to represent the company’s full line
Results in a clear definition of the salesperson’s responsibilities
Increases the sales representative’s incentive to cultivate local business and personal ties
Travel expenses are relatively small because each sales representative travels within a small geographic area
Market-Segment-Structured Sales Force
Companies often specialize their sales forces along market segment lines
This is the most common type of structure within the hotel industry
Market-Channel-Structured Sales Force
The importance of marketing intermediaries, such as wholesalers, tour operators, travel agencies, and junket reps, to the hospitality industry has created sales force structures to serve different marketing channels
Customer-Structured Sales Force
A customer-structured sales force recognizes that specific customers exist who are critical to the success of the organization
The sales force is usually organized to serve these accounts through a key or national account structure
Combination-Structured Sales Force
Some hotels and resorts have a sales force structured by product, market segment, market channel, and customer
Proponents of such a sales force believe it encourages the sales force to reach most available customers
Opponents of this system feel that in many cases this sales force structure indicates the hotel is trying to be all things to all people in the absence of long-run goals and strategies
Combination Structured

9. Sales Force Size Group Customers into Size Classes
Establish Desirable Call Frequencies
Calculate the Total Workload
Determine the Average Sales Calls per Representative
Calculate the Number of Sales Representatives Needed
After determining the type and number of desired customers, a workload approach can be used to establish sales force size:
Customers are grouped into size classes according to their annual sales volume
The desirable call frequencies (number of sales calls on an account per year) are established for each class
The number of accounts in each size class is multiplied by the corresponding call frequency to arrive at the total workload for the country in sales calls per year
The average number of calls a sales representative can make per year is determined
The number of sales representatives needed is determined by dividing the total annual calls required by the average calls made by a sales representative
Suppose that the company estimates its national market consists of 1,000 A accounts and 2,000 B accounts
A accounts require 9 calls a year whereas B accounts require 6 calls a year
This means that the company needs a sales force that can make 21,000 sales calls a year
Suppose that the average sales representative can make 1,000 calls a year
The company would need 21 full-time sales representatives

10. Organizing the Sales Department
Inside Sales Force
Field Sales Force
Technical Support
Sales Assistants
Tele-marketers
Commissioned Reps
Salaried Sales Force
Today’s sales managers may have two types of salespeople within their departments: an inside sales force and a field sales force
Inside Sales Force
Inside salespeople include three types
Technical-support persons, who provide technical information and answers to customers’ questions
Sales assistants, who provide clerical backup for the field salesperson
Telemarketers, who use the phone to find new leads, qualify them, and sell to them
Field Sales Force
Commissioned Reps
Hotels and resorts commonly use commissioned sales representatives in distant markets where the market potential does not justify employing a salaried salesperson
Salaried Sales Force
Most hospitality industry sales force members are paid a salary plus benefits. Additional compensation is sometimes available through commissions, bonuses, profit sharing, or other financial remuneration
Team Sales
The concept of a sales team is two or more persons working in concert toward a common sales objective
These persons are not necessarily from the same company
The purpose for a team sales approach is to accomplish objectives through the synergism of two or more people that would be impossible or unduly costly through individual sales efforts
The primary purpose for team sales should be to improve sales competitive position
Teams are best used when the needs of the customer or prospect are complex and require the input of specialists
Team Sales

11. Recruiting and Training a Professional Sales Force
Importance of Careful Selection
Choose Characteristics that Match the Culture
Match Career Acquisitions with Corporate Objectives
Importance of Careful Selection
At the heart of a successful sales force operation is the selection of effective sales people
The performance difference between an average and a top sales person can be considerable
One survey revealed that the top 27 percent of the sales force brought in over 52 percent of the sales
Establishing a Profile of Desired Characteristics Matching the Corporate Culture
The management of each hospitality company has a responsibility to determine a desired sales force profile
Matching Career Acquisitions with Corporate Objectives
The aspirations of a salesperson must first be clearly understood by that person and clearly communicated to the potential employer
Sales Force Training
Sales training is not a onetime process but instead a career-long endeavor (See Slide 12)
Train the Sales Force

12. Types of Sales Force Training
Product/ Service
Policies, Procedures & Planning
Sales Techniques
Members of a sales force require three types of training
Product/service training
Technology creates continuous change within the hospitality industry
Reservation systems, equipment such as airplanes or cruise ships, and entire operational systems change
Service delivery systems, menus, branch locations, and other changes require regular and frequent training
Policies, procedures, and planning training
As organizations increase in size and complexity, the need for formalized systems and procedures increases
Training is essential to ensure that all policies and procedures are understood
Sales techniques training
An age-old debate centers on the wisdom of attempting to teach techniques of selling
One camp firmly believes that salespeople are determined by genetics, personality, and motivation
The other side generally agrees that only a small percentage of individuals make effective salespeople but also contends their effectiveness can be enhanced by learning sales basics

13. Managing the Sales Force
Grow Key Accounts
Grow Selected Marginal Accounts
Prevent Erosion of Key Accounts
Eliminate Selected Marginal Accounts
Provide Lower-Cost Sales Support to Selected Marginal Accounts
Obtain New Business from Selected Prospects
Successful sales managers cannot be described by a narrow profile
If a universal truth exists, it is that long-run successful sales managers exhibit a strong affinity for their subordinates, are willing to learn, and must be reasonably bright
Market conditions often have an inordinate influence over a sales manager’s failure or success
Based on the concept of key customers, six general sales strategies must be recognized by members of the hospitality industry
Prevent erosion of key accounts
It does little good to attract new customers if key customers are lost
Grow key accounts
A hotel property or a hotel chain seldom obtains all or even a majority of a company’s business
Increasing evidence indicates that companies are willing to reduce the number of hotel providers, and to give more of their business to a few hotels, if these companies meet their requirements for service and price
Grow selected marginal accounts
Selected marginal accounts can become key accounts if given sufficient time and a consistent level of service
Eliminate selected marginal accounts
Unfortunately, some accounts result in net losses for a hospitality company
Retain selected marginal accounts but provide lower-cost sales support
Many accounts represent infrequent purchases or low-yield business
A common method of dealing with these accounts is to assign them to an inside sales force
Obtain new business from selected prospects
The process of obtaining new accounts is costly and time consuming
The high cost of obtaining a new customer dictates that this person must have the potential to contribute significantly to profits

14. Principles of Personal Selling
Prospecting
&
Qualifying
Preapproach
Approach
Presentation
&
Demonstration
Negotiating
Overcoming
Objections
Closing
Follow-Up/
Maintenance
Selling today is a profession that involves mastering and applying a set of principles
Prospecting and Qualifying
The first step in the selling process is to identify prospects
Once prospects have been identified, they need to be qualified
Sales representatives need skill in screening out poor leads
Prospects can be qualified by examining their financial ability, volume of business, special requirements, location, and likelihood of continuous business
Preapproach
The salesperson needs to learn as much as possible about the prospect company (what it needs, who is involved in the purchase decision) and its buyers (their personal characteristics and buying styles)
Another task is to decide on the best approach, which might be a personal visit, a phone call, or a letter
Approach
The salesperson should know how to greet the buyer to get the relationship off to a good start
This involves the salesperson’s appearance, the opening lines, and the follow-up remarks
Presentation and Demonstration
The salesperson now tells the product “story” to the buyer, following the AIDA formula of gaining attention, holding interest, arousing desire, and obtaining action
Negotiation
Much of business-to-business selling involves negotiating skills
The two parties need to reach agreement on the price and other terms of sale
Salespersons need to win the order without making deep concessions that will hurt profitability
Overcoming Objections
Customers almost always pose objections during the presentation or when asked for the order
Psychological resistance
Includes resistance to interference, preference for established hotel or airline, apathy, reluctance to giving up something, unpleasant associations about the other person, predetermined ideas, dislike of making decisions, and neurotic attitude toward money
Logical resistance
Consists of objections to the price or certain product or company characteristics
Closing
Now the salesperson attempts to close the sale
Salespersons need to know how to recognize closing signals from the buyer, including physical actions, statements or comments, and questions
Follow-Up/Maintenance
This last step is necessary if the salesperson wants to ensure customer satisfaction and repeat business

15. Motivating a Professional Sales Force
Motivating a Sales Force
Compensation
Supplementary Motivators
The majority of sales representatives require encouragement and special incentives to work at their best level
Sales Force Compensation
To attract and retain sales representatives, the company has to develop an attractive compensation package
The level of compensation must bear some relation to the going market price for the type of sales job and required abilities
The company must next determine the components of compensation: a fixed amount, a variable amount, expenses, and fringe benefits
Supplementary Motivators
Companies use additional motivators to stimulate sales force effort
Periodic sales meetings provide a social occasion, a break from routine, a chance to meet and talk with “company brass,” and a chance to air feelings and to identify with a larger group
Sales meetings are an important communication and motivational tool

16. Evaluation and Control of a Professional Sales Force
Set Sales Quotas
Develop Norms for Salespeople
Use Sales Time Efficiently
Manage Trade Shows
Set Sales Quotas
Many companies set sales quotas prescribing what their sales representatives should sell during the year
Compensation is often tied to the degree of quota fulfillment
Develop Norms for Salespeople
New sales representatives should be given more than a territory, a compensation package, and training
They need supervision
Use Sales Time Efficiently
Sales representatives need to know how to use their time efficiently
One tool is the annual call schedule, showing which customers and prospects to call on in which months and which activities to carry out
Manage Trade Shows
Trade shows are commonly used as a means of generating sales leads, keeping in touch with commercial customers, and writing business
Other Control Techniques
Management obtains information about its sales representatives in several ways
One important source is sales reports
Additional information comes through personal observation, customers’ letters and complaints, customer surveys, and conversations with other sales representatives
Formally Evaluate Performance
The sales force’s reports along with other observations supply the raw materials for evaluating members of the sales force
Formal evaluation procedures lead to at least three benefits
Management has to communicate their standards for judging sales performance
Management needs to gather comprehensive information about each salesperson
Sales representatives know that they will have to sit down one morning with the sales managers and explain their performance or failure to achieve certain goals
Other Control Techniques
Formally Evaluate Performance

17. Social Selling
Ultimately, social selling technologies are helping to make sales forces more:
Efficient
Cost-effective
Productive
However social selling is not without its drawbacks:
Not cheap
Can intimidate low-tech salespeople
Some features cannot be shown over the Internet
Social selling DOES NOT replace face-to-face selling for major clients

18. Key Terms
Allocating sales representatives decide on which customers to allocate scarce products to.
Approach the step in which the salesperson meets the customer for the first time.
Closing the sales step in which a salesperson asks the customer for an order.
Communicating sales representatives communicate information about the company’s products and services.
Follow-up the sales step in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business.
Handling Objections the sales step in which the salesperson seeks out, clarifies and overcomes any customer objections to buying.
Information gathering sales representatives conduct market research and intelligence work and fill in a call report.
Preapproach the step in which the salesperson or company identifies qualified potential applicants.
Presentation the sales step in which the sales persons tells the “value story” to the buyer showing how the company’s offer solves the customer’s problems.

19. Key Terms Prospecting the process of searching for new accounts.
Selling sales representatives know the art of salesmanship: approaching, presenting, answering objections, and closing sales.
Servicing sales representatives provide various services to the customers: consulting on their problems, rendering technical assistance, arranging financing, and expediting delivery.
Social Selling the use of online, mobile, and social media to engage customers, build stronger customer relation-ships and augment sales performance.
Targeting sales representatives decide how to allocate their scarce time among prospects and customers.