1. Personal Selling and Sales Management
Chapter 17 Personal Selling and Sales Management
Chapter 17
Lamb, Hair, McDaniel
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Chapter 17 Personal Selling and Sales Management 1
Describe personal selling
Discuss the key differences between relationship selling and traditional selling
Describe customer relationship management
List the steps in the selling process
Describe the functions of sales management 2 3 4 5
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3. Describe Personal Selling
Chapter 17 Personal Selling and Sales Management
Personal Selling
Describe Personal Selling 1
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Chapter 17 Personal Selling and Sales Management
Advantages of
Personal Selling
Personal selling provides detailed explanation or demonstration of the product.
Message can be varied according to motivations of each customer.
Personal selling can be directed only to qualified prospects.
Costs can be controlled by adjusting the size of the sales force in one-person increments.
Personal selling is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer.
Notes:
Personal selling may work better than other forms of promotion given certain customer and product characteristics. 1
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Chapter 17 Personal Selling and Sales Management
Exhibit 17.1 Comparison of Personal Selling and Advertising/Sales Promotion
Personal selling is important if…
Advertising and sales promotion are more important if…
The product has a high value.
The product has a low value.
It is a custom-made product.
It is a standardized product.
There are few customers.
There are many customers.
The product is technically complex
The product is easy to understand.
Customers are concentrated
Customers are geographically dispersed.
Examples: Insurance policies, custom windows, airplane engines
Examples: Soap, magazine subscriptions, cotton t-shirts
Notes:
Exhibit 17.1 compares the effectiveness of personal selling and advertising/sales promotion based on certain customer and product characteristics.
Personal selling is more important as the number of potential customers decrease, as the complexity of the product increases, and as the value of the product grows.
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Chapter 17 Personal Selling and Sales Management
Relationship Selling
Discuss the key differences between relationship selling and traditional selling 2
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Relationship Selling
Chapter 17 Personal Selling and Sales Management
Relationship selling, or consultative selling, is a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.
Notes:
Until recently, personal selling focused almost entirely on a planned presentation for the purpose of making a sale. In contrast, modern views of personal selling emphasize the relationship that develops between a salesperson and a buyer.
The objective with relationship selling is to build long-term branded relationships with consumer/buyers. The focus is on building mutual trust between the buyer and seller.
Salespeople become consultants, partners, and problem solvers as they strive to develop trust and long-term relationships.
Personal selling has taken a technological turn in the last decade. 2
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Chapter 17 Personal Selling and Sales Management
Exhibit 17.2 Key Differences between Traditional Selling and Relationship Selling
Traditional Personal Selling
Relationship or Consultative Selling
Sell products (goods and services)
Sell advice, assistance, and counsel
Focus on closing sales
Focus on improving the customer’s bottom line
Limited sales planning
Consider sales planning as top priority
Spend most contact time telling customers about product
Spend most contact time attempting to build a problem-solving environment with the customer
Conduct “product-specific” needs assessments
Conduct discover in the full scope of the customer’s operations
“Lone wolf” approach to the account
Team approach to the account
Proposals and presentations based on pricing and product features
Proposals and presentations based on profit impact and strategic benefits to the customer
Sales follow-up is short term, focused on product delivery
Sales follow-up is long term, focused on long-term relationship enhancement
Notes:
The end result of relationship selling tends to be loyal customers who purchase from the company time after time. A relationship selling strategy focused on retaining customers costs a company less than prospecting and selling to new customers.
Exhibit 17.2 lists the key differences between traditional personal selling and relationship selling.
SOURCE: Robert M. Peterson, Patrick Schul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,” National Conference on Sales Management Proceedings, March 1996.
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9. Customer Relationship Management and Personal Selling
Chapter 17 Personal Selling and Sales Management
Customer Relationship Management and Personal Selling
Describe customer relationship management 3
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10. Customer Relationship Management
Chapter 17 Personal Selling and Sales Management
Customer Relationship Management
Identify customer relationships
Understand interactions of the customer base
Capture customer data
Notes:
Customer relationship management assumes two key points:
Customers must take center stage in the organization.
The business must manage the customer relationship across all points of customer contact throughout the organization.
Each of the steps listed on this slide will be covered in detail over the next few slides.
Leverage customer information 3
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11. Identify Customer Relationships
Chapter 17 Personal Selling and Sales Management
Identify Customer Relationships
Companies that have CRM systems:
Follow a customer-centric focus or model
Use knowledge management systems
Organize information gathered through the “learning” process
Learn via interactions
Notes:
Customer-centric organizations are managed under the philosophy that the company customizes its product and service offering based on data generated through interactions with the customer and the company.
Learning: In a CRM system, an informal process of collected customer data through customer comments and feedback on product or service performance.
Knowledge Management: The process by which customer information is centralized and shared in order to enhance the relationship between customers and the organization.
Interaction: The point at which a customer and a company representative exchange information and develop learning relationships. 3
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12. Interactions of the Current Customer Base
Chapter 17 Personal Selling and Sales Management
Interactions of the Current Customer Base
CRM is built on interactions between customers and organizations.
Touch points occur at a wide variety of locations.
Web-based interactions are an increasingly popular.
One popular touch point is the point-of-sale touch point.
Notes:
In a CRM system, touch points are all areas of a business where customers have contact with the company and data might be gathered.
Touch points might include a customer registering for a particular service; a customer communicating with customer service for product information; a customer completing and returning the warranty information card for a product; or a customer talking with salespeople, delivery personnel, and product installers.
As social media have become more popular, many companies have begun to use these media for “social” CRM.
Many point-of-sale software programs enable customers to easily provide information about themselves without feeling violated. 3
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13. Capturing Customer Data
Chapter 17 Personal Selling and Sales Management
Capturing Customer Data
Rather than focusing on the amount of data that can be obtained, companies should focus on the type of data to be acquired and how it can be used to enhance relationships.
Notes:
Vast amounts of data can be obtained from the interactions between an organization and its customers. Therefore, in a CRM system, the issue is not how much data can be obtained, but rather what types of data should be acquired and how the data can effectively be used for relationship enhancement.
Interactions between the company and the customer facilitate the collection of large amounts of data. 3
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14. Leveraging Customer Information
Chapter 17 Personal Selling and Sales Management
Leveraging Customer Information
Campaign management
Retaining loyal customers
Cross-selling other
products and services
Notes:
Data can be applied to marketing messages for specific audiences. This helps facilitate enhanced relationships with customers in those market segments. There are several database applications that are listed on this slide.
CRM provides many opportunities to cross-sell related products. Marketers can use the database to match product profiles and consumer profiles so that they can cross-sell customers products that match their demographic, lifestyle, or behavioral characteristics.
Using transaction and purchase data, a database allows marketers to track customers’ relationships to the company’s products and services and modify the marketing message accordingly.
Designing targeted marketing communications 3
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15. List the steps in the selling process
Chapter 17 Personal Selling and Sales Management
Steps in the Selling Process
List the steps in the selling process
Notes:
The sales process, or sales cycle, is the set of steps a salesperson goes through to sell a product or service. 4
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16. Steps in the Selling Process
Chapter 17 Personal Selling and Sales Management
Steps in the Selling Process
Generate Leads
Qualify Leads
Probe Customer Needs
Develop Solutions
Handle Objections
Close the Sale
Notes:
Completing a sale requires several steps. It can be unique for each product or service, depending on the features of the product, characteristics of customer segments, and internal processes within the firm, such as how sales leads are generated.
There are seven basic steps in the personal selling process.
Follow Up 4
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Chapter 17 Personal Selling and Sales Management
Generating Leads
Advertising
Webinars
Referrals
Trade Shows/
Conventions
Direct Mail
Networking
Telemarketing
Social Media
Cold Calling
Notes:
Lead generation, or prospecting, is the identification of those firms and people most likely to buy the seller’s offerings.
Sales leads can be obtained in several different ways, such as those sources shown on this slide. 4
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Chapter 17 Personal Selling and Sales Management
Cold Calling
A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status.
Notes:
Before the advent of more sophisticated methods of lead generation, most prospecting was done through cold calling. 4
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19. Receptivity and accessibility
Chapter 17 Personal Selling and Sales Management
Qualifying Leads
Receptivity and accessibility
Buying power
Recognized need
Notes:
When a prospect shows interest in learning more about a product, the salesperson has the opportunity to qualify the lead.
Lead qualification involves determining whether the prospect has three things: • A recognized need • The authority to make the purchase decision and access to funds to pay for it • Receptivity and accessibility to the salesperson 4
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20. Approaching the Customer and Probing Needs
Chapter 17 Personal Selling and Sales Management
Approaching the Customer and Probing Needs
A needs assessment is a determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.
Notes:
Before approaching customers, the salesperson should learn as much as possible about the prospect’s organization and its buyers. This process, called the preapproach, describes the “homework” that must be done by the salesperson before contacting the prospect.
The salesperson’s ultimate goal during the approach is to conduct a needs assessment to find out as much as possible about the prospect’s situation. 4
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21. The Consultative Salesperson
Chapter 17 Personal Selling and Sales Management
The Consultative Salesperson
Product or service
Customers
Competition
Industry
Salesperson
must know
everything
about...
Online
Hoover’s Online
Pick a company and try to find out as much information as you can about it using Hoover’s Online. Which database gave you the best and most information about your “lead?” 4
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22. Developing and Proposing Solutions
Chapter 17 Personal Selling and Sales Management
Developing and Proposing Solutions
The Sales Proposal is…
A formal written document or professional presentation that outlines how the salesperson’s product or service will meet or exceed the prospect’s needs.
The Sales Presentation is…
Notes:
After compiling information about the client’s needs and wants, the salesperson develops a solution in which the salesperson’s product or service solves the client’s problem or need.
These solutions are typically presented as a sales proposal during a formal sales presentation.
Usually, there is only one opportunity to present solutions, and salespeople must be able to present the proposal and handle any customer objections confidently and professionally.
A formal meeting in which the salesperson presents a sales proposal to a prospective buyer. 4
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Chapter 17 Personal Selling and Sales Management
Handling Objections
View objections as requests for information.
Anticipate specific objections.
Investigate the objection with the customer.
Be aware of competitors’ products.
Stay calm.
Use the objection to close the sale.
Notes:
The salesperson should not take objections personally as confrontations or insults. Instead, objections should be handled as requests for information, and could be used in a positive way to close the sale. 4
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24. Look for customer signals
Chapter 17 Personal Selling and Sales Management
Closing the Sale
Negotiate
Keep an open mind
Look for customer signals
Tailor to each market
Notes:
Negotiation plays a key role in closing the sale. Negotiation is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement.
A salesperson should emphasize value to the customer, rendering price a nonissue.
In foreign markets, the sales efforts should be tailored to the appropriate way of doing business for that culture. 4
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Chapter 17 Personal Selling and Sales Management
Following Up
In the final step of the selling process—the follow up—the salesperson must ensure:
Delivery schedules are met
Goods or services perform as promise
Buyers’ employees are properly trained to use the products
Notes:
The goal of relationship selling is to motivate customers to purchase again by developing long-term relationships.
Most businesses depend on repeat sales, and repeat sales depend on follow-up by the salesperson. Furthermore, today’s customers are less loyal to brands and vendors. Therefore follow-up is critical in relationship building. 4
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Chapter 17 Personal Selling and Sales Management
Exhibit 17.5 Relative Amount of Time Spent in the Key Steps of the Selling Process
Notes:
Exhibit 17.5 depicts the time involved in the sales process and how those elements relate to the traditional and relationship selling approaches.
Source : Robert Peterson, Patrick Schul, and George H. Lucas Jr., “Consultative Selling: Walking the Walk in the New Selling Enviroment,” National Conference on Sales Management Proceedings, March 1996.
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27. Describe the functions of sales management
Chapter 17 Personal Selling and Sales Management
Sales Management
Describe the functions of sales management 5
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Chapter 17 Personal Selling and Sales Management
Sales Management
Sales managers must:
Define sales goals and the sales process
Determine the sales force structure
Recruit and train the sales force
Compensate and motivate the sales force
Evaluate the sales force
Notes:
There is an old adage in business that nothing happens until a sale is made. Without sales, there is no need for accountants, production workers, or even a company president. Sales provide the fuel that keeps the corporate engines humming. 5
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29. Sales Goals and the Sales Process
Chapter 17 Personal Selling and Sales Management
Sales Goals and the Sales Process
Sales goals provide salespeople with targets and measurements.
Usually goals are developed in terms of desired dollar values, market share, or profit level.
Goals are stated as quotas, or statements of a salesperson’s goals.
Notes:
Without goals to achieve, salesperson performance would be mediocre at best, and the company would likely fail.
A quota is a statement of the salesperson’s sales goals, usually based on sales volume alone but sometimes including key accounts (those with greatest potential), new accounts, repeat sales, and specific products. 5
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Chapter 17 Personal Selling and Sales Management
Sales Force Structure
Sales department organization:
Regional
Product Line
Marketing Function Performed
Market or Industry
Client or Account
Allows for more specific and better customer service
Notes:
Personal selling is an expensive way to market products. Having a well-organized sales force can make the process easier and less costly. 5
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31. The Sales Force Strong Ego Risk Taker Sense of Urgency Intelligent
Chapter 17 Personal Selling and Sales Management
The Sales Force
Strong Ego
Risk Taker
Sense of Urgency
Intelligent
Assertiveness
Creative
Sociable
Empathetic
Notes:
Sales force recruitment should be based on an accurate, detailed description of the sales task as defined by the sales manager.
The strongest salespeople have some key characteristics that make them able to excel in personal sales.
Firms that sell complex products generally offer the most extensive training programs.
Relationship Oriented 5
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32. Compensating the Sales Force
Chapter 17 Personal Selling and Sales Management
Compensating the Sales Force
Compensation planning is one of the sales manager’s toughest jobs. Only good planning will ensure that compensation attracts, motivates, and retains good salespeople.
Although the compensation plan motivates a salesperson to sell, sometimes it is not enough to produce the volume of sales or the profit margin required by sales management.
Notes:
The right type of compensation can reduce employee turnover.
Many salespeople’s careers rely on reviews from customer surveys.
When a compensation plan does not produce the desired sales volume, sales managers often offer rewards or incentives, such as recognition at ceremonies, plaques, vacations, merchandise, and pay raises or cash bonuses. 5
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33. Evaluating the Sales Force
Chapter 17 Personal Selling and Sales Management
Evaluating the Sales Force
Performance evaluations allow managers to review the strengths and weaknesses of the sales force.
This information can then tell a manager what sales skills might need to be reassessed or retrained.
Notes:
To evaluate a sales force, the sales manager needs feedback—that is, regular information from salespeople.
Typical performance measures include sales volume, contribution to profit, calls per order, sales or profits per call, or percentage of calls achieving specific goals such as sales of products that the firm is heavily promoting. 5
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34. The Impact of Technology on Personal Selling
Chapter 17 Personal Selling and Sales Management
The Impact of Technology on Personal Selling
Cell Phones
Laptops
Pagers
Electronic Organizers
Internet
Notes:
Technology will not eliminate the need for salespeople; instead, technology can help improve the customer relationship. Technology, such as laptop computers, cell phones, and pagers allow salespeople to be more accessible to the customer.
The Internet provides salespeople with vast resources of information on clients, competition, and the industry.
The Internet cost-effectively processes orders and services requests, and is freeing sales representatives from tedious administrative tasks to allow more time to focus on client needs. 5
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Chapter 17 Personal Selling and Sales Management
Chapter 17 Video
New Balance Hubway
New Balance Hubway is a bike-sharing system located in Boston Massachusetts designed to augment existing transportation systems in the greater Boston area. In this clip, Hubway discusses how they generate buzz and get funding to build their bike share network.
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