Chapter 9

© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/IrwinMarketing Management, 8e

Chapter Nine

Personal Selling, Relationship Building, and

Sales ManagementKey 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

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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

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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

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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

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Building Relationships with Sales

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Sales Force Objectives

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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

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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?

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Common Sources Of Sales Leads

• Satisfied customers• Endless chain• Center of influence• Promotional activities• List and directories• Canvassing• Spotters• Telemarketing• Sales letters• Other sources

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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

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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

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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

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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

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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

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Cross-Functional Teams

• Improved sales productivity• More flexible and quicker decisions• Better decisions• Increased customer satisfaction

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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

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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

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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

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Organizing The Sales Force

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Organizing The Sales Force

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Supporting Selling

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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

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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

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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

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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

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Sales Force Technology

• Selected technology can improve performance• These elements top the list

- Cell phones - 89%- E-Mail – 85%- Presentation Software – 85%- Desktop PCs – 68%- Notebook Computers – 63%- Contact Management Software – 55%

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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

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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

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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

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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

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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

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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

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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