Chapter 2 Personal Selling -Sales and Distribution Management

Copyright © 2010, S L Gupta

Excel BooksSales and Distribution Management Text & Cases (2nd Edition) S L Gupta2-1

Personal Selling

Basics of Sales Management

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2Personal Selling



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IntroductionSome important aspects of personal selling are:

1. It enhances customer’s confidence in the seller.

2. It promotes long-term business relations through personal intimacy.

3. It provides a human touch to business transactions.

4. It helps facilitate the seller to understand each customer’s needs and preferences more clearly.

5. It helps satisfy a customer by modifying the product as per the customer’s choice and preference.

6. Personal selling followed by personal service helps build long-term relations between the business and the customer.

7. It helps keep up with the competition in the market, based on product customisation as per customer’s preferences.



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8. It is a powerful and effective tool for convincing the customer about the

product.

9. Through personal selling the time lag between introducing a product through

the media and actually selling it is reduced.

10. It provides prospective customers with a better understanding of the product

and an interactive opportunity to liaise with the sales personnel.



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Objectives of Personal Selling

Personal selling objectives may be:

Short-term

Short-term personal selling objectives are more specific and of short-term

duration. These objectives change very frequently as soon as there is change in

production mix. Further, they are usually quantitative objectives.

Long-term

Long-term personal selling objectives are broad and general. There is very little

scope of change in long-term objectives. They are usually quantitative objectives.



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Functions of Personal Selling

Personal selling is an oral presentation in face to face conversation with one or

more prospective customers for the purpose of making sales. The main functions

of personal selling are as follows:

1. Provide service to customers (Introduce the product, explain the right use,

Convince them etc.)

2. To sell the product

3. Maintain the sales record

4. Executive Function

5. Develop goodwill

6. Achieve sales target



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Changing Face of Personal SellingModern sales approach is based on the following parameters

1. Value Sharing: Salespeople study the changing needs and preferences of their customers.

2. Relation Building: A value-based relationship helps the salespeople to constantly mobilise resources and modify the end product by catering to the specifics of the buyer.

3. Role Playing: The salespeople, in personal selling, go far beyond realising sales. Sales people act as consultants to their prospective customers constantly advising them of new products, their updates and impart knowledge to them.

4. Changing Approach: Personal selling comes in a package containing the inputs of the experts from different areas such as maintenance, installation, trouble shooting, delivery staff, sales personnel, etc.



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Benefits of personal selling

1. Availability of expertise

2. Early access to relevant market information

3. Availability to be flexible regarding processes, timing

4. Faster, shorter contracts

5. Economies of information sharing

6. Lower cost of selling

7. Knowledge of other uses or applications



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Efficacy of Personal SellingPersonal Selling with Respect to Product Strategy

Since salespeople are in direct liaison with prospective customers, their input is valuable during product development.

Personal Selling and Pricing Decisions

Sales personnel undergo requisite interaction with prospective customers to gauge their mood with respect to different price levels.

Personal Selling and Distribution

The end result of any distribution effort is the ready availability of the product to the customer, in the right quantity and at the right place.

Personal Selling and Product Promotion

Sharing the same values that the customer does, a salesperson provides motivation and generates interest and confidence in the customer for the product.



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Steps in Personal Selling

Successful personal selling calls for an integrated approach devised from the

experience of the sales personnel. The approach comprises the steps as shown

in the figure here. Each of these steps are further described in brief.

Steps in Personal Selling



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Prospecting

Prospecting is the process of identifying prospective buyers of the product. A prospect is qualified if he has the authority, need, ability and eligibility to buy. There are different ways to identify prospects. Some of the most frequently used methods are described below:

Acquaintance References

Cold Calling

Centre of Influence Method

Personal Observation Method

Direct Mail or Telephone Method

Company’s Records

Newspapers

Retailers

Other Methods



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Pre-approach

Pre-approach is the second step in the selling process which emphasises that the salesman should know, after identifying the prospect in the prospecting stage, the prospect’s likes and dislikes, his needs, preferences, habits, nature, behaviour, economic and social status etc.

Significance of Pre-Approach

1. Salesman concentrates only on the prospects and not the suspects.

2. Salesman gain all the possible information about the prospect before approaching him. Hence any kind of loose talk or serious mistake can be avoided.

3. He is able to give a sales presentation more efficiently, effectively and with confidence.

4. It does not waste the prospect’s time and energy since the salesman is already aware of the needs and preferences of the prospect.



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The “Ferris Wheel” concept, which is aimed at supplying an ongoing list of prospects, is part of world sales record holder Joe Girard’s customer strategy

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Referrals Relationship between customer and sales-person deteriorates

Friends and acquaintances

Business failure

Directories New buyer buys from another source

Trade publications and trade shows

Acquisitions and mergers

Telemarketing and advertising

Customer moves

Death of customer

Cold calling Customer has only a

productone-time need for

Networking Customer needs change because of new technology



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Usage of Prospecting Time

Sales force must plan its time in such a manner that maximum time is made

available for those prospects who are likely to give a large volume of business

to the company.

To avoid this wastage of time, grading of the prospects will be an important

step.



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Approaching

In this stage the prospect and the salesman come in contact with each other

face to face.

The salesman has an opportunity to understand and interact with the

prospect in a better way.

Salesman should put forward his best efforts to make the best use of this

opportunity in getting the attention of the prospect and to convince him to buy

the product.

Getting the attention of the prospect and persuading him to buy are the two

main objectives of a salesman.



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Approach Adopted by Travelling Salesmen

A salesman may directly approach the prospect without any introduction

whatsoever and then conduct an interview.

Sending an advance mailer explaining his product and its benefits vis-à-vis

other products available.

There is no better method of securing an appointment with a prospect than

through a reference given by the friend, relative or business associate of the

prospect.

Another effective way of securing an appointment and interview with the

prospect is for salesmen to give away gifts to the prospects before asking for

an appointment.

Sale letters have proved to be another kind of door opener.



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Successful Approach

The following points specify the importance of a successful approach:

i. A successful approach enhances the sale and it is thus important for the

running of a business.

ii. A failed approach will give an opportunity to the rival company. So a good

approach will go a long way in building good relations with the prospect while

a bad approach will not only result in losing business but will also make it

easy for a competitor to tap new customers.

iii. The approach helps in enlightening the prospect by providing him ample

information about the product, price, competitor’s product, benefits etc. that

he can derive from the product.



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Key guidelines for successful approach

Prior Appointment

Timing

Command

Relaxed Atmosphere

Open Mindedness

Courtesies

Effective Presentation

Follow up



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Methods of Approach

There are different methods of approaching a prospect and some of the most

important ones are given below.

Cashing in on Brand Name or the Company’s Reputation

Customer Benefit Approach

Innovative Product Opens the Door to the Salesman

The Premium Approach (Small Gifts or Novelties)

The Stock Approach

The Approach of ‘Making the Prospect Feel Important’

The Survey Approach

Interactive Approach



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Presentation

Quick presentation creates a good impression.

Attractively packaged, decorated and well- organised.

Should explain the product with its features and price advantage to the

customer in simple and easy terms.

Customer be shown the kind of quality that he is looking for.

Helps the salesman to prove the features of the product and emphasise its

genuineness.



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Demonstration

Demonstration is an exercise to prove the characteristics of the product.

It highlights various attributes of the product such as utility, performance,

service and quality.

It is only during the demonstration that the customer gets an opportunity to

verify the facts about the product.

Demonstration is imperative and essential for a prospect to make a buying

decision.



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The Close

This is the last stage of any sales presentation.

The main aim of the close is to convince the prospect to sign the order form

or to place an order immediately rather than in the future.

It is also important that through proper planning, prospecting, presentation

and demonstration the salesman should try to capture the attention of the

prospect and not let the prospect change his mind.



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Relationship of Salesmanship with Sales Management

and personal Selling

Salesmanship & Personal Selling

1. The ability to quickly develop rapport with their prospective customers.

2. A desire to truly help their customers.

3. The habit of asking questions to gather information before making a pitch.

4. Sticking to a consistent, proven sales process.

5. A never ending desire to learn more about how to sell more effectively.



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Myths about selling

Myths of selling: There are various myths about selling process which needs to

be cleared for a sales person.

1. Buyers are liars

2. Anyone can be persuaded to buy

3. In buying decision, price is the primary reasons

4. A technique that works well for one person will work for everyone

5. Close the sales as soon as possible

6. The deal can be closed at any price



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Various Selling theories

“SELL” Model

This is a simple model describing the various actions associated with the word itself.

1. Show features: it is the very first stage; expected to show the features of the product, demonstrating how it works, and showing the results of using the

product immediately.

2. Explain advantage: Immediately, after demonstrating the product, explain the advantage possibly related with the features, showing the advantages which ate derived from it.

3. Lead into benefits: Correlate the advantages with the benefits. This is simply highlighting the materialization of those benefits in conducting the set of activities due to having/using the product.

4. Let them talk: Then at the end, let them talk further about the product, its features and those future benefits. If the previous steps are done well, they will talk themselves for the sale.



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“SLAID” Model

This is another simple model describing the various actions associated with the

word itself, “Slaid” acronym for sales steps.

1. Show the product: Showing the product in full or showing specific function

is also possible in the beginning, just to trigger the anxiety or curiosity in their

mind. It is not a full product demonstration. Demonstration comes a bit latter

state in this methods.

2. Listen: A partial demonstration flash triggers a lot of questions, or

estimations or expectations, in case if the product is absolutely new concept.

3. Acknowledge: Your hearing will endorse that you have understood and are

ready to fulfill their needs. You may be given elaborative further deep

information about their objection.



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4. Identify: Identify the objections, and bring them on a squaring off situation

with contents offered by your product. If possible, set up a concession clause,

balancing the benefits of new product over the old objections, so that you can

handle the objection and will get the sale.

5. Deliver: Ask the participants to repeat the demonstration to build the

confidence about the product performance.



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Theories of selling

Stimulus response Approach to Selling

This is the simplest approach to selling and is shown in Figure. It is up to the salesperson to provide stimuli, of any kind, initially. This is followed by an attempt to obtain a response from the prospective buyer a continued on until a decision is made.

Stimulis response Approach to Selling

Salesperson providestimuli:

StatementQuestionsActionsAudio/visual aids demonstrations

Buyers responsessought:

Favourable reactions and eventual purchase

Continue process until purchase decision



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Mental State Selling

This approach utilizes the understanding of the AIDA (Attention, Interest, desire, Action) concept and its utilization in the selling process.

It follows the same strategy of the Stimulus response Approach where a script is prepared and followed. What is different here is the timing.

The timing refers to the mental state of the prospective buyer, whether at Attention, Interest, Desire, or Action.

Simplified tasks that the salesperson can do is as follows:

Mental State Sales Task

Awareness To get prospective buyers to be interested in the product

Interest To get prospective buyers to want the product

Desire To get prospective buyers to buy the product

Action To close the sale

Mental State Sales Task

Awareness To get prospective buyers to be interested in the product

Interest To get prospective buyers to want the product

Desire To get prospective buyers to buy the product

Action To close the sale



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Need satisfaction selling

It was critical for salesmen to know what the needs of the customer were.

This was done by various methods, including visit, studies of the customers,

questioning and constantly probing.

Need satisfaction Approach to Selling

Uncover and confirmBuyer needs

Present offering tosatisfy Buyer need

Continue selling untilpurchase decision



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Difference between advertising and Personal sellingBoth—personal selling as well as advertising—are the means to communicate with the target customers for the product or service of an organisation. To be effective, i.e., to produce results, in terms of sales or orders, both should be understandable, interesting, believable and persuasive.

i. However, there are some notable differences between these two means of communication.

ii. The customer comes in direct contact with the salesperson. In advertising, on the other hand, the customer does not come in direct contact with any representative of the organisation.

iii. Advertising has a major role during the pre-purchase phase as the mass demand for the product has to be generated. Advertising also plays an important role in post-purchase phase as it gives sound reassurance to the purchaser. Personal selling, on the other hand, has an important role to play in all the three phases. It plays a major role in the purchase phase.



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Three Phase of a Products/Brand’s Market

1. Pre-purchase phase

2. Purchase phase

3. Post-purchase phase

The pre-purchase phase is characterised by the phase where the organisation is

trying to convince the targeted customers of the benefits of the product/brand.

The purchase phase is the time/duration when the customer is making up his

mind to actually buy the product. The post-purchase phase is one when the

customer has bought the product and is evaluating the decision.

Pre-purchase Purchase Post-purchase

Personal

Selling

Advertising



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Theories of Personal Selling

There are three main theories of personal selling, which are as follows:

AIDAS Theory

Right Set of Circumstances Theory

Buying Formula Theory



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AIDAS Theory

this theory is based on the premise that during a sales presentation, the prospect

consciously goes through five different stages: Attention, Interest, Desire, Action

and Satisfaction.

Attention: The salesperson should attract the prospect to his presentation

before he actually goes into the details of the same.

Interest: He/she should maintain the interest of the prospects throughout the

presentation.

Desire: The next step in the sales process, as per the AIDAS theory, is to

create a strong desire in the prospect’s mind to purchase his product.

Action: Once the salesperson has been successful in taking his prospect

through the three stages, as discussed above, he should induce the

prospects into actually buying the product.



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Right Set of Circumstances Theory

The advocates of this theory opine that all the circumstances, which led to the

sales, were appropriate or “right” for the sales to have taken place. In other

words, if the salesperson is successful in securing the prospect’s attention,

maintaining his interest and inducing his desire to buy the product, sales will

result. Moreover, if the salesperson is highly skilled, he will take control of the

presentation, which would lead to sales.



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Buying Formula Theory

The buying formula theory is based on the analysis of the sequence of events that goes on in the buyer’s mind during the sales presentation. Thus, the theory emphasises on the factors internal to the prospect and the factors which are external, i.e., influence of the salesperson on his prospect’s decision to buy his product. The theory is based on the presumption that the salesperson will take care of the external factors.

The sequence of events in a prospect’s mind can be represented as

There are all the chances that a continuous relationship will develop between the prospect and the salesperson. As a result of sales, the satisfaction will also come in the sequence. This sequence can be presented as

Need Solution Purchase

SatisfactionPurchaseNeed Solution

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