Perspnal Selling

Personal Selling and Direct Marketing

MGT 252, lecture 11a

Learning Goals1. Discuss the role of a company’s salespeople in creating

value for customers and building customer relationships2. Identify and explain the six major sales force management

steps3. Discuss the personal selling process, distinguishing between

transaction-oriented marketing and relationship marketing4. Define direct marketing and discuss its benefits to

customers and companies5. Identify and discuss the major forms of direct marketing

Personal Selling

• The Nature of Personal Selling– Salesperson covers a wide range of positions from

order taker to order getter responsible for relationship building

Personal Selling

• Salespeople have many names1. Agents2. Sales consultants3. Sales Representatives4. Account Executives5. Sales Engineers6. District Managers7. Marketing representatives8. Account Development Representatives

Personal Selling

• The Role of the Sales Force– Two-way personal communication– More effective than advertising in complex selling

situations– The sales force plays a major role in most

companies– The sales force works to represents the company

to customers– They also represent the customers to the

company






• Pharmaceutical companies have extensive sales forces which visit/sell to physicians.

• What would be the challenges in each step of sales force management for the sales force of a pharmaceutical like Viagra?

Major Steps in Sales Force Management

????

• Designing Sales Force Strategy and Structure– Sales Force Structure

• Territorial sales force structure• Product sales force structure• Customer sales force structure• Complex sales force structure

Managing the Sales Force


• Sales Force Strategy and Structure– Sales Force Size

• Many companies use the workload approach to set sales force size

– Other Issues• Outside and inside sales forces• Team selling


• Recruiting and Selecting Salespeople– Careful recruiting can:

• Increase overall sales force performance• Reduce turnover• Reduce recruiting and training costs

• Traits of Successful Salespeople– Intrinsic motivation– Disciplined work style– The ability to close a sale– Ability to build relationships with customers


• Training Salespeople– Training period can be anywhere from a few

weeks to a year or more– Training is expensive, but yields strong returns– Many companies are adding Web-based sales

training programs


• Training Salespeople– Training programs have many goals

• Identify with the company and its products• Know about customers and competitors• The basics of the selling process


• Compensating Salespeople– Compensation elements: salary, bonuses, commissions,

expenses, and fringe benefits– Basic compensation plans:

• Straight salary• Straight commission• Salary plus bonus• Salary plus commission

– Compensation plans should direct the sales force toward activities that are consistent with overall marketing objectives.

Managing the Sales Force• Supervising Salespeople

– Supervision is used to direct and motivate salespeople– Companies will vary in how closely they supervise their salespeople;

will vary depending on the skill level and maturity of the sales force, and type of selling

• Tools used:– Annual call plans and time-and-duty analysis can help provide

direction– Sales force automation systems assist in creating more efficient sales

force operations– The Internet is the fastest-growing sales technology tool


• Evaluating Salespeople– Several tools can be used

• Sales reports• Call reports• Expense reports

The Personal Selling Process

• The goal of the personal selling process is to find new customers and sell them something

• Most salespeople spend their time maintaining existing accounts and building long-term customer relationships

• Not all steps required in every sale


• Prospecting and Qualifying– Identifying customers that may have a need for the

product or service being sold– Only a small number of prospects become customers– Prospecting requires effort, time, and commitment


• Preapproach:– Learn as much about the prospective customer as

possible, prior to approaching them to ask for a meeting– Use all resources to learn before meeting– Setting call objectives is important to being productive and

not wasting the customer’s time


• Approach:– Meeting and greeting the customer for the first time– Involves salesperson’s appearance, opening lines, and the

follow-up remarks– Listening to the customer is crucial

The Personal Selling Process• Presentation and demonstration:

– What happens during the sales call– Purpose is to uncover needs and then attempt to satisfy

them– Questioning and listening skills are important– Technology can help or get in the way– Customers value empathy, honesty, punctuality, reliability,

thoroughness, and follow through

The Personal Selling Process• Handling objections:

– The salesperson seeks out, clarifies, and overcomes customer objections to buying the product or service

– Customers object for different reasons: no need, lack of information, product limitation, or as a negotiating tactic

– Handling objections is important, but preventing them is more effective; need to look at qualifying skills and use of features, advantages, and benefits


• Closing the sale:– Asking the customer to buy (order) the product– The only step that produces revenue; most important– Fear of rejection makes this step the most difficult– Keep it simple, honest, and direct; different types of

closing techniques make assumptions that can be dangerous if used improperly


• Follow-up:– What takes place after the sale– To ensure customer satisfaction– To keep the door open for repeat business– Ask for referrals

Personal Selling and Customer Relationship Management

• The principals just described are transaction-oriented

• Companies want to encourage repeat purchasing because it is more efficient than trying to replace lost customers

• It takes different skills to build relationships with customers

• Mutually profitable relationships are built on creating value, offering packaged solutions to problems, and improving products and processes






Direct Marketing

• Direct Marketing consists of direct one-to-one connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

Direct Marketing

• The new Direct Marketing Model– Direct Marketing is both, a direct marketing

channel and an element of the marketing communications mix

– Technology has made of direct marketing a new and complete model for doing business.

– Firms employing this direct-marketing model (such as Dell Computer) use it as the only approach

Forms of Direct Marketing

• Telephone marketing: outbound and inbound, suffers from consumer burnout, technology to block calls

• Direct mail marketing: flexible, personalized, but suffers from junk mail image

• Catalogue marketing: the big winners in the rise of the Internet; huge cost efficiencies by moving catalogue offering online

• Direct-response television marketing: infomercials work, despite a poor reputation

• Kiosk marketing: going where the customers are

• For buyers:– Convenient– Easy to use– Private – Access to a wealth of information– Immediate – Interactive

Benefits of Direct Marketing

• For Sellers– Powerful tool for building relationships– Allows for targeting of small groups or individuals with

customized offers in a personalized fashion– Can be timed to reach prospects at the right time– Offers access to buyers that couldn’t be reached via other

channels– Low-cost, effective alternative for reaching specific

markets

Benefits of Direct Marketing

Customer Databases andDirect Marketing

• Customer database: organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data– Databases include comprehensive data including geographic,

demographic, psychographic and behavioral– Databases can be used to identify prospects, tailor products, and

maintain customer relationships– Database marketing requires substantial investment in hardware,

software, personnel– Build customer loyalty by tailoring new offers to their specific interests