Presentation3

Chapter

2Personal Selling

What Is Personal Selling?

Mathew Lawrence

Personal selling occurs where an individual salesperson sells a product, service or solution

to a client. Salespeople match the benefits of their offering to the specific needs of a client.

Definition : A form of person to person communication in which a salesperson works with

prospective buyer and attempts to influence purchase in the direction of his or her

company’s products or services

Some important characteristics of Personal selling:

It provides human touch to business transaction.

It promotes long term business relationship.

It enhances customer confidence

It helps in understanding the pulse of the customer.

It helps in customizing the product.

Helps in convincing the customer about the product.

Cont….

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.

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.

Cont….

Some long term objectives of personal selling are:

1. enhances customer’s confidence in the seller.

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

3. provides a human touch to business transactions.

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

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

6. helps build long-term relations between the business and the customer.

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

8. convincing the customer about the product.

9. the time lag between introducing a product throug the media and

actually selling it is reduced.

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. Develop goodwill

5. Achieve sales target

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

Cont….

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

Cont….

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 Personal Observation Method Direct Mail or Telephone Method Company’s Records Newspapers Retailers Other Methods

Cont….

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.

Cont….

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.

Cont….

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.

Cont….

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.

Cont….

Key guidelines for successful approach

Prior Appointment

Timing

Command

Relaxed Atmosphere

Open Mindedness

Courtesies

Effective Presentation

Follow up

Cont….

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.

Cont….

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.

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.

Cont….

Various Selling theories“SELL” ModelThis 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.

Cont….

“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.

Cont….

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.

Cont….

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

Cont….

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.

Cont….

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.

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

FORMULATING PERSONAL-SELLING STRATEGY

Competitive Settings--Pure, Monopolistic, Oligopolistic, No Direct Competition

Personal Selling Objectives-- Qualitative & Quantitative

Determining the kind of sales personnel--Product Market Analysis, Salesperson’s role in securing orders, choice of basic selling style

Determining the size of the sales force--Workload, Sales Potential, Incremental

Individualizing selling strategies

Competitive StrategiesPure

Large number of buyers and sellersNo one powerful enough to control or influence market pricesNo buyer or seller is so big which can impact the product’s total

demand and supplyAll products are identical, no differentiationAll buyers are aware of all sellers’ prices

Not a real world situation and hence no company concerns itself with a particular personal selling strategy for Pure Competition

Monopolistic

Many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike)

Easy for additional competitors to enter the market

Advertising differentiates the brand in the minds of final buyers and stimulates selective demand

Key element in marketing strategy is the ability to differentiate the product ( by both Advertising and Personal Selling)

Personal Selling’s role is that of servicing the distribution network and stimulating promotional efforts by the middlemen

Oligopolistic Number of competitors are small enough that they are individually

identified and known to each other

Difficult for new competitor to enter the market

Successful organizations keep on growing and less successful disappears

Oligopoly produces most aggressive competition

Strategies of one player has deep impact on the strategies of other players

Personal Selling Strategy plays important role in building and maintaining dealer cooperation, in servicing distribution network and in gathering information on competitor’s activities

No Direct Competition

Both monopoly or oligopoly have indirect competition They vie sellers in other industries for the same prospects’

interest and buying decisions Even in case of no direct competition, personal selling and

advertising plays an important role

Both require the effective implementation of personal selling strategy in terms of both kind and number of sales personnel even in case of indirect competitionChoosing pricing strategy calls for effective implementation of personal selling strategy

Personal Selling ObjectivesQualitative Vary with competitive setting Long Term Carried from one operating period to another When qualitative objectives change, there are changes in

nature of sales jobs and size of the sales forceQuantitative Vary with competitive setting Short Term Adjusted from operating period to operating period Since short term, they impact more upon the size of the sales

force than upon the nature of the sales job