1. Personal Selling and Sales Promotion20
Personal Selling and Sales Promotion

2. The Nature of Personal Selling
Agenda
The Nature of Personal Selling
Elements of the Personal Selling Process
Types of Salespeople
Managing the Sales Force
The Nature of Sales Promotion
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3. The Nature of Personal Selling
Paid personal communication that informs customers and persuades them to buy products.
Most adjustable to customer information needs
Most precise (targeted) form of promotion methods
Most expensive element in promotion mix
Personal selling as a career
The potential for high income
A great deal of freedom
A high level of training
A high level of job satisfaction
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4. General Steps in the Personal Selling Process
FIGURE 20.1
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5. Elements of the Personal Selling Process
Prospecting
Developing a list of potential customers
Sales records, trade shows, commercial databases, newspaper announcements, public records, telephone directories, trade association directories
Reponses to advertisements with information request forms
Referrals—recommendations from current customers
Need good CRM to manage list
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6. Elements of the Personal Selling Process (cont’d)
Preapproach
Finding and analyzing information about the prospect
Specific product needs
Current use of brands
Feelings about available brands
Personal characteristics
Additional research
Identifying key decision makers
Reviewing account histories and problems
Contacting other clients for information
Assessing credit histories and problems
Preparing sales presentations
Identifying product needs
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7. Elements of the Personal Selling Process (cont’d)
Approach
The manner in which a salesperson contacts a potential customer
Purpose is to gather information about the buyer’s needs and objectives
Important to create a favorable first impression and build rapport with prospective customer
Typical approaches
Referral by another customer to a prospective customer
“Cold” call without prior introduction to the customer
Repeat contact based on prior meeting(s) with the potential customer
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8. Elements of the Personal Selling Process (cont’d)
Making the Presentation
During the presentation:
Attract and hold the prospect’s attention.
Stimulate interest in the product.
Spark a desire for the product.
Listen and respond to the prospect questions and comments.
Ways to enhance the presentation’s effects
Have the prospect touch, hold, or use the product.
Use audiovisual technology to heighten the impact of the presentation.
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9. Elements of the Personal Selling Process (cont’d)
Overcoming objections
Anticipate objections and counter them during the presentation
Generally, best to handle objections as they arise
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10. Elements of the Personal Selling Process (cont’d)
Closing the sale
Closing is the stage in the selling process when the salesperson asks the prospect to buy the product.
Closing strategies:
“Trial” closing: asking questions (what, how, or why) that assume the customer will buy the product
Asking for a tryout order: low-risk way for customer to try out the product
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11. Elements of the Personal Selling Process (cont’d)
Following up
Determining if the delivery and setup of order was completed to the customer’s satisfaction
Ascertaining the customer’s future product needs
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12. Exercise
Explain how you can use the seven steps of personal selling in an activity such as getting a job.
PROSPECTING: The salesperson must develop a list of customers.
PREAPPROACH: The salesperson must find and analyze information about each prospect’s specific product needs, current use of brands, feelings about available brands, and personal characteristics.
The objective for this class exercise is for students to understand and apply the steps used in personal selling.
Prospecting—developing a list of customers. After developing a list, evaluate each prospect on the basis of his/her ability, willingness, and authority to buy the product. Only such prospects (dates, teachers, parents) with potential are pursued further. Although prospecting helps salespeople be more efficient, they should be careful not to prejudge customers before getting adequate information (e.g., a poorly dressed customer may have the ability and desire to buy).
Preapproach—find and analyze information about each prospect’s specific product needs, current use of brands, feelings about available brands, and personal characteristics.
Approach—the manner in which a salesperson contacts a potential customer. The first contact is generally to assess buyers’ needs and objectives. The prospect’s first impression is usually a lasting one with long-run consequences. You might ask, “Why are these two stages so important?” One reason is that a customer-based salesperson will take the time to find out what the customer needs (satisfying those needs occurs in the presentation application of the marketing concept). The second is the importance of the first impression. In most interviews, the company representative makes his/her mind up about the individual in the first few minutes (some say 30 seconds). Whether it is making a sale or getting a date or a job, how one first appears has a significant impact.
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13. Exercise (cont’d)
APPROACH: The salesperson adopts a certain manner in contacting a potential customer. The first contact is generally to assess the buyer’s needs and objectives. The prospect’s first impression is usually a lasting one.
MAKING THE PRESENTATION: The salesperson must attract and hold the prospect’s attention to stimulate interest. Product demonstrations, listening to comments, and observing responses are important.
Making the presentation—the salesperson must attract and hold the prospect’s attention to stimulate interest and stir up a desire for the product (AIDA). Product demonstrations, listening to comments, and observing responses are important.
Overcoming objections—seeking out a prospect’s objections in order to address them. One of the best (though risky) ways is to anticipate and counter objections before the prospect has an opportunity to raise them. Otherwise, deal with objections when they occur or at the end of the presentation.
Closing—asking the prospect to buy the product. Methods include “trial close” by asking questions that assume that the prospect will buy the product. A salesperson should try to close at several points during the presentation because the prospect may be ready to buy. Although these steps generally follow this order, they are often intertwined. After stu­dents have discussed how they use these steps (with examples), you might ask, “Why is closing so important?” If given a chance to sell, most people can present and overcome objections but are hesitant to close because they are afraid of rejection. If they did a good job of preparing and listening, they should assume that the customer is ready to buy or that objections are only excuses to be overcome.
Follow-up—contacting the customer to learn what problems or questions have arisen. Follow-up may also be used to determine future needs. With the grow­ing importance of relationship marketing, the follow-up is becoming as important as the other steps, if not more so. You might ask, “Why do some of you (or your parents) continue to buy cars from the same dealership?”
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14. Exercise (cont’d)
OVERCOMING OBJECTIONS: One of the best ways is to anticipate and counter objections before the prospect has an opportunity to raise them. Otherwise, deal with objections when they occur.
CLOSING: The salesperson asks the prospect to buy the product. Attempt a “trial close” by asking questions that assume the prospect will buy the product. A salesperson should try to close at several points during the presentation.
FOLLOW-UP: The salesperson contacts the customer to learn what problems or questions have arisen. This may also be used to determine future needs.
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15. Types of Salespeople Order Getters Order Takers
The salesperson who sells to new customers and increases sales to current ones
Creative selling
Current-customer sales
New-business sales
Order Takers
The salesperson who primarily seeks repeat sales
Inside order takers
Field order takers
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16. Types of Salespeople (cont’d)
Support Personnel: sales staff members who facilitate selling but usually are not involved solely with making sales
Missionary salespeople
Support salespersons who assist the producer’s customers in selling to their own customers
Trade salespeople
Salespersons involved mainly in helping a producer’s customers promote a product
Technical salespeople
Support salespersons who give technical assistance to a firm’s current customers
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17. Exercise
Salespeople are typically classified as order getters, order takers, and support personnel. How would you classify the following salespeople?
Pharmaceutical salesperson selling to doctors
Car salesperson
Retail store salesperson
Telemarketer soliciting donations for a charity
This exercise is relatively straightforward. Almost every student will have had some contact with one or several of these salespeople. However, students usually do not think about the types of selling these people do. Have your students classify each salesperson and then justify their answers. The most likely answers:
Missionary salesperson
Order getter, new-business sales
Inside order taker
Trade salesperson
Order getter/field order taker
Field order taker
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18. Exercise (cont’d) Real estate agent Heavy equipment salesperson
Agent for a snack food distributor who only stocks shelves
Door-to-door cosmetics sales-person
Insurance salesperson
Agent for a snack food distributor who fills a retailer’s orders
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19. Major Sales Management Decision Areas
Establishing
sales force
objectives
Determining
size
Recruiting
and selecting
salespeople
Training
sales
personnel
Compensating
Motivating
Managing
territories
Controlling and
evaluating
performance
Major Sales Management Decision Areas
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20. Managing the Sales Force
Establishing Sales Force Objectives
Objectives tell salespeople what they are to accomplish during a specified time period.
Objectives for the total sales force
Sales volume: total units or dollars of product sold for a period of time
Market share: unit or dollar percentage share of the total market for a product
Profit: dollars or percentage of return on investment (ROI)
Objective for individual salespersons
Quotas: dollars or units sold, or average order size, average number of calls, or ratio of orders to calls by an individual salesperson
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21. Managing the Sales Force (cont’d)
Determining Sales Force Size
Size of sales force affects
compensation methods for salespersons.
morale of salespersons.
overall sales force management.
Methods for determining optimal sale force size:
Dividing the number of sales calls necessary to serve customers by the number of sales calls a salesperson makes annually
Adding additional salespersons until the cost of adding one more salespersons equals the additional sales that would be generated by that person
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22. Managing the Sales Force (cont’d)
Recruiting and Selecting Salespeople
Recruiting
Developing a list of qualified applicants for sales positions
Establish a set of qualifications that best match the firm’s particular sales tasks
Prepare a job description listing specific tasks
Analyze successful salespeople among current employees
Sources of applicants
Other departments in the company, other firms, employment agencies, educational institutions, job ad respondents, employee referrals
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23. Managing the Sales Force (cont’d)
Training Sales Personnel
What to teach?
The company, its products, or selling methods
Whom to train?
Newly hired or experienced salespeople, or both
When/where to train?
In the field, at educational institutions, in company facilities
Before or after initial field assignment
Frequency, sequencing, and duration of periodic training
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24. Managing the Sales Force (cont’d)
Training Sales Personnel (cont’d)
Who will train?
Sales managers, technical personnel, outside consultants
How to train?
Materials and instructional methods
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25. Managing the Sales Force (cont’d)
Compensating Salespeople
Compensation objectives
Attract, motivate, and retain effective salespeople
Maintain the desired level of control
Provide acceptable levels of income, freedom, and incentive
Encourage proper treatment of customers
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26. Major Types of Sales Force Compensation Methods
Straight Commission
Paying salespeople according to the amount of their sales in given time period
Commission may be based on percentage of sales or on a sliding scale
Requires highly aggressive selling and minimal nonselling tasks
Provides salespeople with maximum incentive but little financial security
Straight Salary
Paying salespeople a specific amount per time period
Most useful when compensating new salesperson, moving into new territories or customers, sales requiring many services for customers
Salary remains the same until pay increase
Provides salespeople with more security but less incentive
Combination
Paying salespeople a fixed salary plus a commission based on sales volume
Most popular compensation method
Provides level of security and some incentive
Can require that salesperson exceeds a certain sales level before earning a commission
Major Types of Sales Force Compensation Methods
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27. Average Salary for Sales and Marketing Executives, 2003
Total Compensation
Base Salary
Bonus Plus Commissions
Executive
$144,643
$95,170
$49,483
Top Performer
$153,417
$87,342
$66,075
Mid-Level Performer
$92,337
$58,546
$33,791
Low-Level Performer
$63,775
$44,289
$19,486
Average of all positions
$111,135
$70,588
$50,547
Source: Christine Galea,”The 2004 Compensation Survey,” Sales & Marketing Management, May 2004, p.29.
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28. Managing the Sales Force (cont’d)
Motivating Salespeople
Motivation should be provided on a continuous basis.
Motivational incentives
Enjoyable working conditions
Power and authority
Job security
Opportunities to excel
Motivational methods
Sales contests
Recognition programs
Awards (travel, merchandise, and cash)
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29. An Example of a Sales Incentive Program
Courtesy of SalesDriver.
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30. Managing the Sales Force (cont’d)
Managing Sales Territories
Creating sales territories
Based on similar sales potential or requiring about the same amount of work
Setting differential commission rates to compensate for differences in the characteristics of territories (density and distribution of customers)
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31. Managing the Sales Force (cont’d)
Managing Sales Territories (cont’d)
Routing and scheduling considerations
Geographic size and shape of the territory
Number and distribution of customers
Sequence of customer calls
Routes and distances traveled
Minimizing salesperson’s travel and lodging costs
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32. Managing the Sales Force (cont’d)
Controlling and Evaluating Sales Force Performance
Sales objectives, determined by the sales manager, stated in terms of
Sales volume
Average number of calls per day
Average sales per customer
Actual sales relative to sales potential
Number of new customer orders
Average cost per call
Average gross profit per customer
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33. The Nature of Sales Promotion
An activity and/or material that acts as a direct inducement to resellers or salespeople to sell a product or consumers to buy it
It encourages product trial and purchase by adding value to the product.
It is most effective when it facilitates or is facilitated by personal selling and advertising.
Its use has grown dramatically over the last 20 years at the expense of traditional advertising.
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34. The Nature of Sales Promotion (cont’d)
Deciding Which Sales Promotion Method to Use
Product characteristics
Target market characteristics
Distribution channel(s)
Number and types of resellers
Competitive and legal environment
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35. Consumer Sales Promotion Methods
Encourage or stimulate consumers to patronize specific stores or to try particular products
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36. Sales Promotions Like This Provide Incentives to Customers
Reprinted with permission of LORD’S & LADY’S Hair Salon, Inc.
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37. Consumer Sales Promotion Methods (cont’d)
Coupons and Cents-Off Offers
Coupons
Written price reductions used to encourage consumers to buy a specific product
Effective coupons are easily recognized and state the offer clearly.
The nature of the product is the prime consideration in setting up a coupon promotion.
Advantages: generate brand awareness and interest and reward brand loyalty
Disadvantages: Fraud and misredemptions; consumer ill-will from stock-outs during promotions
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38. Consumer Sales Promotion Methods (cont’d)
Coupons and Cents-Off Offers (cont’d)
Cents-off offers
Promotions that let buyers pay less than the regular price to encourage purchase
Refunds and Rebates
Money refunds
Offering consumers money when they mail in a proof of purchase, usually for multiple product purchases
Rebates
Sending consumers a specific amount of money for making a single product purchase
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39. Consumer Sales Promotion Methods (cont’d)
Frequent User Incentives
Frequent-user incentives
Incentive programs that foster consumer loyalty by rewarding customers’ repeat (frequent) purchases
Point-of-Purchase Materials
Point-of-purchase displays
Signs, window displays, display racks, and similar means used to attract customers and to encourage immediate purchases
Demonstrations
Manufacturers use it temporarily to encourage trial use and purchase of a product or to show how a product works.
Highly effective yet costly in practice
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40. Consumer Sales Promotion Methods (cont’d)
Free Samples and Premiums
Free samples
Samples of a product given out to encourage trial and purchase
Used to increase sales volume and obtain desirable distribution for fast turnover products
The most expensive form of sales promotion
Premiums
Items offered free or at a minimal cost as a bonus for purchasing a product
Premium must match both the target market and the brand’s image.
Premiums must be easily recognizable and desirable.
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41. Consumer Sales Promotion Methods (cont’d)
Consumer Games, Contests, and Sweepstakes
Consumer contests and games
Individuals compete for prizes based on analytical or creative skills.
Competitions for prizes are used to generate retail traffic and to increase exposure to promotional messages.
Consumer sweepstakes
A sales promotion in which entrants submit their names for inclusion in a drawing for prizes
Used more than contests and attract more widespread interest
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42. Do coupons make consumers more “brand loyal”?
Debate Issue
Do coupons make consumers more “brand loyal”?
YES
Coupons are a good way to reward present users of a product.
Present users will use a particular brand more often.
Coupons encourage consumers to purchase in larger quantities.
The larger the price reduction, the greater the number of consumers taking advantage of the promotion. NO
Many manufacturers offer coupons; consumers will switch brands by buying those products for which they can find coupons.
Consumers have been trained not to buy without incentives.
Truly brand-loyal consumers will buy a particular brand with or without a price incentive.
Temporary price reductions increase sales today at the expense of future sales.
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43. Trade Sales Promotion Methods
Ways of persuading wholesalers and retailers to carry a producer’s products and to market them aggressively
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44. Trade Sales Promotion Methods (cont’d)
Trade Allowances
Buying allowance
A temporary price reduction to resellers for purchasing specified quantities of a product
Buy-back allowance
A sum of money a producer gives a reseller for each additional unit bought after an initial promotion deal is over
Scan-back allowance
A manufacturer’s reward to retailers based on the number of pieces scanned
Merchandise allowances
A manufacturer’s agreement to help resellers pay for special promotional efforts
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45. Trade Sales Promotion Methods (cont’d)
Cooperative Advertising and Dealer Listings
Cooperative advertising
Sharing of media costs by manufacturer and retailer for advertising the manufacturer’s products
Dealer listings
Ads promoting a product and identifying retailers that sell the product; influences retailers to carry the products, builds traffic at the retail level, and encourages consumers to shop at participating dealers
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46. Trade Sales Promotion Methods (cont’d)
Free Merchandise and Gifts
Free merchandise
A manufacturer’s reward given to resellers for purchasing a stated quantity of goods
Usually takes the form of a reduced invoice
Dealer loader
A gift, often part of a display, offered to a retailer who purchases a specified quantity of merchandise
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47. Trade Sales Promotion Methods (cont’d)
Premium (Push) Money
Extra compensation to salespersons for pushing a line of products
Sales Contests
A means of motivating distributors, retailers, and salespeople by recognizing outstanding achievements
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