Personal Selling and Direct Marketing Chapter 16 Personal Selling and Direct Marketing

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing

Case Study CDW Canada Inc. CDW Canada serves businesses and public sector customers CDW’s direct marketing model combines high-touch personal selling with modern high-tech web presence to build lasting customer relationships. Highly devoted to customer with “Circle of Service” philosophy Nearly 2000 account managers are responsible for building and maintaining customer relationships Account managers work closely with customers. Salespeople are highly knowledgeable Training is extensive Nine technology teams with more than 150 specialists support salespeople’s customer problem solving efforts. Account managers are energetic and passionately customer focused CDW account managers succeed by helping customers, assessing their needs, and solving their problems

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies 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 names Agents Sales consultants Sales Representatives Account Executives Sales Engineers District Managers Marketing representatives 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

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing

Major Steps in Sales Force Management ? 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?

Managing the Sales Force 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

Managing the Sales Force 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

Managing the Sales Force 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

Managing the Sales Force 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

Managing the Sales Force 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 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

Managing the Sales Force Supervising Salespeople Effective supervisors also motivate the sales force Organizational climate Sales quotas Sales meetings Positive incentives Sales meetings, sales contests, honors, etc.

Managing the Sales Force Evaluating Salespeople Several tools can be used Sales reports Call reports Expense reports

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing

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

The Personal Selling Process 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

The Personal Selling Process 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

The Personal Selling Process 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

The Personal Selling Process 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

The Personal Selling Process 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

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing

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

How Dell Changed an Industry Dell computers revolutionized an industry Previously, companies built computers for inventory, sold through retail distribution network Biggest challenge: fast pace of technological change in computer components created obsolete inventory Dell’s big idea: only build computers to order, sell direct to customers, use just in time inventory management to eliminate obsolescence Selling direct lowers costs and prices The challenge: providing the levels of customer sales assistance and service that were previously given by retailers Result: Dell market share of PC market is now 31%; dominates the industry

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

Benefits of Direct Marketing 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

Customer Databases and Direct 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

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing

Direct Marketing Integrated Direct Marketing Direct marketing campaigns that use coordinated, multiple promotional vehicles and multiple stages to improve response rates and profits Avoids confusing the customer Generates leverage of monies spent Suits today’s media-obsessed consumer Figure 16.5

Direct Marketing Public Policy and Ethical Issues Irritation, Unfairness, Deception, and Fraud Invasion of Privacy Personal Information Protection and Electronic Documents Act (2004): Consumer consent Limitations Accuracy Right to access

Learning Goals Discuss the role of a company’s salespeople in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing Define direct marketing and discuss its benefits to customers and companies Identify and discuss the major forms of direct marketing