Personal Selling Copyright 2010 SAGE Publications, Inc. 9-1

IBM 1911, C-T-R (Computing-Tabulating-Recording Company Sales an important ingredient of IBM 1993 new strategic effort “fully-integrated solutions” Service, products, and technologies sold as one system 2000 U.S. National Medal of Technology award Copyright 2010 SAGE Publications, Inc. Insert Photo

Retail selling Order taker Commission sales Service salesperson Service provider who also sells Copyright 2010 SAGE Publications, Inc. 9-3 Insert Photo 9.2

Business-to-Business Selling Field salespeople Missionary salespeople Telemarketers Copyright 2010 SAGE Publications, Inc. 9-4

Copyright 2010 SAGE Publications, Inc. Insert Figure Steps in the Selling Process

Copyright 2010 SAGE Publications, Inc. Insert Figure

Qualifying Prospects Not all customers/prospects are of equal value Qualify along two dimensions Potential income the lead can generate Probability of acquiring prospect as a customer Only best prospects warrant visits due to high costs Quality of lead determines method of contact Copyright 2010 SAGE Publications, Inc. 9-7

Copyright 2010 SAGE Publications, Inc. Insert Figure

Classification of Prospects “A” Category Best prospects Field salespeople will make sales call “B” Category Prospect satisfied with current vendor Use telephone, mail, to contact “C” Category Use telephone or Send marketing material “D” Category Send marketing materials Copyright 2010 SAGE Publications, Inc. 9-9

Copyright 2010 SAGE Publications, Inc. Insert Figure Knowledge Acquisition Information

Sales Presentation Stimulus response Need satisfaction Problem solution Mission sharing Copyright 2010 SAGE Publications, Inc. Insert Photo

Copyright 2010 SAGE Publications, Inc. Insert Figure Handling Objections

Copyright 2010 SAGE Publications, Inc. Inse rt Figu re Closing Methods

Follow-Up Crucial element of effective selling Cost effective to retain current customers Often neglected by salespeople Following up sales calls that do not generate orders Who will follow-up? When? How? Copyright 2010 SAGE Publications, Inc. 9-14

Relationship Selling Goal of sales  Develop relationships Requires positive experiences for both sides Takes time to evolve Requires trust Copyright 2010 SAGE Publications, Inc Insert Photo 9.5

International Perspective Language and slang Culture and subcultures Method of introduction Eye contact Body language, gestures, and physical distance Giving and receiving gifts Use of business cards Table manners and foods Directness in tone Copyright 2010 SAGE Publications, Inc. 9-16

Managing a Sales Force Recruiting and selection Training Compensation Motivational programs Performance evaluation Copyright 2010 SAGE Publications, Inc. 9-17

Recruiting and Selection Ongoing and systematic Develop strong pool of applicants Tap all internal and external sources Copyright 2010 SAGE Publications, Inc. 9-18

Copyright 2010 SAGE Publications, Inc. Insert Figure External Recruiting

Applicant Screening Level of education Degree of experience Personality and personal characteristics Aptitude Skill level Personal characteristics Legal compliance Copyright 2010 SAGE Publications, Inc Insert Photo 9.6

Training On-the-job training Demonstration Sink-or-swim Off-the-job training Films and classroom instruction Simulations Interactions with sales trainers Better selling tactics Motivational speeches Copyright 2010 SAGE Publications, Inc. 9-21

Copyright 2010 SAGE Publications, Inc. Insert Figure

Straight Salary Advantages Leads to greater focus on customer service Can emphasize non-selling activities Rewards are equal even when differences in sales territories Can be structured to reward experience and competence Reduces inclination to use high-pressure selling Disadvantages Little incentive to push for a sale May spend more time on non-selling activities Copyright 2010 SAGE Publications, Inc. 9-23

Straight Commission Advantages Better motivational tool Pay linked to sales Disadvantages Less focus on customer service Less effort on non-selling activities No incentive to work with team or other staff members Can produce high-pressure selling Encourage single-transaction mentality Copyright 2010 SAGE Publications, Inc. 9-24

Salary + Commission Used by most companies Mix depends on the company’s goals Higher portion in salary when Stress customer service Stress higher-quality customer relationships Higher portion in commissions when goal is to Boost sales Add new customers Increase market share Copyright 2010 SAGE Publications, Inc. 9-25

Bonuses Single project or systematic Yearly Quarterly Individual or group Various goals Group bonuses encourage Team work Individual bonuses encourage Personal accomplishments Copyright 2010 SAGE Publications, Inc. Insert Photo

Benefits Has become challenge for most companies Have major impact on Recruiting new employees Retention of employees Cost management Copyright 2010 SAGE Publications, Inc. 9-27

Managing Pay Systems Balance short term and long term goals Becomes more complex with Multiple sales levels Field salespeople In-side sales staff Telemarketers Missionary salespeople Major accounts salespeople Outbound telemarketers Copyright 2010 SAGE Publications, Inc. 9-28

Motivational Programs Financial incentives Non-financial incentives Copyright 2010 SAGE Publications, Inc. Insert Photo

Copyright 2010 SAGE Publications, Inc. Insert Figure

Copyright 2010 SAGE Publications, Inc. Insert Figure Insert Photo 9.9

Copyright 2010 SAGE Publications, Inc. Insert Figure

Copyright 2010 SAGE Publications, Inc. Insert Figure Input Measures

Copyright 2010 SAGE Publications, Inc. Insert Figure Output Measures

Financial Measures Sales volume Gross margin on sales Contribution margin for each salesperson More important if salesperson can Adjust price Offer incentives Copyright 2010 SAGE Publications, Inc. 9-35

Copyright 2010 SAGE Publications, Inc. Insert Table

Copyright 2010 SAGE Publications, Inc. Insert Table

Copyright 2010 SAGE Publications, Inc. Insert Table

Warning on Financial Analysis Financial analysis tied to input and output measures Comprehensive evaluation Evaluation tied to compensation and rewards Other factors influencing sales Organizational factors Environmental factors Copyright 2010 SAGE Publications, Inc. 9-39

Performance Evaluation Meeting Give notice in advance Suggest comfortable place Begin with accomplishments and strengths Continue with weaknesses and problem areas Set goals for next evaluation period Copyright 2010 SAGE Publications, Inc. 9-40

Copyright 2010 SAGE Publications, Inc.3-41 Marketing and finance degrees Business analysts with 3M, Wal-Mart account Marketing courses Consumer Behavior Marketing Research Marketing Management Learning on the job Insert Photo 9.10

Copyright 2010 SAGE Publications, Inc. How will Susan’s decision impact each of the customers? Insert Figure 9.11 What should Susan Hanson do? Which of the three choices is best? Why? How would you handle each employee? How would you handle the customers? 9-42

Copyright 2010 SAGE Publications, Inc. Insert Photo What type of salespeople best fit Kretschmar? 2.Should different types of salespeople be hired? 3.Which criteria should be used in selecting salespeople? Aptitudes, skill levels, and personal characteristics 4.What type of compensation structure should be used? 5.What types of motives and incentives best fit the sales force? 6.Which input and output measures are best suited? 9-43