Personal Selling

Personal Selling Personal communication of information to persuade consumers to buy the product or service Personal selling is preferred when market is concentrated the product has high unit value; technical; not standardized introductory stage in PLC

Characteristics of personal selling Advantages of personal selling flexible communication focused on prospective customers with sales goal long-term relationship with consumers Disadvantages of personal selling high cost difficulty of managing sales force

Scope of personal selling Inside personal selling customers approach sales people e.g., retail-store selling; telephone order taking Outside personal selling salespeople go to customers Type of contacts personal contact telephone mail Type of customers business buyers intermediaries consumers

Personal selling process Prospecting Preapproach Presentation Postsale service Identifying Qualifying Information Habit Preference AIDA Attention Interest Desire Action Reduce dissonance Build goodwill

Personal selling process: Prospecting Identifying prospective customers identifies specific individuals or firms that may be potential customers Qualifying the prospects determines whether prospect consumers have the willingness to buy, purchasing power, and authority to buy

Personal selling process: Preapproach to individual prospects Finding out prospect’s buying behavior and preferences Finding out organization buying decision process in business-to-business selling

Personal selling process: Presenting the sales message AIDA (Attention, Interest, Desire, and Action) attract attention hold the prospect’s interest build a desire for the product stimulate the action of closing the sale

Personal selling process: Postsale services Checking delivery, financing, installation, and other areas that might be related to consumer satisfaction Dealing with cognitive dissonance summarizing the product’s benefits after the purchase repeating why the product is better than alternatives not chosen emphasizing how satisfied the will be with the product

Sales Force Management Topic 23 Sales Force Management

What makes a good salesperson? It is difficult to define traits that make a good sales person Different sales job involves different selling tasks -- and require different skills and need different personality traits

What makes a good salesperson? Ability skills knowledge Motivation financial non-financial Ability high low high Motivation low

Staffing and operating sales force Recruitment and Selection Assimilation Training Motivation Compensation Supervision Performance Evaluation

Staffing and operating sales force: Recruitment and selection (cont.) 1. Determining hiring specification defining the number and type of people wanted job analysis and job description 2. Recruiting applicants 3. Selecting sales people interviews, formal tests (sales attitude, analytical and organizational skills, personality traits, etc), past employment history, references

Staffing and operating sales force: Assimilation/ Training the process in which new sales people are integrated into the company Training to learn consumers’ need, buying motives, buying habits to learn competitor’s characteristics and strategies to enhance and refine selling skills to learn about products to improve time and territory management

Staffing and operating sales force: Motivation Type of motivation Financial incentives compensation plans expense accounts fringe benefits Nonfinancial awards

Staffing and operating sales force: Compensation Direct monetary payments Strait salary fixed payment for a period of time provides security and stability for sales force not enough incentive for sales increase Strait commission payment tied to a specific unit of accomplishment Combination plan Indirect monetary compensation paid vacation, pension, insurance plans

Staffing and operating sales force: Supervision Supervising sales force is difficult because: sales people often work independently the relationship between sales effort and sales outcome is not clear

Staffing and operating sales force: Performance Evaluation It is difficult to evaluate a salesperson’s performance Output = f (salesperson’s effort, environment) Qualitative evaluation bases knowledge of product, company policies, and competition Time management and preparation for sales calls customer relations personality and attitude

Staffing and operating sales force: Performance Evaluation Quantitative evaluation bases Quantitative input measures Call rate, direct selling expenses, non-selling activities Quantitative output measure sales volume, sales volume as a percentage of quota, gross margin, orders, closing rates, accounts

Staffing and operating sales force: Performance Evaluation Sales person’s ability Sales person’s motivation Sales environment Sales effort Sales Output

Video Case: Rollerblade Promotional strategies in introductory stage Promotional goals Non-traditional promotions Traditional promotions

Video Case: Rollerblade Marketing strategies in growth/maturity stage Targeting Price