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PRINCIPLES OF PERSONAL SELLING
Dr.Sanjeev Verma NITIE, Mumbai
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Selling is only the tip of the iceberg
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Principles of Personal Selling
Managing the Sales Force: Improving Effectiveness (Source : Rolph Anderson and Bert Rosenbloom, “The World Class Sales Manager: Adapting to Global Megatrends,” Journal of Global Marketing, 5, No. 4, 1992: 11-22)
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Principles of Personal Selling
Professionalism Sales-oriented approach : Stresses high pressure techniques Customer-oriented approach : Stresses customer problem solving Rackham’s questions for prospects (SPIN Selling) (Neil Rackham, SPIN SELLING Field book (New York: McGraw Hill, 1996)) Situation questions Problem questions Implication questions Need-payoff questions Sharon Drew Morgan- Buying facilitation Method (Sharon Drew Morgen, Selling with Integrity: Reinventing Sales Through Collaboration, Respect, and Serving (New York: BERKLEYU Books, 1999)) Q1-Whether Company’s performance can be improved Q2-Whether the seller’s offering would provide a solution
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Major Steps in Effective Selling (Source: W. J. E. Crissy, William H
Major Steps in Effective Selling (Source: W.J.E.Crissy, William H.Cunninggham and Isabelle Cunninggham, Selling: The Personal Force in Marketing (New York : John Willey, 1977), pp )
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Prospecting and Qualifying
The first step in selling is to identify and qualify prospects. Companies can generate leads by : Examining data sources (newspapers, directories, CD-ROMs, Web sites) Exhibiting at trade shows to encourage drop-bys Inviting customers to suggest the names of prospects Cultivating referral sources (suppliers, dealers, and bankers) Contacting organizations and association Engaging in speaking and writing activities that will draw attention Telecommunications (phone, mail, Internet) Dropping in unannounced (cold canvassing) Leads can be categorized as Hot Prospects Warm Prospects Cool Prospects
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Pre approach The sales person needs to learn :
Prospect company Needs Involved in the purchase decision Buyers Personal characteristics Buying styles The sales person should set call objectives : To qualify the prospect Gather information Make an immediate sale The best approach Personal visit Phone call or letter Best timing Finally, the salesperson should plan an overall sales strategy for the account
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Approach The salesperson decides how to get the relationship off to a good start The salesperson might consider : Wearing clothes similar to what the buyers typically wear Show courtesy and attention to the buyer Avoid distracting mannerisms When meeting with the prospect : Open with a positive statement Concentrate on understanding the buyer’s needs (questioning and active listening)
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Presentation and Demonstration
Tells the product “story” to the buyer Following the AIDA formula : Gaining attention Holding interest Arousing desire Obtaining action To presentation use FABV : Features : physical characteristics of market offering Advantages : why the features provide an advantage to customer Benefits : the economic, technical, service, and social benefits delivered by the offering Value approach : the summative worth (monetary term) of the offering
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Presentation and Demonstration
3 different style of sales presentation : Canned approach (oldest presentation) Formulated approach Need-satisfaction approach
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Presentation and Demonstration
Canned approach Memorized sales talk covering the main points Based on stimulus-response thinking The buyer is passive Can be moved to purchase by the use of the right stimulus (picture, word, term, and actions) Formulated approach Identifies the buyer’s needs and buying style Need-satisfaction approach Search the customer’s real needs (encouraging) Use role of a knowledgeable business consultant
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Presentation and Demonstration
Sales presentations can be improved with demonstration aids such as Visual Aids-booklets, brochures, flipcharts, slides, movies Audio and videocassettes Computer Animation shows etc.
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Overcoming Objections
Customers almost always pose objections during the presentation or when asked for the order Types of Objections Psychological Resistance Logical Resistance To handle these objections : maintains a positive approach asks the buyer to clarify the objection asks questions that lead the buyer to answer his or her own objection denies the validity of the objection turns the objection into a reason for buying
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Closing Salespersons need to know how to recognize closing sign from the buyer Physical actions Statements or comments Questions Closing techniques Ask for the order Recapitulate the points of agreement, Offer to help the buyer write up the order Ask whether the buyer wants A or B Get the buyer to make minor choices such as the color or size Indicate what the buyer will lose if the order is not placed now
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Follow-up and Maintenance
After closing Salesperson should cement any necessary details : Delivery time Purchase terms Other matters Salesperson should schedule a follow-up call To detect any problem Assure the buyer interest Reduce any cognitive dissonance Sales person should develop a maintenance and growth plan for the account
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Negotiation My father said: "You must never try to make all the money that's in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won't have many deals.” J. Paul Getty
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Negotiation Much business-to-business selling involves negotiating skills The two parties need to reach agreement Price Others term of sale Salesperson need to win without making deep concessions that will hurt profitability There are 2 exchange in marketing Routinized exchange : administered program of pricing and distribution Negotiated exchange : price and others term area set via bargaining behavior
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Negotiation Although price is the most frequently negotiated issue, other issues include Contract Completion Time Quality of Goods and Services Offered Purchase Volume Responsibility of Financing Risk Taking Promotion Title Product Safety etc.
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Negotiation Traits and Skills for a effective Negotiator
Preparation and planning skills Knowledge of Subject Matter Ability to think clearly and rapidly under pressure and uncertainty Ability to express thoughts verbally Listening skills Judgement and general intelligence Integrity Ability to persuade others Patience etc
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Principles of Personal Selling
Negotiation When to negotiate (Dobler) When factors bear not only on price, but also on quality of service When business risk cannot be accurately predetermined When a long period of time is required to produce the items purchased When production is interrupted frequently because of numerous change orders
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The Zone Agreement (Howard Raiffa)
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Principles of Personal Selling
Formulating a Negotiation Strategy Hard Strategy Soft Strategy Principled Negotiation
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Formulating a Negotiation Strategy
Principled Negotiation (Fisher and Ury, 1992) Separate the people from the problem Focus on interests, not positions Invent options for mutual gain Insist on objective criteria BATNA : Best Alternative to a Negotiated Agreement (Fisher and Ury, 1992)
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Classic Bargaining Tactics
Acting Crazy Be Patient Lets spilt the Difference Trial Balloon Surprises Wet Noodle Big Pot Get a Prestigious Ally The Well Is Dry Limited Authority Whipsaw/Auction Divide and Conquer Get Lost/Stall for Time
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Relationship Marketing
The principles of personal selling and negotiation thus far described are transaction oriented because their purpose is to close a specific sale The company must build a long-term supplier customer relationship by demonstrating that it has the capabilities to serve the account’s needs in a superior way over the long run The company must build relationship marketing rather than transaction marketing, because larger customers are often global and prefer suppliers that can : sell and deliver a coordinated set of products and services to many locations quickly solve problems that arise in different locations work closely with customer teams to improve products and processes
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Relationship Marketing
To succeed in winning and maintaining accounts in today’s demanding environment, company must : Encourage sales teamwork Reward it with appropriate compensation for work on shared accounts Establish better goals Measures for their sales force Reinforce the importance of teamwork in their training programs The organization will begin to focus as much on managing its customers as on managing its products
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Relationship Marketing
When and How to Use Relationship Marketing Short Time Horizons and Low Switching Cost e.g. Commodities Long time Horizon and High Switching Cost e.g.. Office Automation System
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