Personal Selling and Sales Promotion Notes

Chapter 18 Learning Objectives Personal Selling and Sales Promotion · · · · · · · · LO 18-1 Describe the major goals of personal selling LO 18-2 Summarize the seven basic steps in the personal selling process LO 18-3 Identify the types of sales force personnel LO 18-4 Describe team selling and relationship selling LO 18-5 Discuss eight major decisions in sales force management LO 18-6 Describe sales promotion LO 18-7 Review consumer sales promotion methods LO 18-8 Review trade sales promotion methods Personal Selling · Paid personal communication that informs customers and persuades them to buy products in an exchange situation · Advantages o Provides marketers the greatest freedom to adjust a message to satisfy customers o The most precise of all promotional methods; enables marketers to focus on the most promising sales prospects · Disadvantage o It is the most expensive element in the promotion mix General Step in the Personal Selling Process No two salespeople use exactly the same selling methods, but many move through a general selling process consisting of 7 steps. 1. Prospecting a. Developing a database of potential customers b. Names can be found in a variety of sources internal and external to the firm i. Company Sales Records ii. Trade shows iii. Databases iv. Trade Association directories c. Traditional and online advertisements can generate leads on interested prospects d. Customer referrals from current customers are a key source 2. Preapproach a. Before contacting them, the salesperson analyzes information about the prospect’sneeds b. Identify key decision makers c. Review account histories and problems d. Contact other clients for information e. Assess credit histories and problems f. Prepare Sales Presentations g. Identify product needs h. Obtain relevant literature 3. Approach a. The manner in which a salesperson contacts a potential customer b. Is a critical step because the first impression of the salesperson may be long- lasting c. The salesperson must create a relationship with the prospect, not just sell products d. Typical approaches: i. Referrals ii. Cold Canvassing iii. Repeat Contact 4. Making the Presentation a. The salesperson must attract and hold the prospect’s attention, stimulate interest in andspark a desire for the product b. Adapt the presentation to the needs of the prospect 5. Overcoming Objections a. Effective salespeople anticipate and counter objections before the prospect raises them b. The safest approach is to be prepared and handle objections as they arise 6. Closing the Sale a. The stage in the personal selling process when the salesperson asks the prospect to buy theproduct b. The salesperson may attempt a “trial close” by asking questions that assume the prospectwill buy 7. Following Up a. The salesperson must follow up the sale. b. The salesperson should determine if the order was delivered on time and was installedproperly; should learn whether the customer has problems or questions about the product; and should determine the customer’s future product needs. Types of Salespeople · Order Getters: Sell to new customers and increase sales to current customers o Current-Customer Sales o New-Business Sales · Order Takers: Primarily seek repeat sales o Inside Order Takers work in sales offices o Field Order Takers travel to customers · Support Personnel: Staff members who facilitate selling but are not involved solely with making sales o Missionary Salespeople assist producer’s customers in selling to their owncustomers o Trade Salespeople take orders in addition to being support personnel o Technical Salespeople give technical assistance Selected Types of Selling · Team Selling: Using a team of experts from all functional areas of a firm, led by a salesperson,to conduct the personal selling process · Relationship Selling: Building mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time Sales Force Management · The sales force is directly responsible for generating sales revenue · Ethics is important: a firm’s reputation is determined by the behavior of its sales force · Establishing Sales Force Objectives o Sales Objectives give a sales force direction and purpose · Should be stated in precise, measurable terms and be specific about time periodsand geography o Objectives usually are established for: · The entire sales force– in terms of sales volume, market share, and profit · · Individuals– in terms of dollars or unit sales volume Determining Sales Force Size o The size of the sales force affects many aspects of the firm and its strategy o Several methods can determine the best size: · Divide the number of sales calls per year by the average number of individual salesperson’s calls annually · · Marginal Analysis : Additional salespeople are added to the sales force until the cost of an additional salesperson equals the additional sales generated by that person Recruiting and Selecting Salespeople o Recruiting: A process by which the sales manager develops a list of qualified applicants forsales positions o Managers recruit from several sources: o Recruitment should be continuous and systematic · Training Sales Personnel o Training can be formal or informal and on-the-job o Can concentrate on the company, its products, and its selling methods o Training can be: · · · Aimed at salespeople at all seniority and experience levels Conducted in-house or by outside specialists Compensating Salespeople o Compensation should be flexible, equitable, and easy to administer o Compensation levels should reflect a salesperson’s value to the company o A firm may have one or more of the three basic compensation methods · Straight Salary Compensation Plan: salespeople are paid a specified amountregardless of effort · Straight Commission Compensation Plan: compensated solely by sales in a givenperiod · Combination Compensation Plan: salespeople are paid a fixed salary plus commissionbased on sales volume o Average Salaries for Sales Representatives · Motivating Salespeople o Additional efforts beyond compensation are necessary for motivation o Managers must identify their employees’ needs and goals and strive to create a positive organizational climate o Incentives Programs more committed · Managing Sales Territories pay for themselves by making workers happier and o Creating sales territories · Create territories with measurable sales potential · Try to balance sales/earning potential and workload travelling throughout the territory o Routing and Scheduling salespeople · Geographic size and share of sales territory are most important when routing and scheduling sales calls · Number and distribution of customers is also important · · · Some firms have salespeople make their own routes/schedules Major goal is to minimize non-selling times and travel expenses Controlling and Evaluating Sales Force Performance o Managers need information: salespersons’ call reports, customer feedback, or invoices o Dimensions used to measure performance are determined by sales objectives · Calls per day and cost per call · Average sales per customer and gross profit per customer · Actual sales vs. sales potential · Number of new customer orders