Personal Selling, Sales Management, &

Direct Marketing

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Chapter Objectives

• role of personal selling within the promotion mix

• steps in personal selling process

• role of the sales manager

• direct marketing

SELLING

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Personal Selling

• when a company representative

• interacts directly

• with a (prospective) customer

• to communicate

• about a good or service

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Personal Selling

• Personal touch” is more effective than mass-media appeal.

• Selling/sales management

• jobs provide high mobility, especially for college grads with marketing background.

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The Role of Personal Selling

• Personal selling is more important: --when firm uses push strategy.--in B2B contexts. --with inexperienced consumers • who need hands-on assistance.

--for products bought infrequently • (houses, cars, computers).

• Cost per contact is very high.

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Technology and Personal Selling

• Customer relationship management (CRM) software

• partner relationship management (PRM)

• Teleconferencing, • Video-conferencing, • Improved corporate Web sites• Voice-over Internet protocol • Assorted wireless technologies

SALESFORCE.COM

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Types of Sales Jobs

• Order taker• Technical specialist• Missionary salesperson

(stimulate clients to buy)

• New-business salespersonCold calls, breaking in new territory

• order getter • Team selling & cross-functional team

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Approaches to Personal Selling

• Transactional selling: Putting on the hard sellHigh-pressure processfocuses on immediate sales no concern for developing

long-term customer relationship

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Approaches to Personal Selling (cont’d)

•Relationship sellingProcess of building long-term customers

by developing mutually satisfying, win-win relationships with customers

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Creative selling Process

• Makes positive transactions happen

• Series of activities

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Figure 14.1: Steps in Creative Selling Process

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The Creative Selling Process

• Step 1: Prospecting and qualifying--Prospecting:

• developing a list of potential customers

--Qualifying: • determining how likely potential customers are to

become customers

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The Creative Selling Process (cont’d)

• Step 2: Pre-approachCompiling prospective customers’

• background information

planning the sales interview

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The Creative Selling Process (cont’d)

• Step 2: Pre-approachPurchase history, current needs, customer’s interests

From • informal sources, • CRM system, • customers’ Web sites, • and/or business publications

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The Creative Selling Process (cont’d)

• Step 3: ApproachContacting the prospectLearning prospect’s needs, create a good impression, build rapport

• “You never get a second chance to make a good first impression.”

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The Creative Selling Process (cont’d)

• Step 4: Sales presentationbenefits & added value

• of product/firm

advantages over competitionInviting customer involvement

• in conversation

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Step 5: Handling Objections

• Anticipating why prospect is reluctant to make a commitment

• Welcoming objections

• Handling objections successfully to move prospect to decision stage

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Step 6: Closing the Sale

• Gaining the customer’s commitment • in the decision stage

--Last-objection close

--Assumptive close

--minor-points close

--Standing-room-only close

--buy-now close

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Step 7: Follow-Up

• Arranging for delivery, Ensuring sure customer received delivery and is satisfied

• PaymentCredit, factors, etc.

• purchase terms•Bridging to next purchase

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Figure 14.2: The Sales Force Management Process

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Sales Management: Sales force objectives

• What sales force is expected to accomplish and when

Customer Satisfaction

Loyalty

Retention / turnover

New customer development

New product suggestions

Training

Reporting on competition

Community involvement

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Creating a Sales Force Strategy

• Establishing structure and size of a firm’s sales force

• Sales territory: a set group of customersGeographic sales force structureProduct-class sales territoriesIndustry specializationkey/major accounts

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Recruiting, Training, & Rewarding

• Recruiting the right peopleGood listening and follow-up skillsadaptive style

• from situation to situation

TenacityHigh level of personal organization

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Recruiting, Training, & Rewarding

• Sales training:

• teaches salespeople about firm,

• its products,

• how to develop skills,

• knowledge, and

• attitudes to succeed

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Recruiting, Training, and Rewarding

• Paying salespeople well to motivate themStraight commission plan Commission-with-draw plan Straight salary plan

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Recruiting, Training, and Rewarding

• Running sales contests for short-term sales boost

• Call reports: which customers were called on and how call went

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Evaluating the Sales Force

• Is sales force meeting its objectives?• What are possible causes of failure?

Measuring performance

Monitoring expense accounts

for travel and entertainment

DIRECT MARKETING

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Direct Marketing

• Any direct communication to a consumer or business recipient

• designed to generate a response

DIRECT MARKETINGASSOCIATION

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Direct Marketing

• Response: • in the form of an

order, request for further information, a visit to a store

• other place of business

• for purchase of a product

DIRECT MARKETINGASSOCIATION

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Direct Marketing: MAIL ORDER

• Catalogs: collection of products

• offered for sale

described in book form, product descriptions and photos

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Direct Marketing: MAIL ORDER

• Direct mail: brochure/pamphlet offering a specific good/service at one point in time

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Direct Marketing: telemarketing

• conducted over the telephoneMore profitable for business

• than consumer markets

In 2003, FTC established: • National Do Not Call registry

FEDERAL DO NOT CALL REGISTRY

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Direct Marketing (cont’d)

• Direct-response advertising:

• allows consumer to respond

• by contacting the provider

• with questions or an order

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Direct Marketing (cont’d)

• Direct-response TV (DRTV): • short commercials, • 30-minute+ infomercials, • home shopping networks

–HSN–QVC–Jewelry television–ShopNBC–Gemtv

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Direct Marketing (cont’d)

• M-Commerce: • promotional & other e-commerce activities

• transmitted over mobile phones/devices

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Direct Marketing (cont’d)

• M-Commerce: (SMS)

• Short-messaging system marketing

Spim: • instant-messaging version of spam

Adware: • software that tracks Web habits/interests, • presenting pop-up ads• resetting home page

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THE END

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Marketing Plan Exercise

• In developing her marketing plan, Esther Ferre at IBM must use marketing communication mix elements (1) in an integrated way that (2) best invests her promotional dollars.

• --Should personal selling be a high priority in Esther’s marketing plan? Why or why not?

• --Is there a role for direct marketing in her plan? If so, what is it?

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Marketing in Action Case:You Make the Call

• What is the decision facing Eli Lilly?

• What factors are important in understanding this decision situation?

• What are the alternatives?

• What decision(s) do you recommend?

• What are some ways to implement your recommendation?

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Keeping It Real: Fast-Forward to Next Class, Decision Time at Darden Restaurants

• Meet Jim Lawrence, Vice President, Supply Management & Purchasing.

• Volatility in the supply chain threatened food supplies to restaurants.

• The decision: A new model for supply chain management?

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Real People, Real Choices

• IBM (Esther Ferre)• IBM must prioritize investment of resources to

achieve revenue and profit targets. Option 1: reduce sales and support resources for a specific

customer or business segment. Option 2: maintain current level of resources. Option 3: evaluate lower-cost ways to provide sales and support resources.

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Real People, Real Choices

• IBM (Esther Ferre)

• Esther chose option 3: evaluate lower-cost ways to provide sales and support resources.Minimized impact to customer and improved cost

structure of sales team.Maintained customer satisfaction with lower cost. Resulted in increased revenue over time.

IBM.COM

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Discussion

• Professional selling has evolved from hard-sell to relationship selling.--Is hard-sell still used? If so, in

what types of organizations?

--Can hard-sell still succeed –is transactional

selling still appropriate?

--If so, when?

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Group Activity

• Your group are field salespeople for a firm that markets university textbooks.

• As part of your training, your sales manager asks you to outline what you’ll say in a typical sales presentation.--Write that outline.

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Individual Activity

• What are the pros and cons of personal selling as a career choice for you? --List them in two columns, and be as specific as you

can in explaining each.

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Discussion

• Will sales training and development needs vary based on how long salespeople have been in the business? Why or why not?

• Is it possible (and feasible) to offer different training programs for salespeople at different career stages? Why or why not?

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Discussion

• Based on the compensation figures in the chapter, do you think professional salespeople are appropriately paid? Why or why not?

• What do salespeople do that warrants the compensation indicated?

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Discussion

• What is a sales manager’s best approach for determining the appropriate rewards program?

• What issues are important in developing the program?

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Discussion

• Some experts think consumer catalog shopping has increased because of poor service in retail stores. Evaluate the quality of most retail salespeople you meet. How can retailers can improve the quality of their sales associates?

LANDSEND.COM

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Discussion

• M-commerce allows marketers to pinpoint where consumers are and send them messages about a local store. --Do you think consumers will respond positively to m-

commerce? --What benefits do you think it offers them?