Introduction to Personal Selling and Direct Marketing

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Preview• Role of a company’s salespeople in creating

value for customers and building customer relationships

• Six major sales force management steps• Personal selling process, distinguishing between

transaction-oriented and relationship marketing• Direct marketing and its benefits to customers

and companies• Major forms of direct marketing

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Nature of Personal Selling

• Most salespeople well-educated, well-trained professionals who work to build and maintain long-term customer relationships

• Salespeople cover a wide range of positions• Order taker: Department store clerk• Order getter: Creative selling in different

environments

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Role of the Sales Force

• Personal selling is paid, personal form of promotion

• Involves two-way personal communication between salespeople and individual customers

• Salespeople• Probe customers to learn about problems• Adjust marketing offers to fit special needs• Negotiate terms of sales• Build long-term personal relationships

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Role of the Sales Force

• Sales force serves as critical link between company and its customers

• Represents company to customers• Represents customers to company• Goal = customer satisfaction and company profit

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Sales Force Management

• Analysis, planning, implementation, and control of sales force activities

• Includes• Designing sales force strategy and structure• Recruiting and selecting salespeople• Training salespeople• Compensating salespeople• Supervising salespeople• Evaluating salespeople

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Sale Force Structure• Territorial

• Salesperson assigned to exclusive area and sells full line of products

• Product • Sales force sells only certain product lines

• Customer • Sales force organized by customer or industry

• Complex • Combination of several types of structures

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Outside and Inside Sales Forces

• Outside sales force travels to call on customers in the field

• Inside sales force conducts business from office via telephone or visits from perspective buyers

• Includes• Technical support people• Sales assistants• Telemarketers

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Team Selling

• Used to service large, complex accounts• Can find problems, solutions, and sales opportunities

that no single person could find• Can include experts from different areas of selling firm• Pitfalls

• Can confuse or overwhelm customers• Working in teams trouble for some people• Hard to evaluate individual contributions

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Successful Salespeople

• Careful selection can greatly enhance overall sales force performance while minimizing costly turnover

• Key talents of successful salespeople• Intrinsic motivation• Disciplined work style• Ability to close a sale• Ability to build relationships with customers

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Recruiting Salespeople

• Searching the Web• College placement

services• Recruit from other

companies

• Recommendations from current sales force

• Employment agencies• Classified ads

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Sales Force Training Goals

• Learn about different types of customers and their needs, buying motives, and buying habits

• Learn how to make effective sales presentations• Learn about and identify with the company, its

products and its competitors

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Compensating Salespeople• Fixed amount

• Salary • Variable amount

• Commissions or bonuses• Expenses

• Repays for job-related expenditures• Fringe benefits

• Vacations, sick leave, pension, etc.

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Supervising Salespeople

• Goal of supervision is to encourage salespeople to “work smart”

• Help them identify customers and set call norms• Specify time to be spent prospecting

• Annual call plan• Time-and-duty analysis• Sales force automation systems

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Motivating Salespeople

• Goal of motivating sales force is to encourage salespeople to “work hard”

• Organizational climate• Sales quotas• Positive incentives

• Sales meetings• Sales contests• Recognition and honors• Cash awards, trips, profit sharing

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Personal Selling Process for Salesperson• Prospecting

• Identify and qualify potential customers (called prospects)

• Pre-approach• Learn as much as possible about prospects before

making sales calls• Approach

• Meet potential customer for first time• Presentation

• Tell “product story” to potential buyer, highlighting customer benefits

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Personal Selling Process (cont.)• Handling Objections

• Seek out, clarify, and overcome customer objections to buying

• Turn objections into reasons for buying• Closing—Ask for an order

• Difficult if lack confidence or feel guilty asking • Follow-up

• After the sale effort to ensure customer satisfaction and repeat business

• Selling process is transaction oriented; most firms go beyond this and attempt to build mutually profitable relationships

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Direct Marketing

• Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships

• One-on-one communication in which offers are tailored to needs of narrowly defined segments

• Usually seeks a direct, immediate, and measurable consumer response

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Benefits of Direct Marketing to Buyers

• Convenient• Easy to use• Private• Ready access to products and information• Immediate and interactive

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Benefits of Direct Marketing to Sellers

• Powerful tool for building customer relationships• Can target small groups or individuals• Can tailor offers to individual needs• Can be timed to reach prospects at just right

moment• Gives access to buyers unreachable through

other channels• Offers low-cost, efficient way to reach markets

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Customer Databases

Organized collection of comprehensive data about individual customers or prospects, including

• Geographic data• Demographic data• Psychographic data• Behavioral data

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Direct Marketing Forms

• Telephone marketing• Direct-mail marketing• Catalog marketing• Direct-response TV marketing• Kiosk marketing• Online marketing

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Telemarketing

• Used in both consumer and B2B markets• Can be outbound or inbound calls• Do-Not-Call legislation has affected

telemarketing industry

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Direct-Mail Marketing

• Involves sending an offer, reminder, announcement, or other item to person at particular address

• Permits high target-market selectivity• Can be personalized and is flexible• Higher CPM yields better prospects than mass

media• Easy to measure results

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Catalog Marketing• Expected catalog sales in 2008 = $175 billion• Although print still primary medium, more and

more catalogs going digital• Advantages of Web vs. print catalogs

• Save on production and mailing costs• Can offer unlimited merchandise (no size constraint)• Allow real-time merchandising—products and prices

changeable instantly• Can spice up with interactive entertainment (games)

and promotions (e.g., daily specials)

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Direct Response TV Marketing• Direct-response advertising

• TV spots that are 60 or 120 seconds long• Always contain 1-800 # or Web address

• Infomercials• A 30 minute or longer advertising program for single

product• Home shopping channels

• Entire cable channels dedicated to selling multiple brands, items, and services

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Kiosk Marketing

Information and ordering machines generally found in stores, airports, and other locations

• Example: In-store Kodak kiosks allow customers to transfer pictures from digital storage devices, edit them, and produce high-quality color prints

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Integrated Direct Marketing• Involves carefully coordinated multiple-media,

multiple-stage campaigns• Improve response rates and profits by adding media

and stages that contribute more to additional sales than to additional costs

• Example: Integrating paid ad with response channel (Web or phone), direct mail, outbound telemarketing, face-to-face sales call, and continuing communication

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Public Policy and Ethical Issues in Direct Marketing• Irritates consumers• Takes unfair advantage of impulsive or less

sophisticated buyers• Targets TV-addicted shoppers• Deceives, defrauds• Invades privacy

• Perhaps toughest issue

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Recap—What was Covered?• Role of a company’s salespeople in creating

value for customers and building customer relationships

• Six major sales force management steps• Personal selling process, distinguishing between

transaction-oriented and relationship marketing• Direct marketing and its benefits to customers

and companies• Major forms of direct marketing