This slide relates to material on p. 396. At the end of this lecture, you should: Understand the importance and nature of personal selling. Know the three basic sales tasks—order getting, order taking, and supporting—and what the various kinds of salespeople can be expected to do. Understand why customer service presents different challenges than other personal selling tasks. Know the different ways sales managers can organize salespeople so that personal selling jobs are handled effectively. Know how sales technology affects the way sales tasks are performed.
This slide relates to material on p. 396. At the end of this lecture, you should: Know what the sales manager must do, including selecting, training, and organizing salespeople to carry out the personal selling job. Understand how the right compensation plan can help motivate and control salespeople. Understand when and where to use the three types of sales presentations.
This slide relates to material on p. 397. This is the second of three chapters that discuss issues important for Promotion. The promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price.
Summary Overview In this chapter we take a closer look at the important promotion strategy decisions that marketing and sales managers make in personal selling and customer service. Key Issues In this chapter, the discussion will include a number of frameworks and how-to-approaches that guide strategy decisions. The structure of the chapter is divided into four broad personal selling and customer service issues: The importance of personal selling; Personal selling tasks; Strategy decisions; and, The personal selling process. This slide relates to material on p. 397.
Summary Overview In serving a particular target market, one of the key elements of the promotion mix is personal selling. Salespeople are communicators who build relationships . Key Issues Personal selling is important to all companies. Salespeople must be able to meet customer needs and company expectations. It’s also economically important. Personal selling requires strategy decisions . Some of these are issues in managing the sales force, such as: (1) the number and kind of salespeople needed; (2) the technology support the salespeople need; (3) how to select and train salespeople, and (4) how to compensate and motivate them. In addition, salespeople and sales managers need to decide what specific personal selling techniques will be used in dealing with the organization’s customers and prospects. Helping customers make good buying decisions is good selling . In meeting customer needs, salespeople build lasting relationships with customers. Salespeople represent the whole company—and customers too . How the salesperson behaves is all many customers will ever know about the company. Discussion Question: How does this statement apply in financial services? The sales force aids in the market information function , providing feedback to the company on what customers think, feel, and want. Salespeople can be strategy planners , making decisions every day about how to manipulate promotional mix elements to fit the needs of their customers. This slide relates to material on pp. 396-398. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Marketing managers recognize that effective personal selling involves successful completion of a number of activities, and establishing a balance between the right number and the right kind of salespeople. Therefore, it is important for marketers to understand the basic sales tasks that are to be performed. Key Issues Personal selling is divided into three tasks . These basic sales tasks are: order-getting; order-taking; and supporting. Order getters and order takers obtain orders on behalf of a company. Supporting salespeople are not directly interested in orders; their function is to help the order-oriented salespeople. In some cases, a single salesperson will do all three tasks. In other cases, particularly in large companies that depend heavily on personal selling, the tasks are divided among a number of sales professionals. Discussion Question: What are the pros and cons of having a salesperson perform all three basic tasks, compared to dividing the tasks up among several salespeople? This slide relates to material on p. 399. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Order getters : are concerned with establishing business relationships with new customers and developing new business. Order-getting : seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. Key Issues Order getters must be experts about every aspect of their products. Producers’ order getters find new market opportunities —new prospects, new accounts, and new channels of distribution. Good order getters are problem solvers. Many producers give their order getters special training so they will understand their customers’ needs and the products that need to be sold. Discussion Question: In selling services, the customer cannot inspect the service before purchase. How can an order-getting sales rep get the consumer to buy a service sight unseen? Wholesalers’ order getters work closely with retailers. In a sense, they almost hand the product to the customer . They may be involved in training retail employees, doing product demonstrations, working on retail promotions, and other activities. Retail order getters influence consumer behavior and help to move products from the market introduction stage to the market growth stage of the product life cycle, especially for heterogeneous shopping products. This slide relates to material on pp. 399-401. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Order takers : sell to regular customers, completing sales transactions and maintaining relationships. Order-taking : the routine completion of sales made regularly to target customers. Key Issues Order takers need to be highly trained, competent individuals. Order-taking activities can make the difference between keeping and losing a customer. Producers’ order takers train, explain and collaborate . They work on improving the whole relationship with the customer. Even if computers handle routine reorders, someone has to perform basic tasks such as making adjustments, handling complaints, and keeping customers informed of new developments. Wholesalers’ order takers are involved not in getting orders but in keeping them . Wholesale order takers may have to deal with thousands of items. As a result, they often keep in contact with customers on a regular basis and fulfill any needs that arise, as opposed to selling any particular item. Retail order takers are often poor salesclerks who are not paid or trained well. Knowledgeable, courteous, helpful salesclerks can play an important role in a retailer’s marketing mix. Discussion Question: Why do you think that retailers do not place more emphasis on training and compensating retail order takers? This slide relates to material on p. 401. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Supporting salespeople help the order-oriented salespeople but they don’t try to get orders themselves. Their activities, such as providing specialized services and information, are aimed at enhancing the relationship with the customer and getting sales in the long run. Key Issues Missionary salespeople : supporting salespeople who work for producers by calling on their middlemen and customers. Missionary salespeople can increase sales by creating goodwill, providing training, and performing other activities. This position is often used as a training ground for new salespeople. Technical specialists : provide technical know-how in support of order-oriented salespeople. Technical specialists are experts who know product applications , and they often have science or engineering backgrounds. They are more concerned with providing technical details about products than in persuading customers to place orders. Discussion Question: How important are good communication skills for technical specialists? Explain. Customer service reps : work with customers to resolve problems that arise after a purchase. Every marketing-oriented company need good people to handle customer service. This slide relates to material on pp. 402-403. Indicates place where slide “builds” to include the corresponding point.
Summary Overview The focus of customer service is on the service that is required to solve a problem that a customer encounters with a purchase. Key Issues Customer service is part of promotion . A firm should view customer service reps as a key part of personal selling. Regardless of whether the firm or the customer causes the problem, customer service reps need to be effective communicators, have good judgment, and realize that they are advocates not only for their firm, but also for its customers . Discussion Question: Think of an experience that you have had recently where you had a problem with a purchase and you contacted the company about the problem. How was it handled? Were you satisfied? If not, did you tell friends and/or family about the experience? This slide relates to material on pp. 403-404. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on pp. 404-406. Indicates place where slide “builds” to include the corresponding point. Summary Overview The sales manager must organize the sales force so that all necessary tasks are performed well. If different people handle different sales tasks, firms often rely on team selling—when different people work together on a specific account . Key Issues Different target markets need different selling tasks. –Managers often have different sales forces for different target markets who have different support or information needs. For example, big accounts often get special treatment from a major accounts sales force. . Discussion Question: What are the advantages of having a separate sales force for big accounts? Are there any disadvantages? Some salespeople specialize in telephone selling . Telemarketing is quick and inexpensive and can provide a way to serve customers who would otherwise be too expensive to support. Sales tasks are done in sales territories . Sales territory : a geographic area that is the responsibility of one salesperson or several working together. Managers must weigh distance, number of customers, the complexity of account service, and the potential profitability in setting up sales territories. The size of the sales force depends on workload per salesperson . Assessing the workload evaluates the time required for sales tasks as well as the number of customers and other important market factors..
Summary Overview Marketing and sales managers in many firms are finding that some tasks that have traditionally been handled by a salesperson can now be handled effectively and at lower cost by information technology and e-commerce systems. Key Issues Situations requiring a significant need to create and build relationships, and a low degree of information standardization : A salesperson is likely to be required. The salesperson can offer creative problem solving, persuasion, and coordination of sales activities. Situations requiring a significant need to exchange standardized information, but not a great need for relationship building : Marketers can use e-commerce methods to exchange information about inventory, orders, and delivery status. Websites can contain product specifications and prices. Situations requiring a significant need to exchange standardized information, and a great need for relationship building : Technology may provide standardized information, while a sales rep spends time on value-added communication with the customer. Situations requiring neither a significant need to create and build relationships, or the exchange of standardized information : E-commerce sometimes substitutes for personal selling through digital self-service. Electronic banking, ATMs, and virtual shopping carts are examples. Discussion Question: Are consumers becoming more dependent on digital self-service? Why or why not? This slide relates to material on pp. 406-408. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on p. 407-408. Summary Overview Several catalog retailers, including Lands’ End, have invested heavily in digital self-service. Key Issues Some tasks that have traditionally been handled by order-takers can now be handled more efficiently and effectively by e-commerce systems. In addition to a virtual shopping cart for online consumers, the Lands’ End site provides detailed product information, sizing assistance, and notices of markdowns on discontinued, out-of-season, or overstocked merchandise.
Summary Overview There have been great changes in how sales tasks are handled . Many of today’s sales reps rely on an array of software and hardware that was hardly imaginable even a decade ago. Key Issues There is new software for spreadsheet analysis, electronic presentations, time management, sales forecasting, customer contact, and shelf-space management. Hardware devices include personal digital assistants with wireless Internet access, cellular phones, fax machines, laptop computers, pagers, and personalized videoconferencing systems. In many situations the new software and hardware provide a competitive advantage . They are dramatically changing the ability of sales reps to meet the needs of their customers while achieving the objectives of their jobs. However, the availability of these technologies does not change the basic nature of the sales tasks that need to be accomplished. What they do change is the way--and how well--the job is done. Of course, if a firm expects salespeople to be able to use these technologies, that requirement needs to be included in selecting and training people for the job . Discussion Question: What obstacles exist that may hinder the adoption and use of new sales technologies within a particular organization? In other words, if these tools are so great, why doesn’t everyone use them? This slide relates to material on pp. 408-410. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on p. 410. Summary Overview It is important to hire good, well-qualified salespeople. Progressive companies adopt a systematic approach to selecting a sales force. Key Issues Selecting good salespeople takes judgment, plus other specific techniques. Companies constantly update lists of possible job candidates. They invite applications at the company’s website. They schedule candidates for multiple interviews, do background checks, and may even use psychological tests. As shown in this ad, many firms are trying to improve the quality and quantity of applicants for sales positions by turning to online recruiting firms like hotjobs.com. This company also offers Resumix® hiring management software, along with other services to ease and improve the selection task. Discussion Question: If you were selecting someone to serve in a sales force, what types of questions would you ask in an interview?
Summary Overview Sound selection is not the only important consideration for sales managers. Motivating salespeople is also important and requires careful assessment of the needs of the company and the individual when setting compensation. Key Issues Job description : a statement of what a salesperson is expected to do. Job descriptions should be specific and in writing . The job description becomes a tool for recruiting candidates whose qualifications are a good match for the job. Good salespeople are trained, not born . All salespeople need some training --even those with “natural” ability. Training is required to learn: selling methods, customer needs, organization skills, how to promote the product line, and how to constantly update this knowledge with new information. Discussion Question: Why is it that some of the best salespeople are not the back-slapping, extroverted, talkative people most consumers have come to expect when thinking of a professional salesperson? At minimum, a company’s sales training program should cover: company policies and practices; product information; building relationships with customers; and professional selling skills. This slide relates to material on pp. 410-412. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on p. 411-412. Summary Overview Most progressive companies know that sales training can pay off, in more effective sales calls, better listening to customers, and closing sales. Key Issues Well-trained, equipped, and supported salespeople give a firm a competitive advantage in the marketplace. This ad, by Boise Cascade, highlights the skills that are stressed in salesperson training. Boise Cascade wants its sales staff to stand apart from the competition with more attentive responses to customer needs. Sales training often starts in the classroom with lectures, case studies, and videotaped trial presentations and demonstrations. Other parts of the training program may include on-the-job observation of effective salespeople and coaching from sales supervisors. Sales meetings, conventions, electronic communications, and ongoing training sessions help to keep salespeople current. Discussion Question: Why should a firm have so many different methods of training? Why not simply have classroom or videotaped instruction?
Summary Overview To recruit and keep good salespeople, a firm must design an attractive compensation package that also motivates salespeople to become top performers. The key is to match what people want to do and what interests them with the needs of the company. Key Issues Two basic decisions must be made in developing a compensation plan: the level of compensation, and the method of payment. Regarding the level of compensation, the amount of money a person can make should be at least comparable to competitors’ compensation. Compensation varies with the job and needed skills . Payment methods also vary . Salespeople are typically compensated by: straight salary; straight commission--a percentage of sales, or some combination of salary and commission. Discussion Question: Which one of these plans would provide the most security? Which one would provide the most incentive? Combination plans are most common. This slide relates to material on pp. 412-414. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on p. 412-414. Summary Overview What determines the choice of the pay plan? Key Issues Straight salary gives control—if there is close supervision . The salaried salesperson is expected to do what the sales manager wants. Sales managers need to exercise close supervision. Commissions can both motivate and direct . A salesperson on straight commission tends to be his or her own boss. Incentives should link efforts to results . Incentives must be carefully aligned with the firm’s objectives. The incentive portion of a sales rep’s compensation should only be large if there is a direct relationship between the salesperson’s effort and results. Discussion Question: What types of incentives do you think would motivate people to sell more or to provide better customer service? Differences in territory potential can be taken into account when setting sales quotas – the specific sales or profit objectives that salespeople are expected to achieve. Synygy, pictured in the ad above, is a professional-service company that specializes in helping other firms to design and implement sales compensation programs that will help them achieve their objectives. Synygy has been used to implement and manage the variable pay plans for more of the world's largest corporations than any other software solution.
Summary Overview Limitations on working capital or market uncertainty may compel a company to choose a straight commission plan, or combination plan with a large commission component. That way, total selling expense goes up only if salespeople actually bring in customers and revenue. Key Issues This exhibit illustrates that straight salary is simple to understand and administer. It’s the same regardless of sales. Commission is more complicated but can add flexibility. As sales volume increases, sales costs: increase at the fastest rate for a straight commission plan; increase at a lesser rate for a combination plan; and remain constant with a straight commission plan. Compensation plans should be clear . Salespeople need to see the link between effort and income. Although straight salary plans provide the most simplicity, sales managers often sacrifice some simplicity to achieve control, incentive, and flexibility. Discussion Question: What would be the simplest compensation plan—straight salary, straight commission, or a combination plan? Why? Sales managers must plan, implement, and control the compensation plan. This slide relates to material on p. 414.
Summary Overview Each step in the personal selling process involves its own set of skills. But it is also important to think of the process as a whole. Key Issues Prospecting : following all the leads in the target market to identify potential customers and narrow down to the right target . In business markets, a salesperson may have to work hard to find the real purchase decision makers, because of multiple buying influence. The salesperson needs to assess the needs of established customers and set priorities, because all customers are not equal . How long to spend with whom ? Selecting target customers involves identifying factors for success -- what the customer needs, what the company offers, and how well the salesperson can find a good match. A company often develops a way to rank potential customers. Discussion Question: How much planning goes into the typical telemarketing sales calls consumers receive at home? Explain. This slide relates to material on pp. 414-416. Indicates place where slide “builds” to include the corresponding point.
Summary Overview The personal selling process continues with the sales presentation : the salesperson's effort to make a sale or address a customer's problem. Key Issues Before making the presentation, the salesperson should learn as much about the client as possible, such as who makes the purchase decisions and the key criteria they use. Better information allows the salesperson to custom-design a presentation to match specific customer needs. Discussion Question: When have you encountered a salesperson who made what you considered to be an excellent presentation? Explain what made the presentation so good. This slide relates to material on p. 417. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Salespeople choose among three approaches when making a sales presentation—a salesperson’s effort to make a sale or solve a customer’s problem. Key Issues Prepared sales presentation : a memorized presentation that is not adapted to each individual customer. This “canned” approach is often used when the prospective sale is low in value, only a short presentation is possible, or the salesperson is not yet very skilled. It standardizes the presentation, but suffers from being rigid and treating all customers alike. Consultative selling approach : involves developing a good understanding of the individual customer’s needs before trying to close the sale, so it builds on the marketing concept . After making general opening comments, the salesperson asks the customer questions and listens carefully to the answers to identify unique customer needs. The salesperson acts as a “consultant” to meet the customer’s needs. Selling formula approach : starts with a rehearsed presentation, but moves toward more customer interaction, questioning, and participation during the course of the presentation. The selling formula approach is some of both other approaches. Discussion Question: The financial services industry is in various stages of adopting a consultative selling approach to replace its traditional selling formula approach. Comment on the difference between an insurance sale of a product versus using a financial plan to identify insurance needs. This slide relates to material on pp. 417-418. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Selecting a sales presentation approach is not the end of the personal selling process. The salesperson has to make the presentation, close the sale, and follow up after the sale. Key Issues The AIDA model —attention, interest, desire, and action— can help plan sales presentations . It is necessary to get the customer’s attention at the start of a presentation and move to getting the customer to take action. Generating interest, answering problems and objections, and arousing desire are all critical. Presentations should end with a close -- here the salesperson asks for the customer’s business. The best salespeople learn how to close effectively. Whether the presentation ends in a sale or a request for more information, the salesperson should take care to follow up and contact the customer again soon after the call. As in other areas of the promotion mix, ethical issues may arise in personal selling. Obviously, the truthfulness of the salesperson is important. Discussion Question: Is a company ever served well by dishonest salespeople, even if the questionable practices result in high sales volume? Explain. Problems are less likely to arise if a salesperson emphasizes the fulfillment of customer needs and building a long-term relationship. Top management and marketing or sales managers set the ethical tone for the sales force. This slide relates to material on pp. 418-419. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on p. 396. You now should: Understand the importance and nature of personal selling. Know the three basic sales tasks—order getting, order taking, and supporting—and what the various kinds of salespeople can be expected to do. Understand why customer service presents different challenges than other personal selling tasks. Know the different ways sales managers can organize salespeople so that personal selling jobs are handled effectively. Know how sales technology affects the way sales tasks are performed.
This slide relates to material on p. 396. You now should: Know what the sales manager must do, including selecting, training, and organizing salespeople to carry out the personal selling job. Understand how the right compensation plan can help motivate and control salespeople. Understand when and where to use the three types of sales presentations.
This slide refers to boldfaced terms appearing in Chapter 15. Summary Overview These are key terms you should be familiar with based upon the material in this presentation. Key Issues Basic sales tasks : order-getting, order- taking, and supporting. Order getters : salespeople concerned with establishing relationships with new customers and developing new business. Order-getting : seeking possible buyers with a well‑organized sales presentation designed to sell a product, service, or idea. Order takers : salespeople who sell to regular or established customers, complete most sales transactions, and maintain relationships with their customers. Order-taking : the routine completion of sales made regularly to target customers. Supporting salespeople : salespeople who help the order‑oriented salespeople‑‑but don't try to get orders themselves. Missionary salespeople : supporting salespeople who work for producers by calling on their middlemen and their customers. Technical specialists : supporting salespeople who provide technical assistance to order‑oriented salespeople. Customer service reps: work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. Team selling : different sales reps working together on a specific account. Major accounts sales force : salespeople who sell directly to large accounts such as major retail chain stores. Telemarketing : using the telephone to call on customers or prospects. Sales territory : a geographic area that is the responsibility of one salesperson or several working together. Job description : a written statement of what a salesperson is expected to do. Sales quota : the specific sales or profit objective a salesperson is expected to achieve. Prospecting : following all the leads in the target market to identify potential customers. Sales presentation : a salesperson's effort to make a sale or address a customer's problem. Prepared sales presentation : a memorized presentation that is not adapted to each individual customer.
This slide refers to boldfaced terms appearing in Chapter 15. Summary Overview These are additional key terms. Key Issues Close : the salesperson's request for an order. Consultative selling approach : a type of sales presentation in which the salesperson develops a good understanding of the individual customer's needs before trying to close the sale. Selling formula approach : a sales presentation that starts with a prepared presentation outline--much like the prepared approach--and leads the customer through some logical steps to a final close.
Strategy Planning and Personal Selling (Exhibit 15-1) CH 16: Advertising & Sales Promotion Importance of personal selling CH 15: Personal Selling and Customer Service CH 14: Promotion Intro. To Integrated Marketing Communications Personal selling tasks Strategy decisions Personal selling process
Sales force provides market information Salespeople represent whole company Requires strategy decisions Helping to buy is good selling The Importance and Role of Personal Selling Personal Selling Is Important Salespeople represent whole company Sales force provides market information Helping to buy is good selling Requires strategy decisions Salespeople can be strategy planners
What Kinds of Personal Selling Are Needed? Order-Taking Order-Taking Order-Getting Order-Getting Supporting Basic Sales Tasks
Wholesalers’ Order Getters Work Closely with Retailers Producers’ Order Getters Find New Opportunities Order Getters and Order-Getting Order Getters Develop New Business Relationships Wholesalers’ Order Getters Work Closely with Retailers Producers’ Order Getters Find New Opportunities Order Getters and Order-Getting Retail Order Getters Influence Buyer Behavior
Wholesalers’ Order Takers Don’t Get Orders But Keep Them Producers’ Order Takers Train, Explain & Collaborate Order Takers and Order-Taking Order Takers Nurture Relationships to Keep the Business Coming Wholesalers’ Order Takers Don’t Get Orders But Keep Them Producers’ Order Takers Train, Explain & Collaborate Order Takers and Order-Taking Retail Order Takers Are Often Poor Sales Clerks
Technical Specialists Missionary Salespeople Supporting Sales Tasks Supporting Sales Force Informs and Promotes in the Channel Technical Specialists Missionary Salespeople Customer Service Reps
Solves problems after a purchase Technical Specialists What is Customer Service? Customer Service Promotes the Next Purchase Solves problems after a purchase Part of promotion Reps are customer advocates
Sales Territories Telemarketing Major Accounts Sales Force Different Markets, Different Tasks Team Selling The Right Structure Helps Assign Responsibility Sales Territories Telemarketing Major Accounts Sales Force Different Markets, Different Tasks Team Selling Sales Force Size and Workload
Sometimes Technology Can Substitute for Personal Selling (Exhibit 15-2)
What is Done vs. How It’s Done Technology Can Be a Competitive Advantage New Hardware New Software Great Changes in Handling Tasks Information Technology Provides Tools to Do the Job What is Done vs. How It’s Done Technology Can Be a Competitive Advantage New Hardware New Software Great Changes in Handling Tasks Good Selection and Training Needed
Straight Commission Straight Salary Compensating and Motivating Salespeople Straight Commission Straight Salary Level of Compensation Method of Payment Level of Compensation Method of Payment Combination Plan