personal selling

1. Personal Selling and Sales
Force Management
Marketing Management
Manoj jaiswal

2. AGENDA
 Role of salespeople
• Why have a salesforce
• Own salesforce versus independent reps
• Selling job
 Salesforce size
 Organizing the sales force
 Recruiting & selecting salespeople
 Motivation & compensation
 Evaluation of the sales force

3.  Two-way personal communication
 More effective than advertising in complex
selling situations
 The sales force plays a major role in most
companies
 The sales force works to produce customer
satisfaction and company profit.
ROLE OF SALESPEOPLE

4. Reps versus Own Sales Force?

5. Company Salespeople
 Advantages
• Sell only your products
• Can be directed to
specific accounts
• Can train them to sell
by company guidelines
• Sell full product line
 Disadvantages
• High fixed costs
• Takes time to hire
• Costs more initially
• Sales grow more
slowly

6. Independent Reps
 Advantages
• Low fixed costs
(commission-based)
• No need to hire
• Produce sales quickly
• Have established
relationships
 Disadvantages
• Sell for several firms
• Cost more as sales
grow
• Tend to push popular
items
• Only call on best
accounts
• More difficult to control

7. The Personal Selling
Process

8. The Selling Job – Seven Tasks
 Step 1: Locating and
qualifying prospects
• Identifying potential
customers
• Tradeshows often
provide excellent
source
• Screening leads
• Can they use what
you are selling?
• Do they have
financial resources?

9. The Selling Job – Seven Tasks
 Step 2: Pre-call planning
• Good salesperson spends considerable
amount of time planning the call
• Planning includes
• Finding information on past sales calls,
competition, product & service
• Whom to contact
• Customer need analysis

10. The Selling Job: Seven Tasks
 Step 3: The approach
• Stage where salesperson meets customer for
the first time
 Step 4: The presentation
• Benefits of product are presented &
demonstrated
• Presentation tailored to needs of prospect
(adaptive selling)

11. The Selling Job: Seven Tasks
 Step 5: Answering objections
• Be prepared with counterarguments
 Step 6: Closure
• Ask for the order
• Average number of calls to close = 4
 Step 7: Follow-up
• Help ensure customer satisfaction
• Tasks include
• Expediting orders, setting up displays, taking
inventories, training dealer personnel, etc.

12. SALESFORCE SIZE – HOW
MANY? Workload method
 Calculate total amount of work
necessary to serve entire market
 Nr of salespeople = total workload
divided by amount of work average
salesperson is expected to handle

13. SALES FORCE SIZE – HOW
MANY? The Workload Method
Number of Salespeople = {(number of
existing customers + potential
customers) x ideal calling frequency x
length of call} : {selling time available
to one salesperson}

14. HOW MANY SALESPEOPLE –
Workload method - example
 3,000 existing + 2,250 potential clients
 Called 5 x per year for 2 hrs. (incl. travel)
 Available selling time per salesperson =
1,000 hrs.
 Size = (3,000+2,000) x 5 x 2 / 1,000 = 50

15. Sales Force Turnover
 Size influenced by turnover
 Turnover rate = separations per year /
average size of sales force
 Issue
• Customers prefer long-term relationships with
suppliers
• Empty territories mean lost sales
• High recruiting and training costs

16. Sales Force Turnover
 Remedies
• Balancing territories
• Improve financial incentives
• Offer non-financial rewards (trips, trophies,
recognition awards, etc.)

17. Sales force Turnover
 Problems of “low” turnover
• Salespeople resting on their laurels
• Overpaid

18. ORGANIZING THE SALES FORCE
 Geographic units
 Product
• Companies having diverse product lines
• Issue: customer called on by several
salespeople
 Customer
• Customers have unique purchasing
requirements

19. ORGANIZING SALES FORCE
 All 3 forms have been used successfully
 Reorganization necessary as
• Companies grow
• Customers change
• Industry structure changes
 Reorganizing can have negative effects
on staff morale & company’s profits (e.g.,
Xerox)

20. RECRUITING AND SELECTING
SALESPEOPLE
 Careful recruiting can
• Increase overall sales force performance
• Reduce turnover
• Reduce recruiting & training costs
 Recruiting involves
• Soliciting applications
• Screening candidates
• Interviews
• In-field observation
• References, work history, etc.
 Hiring “experienced” versus “inexperienced”
salespeople

21. Traits of Successful
Salespeople
 Enthusiasm
 Patience
 Initiative
 Self-Confidence
 Job Commitment
 Customer
Orientation
 Independent
 Self-Motivated
 Excellent
Listeners
 Friendly
 Persistent
 Attentive
 Honest
 Internally Motivated
 Relationship
Oriented
 Disciplined
 Hardworking
 Team Players

22. MOTIVATING & COMPENSATING
SALESPEOPLE – Straight Salary
 Advantages
• More control over wage
levels
• More control over
salespeople’s activities
• Easier to divide territories
and reassign people
• More effort on relationship-
building & other tasks that
do not bring immediate
revenues
• Useful with long selling
cycles (e.g., planes,
construction)
 Disadvantages
• No incentives for extra
efforts

23. MOTIVATING SALESPEOPLE –
Commission Plans
 Advantages
• Reward
accomplishments, not
time spent
• “Fair”
• Attract better-qualified
applicants
 Disadvantages
• Little control over
salespeople
• Non-selling tasks
neglected
• Salespeople “sell”
themselves
• Reluctance to have
territories changed or
reassigned
• Fluctuating incomes for
salespeople

24. MOTIVATING SALESPEOPLE
 Most companies use combination plans:
• Base salary + commission and/or bonus

25. EVALUATING SALESPEOPLE
 Complex
• Territories differ
• Vast array of jobs
• Host of control measures
• Qualitative versus quantitative
• Input- versus output-based

26. EVALUATING SALESPEOPLE
 Output measures
• Orders
• Number
• Size
• Orders per call (batting average)
• Accounts
• Active, new, overdue, lost
• Sales
• To potential
• To quota
• Per order
• Margin

27. EVALUATING SALESPEOPLE
 Input measures
• Sales calls
• Expenses
• Per call
• Per sale
• Time spent on non-selling tasks