Personal Selling and Sales Promotion Chapter 13

Personal Selling and Sales Promotion Chapter 13

Rest Stop: Previewing the Concepts 1. 2. 3. 4. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Explain how sales promotion campaigns are developed and implemented. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 2

First Stop CDW’s Customer Focused Selling Personal Selling at CDW Background History: CDW is a leading provider of more than 100,000 technology products and services. CDW has achieved 8 billion in sales since being founded 25 years ago. Target Market: Small and midsize businesses who need lots of help and advice are CDW’s core market. Adding Value: CDW works closely with buyers to find solutions to customer’s technology problems. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Account Managers: Goal is to build and manage relationships by being trusted advisors. Training: A required six-week orientation is followed by six months of training on products and sales techniques, and the training never ends. Service: CDW’s extranet and various Web sites allow customers to self-serve. Account managers do not make F2F visit, but rather consult with clients over the phone. 13 - 3

The Nature of Personal Selling Personal selling: Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term customer relationships. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 4

The Nature of Personal Selling Salesperson: An individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building. The term salesperson covers a wide range of positions: Order taker: Department store clerk. Order getter: Demands creative selling and relationship building. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 5

The Role of the Sales Force Personal selling: Interpersonal interactions between salespeople and individual customers occur: Face-to-face. By telephone. Through video or Web conferences. By other means. Personal selling is more effective than advertising in complex selling situations. The role of personal selling varies by firm. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 6

The Role of the Sales Force The sales force serves as critical link between the company and its customers. They represent the firm to the customers. They represent the customers to the firm. Goal customer satisfaction and firm profit. Sales and other marketing functions should work together to create value. Firms can take several actions to bring marketing and sales functions closer. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 7

Managing the Sales Force Sales force management: The 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 8

Managing the Sales Force Types of sales force structure: Territorial: Salesperson is assigned to an exclusive geographic territory in which that salesperson sells the company’s full line. Product: Salespeople specialize in selling only a portion of the company’s products or lines. Customer: Salespeople specialize in selling only to certain customers or industries. Complex: Combination of several types of structures. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 9

Managing the Sales Force Sales force size: May range in size from only a few salespeople to tens of thousands. Increasing sales force size will increase both costs and sales. Workload approach can be useful in setting sales force size. This requires: Grouping accounts by factors related to the effort required to maintain them. Determining the number of people needed to call on each class of accounts. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 10

Managing the Sales Force Other sales force strategy and structure issues include decisions related to use of: Outside sales force: Travels to call on customers in the field. Inside sales force: Conducts business from their offices via telephone or the Internet, or visits from prospective buyers. Team selling: Using teams of people from sales, marketing, engineering, finance, technical support and even upper management to service large, complex accounts. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 11

Managing the Sales Force Key advantage of team selling: Can find problems, solutions, and sales opportunities that no single salesperson could alone. Pitfalls of team selling: Salespeople are competitive and have typically been rewarded on the basis of individual performance. Team selling can confuse or overwhelm customers. Some people have trouble working in teams. Difficult to evaluate individual contributions. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 12

Managing the Sales Force Careful recruiting and selection of salespeople can greatly enhance overall sales force performance while minimizing costly turnover. Key talents of successful salespeople: Intrinsically motivated. Disciplined work style. Ability to close a sale. Ability to build relationships with customers. Several recruiting sources exist. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 13

Managing the Sales Force Recruiting Sources Recommendations from current sales force Employment agencies Classified ads Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Searching the Web Working with college placement services Recruit from other companies 13 - 14

Managing the Sales Force Seminars, sales meetings, and Web e learning form the basis of many sales training programs. Though expensive, training can yield dramatic results. Training programs have several goals. Customer knowledge. The selling process. Company, product, and market knowledge. Online training is becoming more common. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 15

Managing the Sales Force Compensating salespeople involves a mix of compensation elements: Fixed amount: Salary stable income. Variable amount: Commissions or bonuses performance reward. Expenses: Repays for job-related expenditures. Fringe benefits: Vacations, sick leave, pension, etc. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 16

Managing the Sales Force Goal of supervision is to encourage salespeople to “work smart” by: Helping them to identify customers and set call norms. Specifying time to be spent prospecting via: Annual call plan. Time-and-duty analysis. Helping salespeople to work more efficiently using sales force automation systems. Laptops, smart phones, Webcams, wireless access. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 17

Managing the Sales Force Selling and the Internet: The internet is the fastest-growing sales technology tool. Uses include training, servicing accounts, and conducting live sales meetings with sales force or customers. The internet can save time and travel dollars and gives salespeople a new tool. Sales 2.0 technologies are costly and can intimidate workers or customers. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 18

Managing the Sales Force Goal of motivating the sales force is to encourage salespeople to “work hard.” Management can boost sales force morale and performance via: Organizational climate. Sales quotas. Positive incentives. Sales meetings. Sales contests. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 19

Managing the Sales Force Evaluating salespeople and sales force performance requires: Getting regular information from salespeople via sales reports, call reports, and expense reports. Clear standards for judging performance. Providing constructive feedback to the salespeople that can motivate them to perform. Return on sales investment should be assessed for the sales force as a whole. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 20

The Personal Selling Process Steps in the selling process include: Prospecting and qualifying: Identifying qualified potential customers. Preapproach: Learning as much as possible about a prospective customer before making a sales call. Approach: Meeting the customer for the first time. Presentation: Telling the “value story” to the buyer, showing how the firm’s offer solves problems. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 21

The Personal Selling Process Steps in the selling process include: Handling objections: Seeking out, clarifying, and overcoming customer objections to buying. Closing: Asking the customer for an order. Follow-up: Following up after the sale to ensure customer satisfaction and repeat business. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 22

The Personal Selling Process Personal selling and managing customer relationships: The selling process just covered is transaction oriented. But building profitable relationships is a key goal for most firms. Building relationships requires listening to customers, understanding their needs, and carefully coordinating the whole firm’s efforts to create value. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 23

Sales Promotion Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service. Can be targeted toward: Final buyers (consumer promotions). Retailers and wholesalers (trade promotions). Business customers (business promotions). Members of the sales force (sales force promotions). Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 24

Sales Promotion Several factors have contributed to the rapid growth of sales promotion: Product managers are facing more pressure to increase their current sales. Companies face more competition from less differentiated brands. Advertising efficiency has declined. Consumers have become more deal oriented. Growth in sales promotion has resulted in promotion clutter. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 25

Sales Promotion Sales promotion objectives: Consumer promotions urge short-term sales or attempt to enhance customer brand involvement. Trade promotions attempt to get retailers to carry new items and more inventory, to buy ahead, to promote the firm’s brand, and to give the company more shelf space. Sales force objectives include gaining more sales force support for current or new products or getting salespeople to sign up new accounts. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 26

Sales Promotion Sales promotion objectives: Consumer promotions urge short-term sales or attempt to enhance customer brand involvement. Trade promotions attempt to get retailers to carry new items and more inventory, to buy ahead, to promote the firm’s brand, and to give the company more shelf space. Sales force objectives include gaining more sales force support for current or new products or getting salespeople to sign up new accounts. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 27

Sales Promotion Sales promotions should be used with and supported by other promotion mix tools. Sales promotion should focus on reinforcing the product’s position and building long-term customer relationships, rather than simply encourage brand switching or short-term sales only. Use of frequency cards and loyalty programs has grown. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 28

Sales Promotion Consumer Sales Promotion Tools Samples Coupons Cash refunds Price packs Premiums Advertising Point-of-purchase specialties Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall promotions Contests Sweepstakes Games Event marketing (event sponsorships) 13 - 29

Sales Promotion Trade promotions: More sales promotion dollars are directed toward retailers and wholesalers than to the final consumers. Several trade promotion tools exist: Discounts. Allowances. Free goods. Push money. Specialty advertising items. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 30

Sales Promotion Business promotions objectives: Generate business leads. Stimulate purchases. Reward customers. Motivate salespeople. Business promotion tools: Conventions, trade shows, sales contests, and many of the same tools used for consumer or trade promotions. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 31

Sales Promotion Developing the sales promotion program: Decide on the size of the incentive. Set conditions for participation. Decide how to promote and distribute the promotion program. Determine the length of the program. Evaluate the promotion program. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 32

Rest Stop: Reviewing the Concepts 1. 2. 3. 4. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Explain how sales promotion campaigns are developed and implemented. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 13 - 33

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