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Information Provision, Persuasion, After-sale Service, Information Provision, Persuasion, After-sale Service, Prospecting, Random Lead Generation, Lead, Selected-lead Prospecting, Random Lead Generation, Lead, Selected-lead

Searching, Planning the Sales Call, Presenting, Responding to Searching, Planning the Sales Call, Presenting, Responding to Objections, Obtaining Commitment, Long-term Relationship, Objections, Obtaining Commitment, Long-term Relationship,

Functional Relationships, Strategic Alliances, Missionary Functional Relationships, Strategic Alliances, Missionary Salespeople, Technical Sales Specialist, Cross-functional Sales Salespeople, Technical Sales Specialist, Cross-functional Sales

Team, Sales Force Organization, Forecasting Sales, Sales Team, Sales Force Organization, Forecasting Sales, Sales Territories and Quotas, Salary, CommissionTerritories and Quotas, Salary, Commission

Personal Selling, Relationship Personal Selling, Relationship Building, and Sales ManagementBuilding, and Sales Management

Chapter 9Chapter 9

Key TermsKey Terms

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Personal Selling – DefinitionPersonal Selling – Definition

Defined as a two-way flow of communication Defined as a two-way flow of communication between a potential buyer and a salespersonbetween a potential buyer and a salesperson

Use of personal selling depends partially on the Use of personal selling depends partially on the nature of productnature of product Key role played by salesperson in providing Key role played by salesperson in providing

information about productinformation about product Use personal selling when products areUse personal selling when products are

New and differentNew and different Technically complexTechnically complex Expensive and require negotiationExpensive and require negotiation

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Sales ProcessSales Process

Refers to two basic factorsRefers to two basic factors The objectives the salesperson is trying to achieve The objectives the salesperson is trying to achieve

while engaged in selling activitieswhile engaged in selling activities The sequence of stages or steps the salesperson The sequence of stages or steps the salesperson

should follow to achieve the objectives (relationship-should follow to achieve the objectives (relationship-building process)building process)

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Sales Force ObjectivesSales Force Objectives

Information provisionInformation provision PersuasionPersuasion After-sale serviceAfter-sale service

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The Sales Relationship-Building The Sales Relationship-Building ProcessProcess

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The Evolution of Personal SellingThe Evolution of Personal Selling

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Prospecting – Locating Potential Prospecting – Locating Potential CustomersCustomers

Lead – A candidate to whom a sale can be made – Lead – A candidate to whom a sale can be made – target of prospecting processtarget of prospecting process

Random lead generation – Mass appeals that require Random lead generation – Mass appeals that require a high number of contacts to generate qualified leadsa high number of contacts to generate qualified leads

Selected-lead searching – Uses existing contact to Selected-lead searching – Uses existing contact to generate new ones – often called referralsgenerate new ones – often called referrals

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Prospecting – A Screening ProcessProspecting – A Screening Process

Does the lead have a want or need that can be Does the lead have a want or need that can be satisfied by the purchase of the firm’s products or satisfied by the purchase of the firm’s products or services?services?

Does the lead have the ability to pay?Does the lead have the ability to pay? Does the lead have the authority to pay?Does the lead have the authority to pay? Can the lead be approached favorably?Can the lead be approached favorably? Is the lead eligible to buy?Is the lead eligible to buy?

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Common Sources of Sales LeadsCommon Sources of Sales Leads

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Planning the Sales CallPlanning the Sales Call

Thorough knowledge of representative company, Thorough knowledge of representative company, including past historyincluding past history

Thorough knowledge of products and product linesThorough knowledge of products and product lines Good working knowledge of competitor’s products and Good working knowledge of competitor’s products and

product lineproduct line In-depth knowledge of the market for their merchandiseIn-depth knowledge of the market for their merchandise Accurate knowledge of buyer, or prospectAccurate knowledge of buyer, or prospect

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PresentingPresenting

Be well prepared and set a goal for your presentationBe well prepared and set a goal for your presentation Develop a checklist of items for discussionDevelop a checklist of items for discussion Development of good interpersonal skillsDevelopment of good interpersonal skills Adapt your style to the prospectAdapt your style to the prospect

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Overcoming ObjectionsOvercoming Objections

Expect objections to occur at any timeExpect objections to occur at any time During efforts to secure appointmentsDuring efforts to secure appointments During the presentation and subsequent relationshipDuring the presentation and subsequent relationship During attempts to obtain a commitmentDuring attempts to obtain a commitment During the after-sale follow-upDuring the after-sale follow-up

In response to an objection, a sales person should not In response to an objection, a sales person should not challenge the customerchallenge the customer

Make the necessary presentation in order to help the Make the necessary presentation in order to help the client make an intelligent decisionclient make an intelligent decision

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Obtaining CommitmentObtaining Commitment

Important to know how and when to close a saleImportant to know how and when to close a sale Not all sales end in a successful closing – Not all sales end in a successful closing –

Salespeople should analyze the reasons and Salespeople should analyze the reasons and determine whetherdetermine whether More sales calls are necessary to obtain commitmentMore sales calls are necessary to obtain commitment Currently, there just does not exist a good match Currently, there just does not exist a good match

between customer needs and seller offeringsbetween customer needs and seller offerings

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Building Long-Term RelationshipsBuilding Long-Term Relationships

After-marketing activities includeAfter-marketing activities include Establishing and maintaining a customer information fileEstablishing and maintaining a customer information file Monitoring order processingMonitoring order processing Ensuring initial proper use of product or serviceEnsuring initial proper use of product or service Providing customers ongoing guidance and supportProviding customers ongoing guidance and support Analyzing customer feedback and responding quickly to Analyzing customer feedback and responding quickly to

questions and complaintsquestions and complaints Continually conducting customer satisfaction research Continually conducting customer satisfaction research

and responding to itand responding to it

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Relationships Can Lead to Relationships Can Lead to PartnershipsPartnerships

Functional relationships – When a buyer and a Functional relationships – When a buyer and a salesperson has a problem, they work together to salesperson has a problem, they work together to solve itsolve it

Strategic relationships (strategic alliances) – Long-Strategic relationships (strategic alliances) – Long-term, formal relationships in which both parties make term, formal relationships in which both parties make significant commitments and investments in each significant commitments and investments in each other in order to pursue mutual goals and to improve other in order to pursue mutual goals and to improve the profitability of each otherthe profitability of each other

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People Who Support the Sales ForcePeople Who Support the Sales Force

Missionary salespeople – Focus solely on promoting Missionary salespeople – Focus solely on promoting existing products and introduction of new products existing products and introduction of new products (e.g.: pharmaceuticals)(e.g.: pharmaceuticals)

Technical sales specialists – Support the sales staff Technical sales specialists – Support the sales staff by providing training or other technical assistanceby providing training or other technical assistance

Cross-functional sales team – Increased in popularity Cross-functional sales team – Increased in popularity since products increase in technical complexity, and since products increase in technical complexity, and units of the buying organization require specialized units of the buying organization require specialized knowledgeknowledge

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Why Cross-Functional Sales TeamsWhy Cross-Functional Sales TeamsAre Growing in PopularityAre Growing in Popularity

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Managing the Sales and Relationship-Managing the Sales and Relationship-Building ProcessBuilding Process

Efficient and effective sales tools, continuous sales Efficient and effective sales tools, continuous sales training, and adequate support from promotional toolstraining, and adequate support from promotional tools

Efficient delivery and reorder systemEfficient delivery and reorder system Equitable compensation plan to reward and motivate Equitable compensation plan to reward and motivate

performance, and promote company loyaltyperformance, and promote company loyalty Adequate supervision and evaluation of performance Adequate supervision and evaluation of performance

for continual improvementfor continual improvement

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Organizing the Sales ForceOrganizing the Sales Force

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Sales Management Task – Sales Sales Management Task – Sales Force OrganizationForce Organization

Geographic structure – Provides practical benefit of Geographic structure – Provides practical benefit of limiting the distance each salesperson must travellimiting the distance each salesperson must travel

Product structure – Useful when sales force must Product structure – Useful when sales force must have specific technical knowledge about productshave specific technical knowledge about products

Customer structure – Works best when different types Customer structure – Works best when different types of buyers have large or significantly different needsof buyers have large or significantly different needs

Major account management – Use of team selling to Major account management – Use of team selling to focus on major customers to establish long-term focus on major customers to establish long-term relationshipsrelationships

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Forecasting SalesForecasting Sales

Estimate of how much of the company’s output, either Estimate of how much of the company’s output, either in dollars or in units, can be sold during a specified in dollars or in units, can be sold during a specified future period under a proposed marketing plan and future period under a proposed marketing plan and under an assumed set of economic conditionsunder an assumed set of economic conditions

Used toUsed to Establish sales quotasEstablish sales quotas Plan the personal selling efforts and other types of Plan the personal selling efforts and other types of

promotional activitiespromotional activities Budget selling expensesBudget selling expenses Plan and coordinate production, logistics, inventories, Plan and coordinate production, logistics, inventories,

personnel, and so forthpersonnel, and so forth

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Forecasting MethodsForecasting Methods

Jury of executive opinion method – Combines and Jury of executive opinion method – Combines and averages views of top management from different averages views of top management from different departmentsdepartments

Sales force composite method – Sales force becomes Sales force composite method – Sales force becomes the jurythe jury

Customer expectations method – Asks customer Customer expectations method – Asks customer about the quantity they expect to purchaseabout the quantity they expect to purchase

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Forecasting MethodsForecasting Methods

Time-series analysis – Analyzes past sales data and Time-series analysis – Analyzes past sales data and the impact of factors influencing salesthe impact of factors influencing sales

Correlation analysis – Measures relationship between Correlation analysis – Measures relationship between dependent and independent variablesdependent and independent variables

Other quantitative techniques – Growth functions and Other quantitative techniques – Growth functions and simulation modelssimulation models

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Sales Territories and QuotasSales Territories and Quotas

Sales territories can be segmented on the bases ofSales territories can be segmented on the bases of GeographyGeography Product specializationProduct specialization

Sales quotasSales quotas Provide incentives for salespeopleProvide incentives for salespeople Provide a quantitative standard for performance Provide a quantitative standard for performance

measurementmeasurement Evaluate and control the efforts of the sales forceEvaluate and control the efforts of the sales force Activity quotas – Allows monitoring of whether Activity quotas – Allows monitoring of whether

salespersons are engaging in activities to the extent salespersons are engaging in activities to the extent desireddesired

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Sales Territories and QuotasSales Territories and Quotas

Sales quotas represent specific sales goals assigned Sales quotas represent specific sales goals assigned to each territory or unit over designated time periodto each territory or unit over designated time period

Management needs to consider these key factorsManagement needs to consider these key factors All territories will not have equal potential and, hence, All territories will not have equal potential and, hence,

compensation must be adjustedcompensation must be adjusted All salespeople will not have equal ability and All salespeople will not have equal ability and

assignments may have to be made accordinglyassignments may have to be made accordingly Sales task in each territory may differ from time period Sales task in each territory may differ from time period

to time periodto time period Analyzing expenses – Sales forecasts should include Analyzing expenses – Sales forecasts should include

a sales expense budgeta sales expense budget

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Effort- and Results-Oriented MeasuresEffort- and Results-Oriented Measuresfor Evaluating Salespeoplefor Evaluating Salespeople

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Medi-test Company Sales Activity Medi-test Company Sales Activity EvaluationEvaluation

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Motivating and Compensating Motivating and Compensating PerformancePerformance

Salary – Refers to a specific amount of monetary Salary – Refers to a specific amount of monetary compensation at an agreed rate for definite time compensation at an agreed rate for definite time periodsperiods

Commission – Is monetary compensation provided for Commission – Is monetary compensation provided for each unit of sales and expressed as a percentage of each unit of sales and expressed as a percentage of salessales May be computed on the bases ofMay be computed on the bases of

Volume of sales in units of productVolume of sales in units of product Gross sales in dollarsGross sales in dollars Net sales after returnsNet sales after returns Sales volume in excess of a quotaSales volume in excess of a quota

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Types of Incentives and Their Types of Incentives and Their Possible Performance OutcomesPossible Performance Outcomes