Personal Selling and Direct Marketing Chapter 17

Personal Selling and Personal Selling and Direct MarketingDirect Marketing

Chapter 17Chapter 17

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Objectives

Understand the role of a Understand the role of a company’s salespeople in company’s salespeople in creating value for customers creating value for customers and building customers and building customers relationships.relationships.

Know the six major sales force Know the six major sales force management steps.management steps.

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Objectives

Understand the personal selling Understand the personal selling process, and how to distinguish process, and how to distinguish between transaction-oriented between transaction-oriented marketing and relationship marketing.marketing and relationship marketing.

Learn about direct marketing and its Learn about direct marketing and its benefits to customers and companies.benefits to customers and companies.

Know the major forms of direct Know the major forms of direct marketing.marketing.

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Record-breaking Record-breaking earnings and sales earnings and sales growthgrowth

Outstanding sales Outstanding sales force; rated as one of force; rated as one of America’s best.America’s best.

Sales force focuses Sales force focuses on customer successon customer success

Sales force is organized Sales force is organized into separate divisions into separate divisions dedicated to specific dedicated to specific customerscustomersDivision platform teams Division platform teams work with customers work with customers and are linked to and are linked to customer operationscustomer operations

cLearLear

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Definition

SalespersonSalesperson An individual acting for An individual acting for

a company by a company by performing one or performing one or more of the following more of the following activities: prospecting, activities: prospecting, communicating, communicating, servicing, and servicing, and information gathering.information gathering.

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Personal Selling

Salespeople Have Many NamesSalespeople Have Many Names

AgentsAgentsSales consultantsSales consultantsSales Sales RepresentativesRepresentativesAccount Account ExecutivesExecutives

Sales EngineersSales EngineersDistrict ManagersDistrict ManagersMarketing Marketing RepresentativesRepresentativesAccount Account Development Development RepresentativesRepresentatives

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The Role of the Sales ForceThe Role of the Sales Force Two-way personal communicationTwo-way personal communication More effective than advertising in More effective than advertising in

complex selling situationscomplex selling situations The sales force plays a major role in The sales force plays a major role in

most companiesmost companies The sales force works to produce The sales force works to produce

customer satisfaction and company customer satisfaction and company profitprofit

Personal Selling

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Definition

Sales Force ManagementSales Force Management The analysis, planning, The analysis, planning,

implementation, and control of sales implementation, and control of sales force activities. It includes setting and force activities. It includes setting and designing sales force strategy; and designing sales force strategy; and recruiting, selecting, training, recruiting, selecting, training, supervising, compensating, and supervising, compensating, and evaluating the firm’s salespeople.evaluating the firm’s salespeople.

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Figure 17-1:

Major Steps in Sales Force Management

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Sales Force Strategy and StructureSales Force Strategy and Structure

Managing the Sales Force

Sales Force StructureSales Force Structure Territorial sales force Territorial sales force

structure structure Product sales force Product sales force

structure structure Customer sales force Customer sales force

structure structure Complex sales force Complex sales force

structure structure

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Sales Force Sales Force Strategy and Strategy and StructureStructure Sales Force SizeSales Force Size

Many companies Many companies use the workload use the workload

approach to set approach to set sales force size sales force size


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Sales Force Strategy and StructureSales Force Strategy and Structure Outside and inside sales forcesOutside and inside sales forces

Team sellingTeam selling


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Recruiting and Recruiting and Selecting Selecting SalespeopleSalespeople Careful recruiting can: Careful recruiting can:

Increase overall Increase overall sales force sales force performance performance

Reduce turnoverReduce turnover Reduce recruiting Reduce recruiting

and training costs and training costs


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Traits of Successful SalespeopleTraits of Successful Salespeople

EnthusiasmEnthusiasmPatiencePatienceInitiativeInitiativeSelf-ConfidenceSelf-ConfidenceJob CommitmentJob CommitmentCustomer Customer OrientationOrientationIndependentIndependent

Self-Self-MotivatedMotivatedExcellent Excellent ListenersListenersFriendlyFriendlyPersistentPersistentAttentiveAttentiveHonestHonest

Internally Internally MotivatedMotivatedRelationship Relationship OrientedOrientedDisciplinedDisciplinedHardworkingHardworkingTeam PlayersTeam Players

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Recruiting & Selecting SalespeopleRecruiting & Selecting Salespeople Recruiting involves:Recruiting involves:

Soliciting applicationsSoliciting applications Screening candidatesScreening candidates

• InterviewsInterviews• Sales aptitude, personality, analytical Sales aptitude, personality, analytical

and/or organizational tests and/or organizational tests• References, work history, etc.References, work history, etc.


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Training SalespeopleTraining Salespeople Average training period is Average training period is

4 months4 months Training is expensive, but Training is expensive, but

yields strong returnsyields strong returns Training programs have Training programs have

many goalsmany goals Many companies are Many companies are

adding Web-based sales adding Web-based sales training programstraining programs


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U.S. companies spend more that $7 billion annually on training salespeople and devote more than 22 hours per year to the average

salesperson.

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Compensating SalespeopleCompensating Salespeople Compensation elements: salary, Compensation elements: salary,

bonuses, commissions, expenses, and bonuses, commissions, expenses, and fringe benefitsfringe benefits

Basic compensation plans:Basic compensation plans: Straight salaryStraight salary Straight commissionStraight commission Salary plus bonusSalary plus bonus Salary plus commissionSalary plus commission


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Compensating Compensating SalespeopleSalespeople Compensation plans Compensation plans

should direct the sales should direct the sales force toward activities that force toward activities that are consistent with overall are consistent with overall marketing objectives.marketing objectives.

Gain market shareGain market share Solidify market Solidify market

leadership leadership Maximize profitabilityMaximize profitability


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Supervising SalespeopleSupervising Salespeople Effective supervisors provide direction to the Effective supervisors provide direction to the

sales forcesales force Annual call plans and time-and-duty analysis Annual call plans and time-and-duty analysis

can help provide direction can help provide direction Sales force automation systems assist in Sales force automation systems assist in

creating more efficient sales force operations creating more efficient sales force operations The Internet is the The Internet is the

fastest-growing sales fastest-growing sales technology tool technology tool


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Figure 17-2:

How Salespeople Spend Their Time

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Supervising SalespeopleSupervising Salespeople Effective supervisors Effective supervisors

also motivate the also motivate the sales forcesales force

Organizational climateOrganizational climate Sales quotasSales quotas Positive incentivesPositive incentives

• Sales meetings, Sales meetings, sales contests, sales contests, honors, etc. honors, etc.


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American Express targets companies in need of sales force incentives.

The Persona Select cards are prepaid reward cards that allow recipients to buy whatever they most want.

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Evaluating Evaluating SalespeopleSalespeople Sales reportsSales reports Call reportsCall reports Expense Expense

reportsreports


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Figure 17-3:

The Personal Selling Process

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Prospecting and Prospecting and QualifyingQualifying Prospecting: Prospecting:

identifying identifying potential potential customerscustomers

Qualifying: Qualifying: Screening leadsScreening leads


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““Cold calling” by salespeople – visiting Cold calling” by salespeople – visiting offices without an appointment – was offices without an appointment – was mentioned in the text as one method of mentioned in the text as one method of identifying potential prospects.identifying potential prospects.

Discuss the pros and cons of cold Discuss the pros and cons of cold calling. Is it more appropriate for certain calling. Is it more appropriate for certain industries or product types than others?industries or product types than others?

Discussion Question

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MarketSoft Video Clip

Trade shows are often an excellent source of sales leads.

BusinessNow

Click the picture above to play video

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PreapproachPreapproach Learning as much Learning as much

as possible about as possible about a prospective a prospective customer prior to customer prior to making a sales callmaking a sales call


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ApproachApproach Stage of the Stage of the

selling process selling process where the where the salesperson salesperson meets the meets the customer for the customer for the first timefirst time


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Benefits of the Benefits of the product are product are presented or presented or demonstrateddemonstrated

Understanding Understanding prospect prospect needs is keyneeds is key


Presentation & DemonstrationPresentation & Demonstration

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Virtual reality is being used by Johnson & Johnson’s sales representatives to help

prospects learn about STERRAD.

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Handling Handling ObjectionsObjectionsClosingClosing Asking for the Asking for the

orderorder

Follow-upFollow-up Helps ensure Helps ensure

customer customer satisfactionsatisfaction


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Direct Marketing Direct Marketing Benefits: Benefits: BuyersBuyers ConvenientConvenient Easy to useEasy to use PrivatePrivate Access to a Access to a

wealth of wealth of informationinformation

Immediate Immediate InteractiveInteractive

Direct Marketing

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Direct Marketing Benefits: SellersDirect Marketing Benefits: Sellers Powerful tool for building relationshipsPowerful tool for building relationships Allows for targeting of small groups or Allows for targeting of small groups or

individuals with customized offers in a individuals with customized offers in a personalized fashionpersonalized fashion

Offers access to buyers that couldn’t Offers access to buyers that couldn’t be reached via other channelsbe reached via other channels

Low-cost, effective alternative for Low-cost, effective alternative for reaching specific marketsreaching specific markets

Direct Marketing

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Dell’s success is due to their direct selling model

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Customer Databases & Direct Customer Databases & Direct MarketingMarketing Databases include customer profile, Databases include customer profile,

purchase history, and other detailed purchase history, and other detailed informationinformation

Databases can be used to identify Databases can be used to identify prospects, profile customers, and prospects, profile customers, and select customers to receive offers, and select customers to receive offers, and to build relationshipsto build relationships

Direct Marketing

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Customer Customer Databases & Databases & Direct MarketingDirect Marketing Database Database

marketing requires marketing requires substantial substantial investment in investment in hardware, hardware, software, and software, and personnelpersonnel

Direct Marketing

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Suppose that you work for Suppose that you work for a casino that has recently a casino that has recently decided to develop a decided to develop a database in order to better database in order to better target promotional offers to target promotional offers to its clientele.its clientele.

What types of information What types of information would you collect or track in would you collect or track in this database? List as many this database? List as many database fields as you feel database fields as you feel are appropriate.are appropriate.

Discussion Question

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Figure 17-4:

Forms of Direct Marketing

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Telephone MarketingTelephone Marketing Inbound toll-free 800 Inbound toll-free 800

numbers are used to numbers are used to receive orders from receive orders from print or TV adsprint or TV ads

New legislation and New legislation and technological technological advances threaten advances threaten the future of the future of telemarketingtelemarketing

Direct Marketing

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Direct-Mail Direct-Mail MarketingMarketing New trends New trends

include fax, mail, include fax, mail, e-mail, and voice e-mail, and voice mail mail

Catalog Catalog MarketingMarketing Many Many

cataloguers cataloguers have migrated to have migrated to the webthe web

Direct Marketing

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Direct-Response Direct-Response Television Television MarketingMarketing Direct-response Direct-response

advertisingadvertising InfomercialsInfomercials Home shopping Home shopping

channelschannels

Kiosk MarketingKiosk Marketing

Direct Marketing

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Figure 17-5:

An Integrated Direct-Marketing Campaign

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Integrated Direct MarketingIntegrated Direct Marketing

Public Policy and Ethical Issues Public Policy and Ethical Issues Irritation, Unfairness, Deception, Irritation, Unfairness, Deception,

and Fraudand Fraud Invasion of PrivacyInvasion of Privacy

Direct Marketing

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The DMA recently developed its “Privacy Promise to American Consumers”

DMA Privacy Policy

Documents

Personal Selling and Direct Marketing Chapter 17