Personal Selling, Sales Management, and Direct

Marketing

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Chapter Objectives

• Understand the important role of personal selling within the context of the promotion mix

• List the steps in the personal selling process

• Explain the role of the sales manager

• Understand direct marketing

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Real People, Real Choices

• IBM (Esther Ferre)• IBM must prioritize investment of resources to

achieve revenue and profit targets.Option 1: reduce sales and support resources for a

specific customer or business segment.Option 2: maintain current level of resources.Option 3: evaluate lower-cost ways to provide sales and support resources.

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Personal Selling

• Occurs when a company representative interacts directly with a (prospective) customer to communicate about a good or service “Personal touch” is more effective than mass-media

appeal.Selling/sales management jobs provide high mobility, especially for college grads with marketing background.

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The Role of Personal Selling

• Personal selling is more important: --when firm uses push strategy. --in B2B contexts. --with inexperienced consumers who need hands-on

assistance. --for products bought infrequently (houses, cars,

computers).

• Cost per contact is very high.

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Technology and Personal Selling

• Customer relationship management (CRM) software and partner relationship management (PRM)

• Teleconferencing, videoconferencing, and improved corporate Web sites

• Voice-over Internet protocol

• Assorted wireless technologies

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Types of Sales Jobs

• Order taker

• Technical specialist

• Missionary salesperson (stimulate clients to buy)

• New-business salesperson and order getter

• Team selling and cross-functional team

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Approaches to Personal Selling

• Transactional selling: Putting on the hard sellHigh-pressure process that focuses on making an

immediate sale with no concern for developing long-term customer relationship

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Approaches to Personal Selling (cont’d)

• Relationship sellingProcess of building long-term customers by

developing mutually satisfying, win-win relationships with customers

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The Creative Selling Process

• Step 1: Prospecting and qualifying --Prospecting: developing a list of potential customers --Qualifying: determining how likely potential

customers are to become customers

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Step 2: Preapproach

• Compiling background information about prospective customers and planning the sales interview --Purchase history, current needs, customer’s

interests --From informal sources, CRM system, customers’

Web sites, and/or business publications

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Step 3: Approach

• Contacting the prospect

• Learning even more about prospect’s needs, create a good impression, and build rapport

• --“You never get a second

• chance to make a good

• first impression.”

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Step 4: Sales Presentation

• Laying out benefits and added value of product/firm and its advantages over the competition

• Inviting customer involvement in conversation

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Step 5: Handling Objections

• Anticipating why prospect is reluctant to make a commitment

• Welcoming objections

• Handling objections successfully to move prospect to decision stage

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Step 6: Closing the Sale

• Gaining the customer’s commitment in the decision stage --Last-objection close --Assumptive or minor-points close --Standing-room-only or buy-now close

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Step 7: Follow-Up

• Arranging for delivery, payment, and purchase terms

• Making sure customer received delivery and is satisfied

• Bridging to next purchase

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Sales Management

• Setting sales force objectivesWhat sales force is expected to accomplish and whenCustomer satisfaction, loyalty, retention/turnover,

new-customer development, new-product suggestions, training, reporting on competitive activity, community involvement

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Creating a Sales Force Strategy

• Establishing structure and size of a firm’s sales force

• Sales territory: a set group of customersGeographic sales force structureProduct-class sales territories Industry specialization and key/major accounts

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Recruiting, Training, and Rewarding the Sales Force

• Recruiting the right peopleGood listening and follow-up skillsAbility to adapt style from situation to situationTenacityHigh level of personal organization

• Sales training: teaches salespeople about firm, its products, how to develop skills, knowledge, and attitudes to succeed

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Recruiting, Training, and Rewarding the Sales Force (cont’d)

• Paying salespeople well to motivate themStraight commission plan Commission-with-draw plan Straight salary plan

• Running sales contests for short-term sales boost

• Call reports: which customers were called on and how call went

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Evaluating the Sales Force

• Is sales force meeting its objectives?

• What are possible causes of failure?Measuring individual salesperson performance Monitoring salesperson’s expense account for travel

and entertainment

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Direct Marketing

• Any direct communication to a consumer or business recipient designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product

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Direct Marketing (cont’d)

• Mail orderCatalogs: collection of products offered for sale and

described in book form, usually consisting of product descriptions and photos

Direct mail: a brochure/pamphlet offering a specific good/service at one point in time

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Direct Marketing (cont’d)

• Telemarketing: direct marketing conducted over the telephoneMore profitable for business than consumer markets In 2003, FTC established National Do Not Call

registry

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Direct Marketing (cont’d)

• Direct-response advertising: allows consumer to respond by contacting the provider with questions or an orderDirect-response TV (DRTV): short commercials, 30-

minute-plus infomercials, and home shopping networks

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Direct Marketing (cont’d)

• M-Commerce: promotional and other e-commerce activities transmitted over mobile phones/devicesShort-messaging system marketing (SMS) Spim: instant-messaging version of spamAdware: software that tracks Web habits/interests,

presenting pop-up ads and resetting home page

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Real People, Real Choices

• IBM (Esther Ferre)

• Esther chose option 3: evaluate lower-cost ways to provide sales and support resources.Minimized impact to customer and improved cost

structure of sales team.Maintained customer satisfaction with lower cost. Resulted in increased revenue over time.

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Marketing in Action Case:You Make the Call

• What is the decision facing Eli Lilly?

• What factors are important in understanding this decision situation?

• What are the alternatives?

• What decision(s) do you recommend?

• What are some ways to implement your recommendation?

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Keeping It Real: Fast-Forward to Next Class, Decision Time at Darden Restaurants

• Meet Jim Lawrence, Vice President, Supply Management & Purchasing.

• Volatility in the supply chain threatened food supplies to restaurants.

• The decision: A new model for supply chain management?