Managing the Personal Selling Function

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Chapter Questions• What is the role of personal selling in business

marketing?• What is the selling process followed by an

industrial sales person?• What are various types of sales organisations?• How the sales force is managed and deployed? • How the major, national, or key accounts are

managed?• What are the ethical issues in personal selling?

Role of Personal Selling in BM

Major roles are:

1)Part of problem – solving ability of the company

2)Part of the communication mix.

3) Building a long-term relationship with key customers.

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The Selling Process Transactional salesperson follows the process:1. Prospecting and qualifying2. Pre-approach or Pre-call planning3. Approach4. Presentation and demonstration5. Overcoming objections6. Trial close / closing the sale7. Follow-up and service

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Prospecting• It is identifying or finding prospects i.e. prospective or potential customers.• Methods of prospecting or sales lead generation are: (1) referrals from existing customers, (2) company sources (website, ads., tradeshow, teleprospecting), (3) external sources (suppliers, intermediaries, trade associations), (4) salespersons’ networking, (5) industrial directories, (6) cold canvassing

Qualifying• Companies qualify sales leads by contacting them by mail or phone to find their interests (or needs) and financial capacity. • Leads are categorized as: Hot, Warm, and Cool

Preapproach

• Information gathering about the prospect.Sources of information: the Internet, industrial directories, government publications, intermediaries, etc.

• Precall planning• Setting call objectives• Tentative planning of sales strategy: which

products, features and benefits may meet the customer needs

Approach

• Make an appointment to meet the prospect• Make favourable first impression• Select an approach technique:

• Introductory• Customer benefit• Product• Question• Praise• The approach takes a few minutes of a call, but it

can make or break a sale

Presentation and Demonstration

There are four components:• Understanding the buyer’s needs• Knowing sales presentation methods / strategies• Developing an effective presentation• Using demonstration as a tool for sellingWe will examine each of the above points

Understanding the buyer’s needs• Firms and consumers buy products / services to satisfy needs• To understand buyer’s needs, ask questions and listen• In business situations, problem identification and impact questions are importantE.G. • Have you experienced any problems on quality and delivery from the existing supplies?• What impact the quality and delivery problems will have on your costs and customer satisfaction?

Knowing Sales Presentation Methods/StrategiesFirms have developed different methods / styles / strategies of sales presentation• Stimulus response method / canned approach.

• It is a memorised sales talk or a prepared sales presentation. • The sales person talks without knowing the prospect’s needs. E.G.

Used by tele-marketing people• Formula method / formulated approach.

• It is also based on stimulus response thinking that all prospects are similar.

• The salesperson uses a standard formula – AIDA (attention, interest, desire, and action).

• It is used if time is short and prospects are similar. • Shortcomings are: prospects’ needs are not uncovered and uses

same standard formula for different prospects.

Sales Presentation Methods (Continued)

• Need – satisfaction method• Interactive sales presentation• First find prospect’s needs, by asking questions and

listening• Use FAB approach: Features, Advantages, Benefits• Effective method, as it focuses on customers

• Consultative selling method / Problem-solving approach• Salespeople use cross-functional expertise• Firms adopt team selling approach• It is used by software / consulting firms

Developing an Effective Presentation

Some of the guidelines are:• Plan the sales call• Adopt presentation to the situation and person• Communicate the benefits of the purchase• Present relevant and limited information at a time• Use the prospect’s language• Make the presentation convincing – give evidence• Use technology like multi-media presentation

Using Demonstration

• Sales presentation can be improved by demonstration

• Demonstration is one of the important selling tools EGs: Test drive of cars; demonstration of industrial products in use

• Benefits of using demonstration for selling are: • Buyers’ objections are cleared• Improves the buyer’s purchasing interest• Helps to find specific benefits of the prospect• The prospect can experience the benefit

Overcoming Sales Objections / Resistances

• Objections take place during presentations / when the order is asked

• Two types of sales objections:• Psychological / hidden• Logical (real or practical)

• Methods for handling and overcoming objections: (a) ask questions, (b) turn an objection into a benefit, (c) deny objections tactfully, (d) third-party certificate, (e) compensation

Trial close and Closing the sale

• Trial close checks the attitude or opinion of the prospect, before closing the sale (or asking for the order)

• If the response to trial close question is favourable, then the salesperson should close the sale

• Some of the techniques used for closing the sale are: (a) alternative-choice, (b) minor points, (c) assumptive, (d) summary-of-benefits, (e) T-account, (f) special-offer, (g) probability, and (h) negotiation

Follow-up and Service

• Necessary for customer satisfaction• Successful salespeople follow-up in different ways:

For example,• Check order details• Follow through delivery schedule• Visit when the product is delivered• Build long-term relationship• Arrange warranty service

Types of Sales Organisations• Geographic organisation• Product organisation• Market oriented organisation• Combination organisation

Major selection criteria(1)Size and resource of the firm

(2)Nature of product sold in the market

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Management of Sales ForceManagement / administration of sales force

includes: Recruitment and selection of salespersons Training the salespeople Supervision and motivation of sales force Compensation of salesforce Evaluation and control of salespersons

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Recruitment of the Sales ForceAfter planning the needed number and type of

salespeople, recruitment starts by:

• Identifying prospective candidates, using

internal and external sources.

• Evaluating and selecting effective sources of

recruitment.

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Selection of the Sales ForceTools or steps in selection process:• Screening resumes• Application blank• Initial interview• Intensive interview• Testing• Reference check• Physical examinationEach company decides selection criteria-e.g. knowledgeable, high energy, reliable, helpful.

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Training the SalespeopleThe training process has three phases:

•Assess training needs of (1) newly hired sales trainees, and (2) experienced / existing salespeople.•Design and execute sales training programme using ‘ACMEE Method’: Aims, Content, Methods, Execution, Evaluation.

Assess Sales Training Needs

Design and Execute Sales Training Programme

Evaluation and Reinforcement of Sales Training Programme

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Designing & Executing Sales Training Programme Aims / Objectives (Vary from company to company) Examples•Prepare new sales trainees•Increase sales, profits, or both•Increase sales productivity

Content of training programme1) Initial training for new sales trainees (Broader)•Company, product, customer, competitor knowledge•Selling skills or sales techniques.2) Continuing training for existing salespeople (specific)•Depending on training needs•Examples: New product, negotiating skills.

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Sales Training MethodsGrouped into five categories:• Class room / conference training: Lectures, group

discussion.• Behavioral learning: Case studies, role-playing• Online training : Distance learning, interactive multimedia.• Absorption training: CD-ROM, audio cassettes, manuals,

books.• On the job training: Mentoring, job rotation.Execution of Sales Training programmeFirst, make decisions on :1. Who will be the trainees and trainers?2. When and where the training take place?3. What would be the budgeted expenditure?

Execution / Implementation of Sales Training Programme

• Arranging internal / external trainers• Arranging conference hall, teaching aids, travel,

etc.• Prepare time table, communication, etc.Evaluation of Sales Training Programme• Sales performance against targets before and after

training• Written tests before and after the training• Trainees evaluate training programmeReinforcement training methods• Web – based or online training• Refresher training and retraining

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Supervision of Sales Force• Supervision is directing and controlling daily activities of

salespeople: Responsibilities of sales supervisor /manager:

• Communicating & implementing sales policies & strategies

• Counseling on deficiencies of salespeople• Setting goals or targets• Creating a favourable work environment & relationship.• Training and development of sales persons.Methods used for supervising salespeopleDirect : Phone, e-mail, sales meeting, personal contact,

coaching.Indirect: Sales report, sales analysis, expense report,

compensation plan.

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Motivation of Sales Force• Motivation is the effort salesperson makes to complete

activities of the job.• Categories of motivational methods / tools : Financial &

NonfinancialFinancial tools / methods:(1)salary, (2) commission, (3) bonus, (4) fringe benefits, (5)

combination, (6) sales contestsNon- financial tools / methods:(1)Promotion, (2) sense of accomplishment, (3) personal growth

opportunities, (4) recognition, (5) job security, (6) training, (7) sales meetings, (8) job enrichment, (9) supervision

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Compensation of Sales ForcePurpose : Attract and motivate salespeople.Methods / plans of salesforce compensation:• Straight salary• straight commission • combination

• Salary plus commission• Salary plus bonus• Salary plus commission plus bonus

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Evaluate and Control of Sales Force Performance

Purposes : • To decide payment increment, promotion, training needs• To find strengths and weaknessesProcedure• Set policies on performance evaluation and control• Decide bases of (or criteria for) performance evaluation• Establish performance standards / goals / targets.• Compare actual performance with the standards.• Review performance evaluation with salespersons• Decide sales management actions.

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Deployment of Sales ForceIt includes the following • Setting - up sales territories• Determining size of the sales force• Allocating salespeople to territoriesSetting – up or Designing Sales TerritoriesSteps involved are :• Select a control unit• Find location and potential of customers• Use build – up method to decide basic territories

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Determining Size of the Sales Force

Three alternative methods available

1)Workload method

2)Sales potential or Break down method

3)Incremental method

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Allocating Salespeople to TerritoriesCriteria / factors considered for allocation:1)Relative abilities of salespeople• Based on product & market knowledge, past

performance, selling and communication skills.• link salespeople abilities to territory potentials.2) Effectiveness of salesperson in a territory• Relate salesperson’s social & cultural

characteristics with those of territory customers.

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Management of Major / Key / National Accounts• Major, national, or key accounts are high sales and profit

potential customers.• Difference between major and national accounts:

• Complexity of national account due to geographically dispersed customers’ operating units.

• Major accounts are simple to serve as customers’ operating unit is at one place.

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Sales and Profit Potential of customers

Large

Small

Major Account

National Account

Transaction-al Account

Minor Account

Simple ComplexComplexity of Customers

Managing Key AccountsObjective: Become a preferred or sole supplier.Strategy / Tasks:• Team selling – headed by a senior manager.• Relationship marketing-long term, mutually

beneficial.• Support from top management and other

functional executives.• Provide superior value, after identifying key

account’s needs.

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Ethical Issues in Personal SellingEthical situations involving salespeople:• Relations with the company• Relations with customer –main issues:• Gifts• Misrepresentation• Business entertainmentEthical guidelines • Develop and enforce a code of ethics

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