CHAPTER CONTENTS
PAGE
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION 17-2
STUDENT LEARNING OBJECTIVES 17-3
KEY TERMS AND CONCEPTS 17-3
LECTURE NOTES
· Selling the Way Customers Want to Buy 17-4
· Scope and Significance of Personal Selling and Sales Management 17-4
· The Many Forms of Personal Selling 17-6
· The Personal Selling Process: Building Relationships 17-7
· The Sales Management Process 17-11
ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” 17-17
ANSWERS TO “INTERNET EXERCISE” 17-19
SUPPLEMENTAL LECTURE NOTE (SLN)
· SLN 17-1: Telephone Selling: Pervasive and Invasive 17-20
IN-CLASS ACTIVITY (ICA)
· ICA 17-1: Student Perceptions of Selling 17-21
VIDEO CASE 17 TEACHING NOTE (TN)
· Reebok: Relationship Selling and Customer Value 17-24
POWERPOINT THUMBNAILS 17-26
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION
PowerPoint Trans- Hand-
Slides[1] parencies[2] outs[3]
Textbook Figures
Figure 17-1 How outside order-getting salespeople spend
their time each week ü
Figure 17-2 Stages and objectives of the personal
selling process ü
Figure 17-3 The sales management process ü ü
Figure 17-4 Account management policy grid ü
Figure 17-5 U.S. salesforce composition and change ü
Supplemental Figures and Advertisements
Figure 17-A How salespeople create value for customers ü ü
Figure 17-B Comparing order takers and order getters ü ü
Figure 17-C Stages in the personal selling process ü ü
Figure 17-D Techniques for handling objections ü ü
In-Class Activity (ICA) Figure
ICA 17-1, Figure 1 Sales and Selling Quiz ü ü
STUDENT LEARNING OBJECTIVES
After reading this chapter students should be able to:
· Recognize different types of personal selling.
· Describe the stages in the personal selling process.
· Specify the functions and tasks in the sales management process.
· Understand how firms recruit, select, train, motivate, compensate, and evaluate salespeople.
· Describe recent applications of salesforce automation and customer relationship management.
KEY TERMS AND CONCEPTS
account management policies personal selling
adaptive selling personal selling process
consultative selling relationship selling
major account management sales management
order getter sales plan
order taker salesforce automation
LECTURE NOTES
Selling the Way Customers Want to Buy
As president and CEO of Xerox, Anne Mulcahy is successfully transforming it to the realities of the digital age and putting Xerox back onto a growth trajectory.
Mulcahy began her 25-year Xerox career as a field sales representative, and her sales background has played a pivotal role in her management and executive positions. “We’ll win back market share one customer at a time, one sale at a time,” Mulcahy says. “We’ll do that by providing greater value than our competitors–and that means selling the way customers want to buy.”
Her approach to sales, coupled with her management experience, has already borne fruit as Xerox positions itself for the twenty-first century.
I. SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT
Personal selling and management of the sales effort are an important part of the firm’s promotional mix.
A. Nature of Personal Selling and Sales Management
· Personal selling involves the two-way flow of communication between a buyer and seller, often in a fact-to-face encounter, designed to influence a person’s or group’s purchase decision.
· With advances in telecommunications, personal selling also takes place over the telephone, through video teleconferencing, and Internet/Web-enabled links between buyer and sellers.
· Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm. The tasks are setting objectives; organizing the salesforce; recruiting, selecting, training, and compensating salespeople; and evaluating the performance of individual salespeople.
· The tasks involved in managing personal selling include:
setting objectives; organizing the salesforce; recruiting, selecting, training, and compensating salespeople; and evaluating the performance of individual salespeople.
B. Selling Happens Almost Everywhere
“Everyone lives by selling something,” wrote author Robert Louis Stevenson and his observation holds true today.
· The Bureau of Labor Statistics reports that almost 16 million people hold sales positions in the U.S.
· Virtually every occupation that involves customer contact has an element of personal selling.
· About 20% of the chief executive officers in the 1,000 largest U.S. corporations have significant sales and marketing experience in their work history like Anne Mulcahy of Xerox.
C. Personal Selling in Marketing
Personal selling serves three major roles in a firm’s overall marketing effort.
· Salespeople are the critical link between the firm and its customers, matching company interests with customer needs to satisfy both parties in the exchange process.
· Salespeople are the company in a consumer’s eyes. They represent what the company is or attempts to be and are often the only personal contact a customer has with the company.
· Personal selling may play a dominant role in a firm’s marketing program.
D. Creating Customer Value Through Salespeople: Relationship Selling
By being close to the customer, salespeople can create customer value by (1) identifying creative solutions to customer problems,
(2) easing the customer buying process, and (3) following through after the sale is made.
· Salespeople at Medtronic, Inc., the world leader in the heart pacemaker market, are in the operating room for more than 90% of the procedures performed with their product.
· Customer value creation is made possible by relationship selling, the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time.
CONCEPT CHECK
1. What is personal selling?
Answer: Personal selling involves the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
2. What is involved in sales management?
Answer: Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm.
II. THE MANY FORMS OF PERSONAL SELLING
Personal selling assumes many forms based on the amount of selling done and the amount of creativity required to perform the sales task. Two types of personal selling exist: order taking and order getting. Some firms use only one of these, but others use a combination of both.
A. Order Taking
Typically, an order taker processes routine orders or reorders for products that were already sold by the company. The primary responsibility of order takers is to preserve an ongoing relationship with existing customers and maintain sales. They generally do little selling in a conventional sense and engage in only modest problem solving with customers. Two types exist:
· Outside order takers visit customers, arrange displays, and replenish inventory stocks of resellers, such as retailers or wholesalers.
· Inside order takers, also called order clerks or sales clerks:
a. Typically answer simple questions, take orders, and complete transactions with customers.
b. Are often employed by companies that use inbound telemarketing, the use of toll-free telephone numbers that customer s can call to obtain information about products or services and make purchases.
B. Order Getting
An order getter sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service.
· Order getting involves a high degree of creativity and customer empathy and is typically required for selling complex or technical products with many options, so considerable product knowledge and sales training are necessary.
· Order getting is time-consuming (outside order getters work about 48 hours per week) and expensive. A single field sales call costs about $170, factoring in salespeople’s compensation, benefits, and travel-and-entertainment expenses.
· Outbound telemarketing is the practice of using the telephone rather than personal visits to contact customers. It costs $20-$25 per call, with little or no field expense. Some 40 million outbound telemarketing calls are made each year in the U.S.
CONCEPT CHECK
1. What is the main difference between an order taker and an order getter?
Answer: An order taker processes routine orders or reorders for products that were already sold by the company. An order getter sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on their use of a product or service.
2. What percentage of an order getting salesperson’s time is spent selling?
Answer: About 54% (25% selling over the phone and 29% selling face-to-face).
III. THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS
Selling, and particularly order getting, is a complicated activity that involves building buyer-seller relationships. Although the salesperson-customer interaction is essential to personal selling, much of a salesperson’s work occurs before and after the sale itself.
The personal selling process consists of six stages: (1) prospecting,
(2) preapproach, (3) approach, (4) presentation, (5) close, and
(6) follow-up.
A. Prospecting
Personal selling begins with prospecting—the search for and qualification of potential customers. For some products that are one-time purchases, continual prospecting is necessary to maintain sales. There are three types of prospects:
· A lead is the name of a person who may be a possible customer.
· A prospect is a customer who wants or needs the product.
· A qualified prospect is an individual who wants the product, can afford to buy it, and is the decision maker.
· Leads and prospects are generated using several sources. Advertising may contain a coupon or a toll-free number to generate leads. Some companies exhibit at trade shows, professional meetings, and conferences to generate leads or prospects. Others use lists and directories.
· Another approach is cold canvassing in person or by telephone, which simply means that a salesperson may open a directory, pick a name, and visit or call that individual or business. Although the refusal rate is high, this approach can be successful. Cold canvassing is often criticized by consumers as an intrusion on their privacy. It is now regulated in the U.S. Telephone Consumer Protection Act and other measures.
B. Preapproach
Once a salesperson has identified a qualified prospect, preparation for the sale begins with the preapproach, the stage that involves obtaining further information on the prospect and deciding on the best method of approach.
· Knowing how the prospect prefers to be approached and what the prospect is looking for in a product or service is essential.
· Identifying the best time to contact a prospect is also important.
C. Approach
The approach stage involves the initial meeting between the salesperson and prospect, where the objectives are to gain the prospect's attention, stimulate interest, and build the foundation for the sales presentation itself and the basis for a working relationship.
· First impressions are critical. It is common to begin the conversation with a reference to common acquaintances, a referral, or the product or service itself.
· This stage is very important in international settings, where in many societies considerable time is spent establishing a rapport between buyers and sellers. Besides a different pace, different actions may be required. Also, it is important to know how to exchange business cards and when or when not to shake hands.
D. Presentation
The presentation is at the core of the order-getting process, and its objective is to convert a prospect into a customer by creating a desire for the product or service. Three presentation formats exist:
1. Stimulus-Response Format.
· The stimulus-response presentation format assumes that given the appropriate stimulus by a salesperson, the prospect will buy. With this format the salesperson tries one appeal after another, hoping to hit the right button.
· When a McDonald’s counter clerk uses this approach in asking whether you’d like dessert with your meal—the clerk is engaging in suggestive selling.
2. Formula Selling Format.
· A more formalized approach, the formula selling presentation format, is based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect.
· A popular version of this format is the canned sales presentation, which is a memorized, standardized message conveyed to every prospect.
a. Used by firms in telephone and door-to-door selling of consumer products, this approach presentation treats every prospect the same, regardless of differences in needs or preference for certain kinds of information.
b. Although thorough, this presentation does not provide for feedback from the prospective buyer, critical to the communication process and the start of a relationship.
3. Need-Satisfaction Format.
· The need-satisfaction presentation format emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers. Once these are identified, the salesperson tailors the presentation to the prospect and highlights product benefits that may be valued.
· The need-satisfaction format has two selling styles:
a. Adaptive selling involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information.
b. Consultative selling focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution. Novel solutions often arise, thereby creating unique value for the customer.
4. Handling Objections.
· A critical concern in the presentation stage is handling objections, which are excuses for not making a purchase commitment or decision.
· Objections do not put an end to the presentation. Rather, techniques can be used to deal with objections in a courteous, ethical, and professional manner. The six most common techniques for handling objections are:
a. Acknowledge and convert the objection. Use the objection as a reason for buying.
b. Postpone. Say that the objection will be addressed later in the presentation.
c. Agree and neutralize. Agree with the objection, and then show that it is unimportant.
d. Accept the objection. Probe for the reasons behind it, and attempt to stimulate further discussion on the objection.
e. Denial. When an objection is based on misinformation and clearly untrue, it is wise to meet it head on with a firm denial.
f. Ignore the objection. Use when the objection is a stalling mechanism or is clearly not important to the prospect.
E. Close
The closing stage in the selling process involves obtaining a purchase commitment from the prospect.
· This stage is the most important and the most difficult because the salesperson must determine when the prospect is ready to buy. Telltale signals include body language (reexamines product), statements (positive comments), and questions about the particulars of the contract.