Transcript Chapter 14 - The Citadel

Personal Selling, Sales
Management, and Direct
Marketing
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
sell
 High-pressure process that focuses on making an
immediate sale with no concern for developing longterm customer relationship
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Approaches to Personal Selling (cont’d)
• Relationship selling
 Process 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 objectives
 What sales force is expected to accomplish and when
 Customer 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 customers
 Geographic sales force structure
 Product-class sales territories
 Industry specialization and
 key/major accounts
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Recruiting, Training, and
Rewarding the Sales Force
• Recruiting the right people
 Good listening and follow-up skills
 Ability to adapt style from situation to situation
 Tenacity
 High 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 them
 Straight 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 order
 Catalogs: 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 telephone
 More 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 order
 Direct-response TV (DRTV): short commercials, 30minute-plus infomercials, and home shopping
networks
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Direct Marketing (cont’d)
• M-Commerce: promotional and other ecommerce activities transmitted over
mobile phones/devices
 Short-messaging system marketing (SMS)
 Spim: instant-messaging version of spam
 Adware: 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?
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