Personal Selling, Sales Management, and Direct Marketing

1. Personal Selling, Sales Management, and Direct Marketing

2. 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

3. 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.

4. 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.

5. 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.

6. 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

7. 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

8. 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 long-term customer relationship

9. Approaches to Personal Selling (cont’d) • Relationship selling • Process of building long-term customers by developing mutually satisfying, win-win relationships with customers

10. 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

11. 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

12. 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.”

13. Step 4: Sales Presentation • Laying out benefits and added value of product/firm and its advantages over the competition • Inviting customer involvement in conversation

14. Step 5: Handling Objections • Anticipating why prospect is reluctant to make a commitment • Welcoming objections • Handling objections successfully to move prospect to decision stage

15. 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

16. Step 7: Follow-Up • Arranging for delivery, payment, and purchase terms • Making sure customer received delivery and is satisfied • Bridging to next purchase

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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, 30-minute-plus infomercials, and home shopping networks

26. Direct Marketing (cont’d) • M-Commerce: promotional and other e-commerce 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

27. 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.

28. 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?

29. 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?