21-1 2000 McGraw-Hill Ryerson Limited

C H A P T E R T W E N T Y - O N E

PERSONAL SELLING ANDSALES MANAGEMENT

21-2 2000 McGraw-Hill Ryerson Limited

AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:

Recognize different types of personal selling.

Describe the stages in the personal selling process.

Specify the functions and tasks in the salesmanagement process.

Determine whether a firm should use manufacturersrepresentatives or a company salesforce and thenumber of people needed in a companys salesforce.

Understand how firms recruit, select, train, motivate,compensate, and evaluate salespeople.

Describe recent applications of salesforce automation.

21-3 2000 McGraw-Hill Ryerson Limited

Dun & Bradstreet: Selling Information in the Information AgeDun & Bradstreet: Selling Information in the Information Age

Selling information is a demanding task, even forD&B, which is a master of database managementand marketing, with a database of companiesthat is unrivalled.

However, D&B is finding that its market hasbecome more competitive, especially with somuch free data via the Internet.

D&Bs field salespeople must demonstrate howmuch better off credit managers and marketingexecutives will be by using D&Bs information.

21-4 2000 McGraw-Hill Ryerson Limited

Personal SellingPersonal Selling Personal selling involves a two-way flow of

communication between a buyer and seller,often in a face-to-face encounter, designed toinfluence a persons or groups purchasedecision.

With advances in telecommunications,however, personal selling takes place over thetelephone, through video teleconferencing andinteractive computer links between buyersand sellers.

21-5 2000 McGraw-Hill Ryerson Limited

Sales ManagementSales Management Sales management involves planning the selling

program and implementing and controlling the personalselling effort of the firm.

Numerous tasks are involved in managing personalselling including:

-- setting objectives;

-- organizing the salesforce;

-- recruiting, selecting, training, and

compensating salespeople; and

-- evaluating the performance of individual

salespeople.

21-6 2000 McGraw-Hill Ryerson Limited

PP21-1a Personal Selling and Sales Management QuizPP21-1a Personal Selling and Sales Management Quiz

1. About how much does it cost for a manufacturers sales

representative to make a single personal sales call? (check one)

$100 _____ $200 _____ $300 _____

$150 _____ $250 _____ $350 _____

21-7 2000 McGraw-Hill Ryerson Limited

PP21-1b Personal Selling and Sales Management QuizPP21-1b Personal Selling and Sales Management Quiz

2.A salespersons job is finished when a sale is made.

True or False? (circle one)

True False

3. About what percent of companies include customer

satisfaction as a measure of salesperson performance?

(check one)

10% _____ 20% _____ 50% _____

20% _____ 40% _____ 60% _____

21-8 2000 McGraw-Hill Ryerson Limited

Pervasiveness of Personal SellingPervasiveness of Personal Selling

More than 1 million people are employed insales positions in Canada.

Virtually every occupation that involvescustomer contact has an element of personalselling.

Many executives in major companies haveheld sales positions at some time in theircareers.

Selling often serves as a stepping-stone to topmanagement.

21-9 2000 McGraw-Hill Ryerson Limited

How Salespeople Create Value for CustomersHow Salespeople Create Value for Customers

Identify Creative Solutions To Customer Problems Identify Creative Solutions To Customer Problems

Ease The Customer Buying Process Ease The Customer Buying Process

Follow-up After The Sale Is Made Follow-up After The Sale Is Made

Customer ValueCustomer ValueCustomer Value

+

+

=

21-10 2000 McGraw-Hill Ryerson Limited

Relationship SellingRelationship Selling

Relationship selling is the practiceof building ties to customers basedon a salespersons attention andcommitment to customer needsover time.

21-11 2000 McGraw-Hill Ryerson Limited

Partnership SellingPartnership Selling

With partnership selling, buyers and sellers

combine their expertise and resources to create

customized solutions; commit to joint planning;

and share customer, competitive, and company

information for their mutual benefit, and

ultimately the customer.

21-12 2000 McGraw-Hill Ryerson Limited

Concept CheckConcept Check

1. What is personal selling?

2. What is involved in sales

management?

21-13 2000 McGraw-Hill Ryerson Limited

Order Taking (Order Taking (order takerorder taker))

An order taker processes routine orders or reordersfor products that were already sold by the company.

The primary responsibility of order takers is topreserve an ongoing relationship with existingcustomers and maintain sales.

Types of order takers include:

-- outside order takers

-- inside order takers

21-14 2000 McGraw-Hill Ryerson Limited

OrderOrder Getter Getter 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 onthe customers use of a product or service.

Order getters can also be inside (an auto salesperson) oroutside (a D&B salesperson).

Order getting involves a high degree of creativity, customerempathy and is typically required for selling complex ortechnical products with many options, so considerableproduct knowledge and sales training are necessary.

21-15 2000 McGraw-Hill Ryerson Limited

How Salespeople Spend Their Time

11%

31%

19%

25%

15%

PP21-2 How Outside Order-Getting Salespeople Spend Their PP21-2 How Outside Order-Getting Salespeople Spend Their Time Each Week Time Each Week

Service calls

Face-to-face-selling

Waiting/travel

Administrative tasks

Selling over the phone

21-16 2000 McGraw-Hill Ryerson Limited

Comparing Order Takers and Order Comparing Order Takers and Order GettersGetters

Objective Handle routine product Identify new customersreorders and uncover customer needs

Purchase Focus on straight re-buy Focus on new buy andsituation or simple purchase situations modified re-buy purchase

situations

Activity Perform order processing Act as creative problemfunctions solvers

Training Require significant clerical Require significant sales,training product, and customer

training

Basis ofBasis ofComparison Comparison Order Takers Order Takers Order Order Getters Getters

21-17 2000 McGraw-Hill Ryerson Limited

Concept CheckConcept Check

1. What is the principal differencebetween an order taker and anorder getter?

2. What is team selling?

21-18 2000 McGraw-Hill Ryerson Limited

Stages in the Personal Selling ProcessStages in the Personal Selling Process

ProspectingProspecting

PreapproachPreapproach

ApproachApproach

PresentationPresentation

CloseClose

Follow-upFollow-up

21-19 2000 McGraw-Hill Ryerson Limited

PP21-3a Stages and Objectives of the Personal Selling PP21-3a Stages and Objectives of the Personal Selling Process Process

1. Prospecting

2. Pre-approach

3. Approach

Search for and qualify prospects

Start of the selling process; prospects produced through advertising, referrals, and coldcanvassing.

Gather information and decide how to approach the prospect.

Information sources includepersonal observation, othercustomers, and own salespeople.

Gain prospects attention, stimulate interest, and make transition to the presentation.

First impression is critical;gain attention and interest through reference to commonacquaintances, a referral, orproduct demonstration.

21-20 2000 McGraw-Hill Ryerson Limited

PP21-3b Stages and Objectives of the Personal Selling PP21-3b Stages and Objectives of the Personal Selling Process Process

4. Presentation

5. Close

6. Follow-up

Begin converting aprospect into a customerby creating a desire forthe product or service

Different presentation formats arepossible; however, involving thecustomer in the product or servicethrough attention to particular needsis critical; important to dealprofessionally and ethnically withprospect skepticism, indifference,or objections.

Obtain a purchasecommitment from theprospect and create acustomer.

Salesperson asks for the purchase; different approaches include the trial close and assumptive close.

Ensure that thecustomer is satisfiedwith the productor service.

Resolve any problems facedby the customer to ensurecustomer satisfaction andfuture sales possibilities.

21-21 2000 McGraw-Hill Ryerson Limited

Presentation FormatsPresentation Formats

Stimulus-Response Format

Formula Selling Format

Need-Satisfaction Format

-- adaptive selling

-- consultative selling

21-22 2000 McGraw-Hill Ryerson Limited

Techniques for Handling ObjectionsTechniques for Handling Objections

Accept theobjection

Accept theobjection