Session 3-4

• Personal selling• Sales call steps• Negotiation skills• Closing the call

Personal Selling

• There is a growing importance of personal selling due to complexity of products & services and intense competition.

• Salesmen becoming consultants, reduce the inherent inertia, provide info, work as catalysts.

Advertising vs. Personal selling

Adv. Important PS important• No. of customers Large Small• Buyer’s info need Lo Hi• Size / imp of deal Small Large• After sales service Little Much• Product complexity Lo Hi• Dist. Strategy Pull Push• Pricing Policy Preset

Negotiated

Situations conducive for personal selling

• New Product Launches.• Selling Embarrassment Category products.• Industrial and institutional products.• High value items.• Insurance and other undesirable products.• Loans, financial schemes.• Missionary selling.

Growing importance of personal selling

In India there is high scope of personal selling activity:

• Absence of media in many areas.• No advertising for many products.• Vast distribution system.• Low-literacy.• Need for negotiations (psychological need).• Totally unorganized to specialized retailing.• New focus on B2B and Government business.

Sales Don’t Just Happen

• 80% of all sales are made after the 5th call• 48% of all salespersons call once, and quit• 25% call twice, and quit• 10% keep on calling• These 10% make 80% of the sales

SELLING MODEL

1-7

1-8

STEP 1 : DEVELOP PERSONAL SELLING PHILOSOPHY

ADOPT MARKETING CONCEPTADOPT MARKETING CONCEPT

VALUE PERSONAL SELLINGVALUE PERSONAL SELLING

BE PROBLEM SOLVER/PARTNERBE PROBLEM SOLVER/PARTNER

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STEP 2: DEVELOP RELATIONSHIP STRATEGY

ADOPT WIN-WIN APPROACHADOPT WIN-WIN APPROACH

PROJECT PROFESSIONAL IMAGEPROJECT PROFESSIONAL IMAGE

MAINTAIN HIGH ETHICAL STANDARDSMAINTAIN HIGH ETHICAL STANDARDS

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STEP 3: DEVELOP PRODUCT STRATEGY

BECOME PRODUCT BECOME PRODUCT EXPERTEXPERT

SELL BENEFITS, SELL BENEFITS, NOTNOT FEATURES FEATURES

CONFIGURE CONFIGURE VALUE-ADDEDVALUE-ADDED SOLUTIONS SOLUTIONS

THE TOTAL PRODUCT CONCEPT

Figure 6.3 6-11

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STEP 4: DEVELOP CUSTOMER STRATEGY

UNDERSTAND BUYER BEHAVIORUNDERSTAND BUYER BEHAVIOR

DISCOVER CUSTOMER NEEDSDISCOVER CUSTOMER NEEDS

DEVELOP PROSPECT BASEDEVELOP PROSPECT BASE

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STEP 5: DEVELOP PRESENTATION STRATEGY

PREPARE OBJECTIVESPREPARE OBJECTIVES

DEVELOP PRESENTATION PLANDEVELOP PRESENTATION PLAN

PROVIDE OUTSTANDING SERVICEPROVIDE OUTSTANDING SERVICE

INTERRELATIONSHIP OF BASIC STRATEGIES

Creative Selling Process

Prospecting and QualifyingProspecting and Qualifying

PreapproachPreapproach

ApproachApproach

Sales PresentationSales Presentation

Handling ObjectionsHandling Objections

CloseClose

Follow-UpFollow-Up

Contd.• NIS REED and ODPEC process• Xerox SPANCOProspecting• 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.

• Pre-call Planning – Homework on the customer’s needs and developing solutions from your offering.

• Develop the FAB, USP, UPB for the offeringIn case of Institutional Selling, identify the MAN (Money, Authority & Need)

Contd.

• Call Planning – Understand the objective of the call

• sales, more info, permission, appointing new dealer, payment collection, dispute settling, post-sales follow-up.

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• Proper approach-(Gillette 4 x 20, RBI SMART+1C).

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 selling• This is the point where the seller has to use any of

the sales theories, which he believes is relevant to that particular product / situation

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

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)

Contd.

• Objection Handling – Stated objections, real objections, Probing & experience are required to get to the root of problem.

• Techniques:• Superior feature method• Yes…but method

Contd.

Negotiations – To arrive at mutually acceptable solution.

• Most of the branded products in B2C have a MRP and fixed margins. So limited scope for negotiation

• More prevalent in industrial/ institutional selling and bulk customer dealing

Obtaining the Best Deal Distributive Negotiations

Maximum priceMaximum price the buyer is the buyer is

willing to pay or willing to pay or VIU PriceVIU Price

Minimum Minimum priceprice the seller the seller

is willing to is willing to acceptaccept

Zone of Zone of AgreementAgreement

Price Price AnalysisAnalysis

SupplieSupplier Cost r Cost

AnalysisAnalysis

Value Value AssessmentAssessment

Price per Price per UnitUnit00

Cooperating Cooperating with Supplierswith SuppliersIntegrative NegotiationsIntegrative Negotiations

Zone of Zone of AgreementAgreement

CustomeCustomer’s r’s

Minimal Minimal AcceptablAcceptabl

e Level e Level for Item Afor Item A

Supplier’s Minimal Supplier’s Minimal Acceptable Level for Item BAcceptable Level for Item B

(Adapted from Bazerman (Adapted from Bazerman 1986)1986)

VALUE CREATION

• Value = creative improvements enhancing customer experience

• Consumers reward sales people who add value at each step

• When customer not aware of value added by salespeople, focus may shift to price

Theory of Principled Negotiations

• Propounded by Roger Fisher and William Ury• Separate the people from the problem• Focus on interests, not on positions (stance).

Combination of substantive issues and support to human beings on the other side works best

• Invent options for mutual gains• Insist on objective criteria

PRICE ICEBERG

12-31

Price is only the tip of the iceberg…Price is only the tip of the iceberg…remind customer of value-added factors remind customer of value-added factors

below tipbelow tip

Negotiations (contd.)

• The purpose of negotiations – To arrive at better results than what one would have got without bargaining.

• The concept of BATNA• Best Alternative to a Negotiated Agreement

Closing the Call

Effective closing techniques:• Action close – use a financial help.• Gift close – use of additional incentive.• One more Yes – series of positive responses.• Direct Close • Early Close – sense the buying signals.Follow-up – To maintain the account, CRM

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

Selling Consumer Non-durables

• Making 30-40 calls per day to retailers & some wholesalers

• Checks shelf-stock, replenishes stock and tries to get the ‘push’ going

• POP / merchandizing activity• Following beat / route plans

Selling Consumer Durables

• Less number of calls per day to dealers• More emphasis on demonstration, merchandizing,

store-salesmen training etc.• Sometimes doing customer-interaction• Look out for new competition & opportunities• Building strong relationships with his direct

customers – stockists / dealers• Working closely with service team to understand

potential objections from the market

What goes in selling the following?

• Pharmaceuticals

• Industrial Products

• Services

ESP for Successful Selling

• Enthusiasm

• Sincerity

• Perseverance

Selling Skills & attitudes

• Communication skills• Listening skills• Conflict resolution• Negotiation skills• Objection-handling ability• Problem-solving skills• Diligence• ‘Can Do’ attitude