SM Personal Selling Lecture 3 A

Personal Selling

Personal Selling – Defined

Personal selling refers to personalcommunication with an audiencethrough paid personnel of anorganization or its agents insuch a way that the audienceperceives the communicator’sorganization as being the sourceof the message.

Definition of Personal Selling

Personal selling –

1) two-way flow of communication2) between a buyer and seller3) a face-to-face or real time encounter

Why are “ face to face” and “two-way” important?

• Provides a detailed explanation or demonstration of product

• Message can be varied to fit the needs of each prospective customer

• Instant feedback

• Personal persuasion can be used

“A good salesman can get

you to buy ice in winter”

Advantages of Personal Selling

IndustrialRevolution

Post-IndustrialRevolution

War andDepression

ModernEra

1800s1800s 1900s1900s 2000s2000s

Evolution of Personal Selling

Peddlers selling door to door . . . served as intermediaries

Peddlers selling door to door . . . served as intermediaries

Business organizations employed salespeopleBusiness organizations employed salespeople

Selling function became more professional

Selling function became more professional

As we begin the 21st century, selling continues to develop,becoming more professional and more relational

As we begin the 21st century, selling continues to develop,becoming more professional and more relational

When to Use Personal Selling

Customers are concentratedCustomers are concentrated

There are few customersThere are few customers

Product is technically complexProduct is technically complex

Product is custom madeProduct is custom made

Product has a high valueProduct has a high value

Selling image, not productSelling image, not product

Creating Value Through Salespeople

Relationship Selling

building ties to the customer, based on a salesperson’s attention and commitment to customer needs over time.

Examples of Personal Selling

Telemarketing

Inside selling

Retail selling

Field selling

• 12 million people are engaged in personal selling in the United States

• Represents about 10% of the work force

AdvertisingAdvertising

PersonalPersonalsellingselling

Post-transaction:• Reminder and

reassurance

AdvertisingAdvertisingPersonalPersonalsellingselling

Transaction:Transaction: PersuasionPersuasion

Pre-transaction: Create recognition and Create recognition and

info understandinginfo understanding

AdvertisingAdvertising

PersonalPersonalsellingselling

Relative Importance of Advertising and Personal Selling

Buyer –Seller Dyads • Factors influencing Buyer seller dyadic interactions :

• 1)Whenever possible sales personnel should be assigned to prospects whose characteristics are similar .

E g prospects who brought insurance knew more about sales person & their companies , & felt more positively towards them than the prospects who did not buy .

2) The customers perception of the sales person’s behavior is a necessary condition for continuation of the dyadic interaction .

E g In pharmaceutical business the customers perception of the sales man’s behavior allows him to enter the retail store .

3) The buyers initial conditioning with respect to selling E g people are taught from childhood to be aware of tricky sales person.

1) Prospecting2) Pre-approach3) Approach4) Presentation5) Close6) Follow-Up

Six stages of Personal Selling

Sources of prospects

1 Personal Selling: Prospecting

Prospect- possible customer

Qualified Prospect-customer who has desire, means and power to decide

Cold Canvassing- seller initiated contact of,potential customers without advance warning.

3) Approach-First meeting (Physical impressions highly important-

appearance, timeliness, confidence)

2) Pre-approach-Gathering information (when to call, income level, risk tolerance)

Personal Selling: 2)Pre- Approach & 3) Approach

4) Personal Selling: Presentation

A) Stimulus-Response Format – (suggestive selling)keep suggesting items until the buyer responds, like theMcDonalds order taker

B) Formula Selling Format – more formal and planned, like a telemarketer

Canned Selling Presentation

Memorized, standardized message conveyed to every prospect.

Works when seller is a novice or does not know the buyer well

Personal Selling: Presentation

Need-Satisfaction Format- Let the customer do the talking- Salesman probes, listens then suggests, like a financial planner

• Adaptive Selling- pro-active but selective presentation of offerings, based on pre-approach data

• Consultative Selling – re-active presentation for problem solution

Personal Selling: Presentation

Handling Objections

• Acknowledge and Convert the Objection- use the objection as a reason to buy (expensive)

•Postpone hold off answer because next info will convince buyer

(complicated)

•Agree and Neutralize show the objection’s insignificance (side effects)

•Denial refute objection with clear facts

Dealing with Objections

Dealing with Objections(cont) • Listen & do not interrupt Interruption denies the buyer the kind of respect they are entitled to, and

may lead to a misunderstanding of the real substance behind the objection. The correct approach is to listen carefully, attentively and respectfully. The buyer will appreciate the fact that the salesperson is taking the problem seriously and the salesperson will gain through having a clear and full understanding of the true nature of the problem.

Agree & Encounter • This approach maintains the respect that the salesperson shows to the

buyer. The salesperson first agrees that what the buyer is saying is sensible and reasonable, before then putting forward an alternative point of view. It therefore takes the edge off the objection and creates a climate of agreement rather than conflict.

• For example:• Buyer: The problem with your tractor is that it costs more than your

competition.• Salesperson: Yes, the initial cost of the tractor is a little higher than

competitors’ models, but I should like to show you how, over the lifetime of the machine, ours works out to be far more economical.

Dealing with Objections(cont)

• The Straight Denial • This method has to be handled with a great deal of care since the danger

is that it will result in exactly the kind of antagonism that the salesperson is wishing to avoid. However, it can be used when the buyer is clearly seeking factual information.

• For example:• Buyer: I expect that this upholstery will be difficult to clean.• Salesperson: No, Mr. Buyer, absolutely not. This material is made from a

newly developed synthetic fiber that resists stains and allows marks to be• removed simply by using soap, water and a clean cloth.


• Question the objection

• Sometimes an objection is raised which is so general as to be difficult to counter. For example, a customer might say they do not like the appearance of the product, or that the product is not good quality. In this situation the salesperson should question the nature of the objection in order to clarify the specific problem at hand. Sometimes this results in a major objection being reduced to one which can easily be dealt with.

• Buyer: I’m sorry but I don’t like the look of that car.• Salesperson: Could you tell me exactly what it is that you don’t like the look of?• Buyer: I don’t like the pattern on the seats.• Salesperson: Well, in fact this model can be supplied in a number of different

upholstery designs. Shall we have a look at the catalogue to see if there is a pattern to your liking?


• Forestall the objections • With this method, the salesperson not only anticipates an objection and

plans its counter, but actually raises the objection as part of their sales presentation.

• There are two advantages of doing this. First, the timing of the objection is controlled by the salesperson. Consequently, it can be planned so that it is raised at the most appropriate time for it to be dealt with effectively. Second, since it is raised by the salesperson, the buyer is not placed in a position where, having raised a problem, they feel that it must be defended.


• Turn the objection into a trial close

• A trial close is where a salesperson attempts to conclude the sale without prejudicing the chances of continuing the selling process with the buyer should they refuse to commit themselves.

• The ability of a salesperson to turn the objection into a trial close is dependent upon perfect timing and considerable judgment. Usually it will be attempted after the selling process is well under way and the salesperson judges that only one objection remains. Under these conditions they might say the following: ‘If I can satisfy you that the fuel consumption of this car is no greater than that of the Vauxhall Vectra, would you buy it?’


• Hidden Objections

• Not all prospects state their objections. They may prefer to say nothing because to

• raise an objection may cause offence or prolong the sales interaction. • The correct salesperson’s response to hidden objections is to ask

questions in an attempt to uncover their nature. If a salesperson believes that a buyer is unwilling to reveal their true objections, they should ask such questions as the following:

• • ‘Is there anything so far which you are unsure about?’• • ‘Is there anything on your mind?’• • ‘What would it take to convince you?’ Uncovering hidden objections is crucial to successful selling because to

convince someone it is necessary to know what they need to be convinced of.

Overcoming Objections

IF HE HADN’T TOLDME WHAT HIS OBJECTION

WAS, I NEVER WOULDHAVE BEEN

ABLE TO HELP!

Personal Selling: Close

• Trial Close-”Can I put you down for blue or green?”

•Assumptive Close-ask about delivery or warranty choices.

• Urgency Close-”Offer valid for today only.”

• Final Close-Buyer initiated acceptance of the sale.

Closing the Sale• Closing signals• Trial close• Asking the

prospect to buy

Personal Selling Process

Closing the Sale ( cont)

• Simply ask for the order• The simplest technique involves asking directly for the order:• • ‘Shall I reserve you one?’• • ‘Would you like to buy it?’• • ‘Do you want it?’• The key to using this technique is to keep silent after you have asked for

the order.

• Summarise and then ask for the order• This technique allows the salesperson to remind the buyer of the main

points in the sales argument in a manner that implies that the moment for decision has come and that buying is the natural extension of the proceedings.


• The concession close• This involves keeping one concession in reserve to use as the final push

towards agreement: ‘If you are willing to place an order now, I’m willing to offer an extra 2.5 per cent discount.’

• The alternative close• This closing technique assumes that the buyer is willing to purchase but

moves the decision to whether the color should be red or blue, the delivery should be Tuesday or Friday, the payment in cash or credit, etc. In such circumstances the salesperson suggests two alternatives, the agreement to either thus closing the sale:

• • ‘Would you like the red one or the blue one?’• • ‘Would you like it delivered on Tuesday or Friday?’


• The objection close• This closing technique involves the use of an objection as a stimulus to

buy. The salesperson who is convinced that the objection is the major stumbling block to the sale can gain commitment from the buyer by saying, ‘If I can convince you that this model is the most economical in its

• class, will you buy it?’ A positive response from the buyer and reference to an objective statistical comparison by the seller effectively seal the sale.

Address concerns with delivery and installation,

so today’s customer becomes tomorrow’s

qualified prospect or referral source

Personal Selling: Follow-Up

Following Up• Commitments met

– Shipment– Performance

• Reinforce L-R relationship• Satisfied customers rebuy &

recommend• The follow-up call can also be used to provide

reassurance that the purchase was the right one. Many customers suffer from cognitive dissonance, that is being anxious that they have made the right choice

Personal Selling Process

Characteristics of Personal Selling

Flexibility• Adapt to situations• Engage in dialog

Builds Relationships• Long term• Assure buyers receive

appropriate services• Solves customer’s

problems

Can not reach mass audience

Expensive per contactNumerous calls

needed to generate sale

Labor intensive

ConPro

ORDERGETTERS

Currentcustomers

Newcustomers

ORDER

TAKERS

Inside Order Takers

(via mail, telephone, internet)

Outside Field Sales

SUPPORT

PERSONNEL

Missionary

Salespersons

Trade

Salespersons

Technical

Salespersons

Types of Salespersons

Personal Selling• Salespeople have many names

– Agents– Sales consultants– Sales Representatives– Account

Executives– Sales Engineers– District Managers– Marketing

representatives– Account

Development Representatives

Personal Selling Tasks

Order getting• Seeking out

customers• Creative selling• Pioneering• Account

management

Order taking Routine

writing up orders checking invoices assuring prompt order

processing

Suggestive selling

Personal Selling Tasks

• Missionary– Detailer– Goodwill– “Closers”

Cross-functionalAccount service rep

You are part of the total product

Classification or Theories ofPersonal Selling

• Mental States Selling• Right set of Circumstances

Selling • Buying Formula Selling• Behavioral Equation Selling

Mental States Selling/AIDAS

Attention Interest Desire Action Satisfaction

1)Mental States Selling/AIDAS

• Securing Attention -- Put the prospect in to a receptive state of mind

• Gaining Interest -- By using flip charts or visual aids or probing also .Sometimes prospect drops hints which sales person uses in selecting the best approach .

• Kindling Desire --Salesperson keeps the discussion going on. He should answer objections & kindle desire towards ready-to-buy point .

• Inducing Actions-- Always ask for the order

• Building Satisfaction –After customer placed an order the sales person should reassure the customer that the decision was right

2)Right set of Circumstances Selling

Right set of Circumstances Selling

• The sales person seeks selling appeals that evoke desired response

• The set of circumstances include factors external & Internal to the prospect .

• E.g. suppose the sales person tells the prospect “ Lets go out for a cup of coffee .The sales person & the remark are external factors . But the four factors internal to the prospect which affect response are. The presence or absence of desire to 1)have the cup of coffee 2) to have it now 3) to go out 4) to go out with the sales person .

3)Buying Formula Selling (adequacy& pleasant feeling)

EvaluateAlternativeSolutions

Buying Formula Selling(adequacy& pleasant feeling )

Need or problem

Product service

Trade name Purchase Satisfaction and/or

Adequacy

Pleasant feelings

Adequacy

Pleasant Feelings

4)Behavioral Equation Selling • Four elements are included : • 1) Drives: Strong internal stimuli which impels buyers

response . 2 Kinds • a) Innate– ( psychological needs such as hunger , thirst,

pain ) • b) Learned –( striving for status or social approval .• 2) Cues :Weak stimuli that determine when the buyer

will respond • 3) Response :Is what the buyer does• 4) Reinforcement: Any event that strengthens the

buyers tendency to make a particular response

Behavioral Equation Selling • Howard incorporates these four elements into an

equation : • B= P x D x K x V• B= response or internal response tendency i.e. buying

behavior• P= predisposition or force of habit• D= which is the drive or motivation depending on “innate

drives” which are internal such as purely functional requirements, and “learned drives” which can be due to social factors such as status symbols,

• K= which is the incentive potential i.e.. the value of the product or its potential to satisfy the needs of the buyer

• V= which is the intensity of cues ( stimuli) which influence when to buy ( cues can be triggering as well as non triggering & specific triggering)

SM Personal Selling Lecture 3 A

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Transcript of SM Personal Selling Lecture 3 A