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Personal Selling and
Sales Promotion
Agenda
• The Nature of Personal Selling
• Elements of the Personal Selling
Process
• Types of Salespeople
• Managing the Sales Force
• The Nature of Sales Promotion
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The Nature of Personal Selling
• Personal Selling
– Paid personal communication that informs
customers and persuades them to buy products.
• Most adjustable to customer information needs
• Most precise (targeted) form of promotion methods
• Most expensive element in promotion mix
– Personal selling as a career
•
•
•
•
The potential for high income
A great deal of freedom
A high level of training
A high level of job satisfaction
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General Steps in
the Personal
Selling Process
FIGURE 20.1
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Elements of the Personal Selling Process
• Prospecting
– Developing a list of potential customers
• Sales records, trade shows, commercial
databases, newspaper announcements, public
records, telephone directories, trade
association directories
• Reponses to advertisements
with information request forms
• Referrals—recommendations
from current customers
• Need good CRM to manage list
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Elements of the Personal Selling Process
(cont’d)
• Preapproach
– Finding and analyzing information about the
prospect
•
•
•
•
Specific product needs
Current use of brands
Feelings about available brands
Personal characteristics
– Additional research
•
•
•
•
•
•
Identifying key decision makers
Reviewing account histories and problems
Contacting other clients for information
Assessing credit histories and problems
Preparing sales presentations
Identifying product needs
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Elements of the Personal Selling Process
(cont’d)
• Approach
– The manner in which a salesperson contacts a
potential customer
• Purpose is to gather information about the buyer’s
needs and objectives
• Important to create a favorable first impression and
build rapport with prospective customer
– Typical approaches
• Referral by another customer to a prospective customer
• “Cold” call without prior introduction to the customer
• Repeat contact based on prior meeting(s) with the
potential customer
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Elements of the Personal Selling Process
(cont’d)
• Making the Presentation
– During the presentation:
• Attract and hold the prospect’s
attention.
• Stimulate interest in the product.
• Spark a desire for the product.
• Listen and respond to the prospect questions and
comments.
– Ways to enhance the presentation’s effects
• Have the prospect touch, hold, or use the product.
• Use audiovisual technology to heighten the impact of
the presentation.
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Elements of the Personal Selling Process
(cont’d)
• Overcoming objections
– Anticipate objections and counter them
during the presentation
– Generally, best to handle objections as
they arise
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Elements of the Personal Selling Process
(cont’d)
• Closing the sale
– Closing is the stage in the selling process
when the salesperson asks the prospect to
buy the product.
– Closing strategies:
• “Trial” closing: asking questions (what, how, or
why) that assume the customer will buy the
product
• Asking for a tryout order: low-risk way for
customer to try out the product
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Elements of the Personal Selling Process
(cont’d)
• Following up
– Determining if the delivery and setup of
order was completed to the customer’s
satisfaction
– Ascertaining the customer’s future product
needs
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Exercise
Explain how you can use the seven
steps of personal selling in an activity
such as getting a job.
PROSPECTING: The salesperson must
develop a list of customers.
PREAPPROACH: The salesperson must find
and analyze information about each
prospect’s specific product needs, current
use of brands, feelings about available
brands, and personal characteristics.
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Exercise (cont’d)
APPROACH: The salesperson adopts a
certain manner in contacting a potential
customer. The first contact is generally to
assess the buyer’s needs and objectives.
The prospect’s first impression is usually a
lasting one.
MAKING THE PRESENTATION: The
salesperson must attract and hold the
prospect’s attention to stimulate interest.
Product demonstrations, listening to
comments, and observing responses are
important.
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Exercise (cont’d)
OVERCOMING OBJECTIONS: One of the best
ways is to anticipate and counter objections
before the prospect has an opportunity to raise
them. Otherwise, deal with objections when they
occur.
CLOSING: The salesperson asks the prospect to
buy the product. Attempt a “trial close” by asking
questions that assume the prospect will buy the
product. A salesperson should try to close at
several points during the presentation.
FOLLOW-UP: The salesperson contacts the
customer to learn what problems or questions
have arisen. This may also be used to determine
future needs.
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Types of Salespeople
• Order Getters
– The salesperson who sells to new customers and
increases sales to current ones
– Creative selling
• Current-customer sales
• New-business sales
• Order Takers
– The salesperson who primarily
seeks repeat sales
• Inside order takers
• Field order takers
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Types of Salespeople (cont’d)
• Support Personnel: sales staff members who
facilitate selling but usually are not involved
solely with making sales
– Missionary salespeople
• Support salespersons who assist the producer’s
customers in selling to their own customers
– Trade salespeople
• Salespersons involved mainly in helping a producer’s
customers promote a product
– Technical salespeople
• Support salespersons who give technical assistance to
a firm’s current customers
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Exercise
Salespeople are typically classified as
order getters, order takers, and support
personnel. How would you classify the
following salespeople?
1. Pharmaceutical salesperson selling to
doctors
2. Car salesperson
3. Retail store salesperson
4. Telemarketer soliciting donations for a
charity
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Exercise (cont’d)
5. Real estate agent
6. Heavy equipment salesperson
7. Agent for a snack food distributor who
only stocks shelves
8. Door-to-door cosmetics sales-person
9. Insurance salesperson
10. Agent for a snack food distributor who fills
a retailer’s orders
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Major Sales Management Decision Areas
Establishing
sales force
objectives
Determining
sales force
size
Recruiting
and selecting
salespeople
Training
sales
personnel
Major sales
management
decision areas
Compensating
salespeople
Motivating
salespeople
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Managing
sales
territories
Controlling and
evaluating
sales force
performance
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Managing the Sales Force
• Establishing Sales Force Objectives
– Objectives tell salespeople what they are to
accomplish during a specified time period.
– Objectives for the total sales force
• Sales volume: total units or dollars of product sold for a
period of time
• Market share: unit or dollar percentage share of the total
market for a product
• Profit: dollars or percentage of return on investment
(ROI)
– Objective for individual salespersons
• Quotas: dollars or units sold, or average order size,
average number of calls, or ratio of orders to calls by an
individual salesperson
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Managing the Sales Force (cont’d)
• Determining Sales Force Size
– Size of sales force affects
• compensation methods for salespersons.
• morale of salespersons.
• overall sales force management.
– Methods for determining optimal sale force size:
• Dividing the number of sales calls necessary to serve
customers by the number of sales calls a salesperson
makes annually
• Adding additional salespersons until the cost of adding
one more salespersons equals the additional sales that
would be generated by that person
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Managing the Sales Force (cont’d)
• Recruiting and Selecting Salespeople
– Recruiting
• Developing a list of qualified applicants for sales
positions
– Establish a set of qualifications that best match
the firm’s particular sales tasks
• Prepare a job description listing specific tasks
• Analyze successful salespeople among current
employees
– Sources of applicants
• Other departments in the company, other firms,
employment agencies, educational institutions, job ad
respondents, employee referrals
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Managing the Sales Force (cont’d)
• Training Sales Personnel
– What to teach?
• The company, its products, or selling methods
– Whom to train?
• Newly hired or experienced salespeople, or both
– When/where to train?
• In the field, at educational institutions, in company
facilities
• Before or after initial field assignment
• Frequency, sequencing, and duration of periodic training
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Managing the Sales Force (cont’d)
• Training Sales Personnel (cont’d)
– Who will train?
• Sales managers, technical personnel, outside
consultants
– How to train?
• Materials and
instructional methods
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Managing the Sales Force (cont’d)
• Compensating Salespeople
– Compensation objectives
• Attract, motivate, and retain effective
salespeople
• Maintain the desired level of control
• Provide acceptable levels
of income, freedom, and
incentive
• Encourage proper
treatment of customers
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Major Types of Sales Force Compensation
Methods
Straight Salary
• Paying salespeople a
specific amount per
time period
• Most useful when
compensating new
salesperson, moving
into new territories or
customers, sales
requiring many
services for customers
• Salary remains the
same until pay
increase
• Provides salespeople
with more security but
less incentive
Straight Commission
Combination
• Paying salespeople
according to the
amount of their sales
in given time period
• Paying salespeople a
fixed salary plus a
commission based on
sales volume
• Commission may be
based on percentage
of sales or on a sliding
scale
• Most popular
compensation method
• Requires highly
aggressive selling and
minimal nonselling
tasks
• Provides salespeople
with maximum
incentive but little
financial security
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• Provides level of
security and some
incentive
• Can require that
salesperson exceeds
a certain sales level
before earning a
commission
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Average Salary for Sales and
Marketing Executives, 2003
Total
Base Salary Bonus Plus
Compensation
Commissions
Executive
$144,643
$95,170
$49,483
Top Performer
$153,417
$87,342
$66,075
Mid-Level Performer
$92,337
$58,546
$33,791
Low-Level Performer
$63,775
$44,289
$19,486
$111,135
$70,588
$50,547
Average of all positions
Source: Christine Galea,”The 2004 Compensation Survey,” Sales & Marketing Management, May 2004, p.29.
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Managing the Sales Force (cont’d)
• Motivating Salespeople
– Motivation should be provided on a continuous
basis.
– Motivational incentives
•
•
•
•
Enjoyable working conditions
Power and authority
Job security
Opportunities to excel
– Motivational methods
• Sales contests
• Recognition programs
• Awards (travel, merchandise, and cash)
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An Example of a
Sales Incentive
Program
Courtesy of SalesDriver.
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Managing the Sales Force (cont’d)
• Managing Sales Territories
– Creating sales territories
• Based on similar sales potential or requiring
about the same amount of work
• Setting differential commission rates to
compensate for differences in the
characteristics of
territories (density
and distribution of
customers)
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Managing the Sales Force (cont’d)
• Managing Sales Territories (cont’d)
– Routing and scheduling considerations
•
•
•
•
•
Geographic size and shape of the territory
Number and distribution of customers
Sequence of customer calls
Routes and distances traveled
Minimizing salesperson’s
travel and lodging costs
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Managing the Sales Force (cont’d)
• Controlling and Evaluating Sales Force
Performance
– Sales objectives, determined by the sales
manager, stated in terms of
•
•
•
•
•
•
•
Sales volume
Average number of calls per day
Average sales per customer
Actual sales relative to sales potential
Number of new customer orders
Average cost per call
Average gross profit per customer
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The Nature of Sales Promotion
• Sales Promotion
– An activity and/or material that acts as a direct
inducement to resellers or salespeople to sell a
product or consumers to buy it
– It encourages product trial and purchase by
adding value to the product.
– It is most effective when it facilitates or is
facilitated by personal selling and advertising.
– Its use has grown dramatically over the last 20
years at the expense of traditional advertising.
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The Nature of Sales Promotion (cont’d)
• Deciding Which Sales Promotion
Method to Use
–
–
–
–
Product characteristics
Target market characteristics
Distribution channel(s)
Number and types of
resellers
– Competitive and legal
environment
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Consumer Sales Promotion Methods
• Encourage or stimulate consumers to
patronize specific stores or to try
particular products
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Sales
Promotions Like
This Provide
Incentives to
Customers
Reprinted with permission of LORD’S & LADY’S Hair Salon, Inc.
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Consumer Sales Promotion Methods
(cont’d)
• Coupons and Cents-Off Offers
– Coupons
• Written price reductions used to encourage consumers
to buy a specific product
• Effective coupons are easily recognized and state the
offer clearly.
• The nature of the product is the prime consideration in
setting up a coupon promotion.
• Advantages: generate brand
awareness and interest and reward
brand loyalty
• Disadvantages: Fraud and
misredemptions; consumer ill-will
from stock-outs during promotions
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Consumer Sales Promotion Methods
(cont’d)
• Coupons and Cents-Off Offers (cont’d)
– Cents-off offers
• Promotions that let buyers pay less than the regular
price to encourage purchase
• Refunds and Rebates
– Money refunds
• Offering consumers money when they mail in a proof of
purchase, usually for multiple product purchases
– Rebates
• Sending consumers a specific amount of money for
making a single product purchase
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Consumer Sales Promotion Methods
(cont’d)
• Frequent User Incentives
– Frequent-user incentives
• Incentive programs that foster consumer loyalty by
rewarding customers’ repeat (frequent) purchases
• Point-of-Purchase Materials
– Point-of-purchase displays
• Signs, window displays, display racks, and similar
means used to attract customers and to encourage
immediate purchases
– Demonstrations
• Manufacturers use it temporarily to encourage trial use
and purchase of a product or to show how a product
works.
• Highly effective yet costly in practice
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Consumer Sales Promotion Methods
(cont’d)
• Free Samples and Premiums
– Free samples
• Samples of a product given out to encourage trial and
purchase
• Used to increase sales volume and obtain desirable
distribution for fast turnover products
• The most expensive form of sales promotion
– Premiums
• Items offered free or at a minimal cost as a bonus for
purchasing a product
• Premium must match both the target market and the
brand’s image.
• Premiums must be easily recognizable and desirable.
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Consumer Sales Promotion Methods
(cont’d)
• Consumer Games, Contests, and
Sweepstakes
– Consumer contests and games
• Individuals compete for prizes based on analytical or
creative skills.
• Competitions for prizes are used to generate retail traffic
and to increase exposure to promotional messages.
– Consumer sweepstakes
• A sales promotion in which entrants submit their names
for inclusion in a drawing for prizes
• Used more than contests and attract more widespread
interest
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Debate Issue
Do coupons make consumers more
“brand loyal”?
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Trade Sales Promotion Methods
• Ways of persuading wholesalers and
retailers to carry a producer’s products
and to market them aggressively
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Trade Sales Promotion Methods (cont’d)
• Trade Allowances
– Buying allowance
• A temporary price reduction to resellers for purchasing
specified quantities of a product
– Buy-back allowance
• A sum of money a producer gives a reseller for each
additional unit bought after an initial promotion deal is
over
– Scan-back allowance
• A manufacturer’s reward to retailers based on the
number of pieces scanned
– Merchandise allowances
• A manufacturer’s agreement to help resellers pay for
special promotional efforts
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Trade Sales Promotion Methods (cont’d)
• Cooperative Advertising and Dealer
Listings
– Cooperative advertising
• Sharing of media costs by manufacturer and
retailer for advertising the manufacturer’s
products
– Dealer listings
• Ads promoting a product and identifying
retailers that sell the product; influences
retailers to carry the products, builds traffic at
the retail level, and encourages consumers to
shop at participating dealers
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Trade Sales Promotion Methods (cont’d)
• Free Merchandise and Gifts
– Free merchandise
• A manufacturer’s reward given to resellers for
purchasing a stated quantity of goods
• Usually takes the form of a reduced invoice
– Dealer loader
• A gift, often part of a
display, offered to a
retailer who purchases
a specified quantity of
merchandise
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Trade Sales Promotion Methods (cont’d)
• Premium (Push) Money
– Extra compensation to salespersons for
pushing a line of products
• Sales Contests
– A means of motivating
distributors, retailers, and
salespeople by recognizing
outstanding achievements
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