Lecture 22

Managing Personal
• Consumers use WOM to share
information on products and services
‒Positive WOM may be generated
organically but may be managed
and facilitated.
‒Paid Media results from press
coverage of company generated
‒Earned Media – also called Free Media,
is all the PR benefits a firm receives
without having directly paid for anything.
Not really free as firm invests in
products, services and marketing, but
expense are not devoted to eliciting a
media response.
• Social Media
‒Means for consumers to share
‒Useful but cannot be sole source of
marketing communication
‒Three main platforms for social media:
 Online Communities and Forums – may be formed
by consumers with no affiliations or by firms
 Blogs are regularly updated online journals or
diaries. Brings people together based on common
interests. Consumers create most but some are
created by firms. FTC requires disclosure from
bloggers if they have a relationship with marketers.
 Social Networks – consumers looking to connect
with others. Current popular networks are Facebook,
LinkedIn and Twitter
• Buzz and Viral marketing try to showcase
by creating a splash in the marketplace.
‒Buzz Marketing generates excitement,
creates publicity, and conveys new
relevant brand-related information
through unexpected or outrageous
‒Viral Marketing is another form of wordof-mouth or “word-of-mouse” that
encourages consumers to pass along
company-developed products and
services or audio, audio video, or
written information to others online
Opinion Leaders
Opinion Leaders – society contains cliques
and members of each clique tend to interact
frequently which facilitate communication but
also insulates the clique from new ideas.
Malcom Gladwell identifies three factors
working to ignite public interest in an idea:
Opinion Leaders
• Reach the three types of people who can
spread an idea like an epidemic, mavens or
knowledgeable people, connectors who
know and communicate and salesman who
possess persuasive power
• “Stickiness” or expressing and idea so it
motivates people to act
• “The Power of Context” controls whether
those spreading an idea are able to
organize groups and communities around it.
Measuring the effects of Word-ofMouth (WOM)
• Intuit classified blogs into several categories
velocity, share-of-voice (how much talk
occurred), voice quality (what was said and
to what positive or negative degrees), and
sentiment (how meaningful were the
• Researcher Keller Fay notes that 80% of
WOM occurs offline but many marketers
focus on easy-to-track online efforts
Sales Representative Types
• Types of Sales representatives - six positions
‒Deliverer – major task is delivery of
‒Order taker- inside or behind counter,
outside which goes out and makes
‒Missionary – do not take orders but
build relationships
‒Technician – serve as a knowledge
Sales Representative Types
‒Demand creator – use creative skills to
sell tangible goods
‒Solution Vendor – Consultative selling
by providing solutions to solve the
customer problem
Personal Selling and Relationship
• Personal Selling steps appropriate for
transaction situations
• relationship Marketing steps required to
build long-term customer relationship
and ensuing loyalty
Company must
develop sales force
objectives, strategy,
structure, size and
Sales Force Objectives and
• Objectives - tasks to perform include
selling, servicing, information gathering, and
• Strategy - approach can be sales rep to
buyer, sales rep to buyer group, sales team
to buyer group, and conference selling or
seminar selling. A company can utilize a
direct (company) or contractual (outside)
sales force
Sales Force Objectives and
• Direct sales force – full or part-time sales
representative that work directly for the
selling firm
• Contractual sales force – external partners
manufacturers’ reps, sales agents, brokers)
Sales Force Structure
• Territorial – use when selling one
product line to one end-using industry
with customers in many locations
• Product – use when selling many
products to many types of customers
• Market – option similar to product
Sales Force Structure
• Example - Motorola uses four types of
sales force structure: strategic market,
geographic, distributor sales force
focusing on distributors and an inside
sales force using inbound and outbound
telemarketing. Some companies
categorize their large and valuable
customers as strategic accounts and
create a strategic account management
team to manage each of these types of
Sales Force Size
• Group customers into size classes according to
sales volume
• Establish call frequencies (# of account calls per
• Multiply # of accounts in each size class by call
frequency to arrive at total workload, in sales calls
per year
• Determine average # of calls a sales rep can make
per year
• Divide total annual calls (calculated in step 3 above)
by the average annual calls made by a rep
(calculated in step 4 above) to see number of reps
Sales Force Compensation
• Fixed compensation
‒ Salary satisfies need for income stability
‒ Common in jobs with a high ratio of non-selling to
selling duties and jobs here the selling task is
complex and requires teamwork
• Variable Amount
‒ Commissions, bonus, profit sharing, serve to
stimulate and reward effort
‒ Works best where sales are cyclical or depend on
individual initiative
‒ Attracts High performers, but they may emphasize
selling at the expense of the relationship
Sales Force Compensation
• Expense Allowances - Enable sales
reps to meet expenses of travel and
• Benefits – such as paid vacations
provide security and job compensation
• Combination plans feature benefits of
both while limiting their disadvantages
Managing Sales Force
• What makes a good sales representative?
One survey shows 25% of reps generate
52% of sales
• Average sales rep turnover for all industries s
almost 20%. Turnover leads to:
‒ Lost sales
‒ Expense of finding new replacements
‒ Increase pressure on existing reps to pick up slack
Managing Sales Force
• Recruitment procedures
‒ Solicit names from existing reps, agencies
‒ Recruit from colleges
‒ Length of time and expense varies by organization
‒ Universities are collaborating with firms as they develop
sales training programs within their curriculum
Training and Supervising Sales
• Median training period is 28 weeks in
industrial – products firms, 12% in service
firms, 4% in consumer-products
‒Goals - to know and identify with the
company, to know the company’s
products, to know the customers’ and
competitors’ characteristics
‒Other goals - to know how to make
effective sales presentations, and to
understand field procedures and
Sales Rep Productivity
• Norms for customer calls
• Norms for prospect calls
• Using sales time efficiently
Time and duty analysis/improving productivity
Inside sales force
• Due to rising cost of outside sales force
• Rising automation (for inside and outside sales
Sales Rep Motivation
• Motivating Sales Representatives - the
higher the sales person’s motivation, the
greater his or her effort
‒Sales quotas
‒Supplementary motivators (meetings,
contests, etc.)
Sales Rep Evaluation
• Evaluating Sales Representatives
• Sources of information - sales reports
including activity plans and write-ups of
activity reports
• Formal evaluation - current-to-past
sales comparisons, customersatisfaction evaluation, and qualitative
Sales Rep Evaluation
• Key indicators of sales performance
‒ Average # of sales calls per rep per day
‒ Average sales call time per contact
‒ Average revenue per sales call
‒ Average cost per sales call
‒ Entertainment cost per sales call
‒ Percentage of orders per hundred sales call number
of new customers per period
‒ Number of lost customers per period
‒ Sales force cost as a percentage of sales
• Performance may also be related internal factors (effort,
ability, strategy) and external factors (task and luck)
Thank you