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Slide 20-23
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Pre-approach
• Approach
Slide 20-25
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Presentation
Stimulus-Response Format
• Stimulus-Response Presentation
• Suggestive Selling
• Presentation
Need-Satisfaction Format
• Need-Satisfaction Presentation
• Adaptive Selling
• Consultative Selling
Slide 20-28
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Presentation
Handling Objections
• Acknowledge and Convert the Objection
• Postpone
• Agree and Neutralize
• Accept the Objection
• Denial
• Ignore the Objection
Slide 20-30
Techniques for handling objections
Slide 20-31
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Close
Trial Close
Assumptive Close
Urgency Close
Final Close
• Follow-Up
Slide 20-32
THE SALES MANAGEMENT PROCESS
Slide 20-37
7-1
The Consultative Selling—
Customer Relationship Model
Customer
Customer
strategic Performance
Performance
strategic
needs Goals
Goals
needs
•• Costs
Costs
Mutual
Mutual Long-term
Long-term •• Productivity
beneficial
beneficial Productivity
relationships
relationships
agreements
agreements
•• Sales
Sales
Salesperson’s
Salesperson’s
creative •• Profits
Profits
creative
solutions
solutions
7-2
Steps in the Preapproach:
Planning the Sale
Determine
Determine Develop
Develop Develop
Develop Develop
Develop
sales
salescall
call customer
customer customer
customer sales
sales
objective
objective profile
profile benefits
benefits presentation
presentation
7-3A
Information Used in Profile and
Planning
Customer Profile and Planning Sheet
1. Name:
Address:
2. Type of business:
Name of buyer:
3. People who influence buying decision or aid in using or selling our product:
12. Post sales call comments (reason did/did not buy; what to do on next call;
follow-up promised):
7-6A Major Phases in a Presentation:
A Sequence of Events to Complete in
Developing a Sales Presentation
Rapport-building
1.1.Approach
Approach Uncover needs
Attention, interest, transition
Features
2.2.Fully
Fullydiscuss
discuss Advantages
your
yourproduct
product Benefits
Attention
Attention Interest
Interest Desire
Desire Conviction
Conviction Purchase
Purchase
7-8A
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
1. Prospecting
Salesperson locates
and qualifies
prospects
2. Preapproach
Salesperson
determines sales call
objective, develops
cus- tomer profile,
customer benefit program,
and selling strategies.
Customer’s needs are
determined.
7-8B
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
3. Approach Attention due to arousal of Should I see salesperson?
Salesperson potential need or Should I continue to listen,
obtains interview, problem. interact, devote much
meets prospect, and Interest due to recognized time to a salesperson?
begins individualized need or problem and the What’s in it for me?
sales presentation. desire to fulfill the need
Needs are further or solve the problem.
uncovered.
7-8C
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
4. Presentation Interest in information that Is the salesperson prepared?
Salesperson provides knowledge and Are my needs understood?
relates product influences perceptions Is the seller interested in my
benefits to needs, and attitude. needs?
using Desire begins to develop Should I continue to listen
demonstration, based on information and interact?
dramatizations, eval- uation of So what? (to statements
visuals, and proof product features, about features)
statements. advantages, and benefits. Prove it! (to statements
This is due to forming about advantages)
posi- tive attitudes Are the benefits of this
that product may product the best to fulfill
fulfill need or solve my needs?
problem. Positive attitudes
brought about by
knowledge obtained from
7-8D
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
5. Trial close Desire continues based on
Salesperson asks information evaluation.
prospect’s opinion
on benefits during
and after presentation.
Definition:
Market Demand for a product is the total
volume that would be bought by a defined
customer group, in a defined geographical
area, in a defined time period, in a given
marketing environment. This is sometimes
referred to as the Market Demand Curve.
Stage two in the forecast is to
estimate Company Demand
• Company demand is the company’s share of market
demand.
• Note that the Sales Forecast is not necessarily the same as a “sales
target” or a “sales budget”.
• A sales target (or goal) is set for the sales force as a way of
defining and encouraging sales effort. Sales targets are often set
some way higher than estimated sales to “stretch” the efforts of the
sales force.
Managing Personal
Generating
Existing Time
New Accounts
Accounts Management
Mergers and
Acquisitions
Acquiring
Introducing 10% New
New Customers
15% 33%
Products
42%
Increasing
Business with What’s the
Existing Customers
Best Way to Grow?
Territory Management
Key to Productivity
Sales Concentration
% Total Sales
100
80
60
40
20
0
Top Top Top Top
10% 20% 50%
Source: SMM, Jan. 02, p. 40
Personal Selling
Developing a list of Prospects
1. Direct Inquiry
• Advertising
• Direct Mail
• Trade publications
• Trade shows
3. Referrals
4. Cold canvassing
Personal Selling
Qualifying Prospects
1. Needs for your products/services
• Service by phone
B
• Concede to competition
Core Growth
Accounts
Accounts Accounts
Accounts
High Accounts
Accountsare
arevery
very Accounts
Accountsareare
attractive.
attractive. Potentially attractive.
Potentially attractive.
Invest
Investheavily
heavilyin May
in Maywant
wanttotoinvest
invest
Selling resources. .
Selling resources in heavily
in heavily
Drag
Drag Problem
Problem
Low Accounts
Accounts Accounts
Accounts
Accounts Accounts
Accountsarearevery
Accountsare
are very
moderately attractive. unattractive.
unattractive.
moderately attractive.
Invest to maintain Minimal
Minimalinvestment
investment
Invest to maintain
current position.
current position. of resources. .
of sellingresources
selling
Competitive
Competitive Position
Position
Strong
O
P Segment 1- Core Accounts
P Attractiveness: Accounts are very attractive
O because they offer high opportunity and sales
R organization has strong competitive position.
T Selling Effort Strategy: Accounts should
U High receive a heavy investment of sales resources to
N take advantage of opportunity and
maintain/improve competitive position.
I
T
Y
Competitive
Competitive Position
Position
Weak
O
P Segment 2 – Growth Accounts
P Attractiveness: Accounts are potentially
O attractive due to high opportunity, buy sales
organization currently has weak competitive
R position.
T High
Selling Effort Strategy: Additional analysis
U should be performed to identify account where sales
N organization’s competitive position can be
strengthened. These accounts should receive heavy
I investment of sales resources, while other accounts
T receive minimal investment.
Y
Competitive
Competitive Position
Position
Strong
O
P Segment 3 – Drag Accounts
P Attractiveness: Accounts are moderately
O attractive due to sales organization’s strong
competitive position. However, future
R opportunity is limited.
T Low
Selling Effort Strategy: Accounts should
U receive a sales resource investment sufficient to
N maintain current competitive position.
I
T
Y
Competitive
Competitive Position
Position
Weak
O
P Segment 4 – Problem Accounts
P Attractiveness: Accounts are very
O unattractive: they offer low opportunity and
sales organization has weak competitive
R position.
T Low Selling Effort Strategy: Accounts should receive
U minimal investments of sales resources. Less costly
N forms of marketing (for example, telephone sales
I calls, direct mail) should replace personal selling
efforts on a selective basis, or the account coverage
T should be eliminated entirely.
Y
Territory Management
Key to Productivity
Portfolio Analysis: Problem 3
Where do allocation problems seem to occur?
Why might this happen?
24 19 17
Unqualified 20 16 14
15 23
13 21 22 18
12 11 50%
9 closure
10 probability
Qualified
7 5 75%
closure
8 6 probability
3 4 90%
Best few closure
1 2 probability
Territory Management
Key to Productivity
Prospecting Model -- Selling Priorities
Sales Funnel
FIRST Close your “Best Few”
sales objectives
25%
17% Selling over
the phone
Waiting and
Travel
How Salespeople
Spend Their Time
Territory Management
Key to Productivity
Salespeople’s Time Wasters
1. Telephone interruptions
2. Drop-in visitors
3. Lack of self-discipline
4. Crises
5. Meetings
6. Lack of objectives, priorities & deadlines
7. Indecision and Procrastination
8. Attempting too much at once
9. Leaving tasks unfinished
10. Unclear communication
Personal Time Management
Importance
High Low
High Time
Time
Emergencies
Emergencies Wasters
Wasters
Urgency
Low Personal
Personal Recreation
Recreation
Growth
Growth
100,000 100,000
Catalog Drops Website Visits
Territory-time
Territory-time
allocation
allocation
Territory
Territoryand
and Scheduling
Schedulingand
and Customer
Customersales
sales
customer
customer routing
routing planning
planning
evaluation
evaluation
Location of Accounts
and Sequence of Calls
Oklahoma City
62
35
62
2.
Distribution
Center
Weekly Route Report
Straight-Line Pattern
First call
c
c c c
Work back
Three Basic Routing Patterns
Cloverleaf Pattern c c
c c
c c
c c c c
c c
Base
c c c c
c c
c c
Each leaf out and
c c back the same day
c c
Three Basic Routing Patterns
Major-City Pattern
2 3
1 1 = Downtown
4 5
A Partial Map of Your Sales
Territory
L E F H M
K N
B O R J
C
Your
favorite
restaurant
D P I
G A
Start
Sales quota
LEARNING OBJECTIVES
Objectives and quotas are fundamental parts of a company, because
they provide the sales force with direction and goals. Selling by
objectives (SBO) is a system that unites the sales force. This
chapter should help you understand:
Salesperson
1. Regular
2. Problem Solving
3. Innovative
SELLING BY OBJECTIVES SETS
FUTURE TARGETS
N am e
F o r Year
L is t Y o u r R e s p o n s ib ilit y A r e a
R e s u lt s E x p e c t e d
O u tp u t P e s s im is t ic R e a lis t ic O p t im is t ic R e s u lt s
1 . $ V o lu m e / m o n t h
2 . $ E x p e n se/ m o n th
3 . G r o s s m a r g in / m o n t h
4.
5.
6.
7.
8.
9.
10.
11.
12.
O th er
I n s t r u c t io n : L is t t h e r e g u la r , o n g o in g , r e c u r r in g o b je c t iv e s . C o v e r t h e t e n m a jo r r e s p o n -
s ib ilit ie s o f y o u r jo b n e x t y e a r t o m a n a g e t e r r it o r y, a c c o u n t s , c a lls , a n d y o u r s e lf .
A GOOD OBJECTIVE AND
QUOTA PLAN IS SMART
Specific
Measurable
Attainable
Realistic
Time specific
A simple three-way test to judge how well quotas
and objectives are written:
M u tu a lly S et
M ea su r e
O b je ct i v e s a n d
P er fo r m a n ce
Q u ota s
E v a lu a te
P er fo r m a n ce
P u b liciz e
P er fo r m a n ce R ew a rd
R esu lts o r P en a lty
THE SALES TERRITORY IS
WHERE QUOTAS ARE MADE
P e o p le P la n n in g E m p lo y m e n t P la n n in g
T im e L in e
What’s a salesperson worth?
• Intelligence
• Education
• Personality
• Experience
• Appearance
CHARACTERISTICS OF SUCCESSFUL SALESPEOPLE
I n te rn a l
S o u rc e s
S a le s
Q u a lifie d E v a lu a t e
H um an A p p lic a n t
R e c ru itm e n t A p p lic a n t R e c ru itm e n t S e le c t io n
R e s o u rc e Pool
Pool R e s u lts
P la n n in g
E x te rn a l
S o u rc e s
LEGAL INFLUENCES
2 R e p o rt to W o rk 2 :2 21
3 O ffe r/ H ire s 3 :2 14
30 I n te r v ie w / O ffe r 1 0 :1 21
12 0 L e a d s / I n te rv ie w 4 :1 30
SOURCES OF RECRUITS –
WHERE ARE THEY FOUND?
INTERNAL SOURCES
Internal recruitment sources come from inside the
company:
• Current Employees.
• Promotions.
• Transfers.
EXTERNAL SOURCES
• Walk-ins. • The Internet.
• Employment agencies. • Internships.
• Radio and television. • Colleges and
universities.
• Newspaper • Competitors.
advertisements.
• Telephone-in
advertisements.
REALISTIC JOB PREVIEWS HELP BOTH
COMPANY AND RECRUITS
A “realistic job preview” means that a person is
given pertinent information about the job without
distortion or exaggeration.
Companies can expect these results from
realistic previews:
• Newly hired salespeople have a higher
rate of job survival than those hired
using traditional previews.
• Salespeople hired indicate higher
satisfaction.
• Managers can set the job expectations of
new salespeople at realistic levels.
• Realistic previews do not reduce the flow
of highly capable applicants.
THE QUALIFIED
APPLICANT POOL
The organization should find out:
Motivation
MotivationTools
Tools
Self-
Self- Quotas
Quotas Incentive
Incentive Recognition
Recognition
management
management programs
programs programs
programs
Reasons for Motivating Salespeople
• Frequent rejection
• Physical separation from company
support
• Direct influence on quality of sales
presentation
• Indirect influence on performance
Steps to Greater
Personal Motivation
Number Percent
847 86%
341 74%
757 54%
431 51%
828 37%
458 37%
INDIVIDUAL NEEDS
Maslow’s Related
Hierarchy Sales Force
of Needs Motivators
Self- Challenging tasks
actualization calling for creativity
Self-
actualization
in service to
society
Safety
Physiological
Affiliation (belonging)
What Makes Great Salespeople?
The Competitor
The Ego-driven
The Achiever
The Service-oriented
Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies
for Industrial Sales Force,” Journal of Marketing Research, August, 1996), pp. 266-67.
Typical Sales Job Activities
Job Dimension Activities
Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position
Taxonomies for Industrial Sales Force,” Journal of Marketing Research,
August, 1996), pp. 266-67.
Motivation
Career Stages
• Does everyone go through these stages?
• What can be done to address the concerns of
management at each stage?
• How can sales managers address the
management concerns at each stage?
Career Stages
Age Range
Proportion of 20 30 40 50 60 65
Career Concerns Sales Force
Exploration 14%
Establishment 29%
Maintenance 42%
Disengagement 15%
Sales 60%
volume 55%
quota
Large firms’
Bar
Sales2 >$40M
Profit- 32%
based 14% Small firms’
quotas Bar
Sales1 < $40M
28%
Activity
quota
14%
Percentage of
Type of Award Firms Using
Cash 59
Selected Merchandise 46
Merchandise Catalog 25
Travel 22
Giving Status to
Salespeople
1. Compensation -- exceed first-line managers
2. Job Title -- no cost but considerable payback
3. Company Car Upgrade -- salespeople spend
much time in car - reminds them of their value.
4. Car Phone -- justified on a purely business basis
5. Field Sales Council -- meet president for 1/2 day open-
ended discussion on field marketing conditions - report
back to field meetings the results
6.Outside Secretarial Support -- or more exclusive central.
7. Published Success Stories -- high form of recognition
8. Task Force Assignments -- e.g., review of all paperwork.
Sales force – compensation ,
appraisal
Appraisal
• SMART objectives
• On the job
• Time period for review
– Weekly
– Monthly
– Quarterly
– Annual
Appraisal
• One to one
• Team appraisal
• Results of appraisal
– Promotions
– Competency development
– Compensation review
– New territory
Compensation
• Straight Salary
• Straight Commission
• Combination Plan
Straight Salary
• Salesperson paid a set amount of money
based upon hours or days worked
– Often adopted when salesperson must devote
significant amounts of time to other duties
• Market research, customer service, administration
– Simple to administer by sales manager
– But, no direct link between performance and
reward!
• More commonly used in Europe and may be difficult to
change by global sales managers
Straight Commission
• Adopted by performance-oriented firms that pay
salesperson for their achievements
– Each person is paid a percentage of their total sales
• Easy to evaluate performance
• Plans encompass an element of insecurity
• Not believed acceptable in some cultures, like EU
• Some evidence of acceptance in Japan
• Can lead salesperson to shirk duties or pressure customers
to buy
Combination Pay Plan
• The combination plan is the most popular
– Employed by more than 80% of US firms
– May appear in many forms:
• Salary, commission, individual and group bonuses
– Basic security bestowed by set salary
– Motivation introduced by commission/bonus
• Combination plans more time consuming
for sales managers to oversee
Ethical Compensation Issues
• Major dilemma – hire the best salesperson for
the lowest possible salary. Other dilemmas
include:
– Pay at, below or above market salaries?
– Setting a cap on total pay?
– Assigning lucrative sales territories?
– Team vs. individual incentives?
– Frequency of paying commission?
– Pay discrimination?
Sales Contests
• Sales contests are short-term incentive
programs implemented to motivate salespersons
to achieve specific goals or activities
• For sales contests to be successful:
– Objectives must be specific and clearly defined
– Contest theme must be exciting and clearly
communicated
– Each salespersons must believe they can win
– Awards must be attractive to participants
– Contest must be promoted and managed properly
Sales Contest Elements
• Contest Objectives
– To increase total and product sales most common
– Sales force must be given sufficient time
– All contest information and rules must be clear
• Theme
– Contests receive a theme to create excitement
• Chance of winning
– Compete against self, others, or as a team?
• In U.S. salesperson has about a 40% chance of winning
Types of Rewards
• Sales contests can offer many types of reward in
the form of:
– Cash, prizes, or travel
– Perceived value very important as it must be of
sufficient value to motivate additional effort
• Promotion of contest important
– Launched as a special event with handouts
– Large scorecards to communicate progress
– Newsletter articles or interim prizes can keep
motivation up
Sales Contest Concerns
• A number of concerns have been raised
about sales contests
– When not properly designed contests take a
lot of managerial time to administer
– Improper contests can actually de-motivate
– Do sales contests generate additional sales?
– Should sales force be paid twice for doing
job?
– If contests are for short-term, then why have a
“never-ending” sales contest?
Non-Financial Incentives
• Human needs require approaches other
than compensation to remain satisfied
– Ability to grow
– Recognition programs
• Salesperson of the year, President’s Club
– Opportunity to travel
– Educational assistance
Sales Expense Plans
• Linked to salary in some ways
– Globally, firm may pay salesperson’s
expenses to live overseas that include family
– Expatriate expenses are significant
• Expense plans include
– Unlimited
– Per diem
– Limited expense plan
Unlimited Expense Plan
• All legitimate expenses are reimbursed
• Plan has a number of advantages
– Communicates trust to the sales force
– Sales manager can focus on more important issues
– Salesperson cannot complain that resources not
available to make sale
• Sales force must be given guidance and
expenses must still be monitored to insure
sound judgment
– Reimbursed expenses vary by country – e.g.
entertainment and alcohol
Per Diem Expense Plan
• The salesperson is given a set amount of
money for each day s/he is in the field
– For example, US$250 per day
• Budget can be set by multiplying rate times total
days sales force expected to travel
• Single rate unlikely to work in all locales due to
varying costs
• Sales manager must adjust per diem rates
regularly as prices expand or contract
Limited Expense Plan
• The firm sets a maximum daily amount
paid for each category of expense
– That is, US$125 for lodging, $50 for meals,
$30 for auto rental, and $20 for miscellaneous
• Limits firm’s upper travel expense limit
• Must be updated and will vary by location
• When actual costs exceed plan, salesperson may
try to save in some areas to meet expenses in
other
• Salesperson’s attention may be diverted from
client