Foreword

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(No Transcript)
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Professional Sales
Foreword
Good listeners generally make more sales than
good talkers.
-B. C. Holwick-
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OBJECTIVES
After reading this chapter, you should be able to

• Explain the role and nature of personal selling
  and the role of the sales force.

• Describe the basics of managing the sales force,
  and explain
• how to set sales force strategy
• how to pick a structure (territorial, product,
  customer,or complex)
• how to ensure sales force size is appropriate

• Identify the key issues in recruiting, selecting,
  training, and compensating salespeople.

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OBJECTIVES
After reading this chapter, you should be able to

• Discuss supervising salespeople, including
  directing, motivation, and evaluating performance.

• Apply the principles of the personal selling
  process, and outline the steps in the selling
  process
• qualifying
• preapproach and approach
• presentation and demonstration
• handling objections
• closing
• follow-up

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Professional Sales
Grapevine, Texas

• The city of Grapevine, Texas, became an important
  tourism destination without benefit of beaches or
  mountains or a Grand Canyon.
• What Grapevine had was
• available development land for development
• access to 7 major highways Dallas-Fort Worth
  Airport
• a team of salespeople consisting of a mayor, city
  council, and the city managers office Go Team
• Just north of the Dallas-Fort Worth metroplex and
  DFW airport, Grapevine decided that tourism and
  hospitality were the industries it wanted.

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Professional Sales
Grapevine, Texas

• Grapevine decided that tourism, hospitality, and
  shopping would create jobs and attract
  out-of-area visitors as well as patrons from
  Dallas/Fort Worth.
• It was felt that these were complementary to the
  historic nature of the community would assist
  in preserving the culture of a small town.
• The mayor, city council, and the city managers
  office believed in the value of tourism
  hospitality.
• Tommy Hardy, assistant city manager, was charged
  to promote the destination and tourism economic
  development of Grapevine.

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Professional Sales
Grapevine, Texas

• Tommy decided he would need to fully understand
  tourism and the hospitality industry.
• This meant knowing major players, understanding
  their language, such as ADR, and REVPAR.
• It also meant that Grapevine needed to develop a
  marketing plan with desired target hospitality
  companies, and pursue them with professional
  marketing/sales strategies.
• The city of Grapevine worked closely with
  developers, architects the financial community.

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Professional Sales
Grapevine, Texas

• Tommy staff made calls on targeted companies,
  conducted tours, hosted receptions and provided
  continuous follow-up to close the sale.
• Tommy said they were never afraid to go to the
  private sector for assistance in planning
  marketing.
• We always took big steps he said, and the
  private community supported us.
• The mayor of Grapevine has great civic pride, and
  worked aggressively with Tommy and staff to bring
  hospitality retailing companies to the
  community.
• he has a reputation as a closer, clinching many
  deals

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Professional Sales
Grapevine, Texas

• Sales and bed taxes generated by the complex
  support the Grapevine Convention Visitors
  Bureau, which organizes events such as GrapeFest.
• proven very popular with the local community and
  day visitors from the metroplex, adding to
  tourism revenue
• An area in northeast Grapevine was targeted for
  commercial tourism/hospitality development.
• One of the earliest companies was the Gaylord
  Texan mega-resort, which opened in 2004 with
  1,511 hotel rooms and a 400,000-square-foot
  convention center.
• nine additional hotels then located in the area

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Professional Sales
Grapevine, Texas

• In 2006 Great Wolf Resorts began construction of
  a 60 million, all-suite hotel,
  50,000-square-foot indoor water park, and a
  conference center.
• Tourism development planners know the importance
  of retail shopping, and a huge retail shopping
  area was developed, including Grapevine Mills
  Mall.
• The spectacular Bass Pro Shops Outdoor Worldwith
  200,000 square feet of space was built in close
  proximity and attracts 2 million visitors per
  year.

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Professional Sales
Grapevine, Texas

• Tourism development also occurred outside the
  destination corridor within the historic downtown
  Grapevine area and other areas.
• the Grapevine Vintage Railroad connects
  Grapevinewith the renovated Fort Worth
  Stockyards
• a complex of upscale restaurants known as the
  Epicenter was developed on South Main Street in
  Grapevine
• Tourism in Grapevine means 13 million visitors
  annually, and thousands of individuals are
  directly employed in the industry, providing a
  healthy economy.

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Professional Sales
Grapevine, Texas

• Tourism has allowed downtown Grapevine to
  flourish and has encouraged historical
  preservation and cultural growth in the arts.
• Grapevine also saw over a 22 increase in its
  REVPAR, over twice the rate of its competitors.
• None of this would have been possible without the
  teamwork between the private sector and the
  public.
• nor without sales planning strategy by a
  dedicatedteam who wanted to see Grapevine grow
  in a desiredand beneficial manner

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Management of Professional Sales
Introduction

• Success or failure within the hospitality
  industry ultimately rests on the ability to sell.
  
• No member of the hospitality industry can be
  seenas being above the need to sell.
• Discourteous front-desk clerks and grumpy
  cashiers are part of ones sales force.
• These and all others who face the public can
  drive away or attract business.
• Successful owners and managers know that they
  must sell continuously.

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Management of Professional Sales
Introduction

• County commissioners, tax officials, planning
  boards, the press, bankers, and local visitor
  center must all be sold on ones hospitality
  business.
• Libraries could be filled with tales of lost
  sales or fractured guest relationships because of
  a curt response or an unsavory attitude.
• Everyone must sell, but a few individuals have
  the specific responsibility for ensuring payrolls
  can be met, invoices paid, and fair return on
  investment achieved.
• These are the professional salespeople.

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Management of Professional Sales
Classification of Sales Positions

• Deliverer - positions in which the salespersons
  job is predominantly to deliver the project
• Order taker -  positions in which the salesperson
  is predominantly an inside or outside order taker
• Missionary - in which the salesperson is called
  on tobuild goodwill or to educate actual or
  potential users
• Technician - major emphasis on technical
  knowledge
• Demand creator - positions that demand the
  creative sale of tangible products or of
  intangibles
• Strategic client partner - planning, sales,
  marketing, and areas affecting success of client
  and relationship between client and supplier

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Nature of Hospitality Sales

Introduction

• Sales personnel serve as the companys
  personallink to customers.
• The sales representative is the company to many
  customers brings back much needed intelligence.
  
• While cost estimates for making a personal
  salescall vary one conclusion remains constant
• personal selling is the most expensive contact
  and communication tool used by the company
• Sales orders are seldom written on the first
  calland often require five or more calls,
  particularlyfor larger orders.

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Nature of Hospitality Sales

Personal Selling

• Despite the high cost, personal selling is often
  the most effective tool available.

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Nature of Hospitality Sales

Sales Tasks

• Sales representatives perform one or more of the
  following tasks for their companies
• Prospecting - finding cultivating new
  customers.
• Targeting - sales reps decide how to allocate
  their scarce time among prospects and customers.
• Communicating - information about the companys
  products and services.
• Selling - approaching, presenting, answering
  objections, and closing sales.

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Nature of Hospitality Sales

Sales Tasks

• Servicing - services to the customersconsultingo
  n their problems, rendering technical assistance,
  arranging financing, and expediting delivery.
• Information gathering - market research and
  intelligence work and filling in call reports.
• Allocating - deciding to which customers to
  allocate scarce products to during product
  shortages.
• Maintaining strategic partnerships - senior
  salespeople including the sales manager provide
  valuable planning assistance to clients.

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Nature of Hospitality Sales

The Task Mix

• During product shortages, such as a temporary
  shortage of hotel rooms during a major
  convention, sales reps find themselves with
  nothing to sell.
• some companies jump to the conclusion that
  fewersales representatives are needed
• This overlooks the salespersons other roles
• allocating the product
• counseling unhappy customers
• selling other company products not in short
  supply
• It ignores the long-run nature of hospitality
  sales.

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Nature of Hospitality Sales

The Task Mix

• Many conventions conferences are planned years
  in advance salespeople must often work with
  meeting/convention planners 2-4 years in advance.
  
• Resorts in the US have concentrated much of their
  selling efforts on meetings and conferences,
  which by now represent 35 or more of their
  customers.
• not achieved by viewing sales as a short-run
  tactic
• As companies move toward a stronger market
  orientation, their sales forces need to
  becomemore market focused and customer oriented.

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Nature of Hospitality Sales

The Task Mix

• Marketers believe a sales force will be more
  effective if members understand marketing as well
  as selling.
• A hospitality industry writer concluded

• closing sales has more to do with professionalism
  than anything else
• understanding the identity of real prospects
  increasessales productivity
• sales force members can save hours of time by
  having information about prospect group clients
• it is critical to know what groups have a history
  of booking rooms in your type of hotel

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Sales Force Objectives

Introduction

• Hospitality companies typically establish
  objectives for the sales force, essential for two
  reasons
• objectives ensure that corporate goals are met
• they assist sales force members to plan
  executetheir personal sales programs
• Sales force objectives must be customer designed
  annually for each company.
• Individual sales objectives are established to
  support corporate goals and marketing and sales
  objectives.
• Annual marketing and sales objectives are
  normally broken into quarterly and monthly
  objectives.

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Sales Force Objectives

Common Objectives

• Although custom designed, there are objectives
  commonly employed by hospitality industry
• Sales Volume
• Sales Volume by Selected Segments
• Sales Volume and Price/Margin Mix
• Upselling and Second-Chance Selling
• Market Share or Market Penetration
• Product-Specific Objectives

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Sales Force Structure and Size

Introduction

• The diverse nature of the hospitality industry
  means different sales force structures sizes
  have evolved.
• Sales force structure within the airline industry
  is different from that of a hotel or cruise line.
  
• Most restaurants do not use a sales force but
  depend on other parts of the mix, such as
  advertising and sales promotion.
• Structure of a hotel sales department depends
  onthe culture of the organization, size of the
  property, nature of the market, and type of hotel.

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Sales Force Structure and Size

Territorial-Structured Sales Force

• In the simplest sales organization, each sales
  representative is assigned an exclusive
  territoryin which to represent the companys
  full line.
• A territorial sales organization is often
  supportedby many levels of sales management
  positions.
• Each higher-level sales manager takes on
  increasing marketing and administration work in
  relation to the time available for selling.
• In fact, sales managers are paid for management
  skills rather than their selling skills.

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Sales Force Structure and Size

Territorial-Structured Sales Force

• In designing territories, the company seeks
  certain characteristics, based on territory size
  shape.
• Salespersons in restaurant hotel supply
  companies are often assigned to a territory.
• Hotels with international markets often assign
  their international salespeople to a territory
  such as Europe or a specific country such as
  France.

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Sales Force Structure and Size

Territorial-Structured Sales Force

• Territories are formed by combining smaller
  units, such as counties or states, until they add
  up to a territory of a given sales potential or
  workload.
• Territories can be designed to provide either
  equal sales potential or equal workload.
• each offers advantages at some cost
• This doesnt concern a sales force on straight
  salary, but when sales representatives are
  compensated partly on commission, territories
  vary in their attractiveness even though
  workloads are equal.

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Sales Force Structure and Size

Market-Segment-Structured Sales Force

• Companies often specialize their sales forces
  along market segment lines.
• the most common structure within the hotel
  industry
• Separate sales forces can be set up by different
  industries for the convention/meeting segment,
  the incentive travel market, and other major
  segments.
• The advantage of market specialization is that
  each force gains knowledge about specific
  segments.
• The major disadvantage arises when members of a
  segment are scattered around the country or
  world.
• this vastly increases the travel costs

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Sales Force Structure and Size

Market-Channel-Structured Sales Force

• The importance of marketing intermediaries has
  created structures to serve marketing channels.
• the cruise line industry has historically
  depended ontravel agents for the bulk of their
  sales
• hotels such as those near historical sites
  receivesubstantial bookings from motor coach
  tour brokers
• Location, size, and type of hospitality company
  greatly affect relative importance of
  intermediaries.
• and affects whether a company designs its sales
  force structure by travel intermediary

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Sales Force Structure and Size

Customer-Structured Sales Force

• A customer-structured sales force recognizes
  specific customers critical to the success of the
  organization.
• the sales force is usually organized to serve
  theseaccounts through a key or national account
  structure
• Large accounts (key, major or national accounts)
  are often singled out for special attention
  handling.
• If a company has several such accounts, it may
  create a national account management (NAM)
  division.

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Sales Force Structure and Size

Customer-Structured Sales Force - NAM

• NAM is growing for a number of reasons.
• buyer concentration increases via mergers
  acquisitions
• buyers are centralizing their purchases
• In organizing a NAM division, a company faces a
  number of issues, including

• how to select national manage accounts
• how to develop, manage evaluate a national
  account manager
• how to organize a structure for national accounts
• where to locate NAM in the organization

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Sales Force Structure and Size

Combination-Structured Sales Force

• Some hotels resorts have a sales force
  structured by product, market segment or channel
  customer.
• often a reaction to internal market forces
  ratherthan the result of strategic thinking
• A large hotel might have a separate sales force
  for

• catering/banquet (product)
• convention/meeting (market segment)
• tour wholesale (marketing intermediary)
• national accounts sales force (customer)

• Proponents believe it encourages the sales force
  to reach all or most available customers.

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Sales Force Structure and Size

Combination-Structured Sales Force

• Opponents feel this sales force structure
  indicatesthe hotel is trying to be all things to
  all people inthe absence of long-run goals and
  strategies.
• Regardless of structure used by a hotel or
  resort, a particular market segment neglected by
  many North American hoteliers is local markets.
• A sales manager must be aware of the local market
  and develop a sales force structure appropriate
  for penetrating this market.

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Sales Force Structure and Size

Sales Force Size

• As sales reps are one of the companys most
  expensive assets, a workload approach can help
  establish sales force size. This method consists
  of

• grouping customers according to annual sales
  volume
• establishing desirable call frequencies for each
  class
• the number of accounts in each size class is
  multipliedby the call frequency to arrive at the
  total workload forthe country in sales calls per
  year.
• average number of calls per year a rep can make
  is determined
• number of sales reps needed is determined

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Sales Force Structure and Size

Sales Force Size

• Size of a sales force is determined by market
  changes, competition, corporate strategy
  policies.
• Several of factors that influence the size of a
  hotels sales force are

• corporate/chain sales support
• use of sales reps
• team selling
• electronic and telephone sales
• travel intermediary dependency

• A professional sales manager must be aware of
  changing trends and new technology.

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Organizing the Sales Department
Introduction

• Hospitality companies traditionally design
  departments along functional lines.
• Todays sales managers may have two types of
  salespeople within their departments.
• an inside sales force and a field sales force
• The term inside sales can be misleading because
  many field salespeople spend a great deal of
  their time inside the hotel.
• calling clients and prospects meeting with them
• making arrangements with other departments
• answering mail and completing sales reports

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Organizing the Sales Department
Information Needed by the Sales Force

• Salespeople need a database of customers/clients
  to helps them to prepare for sales calls answer
  questions while talking with customers.
• The purpose is not to overwhelm the sales
  forcewith data but assist them to better serve
  the clientand in turn realize sales success.

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Organizing the Sales Department
Reservations Department

• The reservations department is a very important
  inside sales area reservationists may speak
  with80 of a companys customers.
• Unfortunately, reservations is sometimes not
  viewed as part of the sales team may have
  little communication with the sales department.
• in worst-case scenarios, they may find themselves
  at odds
• Training reservationists to be good company
  representatives and teaching them how to
  sellwill pay back big dividends in the long run.

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Organizing the Sales Department
Field Sales Force - Commissioned Reps

• Sales managers face an increasingly complex
  marketplace, creating the need to review the
  organizational design of the field sales force.
• Commissioned Reps - Hotels resorts commonly use
  commissioned sales reps in areas where market
  potential does not justify a salaried
  salesperson.
• commissioned reps normally represent several
  different properties, but attempt not to
  represent competing clients
• The relationship between sales rep hotel is not
  always satisfactory, often because reps are hired
  without conducting a careful analysis.

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Organizing the Sales Department
Field Sales Force - Commissioned Reps - Simple
Rules

• Select markets with care. Distant markets should
  be selected to match corporate goals
  marketing/sales objectives.
• Visit the market personally. Meet with
  prospective sales reps, examine their offices,
  check references.
• note their personal appearance, ask for a list of
  clients
• clear the rep through police the Better
  Business Bureau
• Include the sales rep as part of the hotels
  sales force. 

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Organizing the Sales Department
Field Sales Force - Salaried Sales Force

• Most hospitality industry sales force members are
  paid a salary plus benefits, with additional
  commissions, bonuses profit sharing.
• Traditionally, hospitality companies have
  employed members of the sales force to perform
  the sales function primarily in an individualized
  manner.
• This system continues to be the backbone of
  hospitality sales, but newer forms of
  organizinga field sales force are gaining
  acceptance.

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Organizing the Sales Department
Field Sales Force - Team Sales

• Team sales have become a necessity in many
  industries hospitality is no exception.
• The concept of a sales team is two or more
  persons working in concert toward a common sales
  objective.
• not necessarily from the same company
• The purpose is to accomplish objectives through
  synergism of two or more people impossible or
  unduly costly through individual sales efforts.
• People from various disciplines departments are
  sometimes brought together to improve morale,
  teach teamwork, and cross-educate.

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Organizing the Sales Department
Field Sales Force - Team Sales

• In addition to traditional objectives, like
  increased occupancy, other nonquantifiable
  objectives are sometimes established for teams.
• generally dealing with enhancing image
  goodwillor using the team as a human resource
  training pool
• Teams in the hospitality industry have
  traditionally been used for specific tasks, which
  include
• sales blitzes travel missions
• charity promotions community improvement
  programs
• The primary purpose for team sales should be to
  improve sales competitive position.

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Relationship Marketing and Strategic Alliances
Introduction

• The goal of personal selling was
  traditionallyviewed as a specific contract with
  a customer.
• In many cases the company is not seeking just a
  onetime sale, it has targeted a major account
  itwould like to win serve for a long period of
  time.
• The company wants to demonstrate it is capable of
  serving the account in a superior way,
  particularlyif a committed relationship can be
  formed.
• Selling to establish a long-term collaborative
  relationship is more complex than a short-run
  approach.

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Relationship Marketing and Strategic Alliances
Introduction

• Todays large, often global customers prefer
  suppliers who can sell deliver a
  coordinatedset of products services.
• Companies recognize sales teamwork
  increasinglyis the key to winning and
  maintaining accounts.
• and asking their people for teamwork doesnt
  provide it
• They need to revise their compensation system to
  give credit for work on shared accounts, set
  better goals and measures emphasize teamwork in
  their training programs.
• while honoring the importance of individual
  initiative

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Relationship Marketing and Strategic Alliances
Relationship Marketing

• Relationship marketing acknowledge that important
  accounts need focused, continuous attention.
• salespeople must do more than call when they
  think customers might be ready to place orders
• they should monitor key accounts, know their
  problems,be ready to serve them try to be part
  of the clients team
• When implemented properly, the organization
  begins to focus as much on managing customers as
  on managing products.
• Companies should also realize that relationship
  marketing, it is not effective in all situations.

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Relationship Marketing and Strategic Alliances
Strategic Alliances

• Strategic alliances are a highly developed form
  of relationship marketing common between vendor
  buyer or noncompeting vendors a common buyer.
• A strategic alliance may involve the following
• confidences database market knowledge
• planning resources risks security technology
• Strategic alliances directly affect the nature of
  the professional sales function within
  hospitality companies.

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Relationship Marketing and Strategic Alliances
Strategic Alliances - Three Types in the Hotel
Industry

• One-night stands. Short-term opportunistic
  relations, such as cross-advertising between a
  hotel and a restaurant.
• Affairs. Medium-term tactical relationships.
  Hotels may participate with airlines in
  frequent-flyer programs.
• I dos. Equivalent to marriage, where parties
  expect long-term commitment. In some cases,
  equity investment is essential.

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Relationship Marketing and Strategic Alliances
Strategic Alliances - Necessities

• Strategic alliances have become a necessity
  dueto a variety of factors

• globalization
• complicated customer needs
• large customers with multiple locations
• the need for technology
• highly interdependent vendor/buyer relationships
• intensified competition
• low profitability within the hospitality industry

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Recruiting and Training a Professional Sales Force
Introduction

• At the heart of a successful sales force
  operation is the selection of effective sales
  representatives.
• Performance difference between an average anda
  top sales representative can be considerable.
• a survey revealed the top 27 of the sales
  forcebrought in over 52 of the sales
• Beyond differences in sales productivity are the
  wastes entailed in hiring the wrong person.
• finding training a new salesperson plus the
  costof lost sales can be substantial, and a
  sales force withmany new people is generally
  less productive

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Recruiting and Training a Professional Sales Force
What Makes a Good Sales Representative

• Most customers say they want sales
  representatives to be honest, reliable,
  knowledgeable, and helpful.
• A study of superachievers found that super sales
  performers exhibit the following traits
• risk taking, powerful sense of mission,
  problem-solving bent, care for the customer, and
  careful planning
• One of the shortest lists concluded that the
  effective salesperson has two basic qualities
• empathy, the ability to feel as the customer does
• ego drive, a strong personal need to make the sale

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See this feature on 444 of your textbook.
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Recruiting and Training a Professional Sales Force
A Profile of Desired Characteristics

• Management of a hospitality company must
  determine a desired sales force profile.
• this is not solely the responsibility of a sales
  manager
• Desired characteristics such as must be
  enunciated clearly by management.
• honesty, personal integrity, self-esteem,
  confidence,inner motivation, desire to excel
• Both employer and salesperson need to recognize
  that success cannot be realized if the two
  partiesare incompatible.

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Recruiting and Training a Professional Sales Force
Matching Career Acquisitions Corporate
Objectives

• The aspirations of a salesperson must first be
  clearly understood by that person and clearly
  communicated to the potential employer.
• The hospitality industry offers many advantages

• the industry is fun
• clients are generally personable and willing to
  listen
• fellow salespeople and other colleagues are
  generally people oriented, gregarious,
  enjoyable
• opportunities for travel exist
• opportunities for movement within the industry
  exist
• management opportunities exist

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Recruiting and Training a Professional Sales Force
Matching Career Acquisitions Corporate
Objectives

• Career promotion to general manager, from sales
  in hotels resorts, historically has not often
  occurred.
• but is beginning to happen more frequently
• General Manager positions generally call for
  individuals with broader experience and training.
• food beverage, front desk, and other
  operational areas
• Experienced and astute sales managers seem to
  develop a sixth sense for determining whether a
  candidates personality and background truly
  match the sales position.

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Recruiting and Training a Professional Sales Force
Sales Force Training

• Sales training is vital to success, yet
  unfortunately it remains a weak link within the
  hospitality industry.
• training is a career-long endeavor
• Sales force members require training in these
  areas
• product/service training sales techniques
• policies, procedures, and planning
• While sales training is most effective when
  customized, general factors contributing to
  successor failure of a salesperson should be
  consideredwhen developing a sales training
  program.
• effectiveness can be enhanced by learning sales
  basics

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Recruiting and Training a Professional Sales Force
Sales Force Training

• Six factors contribute to sales failure, and each
  is relevant to salespeople in the hospitality
  industry

• poor listening skills
• failure to concentrate on top priorities
• lack of sufficient effort
• inability to determine customer needs
• lack of planning for sales presentations
• inadequate product/service knowledge

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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance

• Formal training may sometimes be necessary in
  which technical details must be memorized.
• interactive video training has proven effective
• many companies are adding web-based e-learningto
  their sales training programs
• Many sales managers err in purchasing an
  expensive training system of programmed learning.
• training programs must be carefully selected

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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance

• Materials specifically designed for the
  hospitality industry are offered by
• Hotel/Motel Educational Association
• CLIA (Cruise Lines International Association)
• National Restaurant Association
• Universities are now developing strategic
  relationships with companies and trade
  associations to train management and staff on an
  ongoing basis.
• Preparatory training is enhanced by skills
  learned in the workplace, as ultimately, all
  training is perfected on the job.

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Recruiting and Training a Professional Sales Force
Training Materials and Outside Training Assistance

• Some managers believe effective training
  consistsof learning from ones trials errors
  while selling.
• This extremely threatening, costly, sink-or-swim
  system, creates unnecessary turnover morale
  problems.
• It is critical for the sales manager to monitor
  progress and offer encouragement
  suggestionsfor improving areas of weakness.
• effective sales managers are effective teachers
• Individuals who do not enjoy teaching or coaching
  may find their own management careers are limited.

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Managing the Sales Force
Introduction

• Research study on this subject clearly indicate
  that successful sales management is not the
  result of following a formula.
• Long-run successful sales managers exhibit a
  strong affinity for subordinates, are willing to
  learn continuously must be reasonably bright.
• Market conditions often have inordinate influence
  over failure or success, and despite their skills
  or lack thereof, sales managers may look weak or
  triumphant.

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Managing the Sales Force
Selecting Sales Strategies

• Sales successes within the hospitality industry
  depends on development of excellent long-run
  relationships with clients or accounts.
• This 80/20 concept says that a majority of a
  firms business comes from a minority of its
  customers.
• the key, national, or major accounts
• Certain corporate clients travel
  intermediaries, such as travel agents, generally
  serve as key accounts, and provide large numbers
  of customers.

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Managing the Sales Force
Selecting Sales Strategies - Six General Ones

• Prevent erosion of key accounts. It does little
  goodto attract new customers if key customers
  are lost.
• Grow key accounts. Evidence indicates companies
  are willing to reduce the number of providers if
  these companies meet requirements for service and
  price.
• Grow selected marginal accounts. Marginal
  accounts can become key accounts given sufficient
  time and a consistent level of service.
• Eliminate selected marginal accounts. Some
  accounts result in net losses for a hospitality
  company.

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Managing the Sales Force
Selecting Sales Strategies - Six General

• Retain selected marginal accounts but provide
  lower-cost sales support.  Many low-yield
  accounts cannot bear the cost of personalized
  sales calls or expensive promotions.
• Obtain new business from selected prospects. The
  process of obtaining new accounts is costly and
  time consuming.
• the high cost dictates that the customer must
  have the potential to contribute significantly to
  profits

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Managing the Sales Force
Sales Force Tactics

• Personal selling is an ancient art, and effective
  salespersons have more than instinct.
• they are trained in tactics to achieve sales
  success
• All the sales training approaches try to convert
  a salesperson from being a passive order taker to
  an active order getter.
• In training salespeople to acquire signed orders
  (contracts), there are two basic approaches
• a sales-oriented approach
• a customer-oriented approach

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See this feature on page 452 of your textbook.
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Managing the Sales Force
Sales Force Tactics - Eight Major Tactics

• Prospecting and Qualifying - to identify
  prospects.
• Preapproach - learn as much as possible about the
  prospect company.
• Approach - get the relationship off to a good
  start, involving the salespersons appearance,
  opening lines, and follow-up remarks.
• Presentation and Demonstration - tell the product
  story to the buyer, following the AIDA formula
  of gaining attention, holding interest, arousing
  desire, and obtaining action.

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Managing the Sales Force
Sales Force Tactics - Eight Major Tactics

• Negotiation - the two parties need to reach
  agreement on the price and other terms of sale.
• Overcoming Objections - resistance can be
  psychological or logical. The salesperson needs
  training in the broader skills of negotiation.
• Closing - know how to recognize closing signals,
  including physical actions, statements or
  comments, and questions from the buyer.
• Follow-Up/Maintenance - necessary to ensure
  customer satisfaction and repeat business.

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Managing the Sales Force
Motivating a Professional Sales Force

• Some sales representatives put forth their best
  effort without any special coaching from
  management.
• they are ambitious, self-starters to whom
  sellingis the most fascinating job in the world
• The majority of sales reps require encouragement
  incentives to work at their best level,
  especially true of field selling, due to factors
  which include
• the nature of the job
• human nature
• personal problems

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Managing the Sales Force
Motivating a Professional Sales Force

• Managers must be able to convince salespeople
  that they can sell more by working harder or by
  being trained to work smarter.
• They must also be able to convince
  salespeoplethat rewards for better performance
  are worth the extra effort.

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Managing the Sales Force
Sales Force Compensation

• To attract retain sales representatives, the
  company has to develop an attractive compensation
  package.
• Sales representatives would like
• income regularity, extra reward for an
  above-average performance, fair payment for
  experience and longevity
• Management would like
• control, economy, and simplicity
• Management must determine the level components
  of an effective compensation plan.
• which must bear some relation to the going market
  price for the type of sales job and required
  abilities

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Managing the Sales Force
Sales Force Compensation

• The company must determine the components of
  compensation
• a fixed amount a variable amount
• expenses fringe benefits
• Importance of monetary rewards to a
  hospitalitysales force must not be minimized.
• they are expected to maintain a large fashionable
  wardrobe, work long hours, experience stress
  oftengive up family experiences for the sake of
  their career

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Managing the Sales Force
Supplementary Motivators

• Periodic sales meetings provide a social
  occasion,a break from routine, a chance to meet
  talk with company brass, and to air feelings
  identifywith a larger group.
• meetings can also be used for training
• Companies also sponsor sales contests to spur the
  sales force to a special selling effort above
  what would normally be expected.

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Managing the Sales Force
Evaluation and Control

• We have been describing the feed-forward aspects
  of sales supervision, how management communicates
  what the sales representatives should be doing
  and motivates them to do it.
• Good feed forward requires good feedback, which
  means getting regular information from sales
  representatives to evaluate their performance.

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Managing the Sales Force
Sales Quotas

• Many companies set quotas prescribing what their
  sales reps should sell during the year and by
  product
• compensation is often tied to degree of quota
  fulfillment
• The company prepares a sales forecast, the basis
  for planning production, workforce size, and
  financial requirements.
• Management establishes sales quotas for its
  regions and territories, which typically add up
  to more than the sales forecast.
• sales quotas are often set higher in order to
  stretchsales managers salespeople to perform
  their best

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Managing the Sales Force
Sales Quotas - Three Schools of Thought

• The high-quota school sets quotas higher than
  most sales representatives will achieve but are
  attainable.
• The modest-quota school sets quotas a majority of
  the sales force can achieve.
• The variable-quota school thinks individual
  differences among sales representatives
  warranthigh quotas for some modest quotas for
  others.

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Managing the Sales Force
Developing Norms for Salespeople

• New sales representatives should be given more
  than a territory, a compensation package, and
  training.
• they need supervision, the expression of the
  employers natural, continuous interest in the
  activities of their agents
• through supervision, employers hope to direct
  motivate the sales force to do a better job
• Companies vary in how closely they direct
  theirsales representatives.
• those on commission generally receive less
  supervision
• salaried reps are likely to receive substantial
  supervision

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Managing the Sales Force
Developing Norms for Salespeople

• The number of calls that an average salesperson
  makes during a day has been decreasing.
• The downward trend is owing to increased use of
  technology a drop-in cold calls due to better
  market research data for pinpointing prospects.
• also difficulties reaching prospects because of
  traffic congestion, busy prospect schedules
  other issues
• Companies often decide how many calls to make a
  year on particular-sized accounts, with call
  norms depending on expected account profitability.

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Managing the Sales Force
Developing Norms for Salespeople

• Regardless of how a force is structured,
  individual sales reps must classify their
  customer base.
• A rep responsible for channel intermediaries
  quickly learns that not all are capable of
  producing the same sales volume/profit.
• equally true for the conference/meeting segment,
  and to some degree for national accounts
• Not all prospects may be contacted every year,
  and it is important to know 2nd 3rd third-tier
  prospects.
• so they can be contacted if a slowdown occurs in
  the top targeted groups

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Managing the Sales Force
Developing Norms for Salespeople

• Companies set up prospecting standards for a
  number of reasons, because if left alone, many
  sales reps spend most of their time with current
  customers
• Current customers are better known quantities,
  and reps can depend on them for some business,
  whilea prospect might never deliver any
  business.
• Unless sales representatives are rewarded
  foropening new accounts, they might avoid new
  account development.

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Managing the Sales Force
Using Sales Time Efficiently

• A tool for using time efficiently is the annual
  call schedule, showing which customers
  prospects to call on, in which months,
  activities to carry out.
• another tool is time-and-duty analysis
• Companies are constantly seeking ways to improve
  sales force productivity, using such methods as
• training sales reps in the use of phone power
• simplifying record-keeping
• using the computer to develop call routing
  plansand to supply customer competitive
  information

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Managing the Sales Force
Trade Shows

• Trade shows are commonly used as a means of
  generating sales leads, keeping in touch with
  commercial customers, and writing business.
• The cost/return effectiveness of trade shows
  isoften placed in peril or disregarded
  throughlack of effective planning and control.
• Commitments to more effective planning would
  enhance the productivity of trade shows for most
  companies.

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Managing the Sales Force
Trade Shows - Steps to Improve Effectiveness

• Construct a mailing list of prospects - using the
  list of expected visitors from trade show
  management.
• Identify potential leads - and communicate with
  them before the show.
• Promote the show - with incentives that reflect
  the companys theme, products, and services.
• Send letters to prospective buyers - inviting
  them to make a personal contact at the show.
• Keep good records - of visitor contacts at the
  show.
• Follow up - with qualified prospects after the
  show.

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Managing the Sales Force
Trade Shows - Before the Show

• Review trade show objectives - with the sales
  force.
• Designate a trade show captain - responsible for
  managing sales activities.
• Designate times - when certain salespersons are
  expected to work the booth.
• Prohibit - smoking, drinking, eating, and
  bunching together in the trade booth.
• Show sales force members - how to deal with
  difficult visitors, greet customers prospects,
  ID nonprospects use data acquired at the show.

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Managing the Sales Force
Other Control Techniques

• One important way management obtains information
  about its sales source is sales reports.
• reports are divided between activity plans
  write-upsof activity results
• Additional data comes by personal observation,
  customer letters complaints, surveys, and
  conversations with other sales representatives
• Many hospitality companies require reps to
  develop an annual territory marketing plan to
  outline their program for developing new accounts
  increasing business from existing accounts.

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Managing the Sales Force
Other Control Techniques

• Reports provide raw data from which sales
  managers can extract key indicators of
  performance, such as

• average number of sales calls per salesperson 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 calls
• number of new customers per period
• number of lost customers per period
• sales force cost as a percentage of total sales

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Managing the Sales Force
Other Control Techniques

• These indicators answer several useful questions

• are sales representatives making too few calls
  per day?
• are they spending too much time per call?
• are they spending too much on entertainment?
• are they closing enough orders per 100 calls?
• are they producing enough new customers
• are they holding on to the old customers?

• The sales forces reports along with other
  observations supply the raw materials for
  evaluating members of the sales force.

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KEY TERMS

• Allocating. Sales representatives decide to which
  customers to allocate scarce products.
• Communicating. Sales representatives communicate
  information about the companys products and
  services
• Information gathering. Sales representatives
  conduct market research and intelligence workand
  fill in a call report.
• Prospecting. The process of searching for new
  accounts.

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KEY TERMS

• Selling. Sales representatives know the art of
  salesmanship approaching, presenting, answering
  objections, and closing sales.
• Servicing. Sales representatives provide various
  services to the customers consulting on their
  problems, rendering technical assistance,
  arranging financing, and expediting delivery.
• Targeting. Sales representatives decide how to
  allocate their scarce time among prospects and
  customers.

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EXPERIENTIAL EXERCISES
Try This !

• Conduct an interview with a salesperson for a
  hospitality or tourism organization.
• ask the salesperson about the job
• find out what a typical day is like, and what
  theylike and dislike about the job
• ask how they feel technology will affect the
  sales department in the future
• You may of course ask other questions that are of
  interest to you.
• write up your finding in a report

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INTERNET EXERCISES
Try This !

• Support for this exercise can be found on the
  Web site for Marketing for Hospitality and
  Tourism, www.prenhall.com/kotler

• Find a hotel Web site that has a section for
  meeting planners. Do these sites appear to be
  taking the place of a salesperson or offering
  assistance to the sales department?
• Include the names of the sites you have visited
  in your response.

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END
CHAPTER END