Basic%20Marketing,%2013th%20edition

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Chapter 15 Personal Selling
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Sales Is Important!

• Weak Revenues No Firm
• Sales is often the largest marketing expense
• Selling mistakes increase costs and lose revenues
• 1 in 10 workers are in sales
• Sales is the 1 job of AU grads
• Salespeople can earn very high incomes
• Pay is often a function of risk-return

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Personal Sales works better than Ads

• Salespeople get more attention than ads
• Salespeople can adjust to cultural or situational
  factors
• Salespeople can ask questions
• Salespeople can adjust to customer questions
• Salespeople can take the order - now!
• Salespeople can act to make sure the customer is
  satisfied - fix problems

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Salespeople are marketing managers for their
territory

• Identify which customers to aim at
• Which products to emphasize
• Which customers to call on and work hardest
• How to use promotions/sales support money
• When and how to adjust prices
• Good salespeople help the customer buy.

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Critical Selling Skills

• Product/marketing knowledge
• Listening
• Asking good questions
• Asking for the order
• Being Organized
• Being able to handle failure
• Keeping promises and being dependable

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Basic Sales Tasks
15-4
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Supporting Salespeople

• MISSIONARY SALESPEOPLE
• Supporting salespeople who work for
  producerscalling on their middlemen and the
  middlemen's customers
• TECHNICAL SPECIALISTS
• Supporting salespeople who provide technical
  assistance to order-oriented salespeople

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Business Telemarketing

• Growing fast because of cost per contact (250 vs
  1 - 20 per contact).
• Very helpful to identify prospects who are ready
  to buy
• Calls letters can often handle routine tasks
  without the cost of a face to face call
• Remember, time is a critical resource for
  salespeople!

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Consumer Telemarketing

• Outbound Calling Industry Killed by Do Not Call
  legislation
• Only exceptions are for charities politicians
• Inbound calls still very important to many
  companies

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Limitations of Telemarketing

• 1 Very difficult to sell complex products
• 2 Very difficult to sell when there are
  multiple decision makers
• 3 Very difficult to sell when customer needs
  are complex
• However, telemarketing can often cover the basics
  and a face to face call can close the deal.

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Effective Telephone Communication

• 1. Keep mouth clear and voice wet
• 2. Smile!
• 3. Have a long cord so you can use your
  normal gestures
• 4. Eliminate distractions. Clear desk.
• 5. Chose effective words. No jargon.
• 6. Confirm any action by reading it back. Also
  read back critical information
• 7. Be an active listener

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Some Ways to Set Sales Territories

• Geographic areas
• Customer types
• Account size
• Product to be sold
• Any combination of the above

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Salesforce Turnover

• Salesforce Turnover
• ( of salespeople who leave the company in a time
  period) / (Total Number of Salespeople)

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Salesforce Turnover Example

• A company starts the year with 100 salespeople
• During the year, 5 are fired, 6 leave the company
  and 1 dies. Another salesperson has a heart
  attack and is on medical leave for 90 days.
• 12 people are hired during the year.
• What is the salesforce turnover?

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Turnover Answer

• 5 Fired 6 Leave 1 death / 100
• 12 turnover

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Salesforce Turnover is Costly

• Not covering customers
• Not covering them well (stretching)
• Hiring Costs
• Most firms underspend on hiring costs or just
  make do with weak people. This is very costly
  in the long term.

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Very Low Turnover May Indicate

• Salesforce is over paid
• Salesforce is not challenged

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Sales Recruiting

• A written job description lays the groundworkby
  specifying what tasks the salesperson needs to be
  able to do
• Commonly used selection tools are best when used
  in combination
• multiple interviewswith several different people
• personnel and psychological tests
• background checks

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Training

• Initial and ongoing training can help both
  experienced and inexperienced salespeople
• company policies and practices
• product information
• selling techniques (and customer knowledge)

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Sales Compensation

• 3 Main Types
• Straight Salary
• Straight Commission
• Combination Plan
• They differ in
• Degree of fixed costs
• Motivation
• Control over salesperson activities

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Sales Compensation Example

• Company 1, 2 3 each have 10 salespeople
• Company 1 pays each salesperson 80,000 in salary
  and benefits annually
• Company 2 pays salespeople a flat 4 commission
  on sales
• Company 3 pays their salespeople 30,000 in
  salary and a 2 commission
• What is total salesforce compensation for each
  company at sales of 10, 20 and 40 million?

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10 Million in Sales

• Company 1 10 salespeople x 80,000 each
  800,000
• Company 2 10 million in sales x .04 400,000
• Company 3 10 salespeople x 30,000 and 10
  million in sales x .02 500,000

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20 million in Sales

• Company 1 800,000
• Company 2 20 million x .04 800,000
• Company 3 300,000 (20 million x .02)
  700,000

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40 million in Sales

• Company 1 800,000
• Company 2 1,600,000
• Company 3 1,100,000

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Prospecting

• Prospecting following all the leads in the
  target market to identify potential clients (415)
• Salespeople who are effective at prospecting
• Follow up on inquiries quickly (when customer is
  Ready to buy
• Rapidly Identify buying center, decision makers,
  ability to pay, customer needs