prentice hall, copyright 2009 communicating customer value: personal selling and sales promotion...

Communicating Communicating Customer Value: Customer Value:

Personal Selling Personal Selling

and Sales and Sales PromotionPromotion

Chapter 13Next Exit

2

13-2Prentice Hall, Copyright 2009

Rest Stop:Rest Stop: Previewing the ConceptsPreviewing the Concepts

1. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

2. Identify and explain the six major sales force management steps.

3. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and implemented.


BackgroundNation’s largest reseller of

technology products and services to small and mid-size businesses.

Since 2003, sales up 59% to $6.8 billion and profits have grown 52%.

Success is due to customer devotion and “Circle of Service” philosophy.

CDW – CDW – Relationship Building SuccessRelationship Building SuccessCase StudyCase Study

Personal Selling’s RoleSalespeople build and

manage relationships by being trusted advisors.

Training is extensive: a six week orientation is followed by six months of training, and training never ends.

Technology teams consisting of factory-trained specialists and A+ certified technicians support the sales staff.


Personal Selling DefinedPersonal Selling Defined

Personal presentation by the firm’s sales force for the

purpose of making sales and building customer

relationships.


The majority of salespeople are well-educated, well-trained professionals who work to build and maintain long-term customer relationships.

The Nature of Personal SellingThe Nature of Personal Selling


Salespeople represent a company to customers by performing one or more of the following activities: – Prospecting– Communicating– Selling– Servicing– Information gathering– Relationship building



The term salesperson covers a wide range of positions:– Order taker: Department

or other store clerk• The bakery store clerk

shown at right is an example of an order taker.

– Order getter: Demands creative selling and relationship building



The Role of the Sales ForceThe Role of the Sales Force

Personal selling:– Involves interpersonal interactions between

salespeople and individual customers which may occur:• face-to-face

• by telephone

• through video or Web conferences

• or by other means

– Personal selling is more effective than advertising in complex selling situations.



Sales force serves as critical link between company and its customers.– They represent the company to the

customers.– They represent the customers to the

company.– Goal = customer satisfaction and company

profit.



Sales and other marketing functions should work together to jointly create value.

The marketing and sales functions can be brought closer together by: – Increasing communications, via joint

meetings– Joint assignments– Joint objectives and reward systems– Chief revenue officer


Sales Force Management Sales Force Management DefinedDefined

The analysis, planning, implementation, and control of sales force

activities.

Prentice Hall, Copyright 2009 13-12

Figure 13.1Figure 13.1Major Steps in Sales Force Major Steps in Sales Force

ManagementManagement


Managing the Sales ForceManaging the Sales Force

Territorial sales force structure:– Salesperson is assigned to an exclusive geographic

territory in which that salesperson sells the company’s full line.

Product sales force structure:– Salespeople specialize in selling only a portion of the

company’s products or lines. Customer sales force structure:

– Salespeople specialize in selling only to certain customers or industries.

Complex sales force structure: – Combination of several types of structures.


Sales Force OrganizationAutomotive supplier Lear Corporation organizes its sales force around major customers, and often locates sales offices near customers’ facilities.

Marketing in Action



Sales force size:– May range in size from only a few salespeople

to tens of thousands.– Increasing sales force size will increase both

costs and sales.– Workload approach can be useful in setting

sales force size. This requires:• Grouping accounts by factors related to the

effort required to maintain them.• Determining the number of people needed to

call on each class of accounts.


Other sales force strategy and structure issues include deciding who will be involved in the selling effort and how sales support people will work together.




An outside sales force travels to call on customers in the field.

An inside sales force conducts business from their offices via telephone or visits from perspective buyers.– Includes:

• Technical support people

• Sales assistants

• Telemarketers


Fuel for ThoughtFuel for Thought

Inside sales forces use the phone or Internet to service and contact customers.

For what types of products or services do you think that an inside sales force might be more effective than an outside sales force? Explain.



Team selling:– Used to service large, complex accounts.

– Can find problems, solutions, and sales opportunities that no single salesperson could.

– Can include experts from any area of selling firm.



Pitfalls of team selling:– Salespeople are competitive and have

typically been rewarded on the basis of individual performance.

– Team selling can confuse or overwhelm customers.

– Some people have trouble working in teams.– Difficult to evaluate individual contributions.



Careful recruiting and selection of salespeople can greatly enhance overall sales force performance while minimizing costly turnover.

Key talents of successful salespeople:– Intrinsic motivation– Disciplined work style– Ability to close a sale– Ability to build relationships with customers


Searching the Web

College placement services

Recruit from other companies

Recommendations from current sales force

Employment agencies

Classified ads


Recruiting Sources



Training program goals:– Learn about different types of customers

and their needs, buying motives, and buying habits.

– Learn how to make effective sales presentations.

– Learn about and identify with the company, its products and its competitors.



Sales training programs often include:– Seminars– Sales meetings– Web e-learning

• Becoming more common due to substantial cost savings it provides.

– On-demand training for via the Internet, PDAs, cell phones, and video iPods• Visit Salesforce.com to see the various types

of on-demand training that is available.


Sales Force Training

International Rectifier created the online IR University to help keep its hundreds of global salespeople, internal sales staffers, and others trained on the constant stream of new products it introduces.

Marketing in Action



Compensating salespeople:– Fixed amount:

•Salary – Variable amount:

•Commissions or bonuses– Expenses:

•Repays for job-related expenditures– Fringe benefits:

•Vacations, sick leave, pension, etc.



Goal of supervision is to encourage salespeople to “work smart.”– Help them identify customers and set call

norms.– Specify time to be spent prospecting:

• Annual call plan

• Time-and-duty analysis

– Sales force automation systems help salespeople to work more efficiently.• Smart phones, wireless Internet, contact

management software, videoconferencing


Web Selling Enhances Profits

NEC uses Web selling to substantially cut sales costs, while increasing the number of customer contacts. Customers love Web conferences because it provides a clear demonstration of product features without having to host an NEC sales team on-site.

Marketing in Action


Figure 13.2Figure 13.2How Salespeople Spend Their TimeHow Salespeople Spend Their Time



Goal of motivating the sales force is to encourage salespeople to “work hard.”

Management can boost sales force morale and performance via:– Organizational climate– Sales quotas– Positive incentives



Evaluating salespeople and sales force performance requires:– Regular information from salespeople via

sales reports, call reports, and expense reports

– Clear standards for judging performance– Constructive feedback to the sales people

that can motivate them to perform well Return on sales investment should be

assessed for the entire sales force.


Figure 13.3Figure 13.3Major Steps in Personal Selling Major Steps in Personal Selling

ProcessProcess


The Personal Selling ProcessThe Personal Selling Process

Prospecting and qualifying: – The salesperson identifies qualified potential

customers. Preapproach:

– The salesperson learns as much as possible about a prospective customer before making a sales call.

Approach: – The salesperson meets the customer for the

first time.



Presentation: – The salesperson

tells the “value story” to the buyer, showing how the firm’s offer solves problems.



Handling objections: – The salesperson seeks out, clarifies, and

overcomes customer objections to buying. Closing:

– The salesperson asks the customer for an order.

Follow up: – The salesperson follows up after the sale to

ensure customer satisfaction and repeat business.



The selling process is transaction oriented.– The selling process

helps salespeople to close a specific sale with a customer.



Building profitable relationships is a key goal for most firms.– Large customers favor suppliers who can:

• Deliver a coordinated set of products and services.

• Work closely with customer teams to improve products and processes.

– Building relationships requires:• Listening to customers, understanding their

needs, and carefully coordinating the whole firm’s efforts to create value.


Sales Promotion DefinedSales Promotion Defined

Short-term incentives to encourage the purchase or sale of a product or service.

Sales promotions can be targeted toward consumers, businesses, channel members,

or members of the firms’ own sales force.


Sales PromotionSales Promotion

Several factors have contributed to the rapid growth of sales promotion:– Product managers are facing more pressure

to increase their current sales.– Companies face more competition from less

differentiated brands.– Advertising efficiency has declined.– Consumers have become more deal

oriented.


Objectives of consumer promotions:– Urge short-term sales or attempt to enhance

customer brand involvement.

Objectives of trade promotions:– Attempt to get retailers to carry new items and more

inventory, to buy ahead, to promote the firm’s brand and to give the company more shelf space.

Objectives or promotions targeting the sales force: – Attempt to get more sales force support for current

or new products, or to generate new accounts.



Integrating Promotions

Sales promotions should be integrated with and supported by other elements of the marketing mix.

In the example at left, the coupons are integrated within a print magazine advertisement.

Marketing in Action


Building Relationships

Some sales promotions, such as loyalty cards and frequency marketing programs, can help to build relationships. The

PostPoints program shown above targets customers and advertisers.

Marketing in Action



Point-of-purchase displays

Contests Sweepstakes Games Event sponsorship

marketing

Samples Coupons Cash refunds Price packs Premiums Advertising

specialties

Consumer Sales Promotion Tools


New Couponing Forms

Cellfire distributes digital coupons to the cell phones of consumers who sign up for its free service.

Marketing in Action


Trade promotions:– More sales promotion dollars are directed

toward retailers and wholesalers than to the final consumers.

– Several trade promotion tools exist:• Discounts

• Allowances

• Free goods

• Push money

• Specialty advertising items




Business promotion objectives:– Generate business leads– Stimulate purchases– Reward customers– Motivate salespeople

Business promotion tools:– Conventions, trade shows, sales contests,

and many of the same tools used for consumer or trade promotions


Trade Shows

Many trade shows are huge. The International Consumer Electronics show hosted over 2,500

exhibitors and more than 150,000 visitors.

Marketing in Action



Developing the sales promotion program:– Decide on the size of the incentive– Set conditions for participation– Decide how to promote and distribute

the promotion program– Decide the length of the program– Evaluate the program

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Rest Stop:Rest Stop: Reviewing the ConceptsReviewing the Concepts

1. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

2. Identify and explain the six major sales force management steps.

3. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and implemented.

50


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Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall

prentice hall, copyright 2009 communicating customer value: personal selling and sales promotion...

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