Download 16. Personal Selling and Sales Promotion

CHAPTER 16
Communicating
Customer Value:
Personal Selling
and Direct Marketing
Roadmap: Previewing the Concepts
 Discuss the role of a company’s salespeople in




creating value for customers and building
customer relationships.
Identify and explain the six major sales force
management steps.
Discuss the personal selling process,
distinguishing between transaction-oriented
marketing and relationship marketing.
Define direct marketing and discuss its benefits
to customers and companies.
Identify and discuss the major forms of direct
marketing.
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CDW – Relationship Building Success
Background
 Nation’s largest reseller


of technology products
and services to small and
mid-size businesses.
Since 2000, sales up
48% to $5.7 billion and
profits up 15% annually.
Highly devoted to
customer with “Circle of
Service” philosophy.
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Personal Selling’s Role
 “Clicks & people” strategy


combines personal selling
with strong Web presence.
Salespeople build and
manage relationships by
being trusted advisors.
Training is extensive as
salespeople must be
knowledgeable and
customer focused.
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Personal Selling
Personal presentation by the firm’s
sales force for the purpose of making
sales and building customer
relationships.
Salespeople engage in prospecting,
communicating, servicing, and information
gathering on behalf of the firm.
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The Nature of Personal Selling
 Most salespeople are well-educated,
well-trained professionals who work to
build and maintain long-term customer
relationships.
 The term salesperson covers a wide
range of positions:
– Order taker: Department store clerk
– Order getter: Creative selling in different
environments
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The Role of the Sales Force
 Sales force serves as critical link
between company and its customers.
– More effective than advertising in complex
selling situations.
– They represent the company to the
customers.
– They represent the customers to the
company.
– Goal = customer satisfaction and
company profit.
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Figure 13-1
Major Steps in Sales Force Management
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Sale Force Structure
 Territorial:
– Salesperson assigned to exclusive area and sells
full line of products.
 Product:
– Sales force sells only certain product lines.
 Customer:
– Sales force organized by customer or industry.
 Complex:
– Combination of several types of structures.
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Sale Force Size
 Workload approach to setting sales
force size:
– Firm first groups accounts into different
classes according to size, account status,
or other factors related to the effort need
to maintain them.
– The firm then determines the number of
representatives needed to call on each
class the desired number of times.
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Outside and Inside Sales Forces
 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
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Let’s Talk!
Insides 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.
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Team Selling
 Used to service large, complex accounts.
 Can find problems, solutions, and sales


opportunities that no single person could.
Can include experts from different areas of
selling firm.
Pitfalls:
– Can confuse or overwhelm customers.
– Some people have trouble working in teams.
– Hard to evaluate individual contributions.
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Successful Salespeople
 Careful selection 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.
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Recruiting Salespeople
 Recommendations  Searching the
from current sales
force
 Employment
agencies
 Classified ads
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Web
 College
placement
services
 Recruit from
other companies
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Sales Force Training 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.
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Compensating Salespeople
 Fixed amount:
– Salary
 Variable amount:
– Commissions or bonuses
 Expenses:
– Repays for job-related expenditures
 Fringe benefits:
– Vacations, sick leave, pension, etc.
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Supervising Salespeople
 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
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Figure 13-2
How Salespeople Spend Their Time
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Motivating Salespeople
 Goal of motivating sales force is to
encourage salespeople to “work hard.”
– Organizational climate.
– Sales quotas.
– Positive incentives:
 Sales meetings
 Sales contests
 Recognition and honors
 Cash awards, trips, profit sharing
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Marketing in Action
Sales Force Incentives
Many firms offer
their sales forces
cash, trips, and
other incentives
to motivate
performance.
Salesdriver.com
helps companies
select and
manage sales
incentives.
http://www.salesdriver.com/
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Sales Force Evaluation
 Information about the sales force and its
activities comes from:
– Sales reports
– Call reports
– Expense reports
 Management uses this information to

evaluate the planning ability of individuals,
and offers feedback as necessary.
The performance of the sales force as a
whole is evaluated in terms of ROI.
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Figure 13-3
Major Steps in the Selling Process
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The Personal Selling Process
 Prospecting:
– The salesperson identifies qualified potential
customers (called prospects).
 Preapproach:
– The salesperson learns as much as possible
about a prospect before making a sales call.
 Approach:
– The salesperson meets the customer for the first
time.
 Presentation:
– The salesperson tells the “product story” to the
buyer, highlighting customer benefits.
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The Personal Selling Process
 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 & repeat business.
 The selling process is transaction oriented;
most firms go beyond this and attempt to
build mutually profitable relationships.
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Marketing in Action
Technology in Selling
Today’s presentation
technologies allow for
full multimedia
presentations to take the
place of flip charts.
Presentations can be
launched from DVD, CD,
the laptop hard drive, or a
Web site, when using
wireless connections.
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Let’s Talk!
How do the actions of the
sales force and its use of
technology contribute to
building / maintaining
customer relationships?
Explain.
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Direct Marketing
 Direct marketing consists of direct
connections with carefully targeted
individual consumers to both obtain an
immediate response and cultivate
lasting customer relationships.
– One-on-one communication in which
offers are tailored to needs of narrowly
defined segments.
– Usually seeks a direct, immediate, and
measurable consumer response.
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The New Direct Marketing Model
 Some firms use direct marketing as a
supplemental medium.
 For many companies, direct marketing
constitutes a new and complete model
for doing business.
 Some firms employ the direct model as
their only approach.
 Some see this as the new marketing
model of the next millennium.
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Benefits of Direct Marketing
 Benefits to Buyers:
–
–
–
–
Convenient.
Easy to use.
Private.
Ready access to
products and
information.
– Immediate and
interactive.
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Video Snippet
Moto, the Motorola brand
cell phone, uses direct
marketing as one method
of communicating with
consumers.
Branding is important.
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Benefits of Direct Marketing
 Benefits to Sellers:
–
–
–
–
Powerful tool for building customer relationships.
Can target small groups or individuals.
Can tailor offers to individual needs.
Can be timed to reach prospects at just the right
moment.
– Gives access to buyers they could not reach
through other channels.
– Offers a low-cost, efficient way to reach markets.
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Customer Databases
An organized collection of
comprehensive data about individual
customers or prospects, including
geographic, demographic,
psychographic, and behavioral data.
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Figure 13-4
Forms of Direct Marketing
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Telemarketing
 Used in both consumer


and B2B markets.
Can be outbound or
inbound calls.
Inbound consumer
telemarketing and
outbound business-tobusiness telemarketing
remain strong, despite
DNC legislations.
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Telemarketing
 Do-Not-Call legislation forbids most
telemarketers to contact phone
numbers that have been registered on
its Web site.
 Businesses that violate the DNC can be
fined $11,000 per violation.
 Learn more at:
https://www.donotcall.gov/default.aspx
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Marketing in Action
In-Bound Telemarketing
Marketers
commonly use
inbound toll-free
1-800 numbers
to handle orders
from television
and print ads,
direct mail, or
catalogues.
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Direct-Mail Marketing
 Involves sending an offer, reminder,
announcement, or other item to a
person at a particular address.
 Permits high target-market selectivity.
 Can be personalized, and is flexible.
 Higher CPM yields better prospects
than mass media.
 Easy to measure results.
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Catalog Marketing
 More and more catalogs are



going digital on the Internet.
Print catalogs are still the
primary medium.
Expected catalog sales in
2008 = $175 billion.
Web catalogues have specific
advantages and disadvantages
when compared to printed catalogues.
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Direct Response TV Marketing
 Direct-Response Advertising:
– TV spots that are 60 or 120 seconds long.
 Infomercials:
– A 30-minute or longer advertising program
for a single product.
 Home Shopping Channels:
– Entire cable channels dedicated to selling
multiple brands, items, and services.
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Marketing in Action
Direct Response TV
HSN – The Home
Shopping Network –
is a direct response
marketer’s dream.
Products shown on
the channel can be
ordered via a 1-800
number or over the
Internet from the
HSN Web site.
www.hsn.com
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Kiosk Marketing
 Information and
ordering machines
generally found in
stores, airports, and
other locations.
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Let’s Talk!
Suppose that you were
responsible for the
fundraising activities of a
charitable organization.
What type of direct
marketing efforts would
you use? Why did you
select those forms?
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Figure 13-5
An Integrated Direct Marketing Campaign
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Public Policy and Ethical Issues in
Direct Marketing
 Irritating to consumers
 Taking unfair advantage of impulsive
or less sophisticated buyers
 Targeting TV-addicted shoppers
 Deception, fraud
 Invasion of privacy
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Rest Area: Reviewing the Concepts
 Discuss the role of a company’s salespeople in




creating value for customers and building
customer relationships.
Identify and explain the six major sales force
management steps.
Discuss the personal selling process,
distinguishing between transaction-oriented
marketing and relationship marketing.
Define direct marketing and discuss its
benefits to customers and companies.
Identify and discuss the major forms of direct
marketing.
Copyright 2007, Prentice-Hall Inc.
13-44