Topic 2 Describing the Personal Selling Function

 

Evolution of Personal Selling

·         Describe the evolution of personal selling from ancient time to the modern era.

·         Explain the contributions of personal selling to society, business firms, and customers.

·         Distinguish between transaction-focused traditional selling and trust-based relationship selling.

·         Discuss five alternative approaches to personal selling.

·         Describe the three primary roles fulfilled by consultative salespeople.

·         Understand the sales process as a series of interrelated steps.

·         Personal Selling is defined as;

“Personal communication with an audience through paid personnel of an organization or its agencies in such a way that the audience perceives the communicator's organization as being the source of the message”. 

Example of Firms customizing for its customers is; American Express.

·         Wide variety of marketing program.

·         Products – Charge Card and Services.

·         Diverse set of retailers and service providers.

·         Sales presentation – Customizing to specific needs of each buyer.

·         Sales reps spend 3 to 18 hours planning for a single presentation.

·         Create a database on specific customers and specific market segment.

·         Standardizing presentation targeting specific groups. 

Creating Data Base

Creating data base is important for the Sales and Marketing Department and it should be a joint effort by both Sales and Marketing Department join forces to create database. Database should be based on best practice and best presentation and specification.

·         Specific market segmentation.

·         Specific customer specification.

·         Sales materials – industry data sheets etc. 

Presentation

·         A supermarket manager has different needs than a client in the furniture business.

·         Sales Message reflects the customer’s world – Persuasive.

·         Sales Demonstration – practical application of product. 

New technologies and techniques have contributed to the evolution of personal selling and also today you can see the different approaches to personal selling. Some of the approaches are as follows;

·         Better listener than talker.

·         Develop long term relationship with customers.

·         Skill and patience to endure lengthy, complex sales processes.

·         Deliver relevant presentation based on unique customer needs.

·         Teamwork with others in the organization.

Presentation of the sales process as a series of interrelated steps. 

Origins of Personal Selling

Ancient Greek history documents selling as an exchange activity, and the term salesman appeared during this time in the writing of Plato. True sales people (earned a living by selling) did not eventuate until the Industrial Revolution in England from the mid eighteen century to the mid nineteenth century.

During this time, traders, merchants, artisans filled the selling function and they were viewed with contempt because deception was often used in the sale of goods.

Later phase of the Middle Age, the first door to door salesperson appeared in the form of the peddler.

·         Peddlers collected produce from the local farmers.

·         Peddlers sold these produce to the townspeople.

·         Peddlers bought manufactured goods in town.

·         Peddlers sold these goods to the rural people.

·         The peddlers performed important marketing function such as purchasing, assembling, sorting and redistribution of goods.

Industrial Revolution Era

As the Industrial Revolution began to gain momentum in the middle of the eighteen century, the need for salespeople also gained momentum given the economic justification faced during this era.

·         Intercity and international trade began to flourish.

·         Economies of scale in production (mass production).

·         Mass marketing took place into wide geographical areas.

·         Need to reach new customers in dispersed markets.

·         Need more salespeople to carry out these functions. 

Post-Industrial Evolution Era

By the early 1800s, personal selling was well established in England but just beginning to develop in the United States. The situation changed noticeable after 1850, and by the latter part of the century, salespeople were a well-established part of business practice in the US.

As the US economy gained momentum in economic development during the twentieth century, it became apparent that marketing, especially advertising and personal selling would play a vital role in changing the economy from agrarian base to one of mass production and efficient transportation.

Recorded lives of salespeople in the early 1900s;

·         More adventurous.

·         Aggressive.

·         Valuable group of employees pioneering new markets

After a while, these adventurous group of salespeople began to disappear. One clear indication was that selling was becoming a more structured activity.

Sales historian noted changes occurring in the early twentieth century. Charles W. Hoyt noted two types of Salespeople. 

Old Salesman

·         Works for himself and create his own idea. 

The New Salesman

·         Minority and work faster.

·         Works for the firm and the firm takes care of him.

·         Firm helps Salesman.

The management of firms in the US began to understand the tremendous potential of personal selling and simultaneously, the need to shape the growth of the sales function. Interest focuses on how to reduce cost of sales and distributing much larger quantities of goods with less motion. 

War and Depression Era

3O Year span from 1915 to 1945 was marked by three overwhelming events;

·         Two World Wars

·         The Great Depression in the US

Because economic activity concentrated on the war effort, new sales method need not develop quickly during these period. Starving for sales volume, businesses employed aggressive salespeople to produce badly needed revenue.

With renewed prosperity after the war;

·         Salespeople emerged as important employees for an increasing number of firms.

·         Firms began to realize the benefits of research-based integrated marketing programs.

Professionalism: The Modern Era

In the middle 1940s personal selling became more professional.

·         Buyers began to demand more from salespeople.

·         Buyers grew intolerant of high-pressure fast talking salespeople.

·         Buyers prefer well informed, customer-oriented salesperson.

·         Pressure on salespeople to increase the effectiveness with more professionalism.

·         Salespeople well equipped to deal with customers before, during and after the sales.

·         Salespeople must be able to work effectively with others in their organization. 

Stephen E. Heiman - A leading sales consultant and trainer has this to say;

“The future will call increasingly for non-manipulative sales skills. Twisting a customer’s need to fit our product or service is yesterday’s way of selling”. The new way requires an ability to “ask, listen, and understand the issues behind the project need”. Forget the notion that your job is to tell the customer why your product is better than all the rest. The major job you have is understanding the customer’s concept. Unless you perceive to be making a contribution to your customer success, you are not ready for selling in the 21^st Century.” 

Contribution of Personal Selling

Although advertising has traditionally captured the attention of researchers and student, personal selling is actually the most important part of marketing communication for most business firm. This is particularly true in firms that engage in business to business marketing.

More money is spent on personal selling than on any other form of marketing communications, whether it be advertising, sales promotion, publicity or public relations. 

Investment on Personal Selling

Salespeople and Society – Contribute to the nation’s economic growth in two ways;

·         Act as a stimuli for economic transaction.

·         They further the diffusion of innovation.

Salespeople as Economic Stimuli - Salespeople are expected to stimulate action in the business world.

·         Make invaluable contributions by assisting in recovery cycle.

·         Sustain periods of relative prosperity.

·         Recognized as a key force in executing the appropriate strategies and tactics for survival and growth.

Salespeople and Diffusion of Innovation - Salespeople play a critical role in the diffusion of innovation (Process where new products, services and ideas are distributed to society).

·         Customers of new products rely on salespeople as a primary source of information.

·         Provider of useful information to customers.

·         Encouraging the adoption of innovative products and services – salespeople are making positive contribution to society.

 

Salespeople and Employing Firm

·         Salespeople make valuable contribution to their employers.

·         Salespeople contribute to their firm as revenue producers. As a source for market research and feedback.

·         As candidates for management positions. 

Salespeople as Revenue Producers

·         Salespeople feels the brunt of pressures faced by management.

·         Salespeople increasingly responsible for improving profitability.

·         Salespeople improving the productivity of their actions.

Market Research and Feedback - Salespeople spend more time with customers therefore logically important to be involved in market research and providing feedback. 

Salespeople as Future Manager

·         Firms recognizing the need for top management trained in sales.

·         Firms using sales as an entry-level foundation for future assignment. 

Salespeople and Customer - Customers like to deal with salespeople who;

·         Are honest,

·         Provide guidance through the sales process.

·         Helps buyer to solve problems.

·         Have a pleasant personality and good professional appearance.

·         Understand general business trends, economic trends, and buyers business.

·         Coordinate all aspects of the product and service to provide a total package.

 

 Mental States Selling

Assumes that the buying process for most buyers can be led through certain mental states, or steps in the buying process.

·         Mental states are typically referred to as AIDA (Attention; Interest; Desire; Action).

·         Salesperson does most of the talking during presentation. (Feedback during presentation may disrupt flow of presentation).

·         Salesperson plans the presentation prior to calling on the customer (timing is important in determining the mental states).

This method not customer oriented (Customer mental state rather than needs). 

Need Satisfaction Selling

·         Customer is buying to satisfy a particular need or set of needs.

·         Salesperson’s task is to identify the need to be met than to help the buyer meet the need.

·         This method focuses on customer rather than on the salesperson.

·         Salesperson uses questioning, probing tactic to uncover important buyer needs.

Customer seem to appreciate this selling method and is willing to spend time in preliminary meetings.

The Salesperson attempts to uncover customer needs that are related to salesperson’s products or service offering. This may require extensive questioning in the early stages of sales process. After confirming the buyer’s needs, the salesperson proceeds with a presentation based on how the offering can meet those needs.

 

Consultative Selling – Is the process of helping customers reach their strategic goals by using the products, services, and expertise of the sales organization.            

This method focuses on achieving strategic goals of customers, not just meeting needs or solving problems.  Salespeople confirm their customers’ strategic goals, then work collaboratively with customers to achieve those goals. In consultative selling, sales people fulfill three roles;

Strategic Orchestrator – Salesperson arranges the use of sales organization’s resources in an effort to satisfy the customer.

Business Consultant – Salesperson uses internal and external sources to become an expert on the customer’s business. This role includes an educational elements.

Long-term Ally – The salesperson supports the customer, even when an immediate sale is not expected.

 

Selling Process

The non-selling activities on which most sales people spend a majority of their time to ensure successful execution of the sales. Sales process is a series of inter related steps;

1.      Beginning with locating qualified prospective customers.

2.      Salesperson plans the sales presentation.

3.      Makes an appointment to see the customers.

4.      Completes the sales.

5.      Performs post-sales activities 

 

Salespeople must possess certain attributes to inspire trust in their customers and to be able to adapt their selling strategy to different situations. One or more selling approaches are used in the sales process.

The three major phases of the sales process are;

·         initiating,

·         developing, and

·         enhancing customer relationship.

To earn the trust of customers, salespeople should be customer oriented, honest, dependable, competent, and likeable.

Another important element of achieving sound relationship with customers is to recognize that individual customers and their particular needs must be addressed with appropriate selling strategies and tactics. 

In selling strategies are carried out at four levels;

·         Corporate,

·         Business Unit,

·         Marketing Department and

·         The overall sales function

Summary

The history of personal selling can be traced as far back as ancient Greece. The Industrial Revolution enhanced the importance of salespeople, and personal selling as we know today had its roots in the early twentieth century. The current era of sales professionalism represent a further evolution.

Salespeople contribute to society by acting as stimuli in the economic process and by assisting in the diffusion of innovation. They contribute to their employers by producing revenue, performing research and feedback activities, and comprising a pool of future managers. They contribute to customers by providing timely knowledge to assist in solving problems.

In traditional selling, sales were focus more on making transaction then customer oriented.

Sales today is based on trust whereby salesperson becomes a consultant to the customer.

There is much more post sales follow up with relationship selling then with transaction selling and salespeople must have a broader range of skills to practice relationship selling.

There are five alternative approaches to personal selling and these are;

1.      Stimulus response - Uses same sales presentation for all customers.

2.      Mental States – Prescribes that the salesperson lead the buyer through stages in the buying process.

3.      Need satisfaction – Focuses on relating benefits of the seller’s products or services to the buyers particular situation.

4.      Problem Solving Selling – Extends need satisfaction by concentrating on various alternatives available to the buyer.

5.      Consultative Approach Selling – Focuses on helping customers achieve strategic goals, not just meeting needs or solving problems. In consultative selling, salespeople fulfill three primary roles; Strategic orchestrator, business consultants and long term ally to the customers

Consultative Approach Selling –Fulfill three primary roles;

1.      Strategic orchestrator – Salespeople coordinate the use of the sales organization’s resources to satisfy the customer.

2.      Business consultants – Salesperson becomes an expert on the customer’s business and educates the customer on how his or her products can benefit the customer.

3.      Long term ally to the customers – Acting in the customer’s best interest even when an immediate sale is not expected.

Sales process is a series of inter related steps;

1.      Beginning with locating qualified prospective customers.

2.      Salesperson plans the sales presentation.

3.      Makes an appointment to see the customers.

4.      Completes the sales.

5.      Performs post-sales activities.

 

Sources:

Sales Management Analysis and Decision Making by Pilai, Ingram, LaForge, Avila, Schwepker Jr Williams. 5^th Edition Thomson South-Western