Personal Selling is paid personal communication that attempts to inform customers about products and persuades them to purchase the products. The complexity of these types of contracts requires a long-term, personal relationship between salespeople and companies. Compared to other types of promotion, personal selling is the most precise form of communication because it assures companies that they are in direct contact with an excellent prospect. The most serious drawback of personal selling is the cost per contact. Personal selling is also expensive due to the costs associated with recruiting, selecting, training, and motivating salespeople. Despite the high costs, personal selling plays an increasingly important role in IMC and overall marketing strategy. These goals typically involve finding prospects, informing prospects, persuading prospects to buy, and keeping customers satisfied through follow-up service after the sale. To effectively deliver on these goals, salespeople have to be not only competent in selling skills but also thoroughly trained in technical product characteristics. Very few businesses can survive on the profits generated from purely transactional marketing (one-time purchases). For this reason, personal selling has evolved to take on elements of customer service and marketing research. Every contact with a customer gives the sales force a change to deliver exceptional service and learn more about the customer’s needs. Salespeople also have the opportunity to learn about competing products and the customer’s reaction toward them. The importance of building relationships during the sales process. The frontline knowledge held by the sales force is one of the most important assets of the firm. In fact, the knowledge held by the sales force is often an important strength that can be leveraged in developing a marketing strategy.
The sales management process
Generating performance outcomes, the sales force often creates the firm’s reputation, and the conduct of individual salespeople determines the perceived ethicalness of the entire firm.
Developing Sales Force Objectives
Vital to the overall IMC strategy and must be fully integrated with the objectives and activities of other promotional events. Salespeople may be needed to find new customers through prospecting-the identification of potential customers most likely to buy the firm’s products.
A different skill st must be developed to provide support, educate consumers, and provide service after the sale. The connection between selling skills and sales force objectives reinforces the importance of having a fully integrated sales management process.
The technical aspect of establishing sales force objectives involve desired Sales dollars, sales volume, or market share. Further, individual sales objectives might be based on order size, the number of sales calls, or the ratio of order to calls. Ultimately, sales objectives help evaluate and control sales force activities, as well as compensate individual salespeople.
Determining Sales Force Size
The size of the sales force is a function of many variables, including the type of salespeople used, specific sales objectives, and the importance of personal selling within the overall IMC program. The size of the sales force is important because the firm must find a balance between sales expenses and revenue generation.
Determining the specific objectives and tasks that are required to fulfill sales and IMC goals is one approach. This number can be divided by the average number of sales calls that a salesperson can make in one year to derive an estimate of sales force size. Another method involves marginal analysis, where additional salespeople join the sales force until the cost of adding an additional salesperson equals the potential sales that can be generated by that salesperson.
Recruiting and Training Salespeople
Recruiting the right types of salespeople should be closely tied to personal selling and IMC strategies. Firms usually recruit potential salespeople from a number of sources including within the firm, competing firms, employment agencies, educational institutions, and direct-response advertisements placed on the Internet, in magazines, or in newspapers. The cost of hiring and training salesperson can be expensive. State Farm Insurance strives for low sales force turnover by forcing applicants for agent positions to undergo a yearlong series of interviews, tests, and visits with agents before finding out whether they will be hired. Formal training methods have moved toward self-directed, online training modules and away from classroom training. The majority of sales training will be done online or via wireless delivery to handheld devices. The worldwide online sales training market is growing mainly because it is much more cost-effective than traditional training.
Controlling and Evaluating the Sales Force
Controlling and evaluating the sales force require a comparison of sales objectives with actual sales performance. To effectively evaluate a salesperson, predetermined performance standards must be in place. These standards also determine the compensation plan for the sales force. To improve sales performance, the firm can increase incentives to better motivate the sales force, provide additional training to salespeople, or perhaps even change the performance standards if they are inconsistent with market failures.
The impact of technology on Personal Selling
The development of integrated supply chains and the procurement of standardized products over the Internet reduced the need for salespeople in many industries. How can firms use new technology to reduce costs and increase productivity while maintaining a personalized, one-to-one client relationship? One of the keys to using sales technology effectively is to seamlessly integrate it with customer relationship management systems, competitive intelligence activities, and internal customer databases. By automating many repetitive selling tasks, like filling repeat orders, sales technology can actually increase sales, productivity, and one-to-one relationships at the same time. Third-party providers like Salesforce.com-an on-demand, web-based provider of integrated CRM and sales automation solutions. Key to these solutions is integration. By pushing integrated customer, competitive, and product information toward the salesperson, technology can increase salesperson productivity and sales revenue by allowing the sales force to serve customers’ needs more effectively.
Sales Promotion
Sales promotion activities account for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products. Sales promote involves activities that create buyer incentives to purchase a product or that add value for the buyer or the trade. Sales promotion can be targeted toward consumers, channel intermediaries, or the sales force. Sales promotion has one universal goal: to induce product trial and purchase.
Most firm use sales promotion I support of advertising, public relations, or personal selling activities rather than as stand-alone promotional element. Advertising is frequently coordinated with sales promotion activities to provide free product samples, premiums, or value-added incentives.
Sales Promotion in Consumer Markets
Coupons and product sampling are frequently used during new product launches to stimulate interest and trial. Retailers typically offer sales promotions to stimulate customer traffic or increase sales at specific locations. Coupons and free product are common examples, as is in-store product demonstration.
Types of sales promotions to consumers:
- Coupons-reduce the price of a product and encourage customers to try new or established brands. Coupons can be used to increase sales volume quickly, to attract repeat purchases, or even to introduce new product sizes or models. To be most effective, coupons need to be accessible, easy to recognize, and easy to use. For the most part, this requires that coupons be distributed on packages (the highest redemption rates), through inserts in print advertising, through direct mail, or through in-store displays. Although coupon cutting (cutting coupons from newspapers or direct mail) was once quite common, the practice declined over the years. Marketers perceive a bright future for electronic coupons because redemption rates are higher, and because printing and processing costs are lower.
- Rebates-Require much more effort on the consumer’s part to obtain the price reduction. Firms have more control over rebates because they can be launched and ended very quickly. Second, a rebate program allows the firm to collect important consumer information that can be used to build customer databases.
Samples-Samples stimulate trial of a product, increase volume in the early stages of the product’s life cycle and encourage consumers to actively search for a product. Samples can be distributed through the mail, attached to other products, and given out personal selling efforts or in-store displays. Samples can also be distributed via less direct methods. Free samples might be placed in hotel rooms to create consumer awareness of new products.
Loyalty Programs-reward loyal customers who engage in repeat purchases. Discover Card, Hallmark Gold Crown Card
- Point-of-Purchase Promotion-displays, counter pieces, display racks, or self-service cartons that are designed to build traffic, advertise a product, or induce impulse purchases. In-store product demonstration. Examples of these demonstrations include fashion shows, food preparation demonstrations in grocery stores like Whole Foods, and free makeovers in the cosmetics departments of department stores and specialty stores.
- Premiums-are items offered free or at minimum cost as a bonus for purchasing a product. Premium is good at increasing consumption and persuading consumers to switch brands.
- Contest and Sweepstakes-Consumer contests, games, and sweepstakes encourage potential consumers to compete for prizes to try their luck by submitting their names in a drawing for prizes. Contest and sweepstakes are good at attracting a large number of participants and generating widespread interest in a product. Because they require no skill to enter, sweepstakes are an effective way to increase sales or market share in the short term.
- Direct Mail-includes catalog marketing and other printed material mailed to individual consumers, is a unique category because it incorporates elements of advertising, sales promotion, and distribution into a coordinated effort to induce customers to buy. The use of direct mail has grown tremendously in recent years due to consumer time constraints, relatively low cost, and the advent of sophisticated database management tools
Sales Promotion in Business Markets
Sales promotion in business markets is also known as trade promotion. By targeting channel intermediates with promotional activities, manufacturers hope to push their products through the channel by increasing sales and encouraging increased effort among their channel partners.
- Trade Allowances-Manufactures offer a number of different trade allowances, or price reductions, to their channel intermediaries. Buying allowances are price reductions for purchasing specified quantities of a product at a single time (the equivalent of a bulk discount). Related to this is a buy-back allowance where the reduction is proportional to the total amount of product purchased during the time frame of a promotional offer. Finally, a merchandise allowance is a manufactures agreement to pay intermediaries a specific sum of money in exchange for specific promotional efforts such as special displays or advertising. The goal of the allowance is to induce intermediaries to perform specific actions.
- Free Merchandise
- Training Assistance-Can offers training to intermediary’s employees. This typically occurs when the products involved are rather complex.
- Cooperative Advertising-a manufacturer agrees to pay a certain amount of an intermediary’s media cost of advertising the manufacturer’s products. A very popular sales promotion method among retailers.
- Selling Incentives-Push money and sales contests. Push money is in the form of additional compensation to encourage outstanding performance within an intermediary’s sales force. Sales personnel can be recognized for outstanding achievements by receiving money, vacations, computers, or even cars for meeting or exceeding certain sales targets.
