Definition: Personal Selling refers to human-driven interactions between individuals or organizations designed to create economic exchange within a value-creation context.
How Personal Selling Provides Value
Key Terms
CVP (Customer Value Proposition): A collection of buyer-specific benefits.
PVE (Personal Value Equation): Customer benefits received relative to the price, time, and effort required to purchase.
CLV (Customer Lifetime Value): Measure of how much revenue a company can expect from one customer over their full relationship.
Go-to-Market Strategies
Sales-Force Intensive Strategy: A strategy where sales representatives are the primary sales tool, making the building of partnerships essential.
Responsibilities of a Sales Representative
Identify key influencers and decision-makers.
Encourage cooperation and build trust.
Facilitate communication.
Manage conflicts effectively.
Help close solutions that benefit all parties.
Assist others in understanding their perception of value.
Shift or enhance the customer’s perspective.
Engage with various stakeholders including:
Internet / Online
Business Partners
Resellers
Manufacturers
Franchises
Telemarketers
Field Sales Representatives
Key activities of sales representatives include:
Prospecting new customers
Delivering sales presentations
Demonstrating products
Negotiating price and delivery terms
Client Relationship Manager
Role: A customer-centric position focused on maintaining and enhancing relationships with customers.
Account Team Manager
Role: Coordinates team activities in a sales context.
Team Selling: Increasingly popular to enhance collaboration and effectiveness in meeting customer needs.
Supply Chain, Logistics & Channels
Supply Chain Logistics
Definition: How products move from producer to buyer.
Channels
Definition: The people or companies involved in the movement of products.
Information Provider to the Firm
Sales representatives serve as the “eyes and ears” of the company, providing valuable insights into customer needs and market conditions.
Customer Relationship Management (CRM)
Refers to managing interactions with current and potential customers to optimize relationships.
Business-to-Business (B2B) Channels
Sales Representative Titles
Common functions include:
Writing orders
Following up with existing customers to increase sales
Providing 24/7 service
Offering solutions
Managing after-sale service
Ensuring on-time delivery
Ensuring proper installation of equipment
Providing training for operators
Quickly resolving issues.
Types of Sales Representatives
Industrial (Manufacturer’s) Rep: Sells directly from the manufacturer to the customer.
Trade Rep: Sells to distributors who then resell.
Distributor Rep: Sells a mix of products on behalf of multiple manufacturers.
Missionary Rep: Promotes increased sales but does not take orders directly.
Agents: Independent sellers of products they do not own.
Retail Reps: Sell directly to consumers.
Everyone Sells
Sales skills are beneficial in various contexts like:
Building friendships and relationships
Job interviews and salary negotiations
Influencing others and assuming leadership roles.
Ethics
Definition: Principles governing individual or group behavior.
Ethical Selling: Engaging in behavior that respects both the buyer and seller's rights.
Manipulation: Unfairly limiting or reducing a buyer's choices.
Persuasion: Influencing a buyer’s decision based on clarity and benefit.
Common Areas of Ethical Concern
Using deception
Offering bribes, kickbacks, or expensive gifts
Providing special treatment
Divulging confidential information
Engaging in backdoor selling.
Problem Areas
Switching Jobs: Challenges in maintaining ethics during transitions.
Sexual Harassment: Ethical violations in workplace interactions.
Poaching: Inappropriate solicitation of another agent's territory.
Definitions Related to Sales
Agent: A person who acts on behalf of another.
Sale: Transfer of title to goods in exchange for a price.
Offer: Occurs when a specific quote is provided by a salesperson.
Types of Agreements
FOB Destination: Seller retains title until goods are received.
FOB Factory: Buyer gains title when goods leave the seller's facility.
Good Faith Warranty: Oral agreements are as reputable as written ones.
Illegal Business Practices
Reasons for Purchasing
Expressed Warranty: Explicit terms related to product quality.
Implied Warranty: Understandings that come with a purchase.
Business Defamation: Unfounded negative statements about a company.
Reciprocity: Obligation to engage in mutually beneficial transactions.
Tying Agreement: Forcing a buyer to commit to several products.
Types of Customers
Manufacturers: Purchase for production.
Resellers: Buy and sell products to consumers.
Government Agencies: Purchase goods and services for public sector use.
Institutions: Such as schools and hospitals.
Consumers: End-users purchasing for personal use.
Capital Equipment Purchases
Definitions:
OEM Purchases: Original equipment manufacture; components used in final products.
End User Purchases: Companies buying products for internal consumption.
Major Purchases: Significant financial commitments for resources or equipment.
MRO Supplies
Definition: Maintenance, Repair, and Overhaul supplies like paper towels and replacement parts.
Services: Examples include internet and telephone connections, employment agencies, and transportation solutions.
Resellers Considerations
Buying process concerns include:
Derived Demand: Sales based on demand for the final product.
Buying Process Stages:
Recognition of need
Definition of the product type needed
Development of specifications
Search for qualified suppliers
Acquisition of proposals
Evaluation and selection
Order placement and evaluation of performance.
Categories of Buying Needs
Rational Needs: Based on facts and logical criteria.
Emotional Needs: Not quantifiable; often related to morale and satisfaction.
Economic Criteria: Emphasizes demand for the lowest price.
Quality Criteria: Reflects expectations of product quality.
Service Criteria: Expectations around service levels.
Supply Chain Management
Definition: Programs facilitating low-cost, timely flow of products to and from producers and buyers.
Just-in-Time (JIT): Inventory control technique ensuring timely delivery.
Electronic Data Interchange (EDI): Automated systems coordinating logistics effectively.
Automatic Replenishment: Systems designed to reorder stock when it runs low.
Communication in Sales
Buying Center of an Organization
Roles:
Users
Initiators
Influencers
Gatekeepers
Deciders
Life-Cycle Costing: Method calculating total cost of ownership over the useful life of a product.
Communication Principles
Interpersonal Communication
Two-way interaction involving encoding (sending) and decoding (receiving and interpreting) messages.
Feedback: Response to communication efforts.
Key Issues in Communication:
Voice characteristics, rate of speech, loudness, inflection, articulation, and bodily comfort.
Effective Listening and Nonverbals
Listening Rule: Allocate 80% of time to listening and 20% to talking.
Nonverbal Signals: Includes body angle, facial expressions, arm movements, leg placement, and overall appearance (dressing appropriately as a salesperson).
Communicating via Technology
Technology Communication Methods
Varied levels of interaction and quantity conveyed.
Telephone Communications: Politeness, enthusiasm, and active listening are pivotal.
Presentation Techniques
Types of Presentations
Standard Memorized Presentation: Fully scripted, uniform approach with limited effectiveness.
Outlined Presentation:
Similar introductions and answers.
Detailed customization based on customer needs analysis.
Adaptive Selling
Definition: Ability to alter sales behavior according to the selling situation.
Involves adjusting the content or format of the sales presentation as per customer's desired relationship.
Pros: Enhances buyer trust and commitment, leading to higher sales performance.
Cons: Requires more time and creative effort to develop effective approaches.
Learning from Experiences
Strategies for improving sales include observing top performers and receiving feedback from sales managers regarding performance and diagnostics.