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SALES MANAGEMENT

Chapter 3

‘Evolution of Professional Selling’

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The Early American Experience

Yankee Peddler: early American sellers, traditionally based in New England, who sold to pioneers, in the 17th century.

Wagon peddlers: these were nineteen-century salesperson, which covered their territories in covered wagons carrying several tons of merchandize.

Credit investigators: supplier employed people who evaluated retailers credit and developed relations.

Drummers: 19th century sales people who journeyed to merchant’s places for business.

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Contribution of Early American Salespeople

1. The nation’s standard of living improved

2. Personal selling served as a vehicle of upward economic and social mobility

3. Served as a rigorous training ground for future entrepreneurs

4. Source of information, communication flow in different parts of America

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To

SALES MANAGEMENT TRENDSSALES MANAGEMENT TRENDS

From

Transactions Relationships

Local Global

Management Leadership

Individuals Teams

Sales Volume Sales Productivity

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Contributions of Personal Selling :Contributions of Personal Selling :Salespeople and the Employing Firm

Salespeople as Revenue Producers

Market Research and Feedback

Salespeople as Future Managers

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Selling in the 20th Century

1) Production to Sales Era

2) Traditional Sales Approach

3) Emergence of Marketing Concept

4) Strategic Selling

5) Partnering / teamwork in Selling

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1. Production to Sales Era

Previously selling was overshadowed by tremendous growth of manufacturing. Focus was on producing the product rather then marketing it. Selling was regarded as a secondary activity.

New manufacturing methods led to production surplus and a buyer’s market.

College graduates were recruited for sales positions and emphasis was placed on sales training and career development.

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2. Traditional Sales Approach

Canned Sales presentation – structured sales script memorized by the salesperson.

Stimulus response theory – sales approach that holds that the prospect will buy upon hearing the right sales message

Selling formulas – sales approach in which salespeople lead prospects through distinct stages of the buying process in a persuasive manner.

(AIDR – attention, interest, desire, resolve) (AIDA – attention, interest, desire, action)

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3. Emergence of Marketing Concept

The focus on market driven selling has shifted to increased emphasis on solving customer problems and build long-term relationship.

Effective salespeople have learned the questioning and need analysis have replaced the typical sales presentation

Customer Orientation Coordinating Marketing Activities Profit/Goal Direction

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4. Strategic Selling

Emphasis is on Strategic Marketing Plan Outline the ‘Strategic Selling Model’ Tactics to achieve strategic plan

STRATEGY: Carefully conceived plan required to meet sales objectives

TACTICS: Specific techniques, practices, and methods used in customer interaction

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STRATEGICSELLING MODEL

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STEP 1 : Develop Personal Selling Philosophy

ADOPT MARKETING CONCEPTADOPT MARKETING CONCEPT

VALUE PERSONAL SELLINGVALUE PERSONAL SELLING

BE PROBLEM SOLVER/PARTNERBE PROBLEM SOLVER/PARTNER

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ADOPT WIN-WIN APPROACHADOPT WIN-WIN APPROACH

PROJECT PROFESSIONAL IMAGEPROJECT PROFESSIONAL IMAGE

MAINTAIN HIGH ETHICAL STANDARDSMAINTAIN HIGH ETHICAL STANDARDS

STEP 2 : Develop Relationship Strategy

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BECOME PRODUCT BECOME PRODUCT EXPERTEXPERT

SELL BENEFITS, SELL BENEFITS, NOTNOT FEATURES FEATURES

CONFIGURE CONFIGURE VALUE-ADDEDVALUE-ADDED SOLUTIONS SOLUTIONS

STEP 3 : Develop Product Strategy

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UNDERSTAND BUYER BEHAVIORUNDERSTAND BUYER BEHAVIOR

DISCOVER CUSTOMER NEEDSDISCOVER CUSTOMER NEEDS

DEVELOP PROSPECT BASEDEVELOP PROSPECT BASE

STEP 4 : Develop Customer Strategy

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PREPARE OBJECTIVESPREPARE OBJECTIVES

DEVELOP PRESENTATION PLANDEVELOP PRESENTATION PLAN

PROVIDE OUTSTANDING SERVICEPROVIDE OUTSTANDING SERVICE

STEP 5 : Develop Presentation Strategy

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EFFECTIVE RELATIONSHIP STRATEGY

FOUR KEY GROUPS

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5. Teamwork in Selling

Support groups like marketing, sales service, sales support, customer service, marketing research team, sales promotion staff etc.

‘Systems selling approach’ developed in the 1970’s (specifically to market computers, scientific instruments, machine tools) calls for a team approach to selling. It requires salespeople to bring all relevant components of the firm to resolve customer problems/difficulties.

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Example of a ‘Systems Approach’

AT&T and IBM use the team approach in developing effective sales techniques that involves sales support personnel.

The sales representative has the primary responsibility for assigned accounts, but he/she must allocate other resources and support staff to meet the complex needs of the customers.

System engineers design the system, oversee the installations (with the help of the technical support people) and train customers on how to use them.

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Three forms of team selling approach

1. Member of the sales force working together as a team (example: a field sales manager may accompany a salesperson on a joint call to a key customer).

2. Integrating the efforts of other key personnel and department with sales personnel (systems approach)

3. An even wider range of participants, including buyers and other vendors.

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Typical Sales Activities

a. Selling - prospecting, planning, making sales presentationb. Handling orders - writing orders, locating lost ordersc. Product servicing - delivering and installing products, training

customersd. Information handling - receiving customer feedbacke. Conference/sales meeting - setting trade shows, attending

conference/seminarf. Training - training sales people, traveling with new sales

traineesg. Entertaining - taking a customer for dinner, playing golf etch. Traveling - market survey, meeting prospect clientsi. Assisting distributors - establishing relationships with

distributors, collecting due from them

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Classifying Salespeople

1. Creative selling – arousing demand and influencing potential customer (e.g insurance agent who must make potential buyer aware of the need for insurance and convince them to purchase policies)

2. Service selling – aiding a customer in bringing a sale to completion (e.g retail salesperson assist customer in selection)

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THE FUTURE: THE FUTURE: Future Changes and Anticipated Salesforce Response

Intensified Competition More emphasis on developing and maintaining trust-

based long-term customer relationships More Emphasis on Improving Sales Productivity

Increased use of technology (e.g., laptop computers, electronic mail, fax machines)

Fragmentation of Traditional Customer Bases Sales specialists for specific customer types Multiple sales channels (e.g., major accounts programs,

telemarketing, electronic networks) Globalization of sales efforts

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THE FUTURE: THE FUTURE: Future Changes and Anticipated Salesforce Response

Customers Dictating Quality Standards and Inventory/Shipping Procedures to be met by Vendors Team selling Salesforce compensation sometimes based on customer

satisfaction and team performance Demand for In-depth, Specialized Knowledge as

an Input to Purchase Decisions Team selling More emphasis on customer-oriented sales training

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Contributions of Personal Selling :Contributions of Personal Selling :Salespeople and the Customer

Are honest Understand general business and economic trends, as well as

the buyer's business Provide guidance throughout the sales process Help the buyer to solve problems Have a pleasant personality and a good professional image Coordinate all aspects of the product and service to provide a

total package.

Industrial buyers prefer to deal with salespeople who:

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Extending the Sales Classification by Thomas Wotruba (5Ps)

Provider: accepts orders from buyers and supplies the desired product. There is no need to identify the buyers needs or to tailor a sales presentation to the buyer’s interest.

Persuader: convince the buyer to buy their product rather then their competitor’s. The success of salesman depends on his/her ability to influence.

Prospector: seeks out selected buyers perceived to have a need for a product.

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•Problem solver: focus on customers needs and concerns. The customer participates in defining their needs. Salesperson presents a selection of available products and helps the buyer to select from it.

•Procreator: creating a unique offering to match the specific needs of the buyer. Has the authority to adjust prices, credit terms, delivery, and other parts of the marketing mix.

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Qualifications and Skills Required Qualifications and Skills Required for Success by Salespeoplefor Success by Salespeople

Empathy To see things as others

Ego Drive Determination to achieve goals

Ego Strength Self-assured and self-accepting

Verbal Communication Skills Speaking and listening

Enthusiasm In general, and for sales as a career