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In the past few tutorials we saw how marketers can use advertising, sales promotion and public relations to reach a large number of customers. While these methods of the promotion offer many advantages, they each share one major disadvantage: they are a non-personal form of communication. And whether a company is in retailing or manufacturing, sells goods or services, is a large multi-national or a local startup, is out to make a profit or is a non-profit, in all probability at some point they will need to rely on personal contact with customers. In other words, they will need to promote using personal selling. Unfortunately, personal selling is widely misunderstood.
For instance, many customers think salespeople possess traits that include being manipulative, arrogant, aggressive and greedy. While many marketers believe salespeople are only out to make a quick sale intended to increase their income and that they often do this by making unscrupulous deals undermining the marketer’s attempt to build strong brands. While there certainly are some salespeople that fit these descriptions, today the most successful salespeople are those who work hard to understand their customers’ needs with the ultimate goal of ensuring that customer’s needs are satisfied at a high level.
And, more importantly, personal selling holds a key role in the promotional activities of a large number of organizations. In fact, in the business market where one company sells products to another company, money spent to support the selling function far exceeds spending on advertising. What is Personal Selling? ” Personal selling is a promotional method in which one party (e. g. , salesperson) uses skills and techniques for building personal relationships with another party (e. g. , those involved in a purchase decision) that results in both parties obtaining value. In most cases, the “value” for the salesperson is realized through the financial rewards of the sale while the customer’s “value” is realized from the benefits obtained by consuming the product. However, getting a customer to purchase a product is not always the objective of personal selling. For instance, selling may be used for the purpose of simply delivering information. Because selling involves personal contact, this promotional method often occurs through face-to-face meetings or via a telephone conversation, though newer technologies allow contact to take place over the Internet including using video conferencing or text messaging (e. . , online chat). Among marketing jobs, more are employed in sales positions than any other marketing-related occupation. In the U. S. alone, the U. S. Department of Labor estimates that over 14 million or about 11% of the overall labor force are directly involved in selling and sales-related positions. Worldwide this figure may be closer to 100 million. Yet these figures vastly underestimate the number of people who are actively engaged in some aspect of selling as part of their normal job responsibilities.
While millions of people can easily be seen as holding sales jobs, the promotional techniques used in selling are also part of the day-to-day activities of many who are usually not directly associated with selling. For instance, top corporate executives whose job title is CEO or COO are continually selling their company to major customers, stock investors, government officials, and many other stakeholders. The techniques they employ to gain benefits for their company are the same used by the front-line salesperson to sell to a small customer.
Consequently, our discussion of the promotional value of personal selling has implications beyond the marketing and sales departments. Advantages of Personal Selling One key advantage personal selling has over other promotional methods is that it is a two-way form of communication. In selling situations the message sender (e. g. , salesperson) can adjust the message as they gain feedback from message receivers (e. g. , customer). So if a customer does not understand the initial message (e. g. , doesn’t fully understand how the product works) the salesperson can make adjustments to address questions or concerns.
Many non-personal forms of promotion, such as a radio advertisement, are inflexible, at least in the short-term, and cannot be easily adjusted to address audience questions. The interactive nature of personal selling also makes it the most effective promotional method for building relationships with customers, particularly in the business-to-business market. This is especially important for companies that either sell expensive products or sell lower cost but high volume products (i. e. , buyer must purchase in large quantities) that rely heavily on customers making repeat purchases.
Because such purchases may take a considerable amount of time to complete and may involve the input of many people at the purchasing company (i. e. , buying center), sales success often requires the marketer develop and maintain strong relationships with members of the purchasing company. Finally, personal selling is the most practical promotional option for reaching customers who are not easily reached through other methods. The best example is in selling to the business market where, compared to the consumer market, advertising, public relations, and sales promotions are often not well received. Disadvantages of Personal Selling
Possibly the biggest disadvantage of selling is the degree to which this promotional method is misunderstood. Most people have had some bad experiences with salespeople who they perceived were overly aggressive or even downright annoying. While there are certainly many salespeople who fall into this category, the truth is salespeople are most successful when they focus their efforts on satisfying customers over the long term and not focusing on their own selfish interests. A second disadvantage of personal selling is the high cost of maintaining this type of promotional effort. Costs incurred in personal selling include:
High cost-per-action (CPA) – As noted in the Promotion Decisions tutorial, CPA can be an important measure of the success of promotion spending. Since personal selling involves person-to-person contact, the money spent to support a sales staff (i. e. , sales force) can be steep. For instance, in some industries, it costs well over (US) $300 each time a salesperson contacts a potential customer. This cost is incurred whether a sale is made or not! These costs include compensation (e. g. , salary, commission, bonus), providing sales support materials, allowances for entertainment spending, office supplies, telecommunication and much more.
With such a high cost for maintaining a sales force, selling is often not a practical option for selling products that do not generate a large amount of revenue. Training Costs – Most forms of personal selling require the sales staff to be extensively trained in product knowledge, industry information and selling skills. For companies that require their salespeople attend formal training programs, the cost of training can be quite high and include such expenses as travel, hotel, meals, and training equipment while also paying the trainees’ salaries while they attend.
A third disadvantage is that personal selling is not for everyone. Job turnover in sales is often much higher than other marketing positions. For companies that assign salespeople to handle certain customer groups (e. g. , geographic territory), turnover may leave a company without representation in a customer group for an extended period of time while the company recruits and trains a replacement. Types of Selling Roles As we noted above, worldwide millions of people have careers that fit in the personal selling category. However, the actual functions carried out by someone in sales may be quite different.
In general, there are four major types of selling roles: (i) Order Getters (ii) Order Takers (iii) Order Influencers (iv) Sales Support The objectives of each role are often very different and within each role, there are several sub-classifications. A detailed discussion of each role can be found in the Types of Selling Roles tutorial. Trends in Selling While the basic premise of personal selling, building relationships, has not changed much in the last 50 years, there are a number of developments that are impacting this method of promotion including i) Controlled Word of Mouth (ii) Customer Information Sharing (iii) Mobile and Web Computing (iv) Electronic Sales Presentations (v) Electronic Sales Training (vi) Use of Customer Teams (I) Controlled Word of Mouth One of the most influential forms of promotion occurs when one person speaks highly of a product to someone else, particularly if the message sender is considered an unbiased source of information. Until recently, marketers have had little control over a person-to-person promotion that did not involve salespeople (i. e. , biased source).
However, marketers are beginning to experiment with new methods of promotion that strategically takes advantage of the benefits offered by word-of-mouth promotion. Unlike salespeople who attempt to obtain an order from customers, controlled word-of-mouth promotion uses real people to help spread information about a product but do not directly elicit customer orders. With controlled word-of-mouth promotion, a marketer hires individuals to spread positive information about a product but in a way that does not make it obvious to others that they are being paid to do so.
The technique is especially useful when building awareness of new products and this approach has been dubbed “buzz” marketing as a way to describe its objective of building a high level of awareness for a product. For example, a brewer may form a team of word-of-mouth marketers who visit local taverns and night spots. As part of their job, these marketers may “talk up” a new beer sold by the brewer and even purchase the product for some customers. But in the course of doing so, they do not directly disclose that they are being compensated by the brewer for their efforts.
Controlled word-of-mouth has received a great deal of publicity though much of it has focused on potential ethical concerns. Some have expressed concern that paying people to “act” as if they are interested in a product without any indication of their relationship with the product breaches ethical standards. As more companies explore controlled word-of-mouth marketing it is expected to become an, even more, scrutinized form of personal selling. (II) Customer Information Sharing
Possibly the most dramatic change to occur in how salespeople function on a day-to-day basis involves the integration of customer relationship management (CRM) systems into the selling arena. CRM is the name given to both the technology and the philosophy that drives companies to gain a better understanding of their customers with the goal of building stronger long-term relationships. The essential requirement for an effective CRM system is the need for all customer contact points (e. g. , salespeople, customer service, websites) to gather information so that this can be shared with others in the company.
But CRM has faced some rough times within the sales force for the exact reason it is important: salespeople must share their information. Salespeople have historically been very good at developing relationships and learning about customers, but often loath sharing this since, in effect, information is what makes them important. In the minds of some salespeople, letting go of the information reduces their importance to the company. For example, some salespeople feel that sharing all they know about a customer will make them expendable as a salesperson since a company can simply insert someone new into their spot at any time.
While the attitude toward CRM has made its implementation difficult in many companies, salespeople should understand that it is not going away. CRM and information sharing has proven to be critical for maintaining strong customer relations and salespeople must learn to adapt to it. (III) Mobile and Web Computing The move to an information sharing approach is most effective when salespeople have access to information sharing features when they need it most. Mobile technologies, such as wireless internet (WiFi) and cellular Internet access, allow salespeople to retrieve needed information at any time.
For example, if a salesperson takes a customer to lunch, the salesperson can quickly access company material to respond to questions such as how long it may take to receive product if an order is placed. Additionally, there is a growing trend to make key business applications available through a browser rather than having programs loaded on a salesperson’s computer. This allows for the application to be accessed from anywhere at any time. For example, many companies have moved to web-based CRM systems were simply having Internet access allows salespeople to enter and retrieve information.
Also, many new office productivity applications, such as word processing and spreadsheets, are now becoming web-accessible. New generation cell phones or smartphones along with other handheld devices, such as personal digital assistants (PDA), lighten the burden of carrying laptop computers. But because these handheld devices are web-enabled they provide access to much of the same information as a standard computer. While the computing power of handheld devices is still underpowered compared to conventional computers, the move to web-based computing may someday make the handheld the main instrument for inputting and outputting information. IV) Electronic Sales Presentations Technology is also playing a major role in how sales professionals reach prospects and existing customers. While audio/video conferencing has been available for many years using high-end telecommunication hookups, it has only been within the last few years that improvements in Internet access speeds, computing power, and meeting software have made this method for reaching customers a practical alternative to face-to-face sales meetings. These options include:
Online Video Conferencing – Online conferencing essentially act in the same way as telecommunications video conferencing, with one big exception; it is delivered over the Internet. Anyone who has an Internet connection knows that trying to deliver video over the Internet can be a trying experience as video often appears to be slow, jittery and sometimes not even recognizable. But these problems are quickly disappearing and while real-time Internet video conferencing (i. e. , television quality video and audio) is still not routinely accessible to most salespeople, this is expected to change.
Web/Phone Conferencing – To offset the problems associated with Internet delivery of real-time audio and video, many companies deliver sales presentations using a combination of web and telecommunications. The most widely used services use the Internet, to deliver visual material (typically a slide presentation) and telecommunications, to allow for voice conversation. The process has a salesperson arrange for a conferencing time with a prospect who enters the conference by 1) using their web browser to gain access to the visual presentation and 2) using their telephone to call into an audio conference.
Splitting the visual and audio feeds allows for smoother presentations since the conference participants’ computers need only process the visual material. It should be noted, that while audio access is now being carried out over telephone connections, the emergence of telephone over the Internet (i. e. , VOIP – voice over Internet Protocol) may soon help resolve some of the problems that have been encountered when delivering both. Online Text Chat – Online chat allows for real-time communication between multiple participants using text messaging.
While this form of buyer-seller communication may not be very effective at getting customers to agree to make a purchase, it has proven very effective in building initial product interest. For example, potential customers visiting a website may use the chat feature to ask a few questions about the company’s products. Engaging a customer this way can then lead to the customer agreeing to receive a phone call from a salesperson to further discuss the product. (V) Electronic Sales Training
Developing the skills and techniques needed to be successful at selling requires an extensive commitment by the individual seller and the seller’s company to sales training. Sales training is the hallmark of professional selling. If there is one thing that separates the truly successful salesperson from those who are not, it is the amount of training and preparation they engage in. Most organizations that employ a sales force offer new salespeople an extensive formal training program often held at dedicated training facilities.
These training programs can range from a few days to many months depending on the industry. But once a salesperson has made the move to the field, training does not stop. Those involved in selling must continue to stay abreast of their products, customers, markets, and competitors. While many companies may continue to employ the same methods used when they first trained their salespeople, a large number of firms are finding that ongoing training can be just as effective using electronic options such as delivering training over the Internet, through downloadable computer programs or through interactive CDs or DVDs.
While feedback using electronic means is not as personal as it might be with in-person training, sophisticated electronic training programs are effective in educating and testing trainee’s knowledge. Also, a live trainer can be contacted very quickly via e-mail, online chat or by a phone call if a question does arise. Using electronic delivery, the cost to the company for adding or updating training material is inexpensive and quick compared to the cost and time needed to produce and ship paper-based materials. Additionally, the use of
RSS feeds or email enables salespeople to be quickly notified when new training material is available. This is useful when the sales force must be made aware of a recent change that will impact how products are promoted such as a price change, new information to be used as a comparison to competitor’s products, a potential problem that has arisen when installing or using a product or some other adjustment. (VI) Use of Customer Teams As we noted in our discussion of technical specialists, salespeople may require the assistance of others in their organization to effectively deal with prospects.
In fact, many companies are moving away from the traditional sale force arrangement, where a single salesperson handles nearly all communication with an account, in favor of a team approach where multiple people are involved. Teams consist of individuals from several functional areas such as marketing, manufacturing, distribution, and customer service. In some configurations, all members share bonuses if the team meets sales goals. Clearly, to be effective a team approach requires the implementation of customer relationship management systems that we discussed earlier.
Details of the Work Example: COCA COLA, EUREKA FORBES Eureka Forbes At Harvard Business School’s picturesque campus on the banks of the Charles River in Cambridge, Massachusetts, students will now learn how a home appliances company became a household name in India, introducing products once considered impractical for the market. Professor Narayan Das, who authored the case study on Eureka Forbes Limited, says the success of its direct selling strategy in India is equally relevant to students here.
Professor at Harvard Business School, Narayan Das says,” We had a case on an enterprise software co, how the salesperson sells a multi-million dollar deal over a period of two years. I was looking for a contrast to that and the Eureka Forbes model is a perfect one because their sales cycle is 12 hours. The salesperson door knocks in the morning and closes the deal in the evening. So it is a very unique situation where we want students to understand the concept of door-to-door selling. It is not commonly done in the US today but is still a huge part.
Whether you’re telemarketing or teleselling, the issues are the same. ” First Year Student at Harvard Business School, Tamhant Jain says, “More than 80% of our class is international. A lot of people want to go abroad and start their own businesses. Even people who will continue to stay here after studies realize business is becoming global. Global markets are in India & China. A case study like this is relevant because it brings diversity, marketing, consumer goods, marketing experience. Such studies are brilliant for us. ”
The CEO of Eureka Forbes, Suresh Goklaney, visited Harvard for the presentation of the case study. Officials from the company were pleased with the students’ response. CEO of Eureka Forbes Suresh Goklaney says,” The reaction from the students was that’s a great company. We would like to work for there They found out that whether there were better methods for training, compensation, motivations. ” Regional Manager (South) of Eureka Forbes, V Mathialagan says,” In India, one thing you must understand is every town the culture, language is different.
Even in Bangalore, different pockets have different cultures. Understanding the needs of individual customs is very imp, which has come out in the case study. But one can’t fit all doesn’t happen in India. Students understand that very well. ” Eureka Forbes is one of about half a dozen Indian companies that have been taken up as case studies at Harvard Business School and the author of the study is confident it will remain on the curriculum for years to come. Coca-cola using a combination of mass selling & personal selling
Sales Promotion and Personal Selling. Coca-Cola was one of the first companies to recognize the power of coupons for sales promotion purposes. In 1887, one of the company’s Partners, Asa Griggs Candler, helped to launch the company into the public eye using innovative and never-tried-before advertising techniques, one of which was a coupon, handwritten by the man himself. Soon, Candler was creating coupons offering complimentary Coca-Cola to people who he believed might ultimately be interested in buying the product.
These coupons were mailed out to potential customers and were also placed inside magazines for readers to discover. The advertising worked. More than eight billion free Coca-Cola drinks were given out to people and within eight years Coca-Cola was being served in every single state that was part of the United States at that time. The tradition continues. In May and June of this year, Coca-Cola Great Britain (CCGB) carried out a mobile coupon campaign in the UK, powered by digital voucher company,i-move. Using the Pay Point network, hundreds of thousands of bottles of Fanta, Sprite, and Dr.
Pepper was distributed free, using secure digital vouchers delivered to mobile phones. Selected Pay Point stores were given eye-catching point-of-sale material, including door posters, shelf blazers, and fridge-top stands, which made clear the simple step required of customers to get their free drink. All they had to do was send a text message with the word ‘YES’, followed by their date of birth. Valid voucher requests received a text message reply within a few seconds that included a unique voucher code that was validated by the retailer using the Pay Point terminal.
Because voucher redemption was performed in real-time using the Pay Point terminal, vouchers could not be used twice, eliminating the risk of fraud. Another immediate benefit was that brand managers could monitor the campaign’s progress store-by-store, bottle-by-bottle, eliminating the risk of over-subscription. Retailers were reimbursed automatically, within six days, via Pay Point. “We are very focused towards driving additional footfall and profits for our retailers, and this activity has done both on a significant scale by making customers the compelling offer of free products,” says Pay Point Retail Strategy Director Mike Igoe. “The real-time redemption solution offered by i-move and Pay Point makes this type of activity attractive because it mitigates the financial risks for all parties. ” By the conclusion of the eight-week campaign, over 200,000 drinks had been given away to nearly 100,000 consumers across the UK, with the campaign delivering a redemption rate of 87%, according to i-move, leading the company to describe it as: “the most popular and effective mobile coupon campaign the UK has ever seen”. Coca-Cola Head of Communication, Ed Knight, says: We always strive to engage our consumers in an appropriate and exciting manner and this campaign has achieved exactly that. Pay Point and i-move have created a national marketing network that allows us to activate promotions for specific products in specific stores. In addition, this system allows us to run sampling campaigns across thousands of retailers simultaneously, without any additional staffing costs or impact on the supply chain. The feedback we have received from retailers and consumers alike has been relentlessly positive and the campaign itself has been both a commercial and technical success. ” CONCLUSION
Personal selling is the primary tool utilized in business marketing and is generally supported by other elements such as advertising, publicity, and sales promotion. In today’s world marked by complex technologies, and multiple choices—both product and sales and service outlets—the customer is increasingly becoming dependent on the salesperson. The customer is wanting an answer to the question “Why you” and “Why not your competitor’s product. ” The customer wants to be sure that he or she is getting value for his or her money. And finally wants to be reassured that whenever service is required, the sale person will be there.
In other words, it’s the salesperson who provides competitive product information to the customer, helps the latter to apply the product to his or her situation and also reassure the customer on prices and service. It’s through these activities that the salesperson provides a competitive advantage to the firm or enterprise.