Students to Start-Ups Entrepreneurial Skills Series

Chapter 02

Principles of Personal Selling

Selling is only the tip of the iceberg

There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Peter Drucker

Principles of Personal Selling

Personal selling is an ancient art that has spawned many principles Sales professionalism Negotiation Relationship marketing

Sales Professionalism
All sales-training approaches try to convert a salesperson from a passive order taker into an active order getter Order takers : That customers know their own needs Resent attempts to influence them Prefer courteous and self-effacing salespersons Two basic become a order getters : Sales-oriented approach Stresses high pressure techniques Customer-oriented approach Stresses customer problem solving No approach works best in all circumstances

Major Steps in Effective Selling

Prospecting and Qualifying Pre approach

Approach Presentation and Demonstration Overcoming objections Closing Follow up and Maintenance

Prospecting and Qualifying

The first step in selling is to identify and qualify prospects. Companies can generate leads by :
Examining data sources (newspapers, directories, CD-ROMs, Web sites) Exhibiting at trade shows to encourage drop-bys Inviting customers to suggest the names of prospects Cultivating referral sources (suppliers, dealers, and bankers) Contacting organizations and association Engaging in speaking and writing activities that will draw attention Telecommunications (phone, mail, Internet) Dropping in unannounced (cold canvassing)

Pre approach
The sales person needs to learn : Prospect company Needs Involved in the purchase decision Buyers Personal characteristics Buying styles The sales person should set call objectives : To qualify the prospect Gather information Make an immediate sale The best approach Personal visit Phone call or letter Best timing Finally, the salesperson should plan an overall sales strategy for the account

Approach
The salesperson decides how to get the relationship off to a good start The salesperson might consider :
Wearing clothes similar to what the buyers typically wear Show courtesy and attention to the buyer Avoid distracting mannerisms

When meeting with the prospect :

Open with a positive statement Concentrate on understanding the buyers needs (questioning and active listening)

Presentation and Demonstration

Tells the product story to the buyer
Following the AIDA formula :
Gaining attention Holding interest Arousing desire Obtaining action

To presentation use FABV :

Features : physical characteristics of market offering Advantages : why the features provide an advantage to customer Benefits : the economic, technical, service, and social benefits delivered by the offering Value approach : the summative worth (monetary term) of the offering

Presentation and Demonstration

Spend too much on product features ( a product orientation) than the offerings benefits and value ( a customer orientation) 3 different style of sales presentation : Canned approach (oldest presentation) Formulated approach Need-satisfaction approach

Presentation and Demonstration

Canned approach
Memorized sales talk covering the main points Based on stimulus-response thinking
The buyer is passive Can be moved to purchase by the use of the right stimulus (picture, word, term, and actions)

Formulated approach
Based on stimulus-response thinking Identifies the buyers needs and buying style

Need-satisfaction approach
Search the customers real needs (encouraging) Use role of a knowledgeable business consultant

Overcoming Objections
Customers almost always pose objections during the presentation or when asked for the order To handle these objections :
maintains a positive approach asks the buyer to clarify the objection asks questions that lead the buyer to answer his or her own objection denies the validity of the objection turns the objection into a reason for buying

Closing
Salespersons need to know how to recognize closing sign from the buyer
Physical actions Statements or comments Questions

Closing techniques
Ask for the order Recapitulate the points of agreement, Offer to help the buyer write up the order Ask whether the buyer wants A or B Get the buyer to make minor choices such as the color or size Indicate what the buyer will lose if the order is not placed now

Follow-up and Maintenance

After closing
Salesperson should cement any necessary details :
Delivery time Purchase terms Other matters

Salesperson should schedule a follow-up call

To detect any problem Assure the buyer interest Reduce any cognitive dissonance

Sales person should develop a maintenance and growth plan for the account

Negotiation

My father said: "You must never try to make all the money that's in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won't have many deals. J. Paul Getty

Negotiation
Much business-to-business selling involves negotiating skills The two parties need to reach agreement Price Others term of sale Salesperson need to win without making deep concessions that will hurt profitability There are 2 exchange in marketing Routinized exchange : administered program of pricing and distribution Negotiated exchange : price and others term area set via bargaining behavior
To continued in chapter 03 Negotiation..

Relationship Marketing
The principles of personal selling and negotiation thus far described are transaction oriented because their purpose is to close a specific sale The company must build a long-term supplier customer relationship by demonstrating that it has the capabilities to serve the accounts needs in a superior way over the long run The company must build relationship marketing rather than transaction marketing, because larger customers are often global and prefer suppliers that can : sell and deliver a coordinated set of products and services to many locations quickly solve problems that arise in different locations work closely with customer teams to improve products and processes

Relationship Marketing
To succeed in winning and maintaining accounts in todays demanding environment, company must : Encourage sales teamwork Reward it with appropriate compensation for work on shared accounts Establish better goals Measures for their sales force Reinforce the importance of teamwork in their training programs The organization will begin to focus as much on managing its customers as on managing its products

Relationship Marketing
Neil Rackham has developed a method to raise 4 types of question with the prospect SPIN selling
Situation Problem Implication Need-Payoff

Relationship Marketing
Situation question
Ask about fact Explore the buyers present situation

Problem question
Deal with problem, difficulties, and dissatisfactions the buyers is experiencing

Implications question
Ask about the consequences or effects of a buyers problem, difficulties, and dissatisfactions

Need-payoff question
Ask about the value or usefulness of a proposed solution

Relationship Marketing
Neil Rackham suggest if selling complex product or services, sales person should have move from preliminaries to : Investigating problem and needs Demonstrating the suppliers superior capabilities Obtaining a long-term comitment

Notes
1. 2. 3. For an excellent summary of the skills needed by sales representatives and sales managers, see Rolph Anderson and Bert Rosenbloom, The World Class Sales Manager: Adapting to Global Megatrends, Journal of Global Marketing 5, no. 4 (1992): 1122. Some of the following discussion is based on W. J. E. Crissy, William H. Cunningham, and Isabella C. M. Cunningham, Selling: The Personal Force in Marketing (New York: John Wiley, 1977), pp. 11929. For additional reading, see Howard Raiffa, The Art and Science of Negotiation (Cambridge, MA: Harvard University Press, 1982); Max H. Bazerman and Margaret A. Neale, Negotiating Rationally (New York: Free Press, 1992); James C. Freund, Smart Negotiating (New York: Simon & Schuster, 1992); Frank L. Acuff, How to Negotiate Anything with Anyone Anywhere Around the World (New York: American Management Association, 1993); and Jehoshua Eliashberg, Gary L. Lilien, and Nam Kim, Searching for Generalizations in Business Marketing Negotiations, Marketing Science 14, no. 3, pt. 1 (1995): G47G60. See Donald W. Dobler, Purchasing and Materials Management, 5th ed. (New York: McGraw- Hill, 1990). Adapted from Roger Fisher and William Ury, Getting to Yes: Negotiating Agreement Without Giving In, rev. ed. (Boston: Houghton Mifflin, 1992), p. 57. See Frank V. Cespedes, Stephen X. Doyle, and Robert J. Freedman, Teamwork for Todays Selling, Harvard Business Review, MarchApril 1989, pp. 4454, 58. Also see Cespedes, Concurrent Marketing: Integrating Product, Sales, and Service (Boston: Harvard Business School Press, 1995).

4. 5. 6.

Questions

To be continued in the next chapter

Kurniawan kurniawan_260305@yahoo.com