Slide 20-23
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Preapproach
• Approach
Slide 20-25
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Presentation
Stimulus-Response Format
• Stimulus-Response Presentation
• Suggestive Selling
• Presentation
Need-Satisfaction Format
• Need-Satisfaction Presentation
• Adaptive Selling
• Consultative Selling
Slide 20-28
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Presentation
Handling Objections
• Acknowledge and Convert the Objection
• Postpone
• Agree and Neutralize
• Accept the Objection
• Denial
• Ignore the Objection
Slide 20-30
Techniques for handling objections
Slide 20-31
THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS
• Close
Trial Close
Assumptive Close
Urgency Close
Final Close
• Follow-Up
Slide 20-32
THE SALES MANAGEMENT PROCESS
Slide 20-37
7-1
The Consultative Selling—
Customer Relationship Model
Customer
Customer
strategic Performance
Performance
strategic
needs Goals
Goals
needs
••Costs
Costs
Mutual
Mutual Long-term
Long-term ••Productivity
beneficial
beneficial Productivity
relationships
relationships
agreements
agreements
••Sales
Sales
Salesperson’s
Salesperson’s
creative ••Profits
Profits
creative
solutions
solutions
7-2
Steps in the Preapproach:
Planning the Sale
Determine
Determine Develop
Develop Develop
Develop Develop
Develop
sales
salescall
call customer
customer customer
customer sales
sales
objective
objective profile
profile benefits
benefits presentation
presentation
7-3A
Information Used in Profile and
Planning
Customer Profile and Planning Sheet
1. Name:
Address:
2. Type of business:
Name of buyer:
3. People who influence buying decision or aid in using or selling our product:
12. Post sales call comments (reason did/did not buy; what to do on next call;
follow-up promised):
7-6A Major Phases in a Presentation:
A Sequence of Events to Complete in
Developing a Sales Presentation
Rapport-building
1.1.Approach
Approach Uncover needs
Attention, interest, transition
Features
2.2.Fully
Fullydiscuss
discuss Advantages
your
yourproduct
product Benefits
Attention
Attention Interest
Interest Desire
Desire Conviction
Conviction Purchase
Purchase
7-8A
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
1. Prospecting
Salesperson locates
and qualifies prospects
2. Preapproach
Salesperson
determines sales call
objective, develops cus-
tomer profile, customer
benefit program, and
selling strategies.
Customer’s needs
are determined.
7-8B
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
3. Approach Attention due to arousal of Should I see salesperson?
Salesperson obtains potential need or problem. Should I continue to listen,
interview, meets Interest due to recognized interact, devote
prospect, and begins need or problem and the much time to a
individualized sales desire to fulfill the need or salesperson?
presentation. solve the problem. What’s in it for me?
Needs are further
uncovered.
7-8C
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
4. Presentation Interest in information that Is the salesperson prepared?
Salesperson relates provides knowledge and Are my needs understood?
product benefits to influences perceptions and Is the seller interested in my
needs, using attitude. needs?
demonstration, Desire begins to develop Should I continue to listen
dramatizations, based on information eval- and interact?
visuals, and uation of product features, So what? (to statements
proof statements. advantages, and benefits. about features)
This is due to forming posi- Prove it! (to statements
tive attitudes that product about advantages)
may fulfill need or solve Are the benefits of this
problem. Positive attitudes product the best to
brought about by fulfill my
knowledge obtained needs?
from presentation.
7-8D
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
5. Trial close Desire continues based on
Salesperson asks information evaluation.
prospect’s opinion
on benefits during
and after
presentation.
Desire continues based on Do I understand the
6. Objections information evaluation. salesperson’s marketing
Salesperson plan and business
uncovers proposition?
objections. I need more information to
make a decision.
Can you meet my
conditions?
7-8E
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
7. Meet Objections
Salesperson Desire begins to be Let me see the reaction when
satisfactorily answers transformed into belief. I give the salesperson a
objections. Conviction established due to hard time.
belief the product and I have a minor/major
salesperson can solve needs objection to what
or problems better than you are saying.
competitive products. Is something nonverbal
Appears ready to buy. being communicated?
Did I get a reasonable
answer to my objection?
7-8F
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
8. Trial Close Conviction becomes Can I believe and trust this
Salesperson uses stronger. person?
another trial close to Should I reveal my real
see if objections have concerns?
been overcome; or if
presentation went
smoothly before the
close, to determine
if the prospect is ready
to buy.
7-8G
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
9. Close Action (purchase) occurs I am asked to make a buying
Salesperson has based on positive beliefs decision now.
determined that the product will fulfill If I buy and I am
prospect is ready needs or solve problems. dissatisfied, what can
to buy and now I do?
asks for the order. Will I receive after-the-sale
service as
promised?
What are my expectations
toward this
purchase?
Why don’t you ask me to
buy?
Ask one more time and I’ll
buy.
7-8H
The Selling Process and Examples
of Prospect’s Thoughts and Questions
Steps in the Prospect’s Potential
Selling Process Prospect’s Verbal and Mental
Mental Steps Questions
10. Follow-Up Satisfaction—Dissatisfaction Did the product meet my
Salesperson provides expectations?
customer service after Am I experiencing
the sale.
dissonance?
How is the service
associated with this
product?
Should I buy again from this
salesperson?
Sales planning & Forecasting
Definition:
Market Demand for a product is the total
volume that would be bought by a defined
customer group, in a defined geographical
area, in a defined time period, in a given
marketing environment. This is sometimes
referred to as the Market Demand Curve.
Stage two in the forecast is to
estimate Company Demand
• Company demand is the company’s share of market
demand.
• Note that the Sales Forecast is not necessarily the same as a “sales
target” or a “sales budget”.
• A sales target (or goal) is set for the sales force as a way of defining
and encouraging sales effort. Sales targets are often set some way
higher than estimated sales to “stretch” the efforts of the sales force.
Managing Personal
Generating
Existing Time
New Accounts
Accounts Management
Mergers and
Acquisitions
10% Acquiring
Introducing 15% New
33%
New Customers
Products
42%
Increasing
Business with What’s the
Existing Customers
Best Way to Grow?
Territory Management
Key to Productivity
Sales Concentration
% Total Sales
100
80
60
40
20
0
Top Top Top Top
10% 20% 50%
Source: SMM, Jan. 02, p. 40
Personal Selling
Developing a list of Prospects
1. Direct Inquiry
• Advertising
• Direct Mail
• Trade publications
• Trade shows
3. Referrals
4. Cold canvassing
Personal Selling
Qualifying Prospects
1. Needs for your products/services
B
• Service by phone
• Concede to competition
Core Growth
Accounts
Accounts Accounts
Accounts
High Accounts
Accountsare
arevery Accounts
very Accountsare
are
attractive.
attractive. Potentially attractive.
Potentially attractive.
Invest heavily in
Invest heavily in May Maywant
wanttotoinvest
invest
Selling resources
Selling resources. . in heavily
in heavily
Drag
Drag Problem
Problem
Low Accounts
Accounts Accounts
Accounts
Accounts Accounts
Accountsare
arevery
Accountsare
are very
moderately attractive. unattractive.
unattractive.
moderately attractive.
Invest to maintain Minimal investment
Invest to maintain Minimal investment
current
currentposition.
position. of
ofselling resources. .
sellingresources
Competitive
Competitive Position
Position
Strong
O
P Segment 1- Core Accounts
P Attractiveness: Accounts are very attractive
O because they offer high opportunity and sales
R organization has strong competitive position.
T Selling Effort Strategy: Accounts should
U High receive a heavy investment of sales resources to
N take advantage of opportunity and
I maintain/improve competitive position.
T
Y
Competitive
Competitive Position
Position
Weak
O
P Segment 2 – Growth Accounts
P Attractiveness: Accounts are potentially
O attractive due to high opportunity, buy sales
organization currently has weak competitive
R
position.
T High
Selling Effort Strategy: Additional analysis
U should be performed to identify account where sales
N organization’s competitive position can be
I strengthened. These accounts should receive heavy
investment of sales resources, while other accounts
T receive minimal investment.
Y
Competitive
Competitive Position
Position
Strong
O
P Segment 3 – Drag Accounts
P Attractiveness: Accounts are moderately
O attractive due to sales organization’s strong
competitive position. However, future
R
opportunity is limited.
T Low
U Selling Effort Strategy: Accounts should
receive a sales resource investment sufficient to
N maintain current competitive position.
I
T
Y
Competitive
Competitive Position
Position
Weak
O
P Segment 4 – Problem Accounts
P Attractiveness: Accounts are very
O unattractive: they offer low opportunity and
sales organization has weak competitive
R
position.
T Low
U Selling Effort Strategy: Accounts should receive
minimal investments of sales resources. Less costly
N forms of marketing (for example, telephone sales
I calls, direct mail) should replace personal selling
T efforts on a selective basis, or the account coverage
should be eliminated entirely.
Y
Territory Management
Key to Productivity
Portfolio Analysis: Problem 3
Where do allocation problems seem to occur?
Why might this happen?
24 19 17
Unqualified 20 16 14
15 23
13 21 22 18
12 11 50%
9 closure
10 probability
Qualified
7 5 75%
closure
8 6 probability
3 4 90%
Best few closure
1 2 probability
Territory Management
Key to Productivity
Prospecting Model -- Selling Priorities
Sales Funnel
FIRST Close your “Best Few”
sales objectives
Selling over
the phone
Waiting and
Travel
How Salespeople
Spend Their Time
Territory Management
Key to Productivity
Salespeople’s Time Wasters
1. Telephone interruptions
2. Drop-in visitors
3. Lack of self-discipline
4. Crises
5. Meetings
6. Lack of objectives, priorities & deadlines
7. Indecision and Procrastination
8. Attempting too much at once
9. Leaving tasks unfinished
10. Unclear communication
Personal Time Management
Importance
High Low
High Time
Time
Emergencies
Emergencies Wasters
Wasters
Urgency
Low Personal
Personal Recreation
Recreation
Growth
Growth
100,000 100,000
Catalog Drops Website Visits
Territory-time
Territory-time
allocation
allocation
Territory
Territoryand
and Scheduling
Schedulingand
and Customer
Customersales
sales
customer
customer routing
routing planning
planning
evaluation
evaluation
Location of Accounts
and Sequence of Calls
Oklahoma City
62
35
62
2.
Distribution
Center
Weekly Route Report
Straight-Line Pattern
First call
c
c c c
Work back
Three Basic Routing Patterns
Cloverleaf Pattern c c
c c
c c
c c c c
c c
Base
c c c c
c c
c c
Each leaf out and
c c back the same day
c c
Three Basic Routing Patterns
Major-City Pattern
2 3
1 1 = Downtown
4 5
A Partial Map of Your Sales
Territory
L E F H M
K N
B O R J
C
Your
favorite
restaurant
D P I
G A
Start
Sales quota
LEARNING OBJECTIVES
Objectives and quotas are fundamental parts of a company, because
they provide the sales force with direction and goals. Selling by
objectives (SBO) is a system that unites the sales force. This
chapter should help you understand:
The relationship between sales objectives and quotas.
Why quotas are important.
The various types of quotas.
The methods for setting quotas.
Criteria needed for a good quota plan.
Major areas for establishing objectives.
How organizations set objectives.
The selling by objectives process.
WHAT IS A QUOTA?
Salesperson
1. Regular
2. Problem Solving
3. Innovative
SELLING BY OBJECTIVES SETS
FUTURE TARGETS
N
a m e
F o r Y e a r
L i s t Y o u r R e s p o n s i b i l i t y A r e a
R e s u l t s E x p e c t e d
O u t p u t P e s s i m i Rs t e i ca l i s tO i c p t i m i Rs t ei c s u l t s
1 $. V o l u m e / m o n t h
2 $. E x p e n s e / m o n t h
3 G. r o s s m a r g i n / m o n t h
4 .
5 .
6 .
7 .
8 .
9 .
1 0 .
1 1 .
1 2 .
O t h e r
I n s t r u c t i o n : L i s t t h e r e g u l a r , o n g o i n g , r e c
s i b i l i t i e s o f y o u r j o b n e x t y e a r t o m a n a g e
A GOOD OBJECTIVE AND
QUOTA PLAN IS SMART
Specific
Measurable
Attainable
Realistic
Time specific
A simple three-way test to judge how well quotas
and objectives are written:
M u t u a l l y S e t
M e a s u r e
O b j e c t i v e s a n d
P e r f o r m a n
Q u o t a s
E v a l u a t e
P e r f o r m a n
P u b l i c i z e
P e r f o r m a n cR e e w a r d
R e s u l t s o r P e n a l t y
THE SALES TERRITORY IS
WHERE QUOTAS ARE MADE
P e o p l e P l a n n i n g E m p l o y m e n t P l a n n i n
H o w M a nT y y p e Ro f e c r u i t mS e e l ne ct t Si o o n c i a l i z a t i o
t o H i r e ? P e o p l e ?
D e t e r m F i in r es t G r a d u B a te i go iT nn r a i n A i n s g s i g
H o w M I n a t ne ry v i e w W o r kE n d Ts e r r i t
t o H i r e
T i m e L i n e
What’s a salesperson worth?
• Intelligence
• Education
• Personality
• Experience
• Appearance
CHARACTERISTICS OF SUCCESSFUL SALESPEOPLE
7. Competitive
PROFILING THE SUCCESSFUL
CANDIDATE
Success in a company may include the following:
• Intelligence
• Prospecting ability
• Ability to create a follow-up system
• Ability to influence people’s decisions and
opinions
• Ability to cultivate long-term client
relationships
• Ability to negotiate contracts and prices
PROFILING THE SUCCESSFUL
CANDIDATE continued
I n t e r n a l
S o u r c e s
S a l e s
Q u a l i f i eE d v a l u a t e
H u m a n A p p l i c a n t
R e s o u r c e R
e c r u i t m e n t A p p l i c a R n et c r u i t m S e nl e t c t i o
P o o l
P o o l R e s u l t s
P l a n n i n g
E x t e r n a l
S o u r c e s
LEGAL INFLUENCES
R e c r u i t m e n t P y r a Rm a i dt i o D a y s
2 R e p o r t t o W 2o : r 2 k 2 1
3 O f f e r / H i r e3s: 2 1 4
3 0 I n t e r v i e w 1 / 0 O: 1 f f e 2 r 1
1 2 0 L e a d s / I n4 :t 1e r v i3 e 0 w
SOURCES OF RECRUITS –
WHERE ARE THEY FOUND?
INTERNAL SOURCES
Internal recruitment sources come from inside the
company:
• Current Employees.
• Promotions.
• Transfers.
EXTERNAL SOURCES
• Walk-ins. • The Internet.
• Employment agencies. • Internships.
• Radio and television. • Colleges and
universities.
• Newspaper advertisements. • Competitors.
• Telephone-in
advertisements.
REALISTIC JOB PREVIEWS HELP BOTH
COMPANY AND RECRUITS
A “realistic job preview” means that a person is
given pertinent information about the job without
distortion or exaggeration.
Companies can expect these results from
realistic previews:
• Newly hired salespeople have a higher
rate of job survival than those hired
using traditional previews.
• Salespeople hired indicate higher
satisfaction.
• Managers can set the job expectations of
new salespeople at realistic levels.
• Realistic previews do not reduce the flow
of highly capable applicants.
THE QUALIFIED
APPLICANT POOL
The organization should find out:
Motivation
MotivationTools
Tools
Self-
Self- Quotas
Quotas Incentive
Incentive Recognition
Recognition
management
management programs
programs programs
programs
Reasons for Motivating Salespeople
• Frequent rejection
• Physical separation from company
support
• Direct influence on quality of sales
presentation
• Indirect influence on performance
Steps to Greater
Personal Motivation
Number Percent
847 86%
341 74%
757 54%
431 51%
828 37%
458 37%
743 34%
INDIVIDUAL NEEDS
Maslow’s Related
Hierarchy Sales Force
of Needs Motivators
Self- Challenging tasks
actualization calling for creativity
Self-
actualization
in service to
society
Safety
Physiological
Affiliation (belonging)
What Makes Great Salespeople?
The Competitor
The Ego-driven
The Achiever
The Service-oriented
Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies
for Industrial Sales Force,” Journal of Marketing Research, August, 1996), pp. 266-67.
Typical Sales Job Activities
Job Dimension Activities
Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position
Taxonomies for Industrial Sales Force,” Journal of Marketing Research,
August, 1996), pp. 266-67.
Motivation
Career Stages
• Does everyone go through these stages?
• What can be done to address the concerns of
management at each stage?
• How can sales managers address the
management concerns at each stage?
Career
Stages
Age Range
Proportion of 20 30 40 50 60 65
Career Concerns Sales Force
Exploration 14%
Establishment 29%
Maintenance 42%
Disengagement 15%
60%
Sales 55%
volume
quota Bar 2
32% Large firms’
14% Sales >$40M
Profit- Bar 1
based Small firms’
quotas 28%
Sales < $40M
14%
Activity 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
quota
Percentage of
Type of Award Firms Using
Cash 59
Selected Merchandise 46
Merchandise Catalog 25
Travel 22
Giving Status to
Salespeople
• Straight Salary
• Straight Commission
• Combination Plan
Straight Salary
• Salesperson paid a set amount of money
based upon hours or days worked
– Often adopted when salesperson must devote
significant amounts of time to other duties
• Market research, customer service, administration
– Simple to administer by sales manager
– But, no direct link between performance and
reward!
• More commonly used in Europe and may be difficult to
change by global sales managers
Straight Commission
• Adopted by performance-oriented firms that pay
salesperson for their achievements
– Each person is paid a percentage of their total sales
• Easy to evaluate performance
• Plans encompass an element of insecurity
• Not believed acceptable in some cultures, like EU
• Some evidence of acceptance in Japan
• Can lead salesperson to shirk duties or pressure customers
to buy
Combination Pay Plan
• The combination plan is the most popular
– Employed by more than 80% of US firms
– May appear in many forms:
• Salary, commission, individual and group bonuses
– Basic security bestowed by set salary
– Motivation introduced by commission/bonus
• Combination plans more time consuming
for sales managers to oversee
Ethical Compensation Issues
• Major dilemma – hire the best salesperson for
the lowest possible salary. Other dilemmas
include:
– Pay at, below or above market salaries?
– Setting a cap on total pay?
– Assigning lucrative sales territories?
– Team vs. individual incentives?
– Frequency of paying commission?
– Pay discrimination?
Sales Contests
• Sales contests are short-term incentive
programs implemented to motivate salespersons
to achieve specific goals or activities
• For sales contests to be successful:
– Objectives must be specific and clearly defined
– Contest theme must be exciting and clearly
communicated
– Each salespersons must believe they can win
– Awards must be attractive to participants
– Contest must be promoted and managed properly
Sales Contest Elements
• Contest Objectives
– To increase total and product sales most common
– Sales force must be given sufficient time
– All contest information and rules must be clear
• Theme
– Contests receive a theme to create excitement
• Chance of winning
– Compete against self, others, or as a team?
• In U.S. salesperson has about a 40% chance of winning
Types of Rewards
• Sales contests can offer many types of reward in
the form of:
– Cash, prizes, or travel
– Perceived value very important as it must be of
sufficient value to motivate additional effort
• Promotion of contest important
– Launched as a special event with handouts
– Large scorecards to communicate progress
– Newsletter articles or interim prizes can keep
motivation up
Sales Contest Concerns
• A number of concerns have been raised
about sales contests
– When not properly designed contests take a lot
of managerial time to administer
– Improper contests can actually de-motivate
– Do sales contests generate additional sales?
– Should sales force be paid twice for doing job?
– If contests are for short-term, then why have a
“never-ending” sales contest?
Non-Financial Incentives
• Human needs require approaches other
than compensation to remain satisfied
– Ability to grow
– Recognition programs
• Salesperson of the year, President’s Club
– Opportunity to travel
– Educational assistance
Sales Expense Plans
• Linked to salary in some ways
– Globally, firm may pay salesperson’s
expenses to live overseas that include family
– Expatriate expenses are significant
• Expense plans include
– Unlimited
– Per diem
– Limited expense plan
Unlimited Expense Plan
• All legitimate expenses are reimbursed
• Plan has a number of advantages
– Communicates trust to the sales force
– Sales manager can focus on more important issues
– Salesperson cannot complain that resources not
available to make sale
• Sales force must be given guidance and
expenses must still be monitored to insure
sound judgment
– Reimbursed expenses vary by country – e.g.
entertainment and alcohol
Per Diem Expense Plan
• The salesperson is given a set amount of
money for each day s/he is in the field
– For example, US$250 per day
• Budget can be set by multiplying rate times total
days sales force expected to travel
• Single rate unlikely to work in all locales due to
varying costs
• Sales manager must adjust per diem rates
regularly as prices expand or contract
Limited Expense Plan
• The firm sets a maximum daily amount paid
for each category of expense
– That is, US$125 for lodging, $50 for meals, $30
for auto rental, and $20 for miscellaneous
• Limits firm’s upper travel expense limit
• Must be updated and will vary by location
• When actual costs exceed plan, salesperson may try to
save in some areas to meet expenses in other
• Salesperson’s attention may be diverted from client