Personal Selling

13th July13

Selling Methods:
Product
Ceiling fan Fruit juices

Feature
2 Ball bearings 100% juice

Advantage
Very quiet Great nutrition

Benefit
Great for classrooms On-the-go meal for children

FAB

Writing Pen

Running shoes

Demo.

Air conditioner Bathing Soap

Attributes Car Price , Safety , Resale value , Mileage , Leg space , Boot space , 4-W drive , Colour , Dashboard , Acceleration , look-at-me , .. Create a 10-pronged FAB approach to selling of a Car ( say Maruti Swift ) to customers with varying needs.

Buying Decision Process:

Need recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behavior

All consumers whether individuals or households or business pass through certain steps in buying a product. The steps are mental for most individuals or HHs but could be formal for business ( Depending upon value of purchase , technicality of buy). Every buying process begins with a need ( real or
Need recognition

perceived) . The stimuli could be internal or external ( hunger vs appetizing food / appealing looks. The stimuli could be physiological or psychological.

Buying Decision Process:

Aroused consumer then searches for more information.
Information search

Nature of search could vary from passive to active with intensity depending upon :
Size of purchase Involvement with product Complexity

Alternatives generated after information search are then

Evaluation of alternatives

evaluated ( weighed) on their ability to satisfy the need. Example Car buyer may be looking at product attributes such as Price , safety , resale value , mileage , leg space , boot space , 4-wheel drive , colour , dash board Consumer forms preferences among brands leading to an intention to buy the most preferred brand.

Car

Buying Decision Process:

The purchase intention can be changed by :
Purchase decision
Attitude of others Friends , relatives , colleagues , media reviews Unanticipated situational factors Financial / health / alternate spend.

High involvement purchase focuses on not only what but

also on where , when , how.

Consumer experiences level of satisfaction or

Post purchase behaviour

dissatisfaction depending upon the products perceived performance vs buyers expectations :

Delight : Satisfaction: Dissatisfaction Perf > expect Perf = expect Perf < expect Repeat purch / Recco Repeat purch Return / Stop buy / Dissuade others

Decision process by businesses includes 3 extra steps :

1. 2. 3. Determining characteristics & quantity of needed product. Development of specifications of product needed. Obtaining and analysing supplier proposals.

What is Sales Strategy?

Sales managers are responsible for strategic decisions at customer level. With a customer base being wide & varied the strategies cannot be formulated at individual customer level. The strategic decisions are made by arranging individual customers into homogenous groups. There are 4 parts of a sales strategy:
1. 2. 3. 4. Classification of accounts. Relationship strategy Selling methods Channel strategy

Sales Strategy
Specific customers are classified into different customer groups.
All customers within a target segment are not exactly the same.

For instance at Tropicana Juices the customers were classified as :

Classification of customers UDS ( Traditional retailers) A / B / C depending on the avg volume per month MT ( Modern Trade) Chains & Stand-alones Institutions Hotels 5 star , Hotels (others) , Restaurants , Hospitals , Schools & colleges, Caterers , Corporates , Airlines , Railways .

Companies develop different sales strategy for each of these customer groups allowing for better targeting.
The relationship between buyers & sellers falls in the range of : Transactional relationship ( Low sales / profit ; low loyalty) vs ( Less discounts , services & commt.) Collaborative relationship ( High commitment ; High value ; L.T) vs (Joint efforts prob. solving & integration) Value-added relationship ( Medium sales / profit ; Potential)
( Mid-scale ; Exceed competition)

Relationship Strategy

Sales Strategy

Sales people use different selling methods to suit different relationship strategies. No hard & fast rules Flexibility is the key Broad listing of selling methods : i. Stimulus response method :
Canned approach Memorized sales presentation or prepared sales presentation. Foundation being Right stimuli leads to right response Product centric vs Need centric. Used by tele-marketing , door-to-door sales people. Best used when relationship strategy is ?

ii.

Formula method :
More evolved stimulus based approach. Approach based on AIDA ( Attention , Interest , Desire and Action ) Best used when relationship strategy is ? This method focuses on the customer. It begins with understanding of buyers needs ( 5 Ws ). More creative and sales effective . Then discussion follows on how the sellers product can meet the customers needs better than that of a competitor. ( FAB ) Best used when relationship strategy is ?

Selling methods
iii.

Need-satisfaction method

iv. FAB

Team selling method

Multi-person sales teams are deployed to deal with multi-person buying centres. Allows multi-functional , multi-skilled teams to achieve sales. Best used when relationship strategy is ?

Sales Strategy
v. Consultative selling method
Also referred to as problem-solution method. Requires the seller to have an in-depth understanding of the customers company Needs / strategic goals / values Commonly deployed approach by advertising , marketing , research and IT companies . Best used when relationship strategy is ?

Selling methods

Sales managers need to ensure that the customers ( specific or group) receive effective & efficient service. The various sales channels available to reach the customer are :
1. 2. 3. 4. 5. 6. 7. 8. Company sales force 3rd party dedicated sales force ( ma foi) Distributors Tele-marketing Internet Brokers and commission agents. Dedicated outlets ( Company showrooms). Franchisees

Channel Strategy

Most companies deploy a mix of channels.

Personal Selling Process:

Prospecting and qualifying

Salespeople perform many activities which may be

broadly classified into selling activities and non-selling activities. The non-selling activities include :
Preparation of sales reports. Collecting payments Obtaining market & competitor information Travelling Waiting to see customers Training / Meetings

Preapproach

Approach

Presentation & demonstration

Overcoming objections Closing the sale Follow up and service

The selling activities consist of various steps of the selling process. We discussed the art of selling in the earlier lessons. Understanding the PS process is the science of selling. No magic formula for sale but following the process would improve the chances of success.

Personal Selling Process:

Prospect is an individual , a family or an organization who needs
the product being sold. Faced with saturation companies need to continuously prospect for new customers ( Tier-2 towns / rural thrust / new outlets) . Prospecting begins with lead ( probable prospect) generation.
a) b) c) d) e) f) g) Outlet listing for Frito & Pepsico Outlet listing for food / FMCG companies avail. with distributor. Sales fraternity network Research reports. Referrals by existing customers. Yellow pages Industrial directories. Cold canvassing walking up and down the street.

Prospecting and qualifying

Qualifying Filtering the probable listing to reach to prospects .

a) Top outlet list basis value turnover. b) Similar consumer base ( Health & wellness ) use of surrogate Diet Pepsi or baked chips or Kellogs corn flakes c) Availability of cooling infrastructure. d) Competitor presence in outlet.

Prospects after qualifying are categorized as hot / warm or cool.

Personal Selling Process:

Preapproach involves information gathering in greater depth and
planning the sales call on the prospect. Non-retail ( Institutions) would require more work on preapproach viz :
Institution size ; Competitor presence ; Nature of business Need for product ; Employee strength ; ; Decision maker name

The sources for information could be :

Internet / online search Industrial directories Trade magazines Chambers of commerce Company annual reports Existing customers & suppliers

Preapproach

Information gather is followed by planning the sales call ( i.e setting of objective for the call ) :
Understanding customer need / requirement. Brief on company / product Relationship building.

Personal Selling Process:

Approach is the act of salesperson meeting the buyer for the first
time. Has the potential to break-or-make the sale and thus first impressions are quite important. First impressions Verbal / Non-verbal / Appearance . The approaches depend on the selling situation and can be broadly categorised as :

Approach

1. Introductory approach Salesperson begins with a salutation & introduces self , company. 2. Customer benefit approach Identifies benefit sought by buyer and appeals to it. Schools Offices Airlines 3. Product approach
Product is carried and shown / sampled useful with new , unique product 4. Question approach Salesperson leads with a question to get the conversation rolling or to get the prospect curious .

5. Praise approach Sincere & subtle praise lower resistance ( Energy , dcor , leadership ..)

Personal Selling Process:

Salesperson needs to understand the customer needs before
presenting to the buyer. The typical sequence being :
1. Understanding the buyers needs by asking questions :
Are you buying for the first time or making a change in supplier ? Who are the purchase decision makers ? Do you have any special quality or delivery requirements? How important is it to get 100% order execution / 4 hour delivery lead time ? Would it interest you if we .

Presentation & demonstration

2. 3.

Knowing selling methods

5 methods covered in sales strategy.

Developing an effective presentation.

Guidelines to be kept in mind include - Objective planning ; Persuasive communication ; FAB approach to meeting customers needs.

Sales presentation can be improved by demonstration especially when a USP exists & has a touch / feel / taste / hear / see ( 5 senses ) element.
Car test drive Food / beverage sampling. Sample flat

Personal Selling Process:

Sales objections , resistance or opposition are common place
during selling and in many cases are an opportunity since they are a sign of customer engagement. Objections could be motivated by :
Predetermined ideas or beliefs ; preference for established brands ; dislike of making decisions ; status quo Tangibles like quality , delivery schedules , pricing , availability .

Objections can be handled by : Overcoming objections

The psychological ( hidden ) objections motivated by beliefs , attitudes and values require sustained communication for breakthroughs. The logical objections are best overcome by :
Ask questions / Turn an objection into a benefit ( 100% expensive but .) / Third party certificate and Compensation.

Personal Selling Process:

Trial closing
Salesperson makes a presentation Salesperson answers prospects objections Salesperson uses a trial close Response unfavorable

Response favorable : Close the sale

Negative response to asked order is difficult to reverse.

Safer option is to test the waters before jumping in with order request. Typical trial close examples are :
To what extent does this product meet your needs ? Which of the benefits are important to you ? So you are saying this issue is all that needs to be resolved in order

Closing the sale happens with asking for order.

Personal Selling Process:

Follow up & service

Sales does not end at procuring the order. Salesperson needs to ensure customer requirements ( special time of delivery , credit , packaging dates etc) are understood & executed correctly. Relationship building thru Win+Win transactions allows for increase in account share through width & depth expansion.

Closing the sale:

1. Alternate choice close
Buyer is given a choice between models & not buy / not-buy.

2. Minor points close

Cash or credit sir ? Or Do you need it gift wrapped ?

3. Assumptive close
Have seen the stock position & this is the order.

4. Summary-of-benefits close

Closing techniques

Figure out benefit important to prospect & use FAB to close.

5. T-account ( or Balance sheet close)

Benefits listed & negatives invited such that B

>>N

6. Special offer close

Buyer at the tipping point then special offer used as deal sweetener

7. Probability close
Buyer says will let you know Prob. Fix Retry if < 50%

8. Negotiation close
Win-Win approach helps to build L.T sustainable relationship & continued stream of revenues & profitability..

Product Features Maxima The display dial is extra digital watch large sized.

Advantage Makes it trendy & in-tune with international trends..

Benefit Look-at-me appeal . Stand out within the peer group.

Multi-functions like alarms , Only sub-Rs 1000 brand with stop watch & countdown these features. timer.
Available in 10 colour choices. Breaks the monotony & lends brightness to look.

Superior value appeal.

Versatile accessory that you can mix-n-match with your dressing. Symbol of class & success for the world. Unmatched life time accuracy

Rolex oyster watch

Price of Rs 3 lacs

Affordable only to the very wealthy. Removes wear / tear of the movement.

Quartz movement uses revolutionary XYZ technology . Mother of pearl dial face

Lends it premium & exclusive look.

The watch would be a true reflection of your taste & personality and thus would be a truly big status symbol.