Info

Í OBJECTIVE 4

Explain how sales promotion campaigns are developed and

implemented.

Author I Personal selling is the Comment | interpersonal arm of the promotion mix. A company's salespeople create and communicate customer value through personal interactions with customers.

Personal Selling (pp 482-485)

Personal selling

Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.

Author Robert Louis Stevenson once noted that "everyone lives by selling something." Companies all around the world use sales forces to sell products and services to business customers and final consumers. But sales forces are also found in many other kinds of organizations. For example, colleges use recruiters to attract new students and churches use membership committees to attract new members. Museums and fine arts organizations use fund-raisers to contact donors and raise money. Even governments use sales forces. The U.S. Postal Service, for instance, uses a sales force to sell Express Mail and other services to corporate customers. In the first part of this chapter, we examine personal selling's role in the organization, sales force management decisions, and the personal selling process.

The Nature of Personal Selling

Personal selling is one of the oldest professions in the world. The people who do the selling go by many names: salespeople, sales representatives, district managers, account executives, sales consultants, sales engineers, agents, and account development reps to name just a few.

People hold many stereotypes of salespeople—including some unfavorable ones. "Salesman" may bring to mind the image of playwright Arthur Miller's pitiable Willy Loman in the drama Death of a Salesman or author Meredith Willson's cigar-smoking, back-slapping, joke-telling Harold Hill in the film musical The Music Man. These examples depict salespeople as loners, traveling their territories, trying to foist their wares on unsuspecting or unwilling buyers.

However, modern salespeople are a far cry from these unfortunate stereotypes. Today, most salespeople are well-educated, well-trained professionals who add value for customers and maintain long-term customer relationships. They listen to their customers, assess customer needs, and organize the company's efforts to solve customer problems.2

Sales is no longer the avenue of choice for washouts from other fields or for the glad-handers who anticipate doing business over steaks and a three-martini lunch. In today's hypercompetitive markets, "buying is not about transactions any more," says one sales expert. "Salespeople must know their customers' businesses better than customers do and align themselves with customers' strategies." That creates an entirely-new role for salespeople. These days, "salespeople must have a wheelbarrow full of business savvy, combined with the credibility to sell to [empowered, well-informed buying] executives," says another expert. Today, sales is about building customer relationships through a "focus on differentiation and linking those differences to the customer's realization of value."

Professional selling: It takes more than fast talk and a warm smile to sell high-tech aircraft, a single big sale can easily run into billions of dollars. Success depends on building solid, long-term relationships with customers.

Salesperson

An individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building.

Consider Boeing, the aerospace giant competing in the rough-and-tumble worldwide commercial aircraft market. Alt takes more than fast talk and a warm smile to sell expensive high-tech aircraft. A single big sale can easily run into billions of dollars. Boeing salespeople head up an extensive team of company specialists—sales and service technicians, financial analysts, planners, engineers—all dedicated to finding ways to satisfy airline customer needs. The selling process is nerve-rackingly slow—it can take two or three years from the first sales presentation to the day the sale is announced. After getting the order, salespeople then must stay in almost constant touch to make certain the customer stays satisfied. Success depends on building solid, long-term relationships with customers, based on performance and trust.

The term salesperson covers a wide range of positions. At one extreme, a salesperson might be largely an order taker, such as the department store salesperson standing behind the counter. At the other extreme are order getters, whose positions demand creative selling and relationship building for products and services ranging from appliances, industrial equipment, and airplanes to insurance and information technology services. Here, we focus on the more creative types of selling and on the process of building and managing an effective sales force.

The Role of the Sales Force

Personal selling is the interpersonal arm of the promotion mix. Advertising consists largely of nonpersonal communication with target consumer groups. In contrast, personal selling involves interpersonal interactions between salespeople and individual customers—whether face-to-face, by telephone, via e-mail, through video or Web conferences, or by other means. Personal selling can be more effective than advertising in more complex selling situations. Salespeople can probe customers to learn more about their problems and then adjust the marketing offer and presentation to fit the special needs of each customer.

The role of personal selling varies from company to company. Some firms have no salespeople at all—for example, companies that sell only online or through catalogs, or companies that sell through manufacturer's reps, sales agents, or brokers. In most firms, however, the sales force plays a major role. In companies that sell business products and sendees, such as IBM or DuPont, the company's salespeople work directly with customers. In consumer product companies such as Unilever and Adidas, the sales force plays an important behind-the-scenes role. It works with wholesalers and retailers to gain their support and to help them be more effective in selling the company's products.

Linking the Company with Its Customers

The sales force serves as a critical link between a company and its customers. A In many cases, salespeople serve both masters—the seller and the buyer. First, they represent the company to customers. They find and develop new customers and communicate information about the

Salespeople link the company with its customers. To many customers, the salesperson is the company.

company's products and services. They sell products by approaching customers, presenting their products, answering objections, negotiating prices and terms, and closing sales. In addition, salespeople provide customer service and carry out market research and intelligence work.

At the same time, salespeople represent customers to the company, acting inside the firm as "champions" of customers' interests and managing the buyer-seller relationship. Salespeople relay customer concerns about company products and actions back inside to those who can handle them. They learn about customer needs and work with other marketing and nonmarketing people in the company to develop greater customer value.

In fact, to many customers, the salesperson is the company—the only tangible manifestation of the company that they see. Hence, customers may become loyal to salespeople as well as to the companies and products they represent. This concept of "salesperson-owned loyalty" lends even more importance to the salesperson's customer relationship building abilities. Strong relationships with the salesperson will result in strong relationships with the company and its products. Conversely, poor salesperson relationships will probably result in poor company and product relationships.3

Coordinating Marketing and Sales

Ideally, the sales force and the firm's other marketing functions should work together closely to jointly create value for both customers and the company. Unfortunately, however, some companies still treat "marketing" and "sales" as separate functions. When this happens, the separated marketing and sales functions often don't get along well. When things go wrong, the marketers (marketing planners, brand managers, and researchers) blame the sales force for its poor execution of an otherwise splendid strategy. In turn, the sales team blames the marketers for being out of touch with what's really going on with customers. The marketers sometimes feel that salespeople have their "feet stuck in the mud" whereas salespeople feel that the marketers have their "heads stuck in the clouds." Neither group fully values the other's contributions. If not repaired, such disconnects between marketing and sales can damage customer relationships and company performance.

A company can take several actions to help bring its marketing and sales functions closer together. At the most basic level, it can increase communications between the two groups by arranging joint meetings and by spelling out when and with whom each group should communicate. The company can create joint assignments

It's important to create opportunities for marketers and salespeople to work together. This will make them more familiar with each other's ways of thinking and acting. It's useful for marketers, particularly brand managers and researchers, to occasionally go along on sales calls. They should also sit in on important account-planning sessions. Salespeople, in turn, should help to develop marketing plans. They should sit in on product-planning reviews and share their deep knowledge about customers' purchasing habits. They should preview ad and sales-promotion campaigns. Jointly, marketers and salespeople should generate a playbook for expanding business with the top 10 accounts in each market segment. They should also plan events and conferences together.

A company can also create joint objectives and reward systems for sales and marketing or appoint marketing-sales liaisons—people from marketing who "live with the sales force" and help to coordinate marketing and sales force programs and efforts. Finally, the firm can appoint a chief revenue officer (or chief customer officer)—a high-level marketing executive who oversees both marketing and sales. Such a person can help infuse marketing and sales with the common goal of creating value for customers in order to capture value in return.

Author I Here's another definition Comment [ of sa|es force management: Planning, organizing, leading, and controlling personal contact programs designed to achieve profitable customer relationships. Here again, the goal of every marketing activity is to create customer value and build customer relationships. ,

Sales force management

The analysis, planning, implementation, and control of sales force activities. It includes designing sales force strategy and structure and recruiting, selecting, training, supervising, compensating, and evaluating the firm's salespeople.

Territorial sales force structure

A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company's full line.

Product sales force structure

A sales force organization under which salespeople specialize in selling only a portion of the company's products or lines.

Managing the Sales Force (pp 485-496)

We define sales force management as the analysis, planning, implementation, and control of sales force activities. It includes designing sales force strategy and structure and recruiting, selecting, training, compensating, supervising, and evaluating the firm's salespeople. These major sales force management decisions are shown in Figure 16.1 and are discussed in the following sections.

Designing Sales Force Strategy and Structure

Marketing managers face several sales force strategy and design questions. How should salespeople and their tasks be structured? How big should the sales force be? Should salespeople sell alone or work in teams with other people in the company? Should they sell in the field or by telephone or on the Web? We address these issues next.

Sales Force Structure

A company can divide sales responsibilities along any of several lines. The decision is simple if the company sells only one product line to one industry with customers in many locations. In that case the company would use a territorial sales force structure. However, if the company sells many products to many types of customers, it might need either a product sales force structure, a customer sales force structure, or a combination of the two.

Territorial Sales Force Structure. In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. This organization clearly defines each salesperson's job and fixes accountability. It also increases the salesperson's desire to build local customer relationships that, in turn, improve selling effectiveness. Finally, because each salesperson travels within a limited geographic area, travel expenses are relatively small.

A territorial sales organization is often supported by many levels of sales management positions. For example, Campbell Soup Company uses a territorial structure in which each salesperson is responsible for selling all Campbell products. Starting at the bottom of the organization, sales merchandisers report to sales representatives, who report to retail supervisors, who report to directors of retail sales operations, who report to 1 of 22 regioiial sales managers. Regional sales managers, in turn, report to 1 of 4 general sales managers (West, Central, South, and East), who report to a vice president and general sales manager.

Product Sales Force Structure. Salespeople must know their products—especially when the products are numerous and complex. This need, together with the growth of product management, has led many companies to adopt a product sales force structure, in which the sales force sells along product lines. For example, GE employs different sales forces within different product and service divisions of its major businesses. Within GE Infrastructure, for instance, the company has separate sales forces for aviation, energy, transportation, and water processing products and technologies. Within GE Healthcare, it employs different sales forces for diagnostic imaging, life sciences, and integrated IT solu-

Major Steps in Sales Force Management i The goal? You guessed it! The company wants to build a skilled and motivated sales I team that will help to create customer value and build strong customer relationships.

i The goal? You guessed it! The company wants to build a skilled and motivated sales I team that will help to create customer value and build strong customer relationships.

Evaluating salespeople

Evaluating salespeople tions products and services. In all, a company as large and complex as GE might have dozens of separate sales forces serving its diverse product and service portfolio.

The product structure can lead to problems, however, if a single large customer buys many different company products. For example, Cardinal Health, a large health care products and services company, has several product divisions, each with a separate sales force. Using a product sales force structure might mean that several Cardinal salespeople end up calling on the same hospital on the same day. This means that they travel over the same routes and wait to see the same customer's purchasing agents. These extra costs must be compared with the benefits of better product knowledge and attention to individual products.

Customer Sales Force Structure. More and more companies are now using a customer sales force structure, in which they organize the sales force along customer or industry lines. Separate sales forces may be set up for different industries, for serving current customers versus finding new ones, and for major accounts versus regular accounts. Many companies even have special sales forces set up to handle the needs of individual large customers. For example, Black & Decker has a Home Depot sales organization and a B&Q sales organization.

Organizing the sales force around customers can help a company to build closer relationships with important customers. Consider Lear Corporation, one of the largest automotive suppliers in the world.

Each year, Lear Corporation produces almost $16 billion worth of automotive seating systems, electrical distribution systems, and related automotive electronics products. Its customers include all of the world's leading automotive companies, from Toyota, Ford, General Motors, Chrysler, and Volvo to BMW, Ferrari, Rolls-Royce, and more than a dozen others. Perhaps more than any other part of the organization, it's Lear's outstanding 145-person sales force that brings to life the company's credo, "Consumer driven. Customer focused." Lear salespeople work hard at relationship building and doing what's best for the customer. "Our salespeople don't really close deals," notes a senior marketing executive. "They consult and work with customers to learn exactly what's needed and when."

Lear organizes its sales force around major customers. More than that, the company itself is broken up into separate divisions dedicated to specific customers. For example, there's a Ford division, a General Motors division, and a Fiat division. This organization lets Lear's sales teams get very close to their customers. In fact, Lear often locates its sales offices in customers' facilities. For instance, the team that handles GM's light truck division works at GM's truck operation campus. "We can't just be there to give quotes and ask for orders," says the marketing executive. "We need to be involved with customers every step of the way—from vehicle concept through launch."5

Complex Sales Force Structures. When a company sells a wide variety of products to many types of customers over a broad geographic area, it often combines several types of sales force structures. Salespeople can be specialized by customer and territory, by product and territory, by product and customer, or by territory, product, and customer. No single structure is best for all companies and situations. Each company should select a sales force structure that best serves the needs of its customers and fits its overall marketing strategy.

A good sales structure can mean the difference between success and failure. Companies should periodically review their sales force organizations to be certain that they serve the needs of the company and its customers. Over time, sales force structures can grow complex, inefficient, and unresponsive to customers' needs. This happened recently to technology giant Hewlett-Packard. To correct the problem, the company's new CEO took dramatic steps to restructure HP's corporate sales force (see Real Marketing 16.1).

Customer sales force structure

A sales force organization under which salespeople specialize in selling only to certain customers or industries.

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