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PRINCIPLES OF PRINCIPLES OF PERSONAL SELLINGPERSONAL SELLING

Dr.Sanjeev VermaDr.Sanjeev Verma

NITIE, Mumbai-400087NITIE, Mumbai-400087

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Selling is only the tip of the icebergSelling is only the tip of the iceberg

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Managing the Sales Force: Improving Managing the Sales Force: Improving EffectivenessEffectiveness(Source :(Source : Rolph Anderson and Bert Rosenbloom, “The World Class Sales Manager: Adapting Rolph Anderson and Bert Rosenbloom, “The World Class Sales Manager: Adapting

to Global Megatrends,” Journal of Global Marketing, 5, No. 4, 1992: 11-22)to Global Megatrends,” Journal of Global Marketing, 5, No. 4, 1992: 11-22)

Principles of Personal Selling

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Principles of Personal Selling

ProfessionalismProfessionalism Sales-oriented approach : Sales-oriented approach : Stresses high pressure techniquesStresses high pressure techniques

Customer-oriented approach : Customer-oriented approach : Stresses customer problem Stresses customer problem solvingsolving

Rackham’s questions for prospects (SPIN Selling)Rackham’s questions for prospects (SPIN Selling)(Neil Rackham, SPIN SELLING Field book (New York: McGraw Hill, 1996))(Neil Rackham, SPIN SELLING Field book (New York: McGraw Hill, 1996))

Situation questionsSituation questions Problem questionsProblem questions Implication questionsImplication questions Need-payoff questions Need-payoff questions

Sharon Drew Morgan- Buying facilitation MethodSharon Drew Morgan- Buying facilitation Method(Sharon Drew Morgen, Selling with Integrity: Reinventing Sales Through Collaboration, Respect, and (Sharon Drew Morgen, Selling with Integrity: Reinventing Sales Through Collaboration, Respect, and Serving (New York: BERKLEYU Books, 1999))Serving (New York: BERKLEYU Books, 1999))

Q1-Whether Company’s performance can be improved Q1-Whether Company’s performance can be improved Q2-Whether the seller’s offering would provide a solutionQ2-Whether the seller’s offering would provide a solution

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Major Steps in Effective Major Steps in Effective SellingSelling((Source: W.J.E.Crissy, William H.Cunninggham and Source: W.J.E.Crissy, William H.Cunninggham and Isabelle Cunninggham, Isabelle Cunninggham, Selling: The Personal Force in Selling: The Personal Force in MarketingMarketing (New York : John Willey, 1977), pp 119-29 (New York : John Willey, 1977), pp 119-29))

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Prospecting and Qualifying Prospecting and Qualifying The first step in selling is to identify and qualify prospects. The first step in selling is to identify and qualify prospects. Companies can generate leads by : Companies can generate leads by :

Examining data sources (newspapers, directories, CD-ROMs, Web Examining data sources (newspapers, directories, CD-ROMs, Web sites) sites)

Exhibiting at trade shows to encourage drop-bys Exhibiting at trade shows to encourage drop-bys Inviting customers to suggest the names of prospects Inviting customers to suggest the names of prospects Cultivating referral sources (suppliers, dealers, and bankers) Cultivating referral sources (suppliers, dealers, and bankers) Contacting organizations and association Contacting organizations and association Engaging in speaking and writing activities that will draw attention Engaging in speaking and writing activities that will draw attention Telecommunications (phone, mail, Internet) Telecommunications (phone, mail, Internet) Dropping in unannounced (cold canvassing) Dropping in unannounced (cold canvassing)

Leads can be categorized asLeads can be categorized as Hot ProspectsHot Prospects Warm ProspectsWarm Prospects Cool ProspectsCool Prospects

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Pre approach Pre approach The sales person needs to learn : The sales person needs to learn :

Prospect company Prospect company • Needs Needs • Involved in the purchase decision Involved in the purchase decision

Buyers Buyers • Personal characteristics Personal characteristics • Buying styles Buying styles

The sales person should set call objectives : The sales person should set call objectives : To qualify the prospect To qualify the prospect Gather information Gather information Make an immediate sale Make an immediate sale

The best approach The best approach Personal visit Personal visit Phone call or letter Phone call or letter Best timing Best timing

Finally, the salesperson should plan an overall sales strategy for the Finally, the salesperson should plan an overall sales strategy for the account account

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Approach Approach

The salesperson decides how to get the The salesperson decides how to get the relationship off to a good start relationship off to a good start

The salesperson might consider : The salesperson might consider : Wearing clothes similar to what the buyers typically Wearing clothes similar to what the buyers typically

wear wear Show courtesy and attention to the buyer Show courtesy and attention to the buyer Avoid distracting mannerisms Avoid distracting mannerisms

When meeting with the prospect : When meeting with the prospect : Open with a positive statement Open with a positive statement Concentrate on understanding the buyer’s needs Concentrate on understanding the buyer’s needs

(questioning and active listening) (questioning and active listening)

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Presentation and Demonstration Presentation and Demonstration Tells the product “story” to the buyer Tells the product “story” to the buyer

Following the Following the AIDAAIDA formula : formula : • Gaining Gaining attentionattention • Holding Holding interestinterest • Arousing Arousing desiredesire • Obtaining Obtaining actionaction

To presentation use To presentation use FABVFABV : : • FeaturesFeatures : physical characteristics of market offering : physical characteristics of market offering • AdvantagesAdvantages : why the features provide an advantage to : why the features provide an advantage to

customer customer • BenefitsBenefits : the economic, technical, service, and social : the economic, technical, service, and social

benefits delivered by the offering benefits delivered by the offering • Value approachValue approach : the summative worth (monetary term) of : the summative worth (monetary term) of

the offering the offering

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Presentation and Demonstration Presentation and Demonstration

3 different style of sales presentation : 3 different style of sales presentation : Canned approach (oldest presentation) Canned approach (oldest presentation) Formulated approach Formulated approach Need-satisfaction approach Need-satisfaction approach

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Presentation and Demonstration Presentation and Demonstration Canned approach Canned approach

Memorized sales talk covering the main points Memorized sales talk covering the main points Based on stimulus-response thinking Based on stimulus-response thinking

• The buyer is passive The buyer is passive • Can be moved to purchase by the use of the right stimulus Can be moved to purchase by the use of the right stimulus

(picture, word, term, and actions) (picture, word, term, and actions) Formulated approach Formulated approach

Based on stimulus-response thinking Based on stimulus-response thinking Identifies the buyer’s needs and buying style Identifies the buyer’s needs and buying style

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

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Presentation and DemonstrationPresentation and Demonstration

Sales presentations can be improved with Sales presentations can be improved with demonstration aids such asdemonstration aids such as Visual Aids-booklets, brochures, flipcharts, Visual Aids-booklets, brochures, flipcharts,

slides, moviesslides, movies Audio and videocassettesAudio and videocassettes Computer Animation shows etc.Computer Animation shows etc.

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Overcoming Objections Overcoming Objections

Customers almost always pose objections during the Customers almost always pose objections during the presentation or when asked for the order presentation or when asked for the order

Types of ObjectionsTypes of Objections Psychological ResistancePsychological Resistance Logical ResistanceLogical Resistance

To handle these objections : To handle these objections : maintains a positive approach maintains a positive approach asks the buyer to clarify the objection asks the buyer to clarify the objection asks questions that lead the buyer to answer his or her own asks questions that lead the buyer to answer his or her own

objection objection denies the validity of the objection denies the validity of the objection turns the objection into a reason for buying turns the objection into a reason for buying

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Closing Closing

Salespersons need to know how to recognize closing Salespersons need to know how to recognize closing sign from the buyer sign from the buyer

Physical actions Physical actions Statements or comments Statements or comments Questions Questions

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

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Follow-up and Maintenance Follow-up and Maintenance

After closing After closing Salesperson should cement any necessary details : Salesperson should cement any necessary details :

• Delivery time Delivery time • Purchase terms Purchase terms • Other matters Other matters

Salesperson should schedule a follow-up call Salesperson should schedule a follow-up call • To detect any problem To detect any problem • Assure the buyer interest Assure the buyer interest • Reduce any cognitive dissonance Reduce any cognitive dissonance

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

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Negotiation Negotiation

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

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Negotiation Negotiation Much business-to-business selling involves negotiating skills Much business-to-business selling involves negotiating skills

The two parties need to reach agreement The two parties need to reach agreement Price Price Others term of sale Others term of sale

Salesperson need to win without making deep concessions that will Salesperson need to win without making deep concessions that will hurt profitability hurt profitability

There are 2 exchange in marketing There are 2 exchange in marketing Routinized exchangeRoutinized exchange : administered program of pricing and : administered program of pricing and

distribution distribution Negotiated exchangeNegotiated exchange : price and others term area set via : price and others term area set via

bargaining behavior bargaining behavior

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NegotiationNegotiation Although price is the most frequently negotiated issue, other issues Although price is the most frequently negotiated issue, other issues

includeinclude Contract Completion TimeContract Completion Time Quality of Goods and Services OfferedQuality of Goods and Services Offered Purchase VolumePurchase Volume Responsibility of FinancingResponsibility of Financing Risk TakingRisk Taking PromotionPromotion TitleTitle Product Safety etc.Product Safety etc.

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NegotiationNegotiation

Traits and Skills for a effective NegotiatorTraits and Skills for a effective Negotiator Preparation and planning skillsPreparation and planning skills Knowledge of Subject MatterKnowledge of Subject Matter Ability to think clearly and rapidly under pressure and uncertainty Ability to think clearly and rapidly under pressure and uncertainty Ability to express thoughts verballyAbility to express thoughts verbally Listening skills Listening skills Judgement and general intelligenceJudgement and general intelligence Integrity Integrity Ability to persuade others Ability to persuade others Patience etcPatience etc

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Principles of Personal SellingPrinciples of Personal Selling

Negotiation Negotiation When to negotiate When to negotiate (Dobler)(Dobler)

• When factors bear not only on price, When factors bear not only on price, but also on quality of servicebut also on quality of service

• When business risk cannot be accurately When business risk cannot be accurately predeterminedpredetermined

• When a long period of time is required to produce When a long period of time is required to produce the items purchasedthe items purchased

• When production is interrupted frequently because When production is interrupted frequently because of numerous change orders of numerous change orders

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The Zone Agreement The Zone Agreement (Howard Raiffa)(Howard Raiffa)

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Principles of Personal SellingPrinciples of Personal Selling

Formulating a Negotiation Formulating a Negotiation StrategyStrategy

Hard StrategyHard Strategy Soft StrategySoft Strategy Principled NegotiationPrincipled Negotiation

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Formulating a Negotiation Formulating a Negotiation StrategyStrategy

Principled Negotiation Principled Negotiation (Fisher and Ury, 1992)(Fisher and Ury, 1992)

Separate the people from the problemSeparate the people from the problem Focus on interests, not positionsFocus on interests, not positions Invent options for mutual gainInvent options for mutual gain Insist on objective criteriaInsist on objective criteria

BATNA : Best Alternative to a Negotiated Agreement BATNA : Best Alternative to a Negotiated Agreement (Fisher and Ury, 1992)(Fisher and Ury, 1992)

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Classic Bargaining TacticsClassic Bargaining Tactics

Acting CrazyActing Crazy Be PatientBe Patient Lets spilt the DifferenceLets spilt the Difference Trial BalloonTrial Balloon SurprisesSurprises Wet NoodleWet Noodle

Big PotBig Pot Get a Prestigious AllyGet a Prestigious Ally The Well Is DryThe Well Is Dry Limited AuthorityLimited Authority Whipsaw/AuctionWhipsaw/Auction Divide and ConquerDivide and Conquer Get Lost/Stall for TimeGet Lost/Stall for Time

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Relationship Marketing Relationship Marketing The principles of personal selling and negotiation thus far described The principles of personal selling and negotiation thus far described

are transaction oriented because their purpose is to close a specific are transaction oriented because their purpose is to close a specific sale sale

The company must build a long-term supplier customer relationship The company must build a long-term supplier customer relationship by demonstrating that it has the capabilities to serve the account’s by demonstrating that it has the capabilities to serve the account’s needs in a superior way over the long run needs in a superior way over the long run

The company must build relationship marketing rather than The company must build relationship marketing rather than transaction marketing, because larger customers are often global transaction marketing, because larger customers are often global and prefer suppliers that can : and prefer suppliers that can :

sell and deliver a coordinated set of products and services to many sell and deliver a coordinated set of products and services to many locations locations

quickly solve problems that arise in different locations quickly solve problems that arise in different locations work closely with customer teams to improve products and processes work closely with customer teams to improve products and processes

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Relationship Marketing Relationship Marketing

To succeed in winning and maintaining accounts in To succeed in winning and maintaining accounts in today’s demanding environment, company must : today’s demanding environment, company must :

Encourage sales teamwork Encourage sales teamwork Reward it with appropriate compensation for work on shared Reward it with appropriate compensation for work on shared

accounts accounts Establish better goals Establish better goals Measures for their sales force Measures for their sales force Reinforce the importance of teamwork in their training programsReinforce the importance of teamwork in their training programs

The organization will begin to focus as much on The organization will begin to focus as much on managing its customers as on managing its products managing its customers as on managing its products

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Relationship MarketingRelationship Marketing

When and How to Use Relationship When and How to Use Relationship MarketingMarketing Short Time Horizons and Low Switching Cost Short Time Horizons and Low Switching Cost

e.g. Commoditiese.g. Commodities Long time Horizon and High Switching CostLong time Horizon and High Switching Cost

e.g.. Office Automation Systeme.g.. Office Automation System