Selling and sales management by Geoff Lancaster©
The full text of Geoff's notes is displayed below without diagrams. You can download a full copy of the notes in Word format (which should display diagrams correctly) by clicking here (82k).
1 Importance of personal selling in the organisation
Selling is part of the promotional, or the communications mix. The other elements in the communications mix are: above-the-line promotion (e.g. advertising) below-the-line promotion (e.g. sales promotion) and public relations as it applies to marketing. However, personal selling is a very important element of marketing and by categorising it as a sub-function of promotion this perhaps devalues its importance. The way personal contact is managed with customers is critical to the success of any organisation, and it can only be carried out competently by people who adopt a professional attitude towards their training and their approach to the business of looking after customers in a caring manner. As a consequence, opinions about a company’s products are often based on the impression the salesperson has left after a meeting with a prospective customer. At no time is the importance of leaving a good impression more true than nowadays when the notion of customer retention is viewed as being as important as the task of seeking out new customers.
The task of selling of course differs according to the products or services being marketed. In some situations the task of selling might reflect more a position of keeping customers satisfied and this task will call for more skills of personality and ‘caring’. In other situations, contractual negotiations might be the main emphasis of the selling task and here skills of prospecting, negotiating, demonstrating and closing a sale will be crucial element for success.
In organisational (which includes industrial) marketing in particular, a great reliance is placed upon personal communication. For fmcg products much faith is placed on above and below the line communication, but personal selling is the principal method of communication in industrial marketing. Indeed, in organisational selling situations the proportion of selling within the total market budget tends to outweigh all other spending.
Personal selling plays a major part in the commercial process of any country. Within the increasing tendency towards the globalisation of business, selling is increasingly important in establishing contact and in bringing about contracts in ever-more competitive market circumstances. Markets are continuously being opened up and barriers to free competition are being broken down. This, of course, is a two way process both to and from a country. In a modern economy, without selling business transactions would not take place.
Where the marketing of products or services involves a more complex decision process, personal selling assumes a critical role. Techniques of negotiation and sales skills plus good knowledge of the product are required to negotiate the sale of major items especially in the industrial marketplace. This can call for highly developed skills of personality as well as of sales technique.
Personal selling can be very costly because it does not simply include the salesperson’s salary. On top of this must be added the necessary expenses of a motor car, an expense account including hotel accommodation and support from the head office. Such additional costs are normally larger than the salesperson’s salary. More to the point, salespeople are authorised to spend the company’s money in achieving sales, so this must be done responsibly.
Marketing effort is designed to achieve long run satisfaction on the part of customers. Personal selling is about personal communication of information with a view to persuading customers to purchase, so it is a major communications tool. Therefore, how well an organisation manages its sales force will have a bearing on the ultimate success of the company.
2 Benefits of personal selling
When compared to the more impersonal methods of other elements in the communications mix, selling has a lot to commend it:
- It is a more flexible medium in that salespersons can adapt their sales presentations to the individual circumstances of the purchasing situation and respond to the prospect’s reactions as the sales interview proceeds.
- Each sales presentation can be different and parts of the presentation can be cut out or adapted to suit individual circumstances.
- Perhaps the biggest advantage it has over other forms of promotion is that it usually results in a sale, unlike other elements of promotion that simply move the prospect towards the final sale.
- The personal approach afforded by selling is very appropriate in certain circumstances most of that relate to organisational purchasing situations:
- Situations of high perceived risk - which might involve an expensive purchase which carries a certain degree of risk on the part of the purchaser. Good sales presentation can anticipate buyer behaviour and overcome fear that the purchaser might feel in relation to a major purchase not being value for money.
- Technically complex products where customers might be confused as they are not necessarily product experts. Careful explanation will be needed on the part of the salesperson, so as not to confuse, but at the same time reading the selling situation such that the level of technicality of the potential buyer can be assessed and the sales presentation adjusted accordingly.
- Commercially complex negotiations might involve special servicing or training arrangements on the part of the sellers. Such complexity means that the situation might be one of high risk on the part of the buyer, and again the approach afforded by the personal salesperson can help to alleviate this perception of risk felt on the part of the potential buyer.
3 The broader task of selling
All selling jobs are different and this is what makes selling unique, in that ‘formula’ approaches to the selling task have never been successful in terms of building up long term relationships. Such formula approaches were a facet of sales orientation, and techniques like ‘putting the customer in the position where they can’t say ‘no’!’ through the clever use of questions designed to give affirmative reactions, might be alright for short-term transactions, but for long term customer loyalty it is counter-productive. Indeed as we move towards a philosophy of customer satisfaction and customer retention as being long term goals, so the task of selling is becoming more expansive than it was in the past. Salespersons will spend less time on the task selling and more time acting as liaison between their host organisations and their key clients. To illustrate what is meant by this last statement we shall consider some of these broader obligations:
Selling is therefore dynamic and it has acclimatised to its new more professional role in the world today. A number of recent developments can be cited here that reflect this adaptation:
- Systems selling that refers to the selling of a total package of related goods and services, and not just the piece of equipment or basic service itself. Companies thus offer solutions to problems rather than attempting to sell individual products.
- Relationship selling which stems out of the notion of relationship marketing, whereby selected important customers are singled out for special treatment in terms of developing longer and deeper relationships. This used to be called ‘key account selling’ whereby important customers were dealt with by a senior salesperson (often the sales manager). However, relationship selling is slightly different in that the persons chosen to do this work are hand-picked salespeople who have the right personality and are able to nurture customers with a view to building up their long term trust and long term business commitment.
- Selling centres or team selling has also grown as a result of the development of more professionalism on the part of purchasing people. It is a team of people who are drawn not only from the sales department, but also carrying representation from areas like production, research and development and finance. The services of non-sales people are called upon as and when required, but the team remains constant. The objective is to meet and demonstrate to customers that they are being visited and serviced ‘in depth’ with different views being put, rather than just the sales view.
4 Different types of selling task
The notion of different types of sales task was first put forward by Robert N McMurry in 1961 and this classification still holds good today. He classified selling positions into the following categories that range from the simplistic to the most complicated level of negotiating ability:
- Mainly delivery where the job is concerned with the distribution of say milk to individual homes or bread to retail outlets. This type of salesperson will possess little in the way of sales skills and responsibilities and continued sales are more likely to come from a pleasant attitude and good service. In some situations, like the delivery of branded soft drinks, a small amount of merchandising work might be required such as setting up display material at the point-of-sale.
- Inside order taker is where the task is one of clerical duties and the opportunity to sell is limited. Customers have normally made up their minds at this stage, so the process is simply one of processing the order and only occasionally offering advice when the customer asks for it.
- Outside order taker is similar to the above, but here the salesperson goes on a repeat round of regular customers. Most negotiation is conducted at higher levels between say the sales manager of a range of grocery products and the purchasing manager of a large chain of food outlets and it is the task of the salesperson to simply service the account. This task occasionally includes merchandising activity or introducing and demonstrating new products.
- Missionary selling is where salespeople are expected to build up goodwill and educate and ultimately influence the actual or potential user rather than simply soliciting orders. Occasional service work can be undertaken as can sales promotional activities.
- Technical selling involves the task of explaining the function of a product to a prospect as well as adapting it to individual customer’s needs. Such salespeople are sometimes called ‘sales engineers’, and here the job entails expert knowledge on the part of the salesperson in terms of product capabilities and design, the likelihood being that he or she is going to be negotiating with technically expert personnel with a decision making unit. However, the ‘term sales engineer’ applies as much to building up territories and clients than to the possession of technical knowledge.
- Creative selling is the final category and this tends to call for the greatest amount of sales ‘skills’. Quite often customers do not realise that they have a ‘need’ for certain product or service and it is up to the creative salesperson to communicate with, and then demonstrate and convince the buyer of such a need. A good illustration might be a new type of production line system that will save the company money in terms of the new system having greater speed and less wastage of material.
5 Selling skills and qualities
A good salesperson is somebody who is a good listener. Only by listening to customers and recognising their needs and fears can effective points of the goods being offered for sale be put before the customer in the form of a sales presentation. This is really a matter of appreciating and understanding buyer behaviour. Once this has been understood, then the task of selling is much simpler because irrelevant sales points can be discarded. Indeed, one of the most common reasons for customers not purchasing is the fact that they are overwhelmed by information. One of the problems that experienced salespeople face is the fact that they have developed a degree of sophisticated technical expertise, so product points and features which might appear simple to the salesperson may not be clear to the customer. It is only by listening to the customer that the salesperson can assess the level of technical competence and guide the sales discussion accordingly. This, it is felt, is perhaps the most important quality that a salesperson must develop.
There are, however, a number of other qualities that it is felt are needed in order to become a good salesperson. These qualities were the basis of a research exercise, and were first put forward by Geoff Lancaster and David Jobber in their book ‘Selling and Sales Management’ (Pitman). These qualities are in descending order of importance:
- Communications skills
- Motivation and self motivation
- Product knowledge
- Educational background
- Resilience and tenacity
- Business sense
- Acceptability or personality
- Self discipline
Interestingly, persuasiveness comes last, so the role of the modern salesperson is not seen to be to ‘win arguments’. Interpreting these factors into qualities that can be translated into a job specification for the human resource management function we suggest that the following represents the elements that should be contained in a job specification that relates to an outside sales position:
- Physical prerequisites - good speech, presentable appearance that will be acceptable to buyers with whom contact will be made.
- Attainments - reasonable education and qualifications that match the degree of knowledge required for understanding the product or service for which representation is sought. Previous experience in the specific product or service area will probably be essential for a senior position as will demonstration of previous success as a salesperson.
- Qualities and aptitudes - the ability to communicate effectively and a high degree of personal drive and self-motivation.
- Disposition - a mature personality and a strong sense of responsibility in terms of always representing the company’s best interests.
- Interests - social activities expected that reflect a sociable nature.
- Personal circumstances - in terms of family commitments and responsibilities. This can be argued in a number of ways so this factor should be looked at in terms of how it suits the particular sales position. If, for instance, family commitments are large and remuneration is based upon some kind of incentive, then the will to earn more will be strong. If, however, the task entails long periods away from home then family life might suffer.
6 The selling routine
The selling routine, or the sales sequence, is the term used to describe the processes and stages through which a typical presentation to a buyer proceeds. The process now described is clearly too sophisticated for the sale of fast moving consumer goods to typical customers. In this situation buyers will have made up their minds before they purchase and buying is simply a matter of routinely choosing and paying for the goods. Indeed, for many products that are sold in organisational buying situations, the same will apply.
It is, therefore, important to realise that the sales routine we are about to describe should be treated flexibly in terms of salespeople being able to adapt it to suit individual purchasing situations, and in some cases miss out certain parts of the sequence. Pre-planning before each sales interview is very important and if the potential customer is known to the salesperson then the interview plan must be tailored and adapted with the customer’s needs in mind. Such adaptation also takes place during the sales routine, as the salesperson listens to cues and signals given by the buyer.
Of course, having such a sales routine assumes that the salesperson has a buyer to meet. Before such a meeting can take place ‘prospects’ must be identified and ‘qualified’. These terms are self-explanatory in that a ‘prospect’ is a potential purchaser and ‘qualified’ means that the prospect has authority to make a purchase decision. However, the fact that the prospect might not be qualified does not mean that a meeting should not take place; in many organisational purchasing situations the first ever meeting a salesperson has with a company is not with the actual buyer.
Figure 1 describes the process of the selling routine and each of the stages referred to is dealt with in more detail afterwards.
|NEED AND PROBLEM IDENTIFICATION|
|PRESENTATION AND DEMONSTRATION|
|FOLLOW-UP AND AFTER SALES SERVICE|
Figure 1 The selling routine or sales sequence
At this stage the sales interview has been arranged and the prospect has been qualified. However, long before the interview takes place, there are a number of matters in which the sales representative must be versed. Most of this will be information that is known already as part of the salesperson’s general knowledge of the marketplace or it will be information which has been acquired through a formal programme of training. Essential information at this stage is:
- Company knowledge about the latest commercial procedures relating to such matters as price, payment terms, complaints and returned goods.
- Product knowledge in relation to technical performance and specifications of current and proposed products and services. This should also include knowledge of the limitations of products in order that false claims will not mistakenly be made.
- Market knowledge relates to the activities and product offerings of competitors including the terms and conditions they are giving. In addition, such information should also extend to general sales trends in the marketplace. If a salesperson knows this kind of information, then authority is immediately conferred within any subsequent negotiation procedures. In addition, it is the salesperson’s job to find out such information and this all forms part of market intelligence. Such information can usually be gained by talking to buyers in the marketplace during or after a sales interview, so better salespeople will establish a firm and lasting rapport with their buyers and so be in a position to acquire this kind of knowledge during the course of their visits to regular customers.
- Customer knowledge relates to knowledge of the customer’s organisation, its spending patterns and types and volume of purchases and personal knowledge in relation to the buyer. A ‘customer record card’ can be used here which details knowledge of the customer and details of the sales visit. This is usually filled in directly after the sales interview, but not, of course, in the presence of the buyer. It also provides a record for any other member of the company who might have to make a visit to the same buyer, so commercial data like delivery times or price negotiations can be picked up straight away. The information on this record card can relate to general information about the company including any future contracts that the company might be anticipating, or any promises that were made in relation to future orders or contracts. At a personal level, detail in relation to the buyer should also be entered. In any organisational selling situation, if the salesperson has established the appropriate kind or rapport, then personal matters might be discussed in addition to business matters, and indeed this is the kind of thing that builds up long term customers relationships. However, how far this goes is usually a function of the personality of the buyer, some of who regard personal friendships with salespeople as being a hindrance to successful commercial negotiations.
- Aids to selling includes sales literature that describes the company’s products or services, current price lists, samples or models. A sales demonstration might utilise spreadsheets or other supporting material delivered through a salesperson’s laptop computer and which can be demonstrated in the buyer’s office as part of the sales presentation. Anything that supplements the face to face verbal part of the sales interview process adds to the variety and quality of the presentation.
- Journey planningrelates to a plan for calls to regular clients who expect such calls as a matter of course in terms of keeping personal lines of communication open between sellers and buyers. A calling cycle should include a variety of ‘regular’ customers in addition to calls to prospective customers. A method of planning such journeys is what is known as ‘differential call frequency’ where more important customers deserve more frequent calls than other customers. The system is sometimes referred to as the ‘sales journey cycle’ and here the normal situation might be to visit most customers once every eight weeks when the cycle will be complete. However, some customers might be visited twice in a cycle and others every other cycle. The kind of organisation involved here is sometimes termed ‘cloverleaf’, whereby the salesperson covers a closely defined geographical area over a period of time and then another similar area when this has been completed, and so on until the sales journey cycle has been completed - in a cloverleaf type pattern.
At a more detailed level, each journey should be planned in terms of a definite appointment that will most probably be through some prior telephoned arrangement.
- Dress and demeanour include matters of personal hygiene and clothing. Dress and behaviour that suit the client is what is aimed for, but it might not be possible to satisfy all customers if say eight are being visited in a single day. In organisational purchasing situations the temptation to ‘over dress’ should be avoided as this might upstage the buyer so the best guide might be to be ‘soberly smart’ and avoid extremes of behaviour like ‘gushing’ comments or affectations.
This is sometimes termed ‘the opening’ and an inherent skill in selling is the ability to ‘size up a situation quickly’. How this initial approach, especially to a new customer, is handled could determine the outcome of the sales interview. Opening remarks are important, and should try to address the circumstances at a very general level, even if it only to comment on the weather. One point worth remembering in the case of a first time visit to a buyer is to be the first to speak by introducing yourself by your Christian name and surname (which should also be cited like this on your visiting card). You will then know very quickly if the buyer is on a ‘familiar’ or a ‘formal’ term basis, as to whether he or she refers to you by your Christian name or by your salutation then surname.
6.3 Need and problem identification
What the salesperson attempts to do here is to discover purchasing motives or buyer behaviour, especially when it is a call to a new buyer. In the case of organisational purchases overall purchasing motives will tend to revolve around general economic value for money criteria, but there might be underlying motives.
A few probing questions, which demand more than straight ‘yes’ or ‘no’ answers before the presentation stage, are desirable in order to attempt to determine buyer behaviour. This will clearly affect the course of the presentation as this will then be able to focus in on the points that the buyer has made clear are a particular issue. It is also the place where listening skills are particularly appropriate. This indeed is an example of how selling is still important at a face to face level in terms of having the ability to be adaptable to individual circumstances.
6.4 The presentation and/or demonstration
Effective communication is demanded here and what are known as USP (Unique Selling Proposition) points can be highlighted. These USPs are product or service features which it is felt competitive products do not possess. A common phrase in selling is: ‘You don’t sell products, you sell benefits’, so the benefits that the customer will gain should be communicated efficiently and effectively as part of a logical sequence within the presentation that has been rehearsed in many different ways before the sales interview.
If the presentation can include a demonstration then so much the better because this provides ‘hard’ evidence. If the buyer is able to somehow participate in this demonstration (even if it is just to handle the product) then better still because he or she is being seen to empathise with the product and can see its benefits at first hand. Demonstrations of course can be shown on video. Failing this, and indeed as well as this, well produced brochures showing the merchandise and describing its technical detail will also be very effective.
The presentation should, of course, focus on those points that the buyer regards as being important and this relates to buyer behaviour that should have been assessed by this stage. The level of technicality of the sales presentation should also be adjusted to suit the buying situation. Depending upon to whom the presentation is being made, will depend upon the nature of the emphasis of the presentation.
It is also at this stage that testimony can be presented which might include letters from satisfied customers. If guarantees over and above statutory guarantees are available then this too can be mentioned here. Objections from the buyer are possible at this stage, but the experienced salesperson will usually be able to anticipate the nature of these and even forestall them by raising them as part of the sales presentation. A principal objection in organisational purchasing situation is ritualistically one of ‘price’, so the good salesperson is able to prepare for this in terms of ‘value for money’ points as part of the presentation.
What the salesperson should guard against is ‘over presentation’ and the needs of the prospect should be kept in mind and avoid overwhelming the interview with too much detail. What is looked for at this stage are buying signals and once these are apparent it is time to bring the presentation and demonstration to a swift conclusion.
The topic of negotiation is a complex process and there are even textbooks devoted to the subject. However, in this context, negotiation usually relates to price that is (quite naturally) the final hurdle to be overcome before the final sale is made. Negotiation is not totally about price. It can involve such matters as servicing arrangements, credit terms, penalty clauses in relation to late delivery, plus many more factors. The essential element is that both parties should aim for an accord which benefits them both. In relation to price negotiation, the ‘room for manoeuvre’ concept which was first put forward by Howard Raiffa in 1982 perhaps explains the situation best, and this is illustrated in Figure 2:
|S2||Would like to sell at|
|B2||Most we will pay|
|AREA OF NEGOTIATION|
|S1||Least we will accept|
|B1||Would like to buy at|
Figure 2 Room for manoeuvre concept of negotiation
The concept is that when negotiating price, sellers and buyers have ideas in their minds as to what they would like to receive or pay for their merchandise. Only very rarely are these figures the same. Indeed, market pricing tells us that prices should be set at what the market will bear, so the likelihood is that a higher price will be stated initially with a view to reducing it through negotiation. This is a philosophy that is at the very centre of market trading. After the sales presentation matters like credit and delivery will be discussed and agreed as part of negotiation, but price is normally the final item on this part of the agenda. The concept is simple and starts with the supposition the seller is normally the first person to state the price required (price S2). The buyer will counter with the price he or she would like to pay (B1). Gradually, negotiation brings the two together and once B2 and S1 are reached from both the buyer’s and the seller’s respective points of view then the area of negotiation has been reached, but the buyer will not know S1 and the seller will not know B1. It is then a matter of proposal and counter-proposal, coupled perhaps with some concessions on either side before a final price is agreed within this area of negotiation.
The aim of selling is to reach the close stage that will result in an agreement to purchase and this is the objective of selling. However, it is sometimes the most difficult stage and a number of techniques exist in relation to closing a sale. Some of the more commonly used methods are now discussed:
- Basic close is the simplest as it simply consists of filling out an order form, but it presumes that the buyer wishes to buy. If, however, the seller is unsure as to the buyer’s purchasing decision at this stage, then this might be a high risk strategy as it could well ‘frighten the buyer off’ in the case of a major purchase.
- Trial close is perhaps better than basic close because it attempts to test the buyer’s willingness to purchase by asking an either/or question like: ‘If you were to purchase, would you be paying cash or credit?’
- Alternative choice is where the salesperson, having received buying signals, attempts to close the sale by offering an alternative choice - ‘Would you like it in black or white?’
- Assumptive close is another variation that assumes the purchaser will buy and the salesperson asks questions like: ‘Where and when would you like the goods to be delivered?’
- Puppy dog technique springs from the idea that if you give a puppy to somebody to look after for say two weeks, then they will not want to part with it when you go to collect it. The same philosophy is adopted for tangible goods that might be offered on free trial for a short period.
- Sharp angle is a technique that the salesperson uses when the customer asks for information like: ‘What is the delivery period?’ The salesperson would then respond with something like: ‘What delivery are you looking for?’ and upon being told, would then say: ‘If we can supply it by then will you place the order?’
- Summary question is a technique that is used when caution is being exercised on the part of the buyer prior to placing the order. The salesperson will then attempt to isolate the cause of resistance by asking questions like: ‘Is it quality?’ - ‘No!’ ‘Is it price?’ - ‘No!’ ‘Is it delivery?’ - ‘No!’...and so on, until the cause of resistance is isolated. This can then be concentrated upon as part of the sales erosion process in attempting to win the order.
- Similar situation is where the salesperson listens to what the purchaser is saying and if this relates to an experience (normally a bad one) relating to the product for sale, the salesperson then brings in, as part of the conversation, another story that relates to another good experience.
- Concession close is normally kept towards the end as the final negotiating and closing ploy. This means keeping a final concession in reserve before agreement is reached in the expectation that this will conclude the sale.
6.7 Follow-up and after sales service
The order process is not fully completed once the sale has been closed. This final area is becoming more prominent nowadays that customer retention is seen as being a long-term strategy of marketing. The notion of ‘customer care’ alone is the essence of a number of modern texts. Follow-up can simply mean a telephone call to the buyer to ascertain whether or not the goods were received in a satisfactory condition at the time promised and this kind of thing gives reassurance to the buyer that the sale was in the interests of the customer. After sales is more than this because it concerns a number of post-sale activities that can be designed to build long term goodwill on the part of the customer and help to ensure repeat purchases on a long term basis. Such activity can also reduce what is known as ‘cognitive dissonance’ which, in the case of a major purchase, is a nagging fear of doubt on the part of the buyer that what has been purchased might not be value for money. A feeling of caring is thus generated through follow-up and after sales service can help to reduce these feelings of doubt.
The reason why this section has been detailed is that without selling, and its associated tactics, commerce would not exist. The next section now looks at how this activity is managed through the sales management.
7 Sales management
The function of sales management is to devise and implement a sales plan and then evaluate and control it during the course of the planning period. The starting point for business planning is the sales forecast that should also be the responsibility of sales management in conjunction with marketing management. Evaluation and control of the plan are more to do with the tactics in sales management and the remainder of this section covers these specific areas. Figure 3 describes these activities in chronological sequence:
Figure 3 Responsibilities of sales management
Each of the elements in Figure 3 is now discussed as part of the sales management process.
The fist consideration here is to establish the size of the sales force. In any organisation there are competing demands upon the company’s funds, so due consideration has to be paid between balancing financial resources against other criteria.
Prior to recruitment a job description must be written for each sales position and this should then be agreed with and given to Human Resource Management, who will conduct the initial recruitment and then pass on suitable shortlisted candidates to the Sales Manager for interview. A typical job description contains a number of elements:
- The job title
- To whom responsible
- Duties and responsibilities including selling tasks which typically include: frequency of visits to customers, after sales service activities and feedback of market intelligence
- Technical ability in terms of knowledge of products or services and their applications and specific sales abilities
- Geographical area to be covered
- Degree of autonomy in terms of reporting to the sales manager and being responsible for the territory (some sales jobs are tightly controlled and others tend to leave it to the individual salesperson to develop the territory)
At this stage, human resource management department will have shortlisted appropriate candidates for interview by sales management and sifted out those who do not match the criteria laid down in the job description. This will have been done by asking candidates to fill in an application form, that makes it easier to provide a standardised comparison. However, in some cases, candidates are asked to submit a curriculum vitae on the basis that such a c.v. might demonstrate imagination of the part of the potential candidate and perhaps highlight some areas that a standard application form will not cover.
It is now a matter for sales management to pick an appropriate candidate in an interview situation. There are a number of ways of tackling interviews: one method, which tends to be less favoured nowadays is the ‘stress’ interview whereby an aggressive stance is taken by the interviewer and the candidate must ‘defend’ him or herself and put forward reasons why they should be chosen. This type of interview might be appropriate if the sales task involves high pressure selling - which is, of course, more a facet of sales orientation. However, most interviews nowadays tend to put the interviewee at their ease on the basis that what is ultimately needed is a harmonious partnership. There are also two ways in which the interview can be tackled - either on a formal question and answer structured basis or on an unstructured basis whereby the interviewee is encouraged to discuss the position and the interview only interjects occasionally to probe certain points. The qualities that are looked for are some of those listed earlier in this chapter in section 4, but most of all what is looked for is somebody who will be an effective member of a team. Research suggests that for selling, the following factors should be considered during the interview process, bearing in mind the selling job for which the interview is being conducted:
- Demographic and physical attributes
- Background and experience in selling and in the product or service to be represented
- Current domestic and financial status and lifestyle
- Intellectual and perception abilities
- Interpersonal and presentation skills
This is an expensive component of the overall marketing budget, coupled to which there is the fact that during training, the salesperson has to be paid whilst not being involved in selling activity. Therefore, sales training should be done competently and professionally in order to gain maximum value for money. Programmes can be done ‘in house’ or through outside sales trainers.
‘In house’ programmes can relate to such matters as product knowledge - perhaps in terms of a member of the product development team conducting a session on a new product that is about to be launched or a modification that is being made to an existing product. In addition to this, an initial training programme might be conducted by the HRM department who will explain the company and its various associations. The marketing manager or director could also input into such a programme in terms of market developments and competitive activities. The sales manager might input training on organisation matters like work routines and preparation and presentation of reports and how these will be used within the company.
External programmes conducted by acknowledged sales trainers can be provided for new staff or through ‘refresher’ programmes for existing staff. Such training can concentrate on specific sales techniques like ‘closing’ or ‘dealing with objections’ or the sales routine in general. Such a programme can of course be conducted by the sales manager, but this will depend upon the sales manager’s skills of delivery and indeed knowledge of modern techniques. Certainly, an ‘in house’ programme would be cheaper than one that is conducted at a hotel or conference venue and what many companies do is to employ a skilled outside trainer to conduct the programme ‘in house’. However, the advantage of sales programmes that are conducted outside and which involve sales personnel from other companies is the breadth of knowledge that is obtained from the training sessions themselves in addition to the indirect knowledge that is obtained through ‘sharing’ experiences with salespeople who work in different organisations.
Selling is a lonely job. The common misconception of the field salesperson is a garrulous individual who is shallow thinking and has a joke for every occasion. From what has been explained so far it can be seen that field selling is a very individualistic task often involving long hours driving and then meeting buyers on a formal basis. Quite often buyers reject the salesperson’s offers after the sales presentation and this can be very demotivating. It often means periods away from home, staying in hotels with no colleagues for company. In many selling situations, the salesperson looks after an area or territory that is distant from the head office. This makes personal relationships with colleagues more difficult, because a visit to head office might only be once a week to meet and report to the sales manager or less in many cases.
Motivation is thus of prime importance here in order to ensure that field salespeople do not feel ‘neglected’ and that they are receiving the appropriate amount of support from head office.
It has already been mentioned that selling in the field is an individualistic kind of activity. It also tends to be a geographically dispersed operation. Only in very large companies can there be a structure under a sales manager that divides the country into regions, with a regional manager controlling each region. Then each region is split into areas with an area manager in control of each area that then has a number of field sales representatives in each area. In reality, in most companies a sales manager has a single tier of either area or regional managers with groups of field sales representatives reporting directly to each area/regional manager. In some situations the country is simply geographically divided and there is a single field sales representative in charge of each region reporting directly to the sales manager at head office.
On the subject of individual supervision, this is largely a function of the product or service being sold and the culture of the parent organisation. Clearly, in geographically dispersed markets, close supervision will not be possible, or even desirable, for one of the attractions of a field sales position is the amount of freedom it offers in being able to control one’s own destiny. It also allows an individual to solve customers’ problems in a creative manner.
Performance measures are perhaps the best methods of providing supervision for salespeople who work away from the head office. Such measures can be qualitative ones through such criteria as the quality of sales presentation as assessed by the field sales manager or the degree of product or market knowledge that the salesperson possesses. This, of course, is assessed by the field sales manager on his or her accompanied visits to customers during the normal course of selling activity, so supervision is also being effected at the same time as an assessment is being made. Quantitative measures are more tangible and these relate to sales volume in general, and, more specifically, to number or orders secured, number of new accounts opened, number of sales and service calls made or amount of market intelligence gathered.
Evaluating the performance of salespeople is really the result of supervision and this is perhaps the most important aspect of sales management. Performance measures must, of course, be set before evaluation can take place and these measures should be agreed at the appointment stage. Measures of evaluation are obvious ones that relate to such matters as sales volume, number of orders secured and number of calls made. In the case of using these as an incentive, it links into remuneration that is dealt with in the next section.
It has already been mentioned that remuneration is a prime motivator in field selling positions and this is why remuneration is normally linked directly to the volume the salesperson sells. However, it is not necessarily as simple as that in many selling situations. In cases when securing an order is part of a team effort it is then difficult to measure the input of an individual salesperson to the negotiating process and in such cases a shared commission or a bonus might be more appropriate.
Basically there are three options open when considering compensation plans:
- Straight salary is more appropriate when the principal component of the sales task is one of calling on regular customers and ‘customer care’ and where retention of existing customers is of prime importance. Quite often such situations call for technical advice being given during sales visits. A facet of the type of industry in which this is appropriate is in high value/low volume markets. Straight salary can of course provide security, but such a situation will not attract people whose main motivation is money, and who, because of this very factor, might be more successful individual salespersons. To a certain extent straight salary arrangements can be incentivised through the use of a bonus that in some way is linked to the success or otherwise of the company over the previous period.
- Straight commission is the other extreme and here the only incentive is to sell. This too has its drawbacks in that salespeople in this situation will be reluctant to spend time on matters that they do not see as being directly related to sales. They will also be reluctant to spend time away from selling meeting with the sales manager or on sales training programmes. If ‘customer care’ is one of the company’s aims then this type of system will not encourage such treatment on the part of the sales force. It is, however, an efficient system from a company’s point of view because it is a straight variable costs that only increases as sales increase, but the downside is that it is often used for these reasons by financially insecure companies.
- Salary plus commission attempts to combine the advantages of both systems. This is why it is often termed the ‘combined plan’ of remuneration. As income is not solely dependent upon commission then management has a greater degree of control over the salesperson’s time, yet sales costs are only generated through increased sales revenues. It is a system that will attract ambitious sales persons who wish to combine security with greater earning power through enhanced personal efforts. At its simplest level, payment can be based on a basic salary plus a fixed percentage on all sales. However, in most organisations a more incentive related system operates. Such a system usually operates on the basis of what is called an ‘escalator’, where the commission increases once a certain level of sales has been reached. Another system is the ‘sales target’ or ‘sales quota’ system, when commission is only earned after an agreed target or quota has been reached for a specified period. This target is usually for a relatively short period. Otherwise, if the period is long (say for one year) then if during the course of the year it seems unlikely that the target will be reached, there might be a temptation on the part of the salesperson to stop trying on the basis that the commission level will never be attained. Such a target or quota is agreed with the sales manager beforehand and it normally reflects sales for a period of not longer than three months.
Along with products and services, this is an essential element of the marketing process, for without selling, products would never reach their intended markets.
The importance of personal selling within an organisation has been examined in conjunction with how it relates to the communications mix and marketing in particular, as well as to the economy in general. Personal selling has been discussed in terms of its advantages over other elements in the communications mix. Different market situations have been identified, and the selling arrangement most suited to each of these has been discussed.
At a more individual level, skills appropriate to selling have been examined which was followed by what is known as the selling (or sales) routine. Each element of the sales routine was then examined in detail in terms of techniques that are typically employed.
Good sales management is the most important element of the sales process and this was examined from the points-of-view of recruitment, selection, training, motivation, supervision, evaluation and remuneration.