MANAGING

PERSONAL
COMMUNICATIONS-
DIRECT MARKETING
& PERSONAL
SELLING
Submitted to: Prof. (Dr.) J.D. Jadeja
Prepared by: Digesh Shah
Kartik Patel
Paresh Sidhdhapura
 INDEX
Sectio Topic
n
1.1 Communication
1.2 Direct Marketing
1.3 Different Channels of Direct Marketing
1.4 Construction of Direct mail campaign
1.5 AIDA Concept
1.6 Permission Marketing
1.7 Designing Sales Force
1.8 Managing Sales Force
1.9 Designing Sales Force Strategy and Structure
1.10 Recruiting and Selecting Sales Representative
1.11 Sales Quotas
1.12 Sources of Information about representatives
1.13 Principles of personal selling
1.1 Communication:

Communication is the process by which we exchange or share

meanings through a common set of symbols.

1. Promotional strategy is closely related to the process of

communications.

2. When a company develops a new product, changes an existing

one, or tries to increase sales, it must communicate its selling
message to potential customers.

Categories of Communication

Interpersonal Communication Mass Communication

1. Interpersonal communication is direct, face-to-face

communication between two or more people.

2. Mass communication refers to communicating a concept or

message to larger audiences, usually through a mass medium
such as television or newspapers.

1.2 Direct Marketing:

Direct marketing is a form of advertising that reaches its

audience without using traditional formal channels of advertising, such
as TV, newspapers or radio. Businesses communicate straight to the
consumer with advertising techniques such as fliers, catalogue
distribution, promotional letters, and street advertising.

Direct Advertising is a sub-discipline and type of marketing. There

are two main definitional characteristics which distinguish it from other
types of marketing. The first is that it sends its message directly to
consumers, without the use of intervening commercial communication
media. The second characteristic is the core principle of successful
Advertising driving a specific "call-to-action." This aspect of direct
marketing involves an emphasis on trackable, measurable, positive
responses from consumers (known simply as "response" in the
industry) regardless of medium.

If the advertisement asks the prospect to take a specific action,

for instance call a free phone number or visit a website, then the effort
is considered to be direct response advertising.

Direct Marketing is predominantly used by Small to Medium

Enterprises with limited Advertising Budgets which do not have a well
recognized Brand Message. A well executed Direct Advertising
campaign offers positive Return on Investment, as the message is not
hidden with over complicated branding, "Vorsprung Durch Technik"
does not directly sell more cars, instead Direct Advertising is straight
to the point, it offers a Product, Service or Event "Buy a New Car" and
explains how to get the offered Product, Service or Event "At Daves
Autos".

History of Direct Marketing:

The term direct marketing is believed to have been first used in

1967 in a speech by Lester Wunderman, who pioneered direct
marketing techniques with brands such as American Express and
Columbia Records. The term junk mail, referring to unsolicited
commercial ads delivered via post office or directly deposited in
consumers' mail boxes, can be traced back to 1954. The term spam,
meaning "unsolicited commercial email", can be traced back to March
31, 1993, although in its first few months it merely referred to
inadvertently posting a message so many times on UseNet that the
repetitions effectively drowned out the normal flow of conversation.

Although Wunderman may have been the first to use the term
direct marketing, the practice of mail order selling (direct marketing
via mail) essentially began in the U.S. upon invention of the typewriter
in 1867. The first modern mail-order catalog was produced by Aaron
Montgomery Ward in 1872. The Direct Mail Advertising Association,
predecessor of the present-day Direct Marketing Association, was first
established in 1917.] Third class bulk mail postage rates were
established in 1928.
 Direct marketing's history in Europe can be traced to the 15th
century. Upon Gutenberg's invention of movable type, the first trade
catalogs from printer-publishers appeared sometime around 1450.

Benefits & drawbacks:

Direct marketing is attractive to many marketers, because in

many cases its positive effect (but not negative results) can be
measured directly. For example, if a marketer sends out one thousand
solicitations by mail, and one hundred respond to the promotion, the
marketer can say with some confidence that the campaign led directly
to 10% direct responses. The number of recipients who are offended
by the junk mail/spam, however, is not easily measured. By contrast,
measurement of other media must often be indirect, since there is no
direct response from a consumer. Measurement of results, a
fundamental element in successful direct marketing, is explored in
greater detail elsewhere in this article.

The Internet has made it easier for Marketing Managers to

measure the results of a campaign. This is often achieved by using a
specific website landing page directly relating to the promotional
material, a call to action will ask the consumer to visit the landing page
and the effectiveness of the campaign can be measured by taking the
number of promotional messages distributed (e.g. 1000) and divide it
by the number of responses (people visiting the unique website page).

Another way to measure the results is to compare the projected

sales for a given term with the actual sales after a Direct Advertising
Campaign.

While many marketers recognize the financial benefits of

increasing targeted awareness, some direct marketing efforts using
particular media have been criticized for generating unwanted
solicitations, not due to the method of communication but because of
poorly complied demographic databases, advertisers do not wish to
waste money on communicating with consumers not interested in their
products. For example, direct mail that is irrelevant to the recipient is
considered junk mail, and unwanted email messages are considered
spam. Some consumers are demanding an end to direct marketing for
privacy and environmental reasons, which direct marketers, are able to
provide by using "opt out" lists, variable printing and more targeted
mailing lists. In response to consumer demand and increasing business
pressure to increase the effectiveness of reaching the right consumer
with Direct Marketing, companies such as Ireland Advertising specialize
in targeted Direct Advertising to great effect, reducing advertising
budget waste and increasing the effectiveness of delivering a
marketing message with better geo-demography information,
delivering the advertising message to only the consumers interested in
the product, service or event on offer.

Benefits for Buyers:

1. Convenient

2. Easy to use

3. Private

4. Access to a wealth of information

5. Immediate

6. Interactive

Benefits for Sellers:

1. Powerful tool for building relationships

2. Allows for targeting of small groups or individuals with

customized offers in a personalized fashion

3. Can be timed to reach prospects at the right time

4. Offers access to buyers that couldn’t be reached via other

channels

5. Low-cost, effective alternative for reaching specific markets

1.3 Different Channels of Direct Marketing

Direct mail

The most common form of direct marketing is direct mail, sometimes

called junk mail, used by advertisers who send paper mail to all postal
customers in an area or to all customers on a list.

Junk mail
Any low-budget medium that can be used to deliver a communication
to a customer can be employed in direct marketing. Probably the most
commonly used medium for direct marketing is mail, in which
marketing communications are sent to customers using the postal
service. The term direct mail is used in the direct marketing industry
to refer to communication deliveries by the Post Office, which may also
be referred to as "junk mail" or "ad mail" or "crap mail" and may
involve bulk mail.

Junk mail includes advertising circulars, catalogs, free trial CDs, pre-
approved credit card applications, and other unsolicited merchandising
invitations delivered by mail or to homes and businesses, or delivered
to consumers' mailboxes by delivery services other than the Post
Office. Bulk mailings are a particularly popular method of promotion for
businesses operating in the financial services, home computer, and
travel and tourism industries.

In many developed countries, direct mail represents such a significant

amount of the total volume of mail that special rate classes have been
established. In the United States and United Kingdom, for example,
there are bulk mail rates that enable marketers to send mail at rates
that are substantially lower than regular first-class rates. In order to
qualify for these rates, marketers must format and sort the mail in
particular ways – which reduces the handling (and therefore costs)
required by the postal service.

Advertisers often refine direct mail practices into targeted mailing, in

which mail is sent out following database analysis to select recipients
considered most likely to respond positively. For example a person
who has demonstrated an interest in golf may receive direct mail for
golf related products or perhaps for goods and services that are
appropriate for golfers. This use of database analysis is a type of
database marketing. The United States Postal Service calls this form of
mail "advertising mail".

Telemarketing

The second most common form of direct marketing is telemarketing,

in which marketers contact consumers by phone. The unpopularity of
cold call telemarketing (in which the consumer does not expect or
invite the sales call) has led some US states and the US federal
government to create "no-call lists" and legislation including heavy
fines. This process may be outsourced to specialist call centers.

In the US, a national do-not-call list went into effect on October 1,

2003. Under the law, it is illegal for telemarketers to call anyone who
has registered themselves on the list. After the list had operated for
one year, over 62 million people had signed up. The telemarketing
industry opposed the creation of the list, but most telemarketers have
complied with the law and refrained from calling people who are on the
list.

Canada has passed legislation to create a similar Do Not Call List. In

other countries it is voluntary, such as the New Zealand Name
Removal Service.

Email Marketing

Email Marketing may have passed telemarketing in frequency at this

point, and is a third type of direct marketing. A major concern is spam,
which actually predates legitimate email marketing. As a result of the
proliferation of mass spamming, ISPs and email service providers have
developed increasingly effective E-Mail Filtering programs. These filters
can interfere with the delivery of email marketing campaigns, even if
the person has subscribed to receive them, as legitimate email
marketing can possess the same hallmarks as spam.

E-Marketing Guidelines:

1. Give the customer a reason to respond: Companies should offer

surfers powerful incentives for reading email pitches and online
ads.

2. Personalize the content of your e-mails: Distributing Companies

Digest directly to customers office e-mail. Customers who agree
to receive the newsletter select from topics listed on an interest
profile.

3. Offer something the customer could not get via direct mail:
Because e-mail campaigns can be carried out quickly, they can
offer time sensitive information.

4. Make it easy for the customer to “unsubscribe”: Online

merchants will face many challenges in expanding the public’s
 use of e-commerce. Customers will have to feel that the
information they supply is confidential and not to be sold to
others.

Kiosk Marketing:

A kiosk is a small building or structure that might house a selling

or information unit. The term describes newsstands, refreshments
stands, and free standing carts whose vendors sell watches, costume
jewelry, and other items often seen along the aisles in a mall. All of
these are direct selling tools.

Door-to-Door Leaflet Marketing

Leaflet Distribution services are used extensively by the fast food

industries, and many other business focusing on a local catchment
Business to consumer business model, similar to direct mail marketing,
this method is targeted purely by area, and costs a fraction of the
amount of a mail shot due to not having to purchase stamps,
envelopes or having to buy address lists and the names of home
occupants.

Broadcast faxing

A fourth type of direct marketing, broadcast faxing, is now less

common than the other forms. This is partly due to laws in the United
States and elsewhere which make it illegal.

Voicemail Marketing

A fifth type of direct marketing has emerged out of the market

prevalence of personal voice mailboxes, and business voicemail
systems. Due to the ubiquity of email marketing, and the expense of
direct mail and telemarketing, voicemail marketing presented a cost
effective means by which to reach people directly, by voice.

Abuse of consumer marketing applications of voicemail marketing

resulted in an abundance of "voice-spam", and prompted many
jurisdictions to pass laws regulating consumer voicemail marketing.

More recently, businesses have utilized guided voicemail to accomplish

personalized business-to-business marketing formerly reserved for
telemarketing. Because guided voicemail is used to contact only
businesses, it is exempt from Do Not Call regulations in place for other
forms of voicemail marketing.

Couponing

Couponing is used in print media to elicit a response from the reader.

An example is a coupon which the reader cuts out and presents to a
super-store check-out counter to avail of a discount. Coupons in
newspapers and magazines cannot be considered direct marketing,
since the marketer incurs the cost of supporting a third-party medium
(the newspaper or magazine); direct marketing aims to circumvent
that balance, paring the costs down to solely delivering their
unsolicited sales message to the consumer, without supporting the
newspaper that the consumer seeks and welcomes.

Direct response television marketing

Direct marketing on TV (commonly referred to as DRTV) has two basic

forms: long form (usually half-hour or hour-long segments that explain
a product in detail and are commonly referred to as infomercials) and
short form which refers to typical 0:30 second or 0:60 second
commercials that ask viewers for an immediate response (typically to
call a phone number on screen or go to a website).

TV-response marketing—i.e. infomercials—can be considered a form of

direct marketing, since responses are in the form of calls to telephone
numbers given on-air. These both allow marketers to reasonably
conclude that the calls are due to a particular campaign, and allow the
marketers to obtain customers' phone numbers as targets for
telemarketing. Under the Federal Do-Not-Call List rules in the US, if the
caller buys anything, the marketer would be exempt from Do-Not-Call
List restrictions for a period of time due to having a prior business
relationship with the caller. Major players are firms like QVC, Thane
Direct, and Interwood Marketing Group then cross-sell, and up-sell to
these respondents.

One of the most famous DRTV commercials was for Ginsu Knives by
Ginsu Products, Inc. of RI. Several aspects of ad, such as its use of
adding items to the offer and the guarantee of satisfaction were much
copied and came to be considered part of the formula for success with
short form direct response TV ads (DRTV)
Direct selling

Direct selling is the sale of products by face-to-face contact with the

customer, either by having salespeople approach potential customers
in person, or through indirect means such as Tupperware parties.

Popularity of Direct Advertising

In a report conducted by the Direct Marketing Association, it was found

that 57% of the campaigns studied were employing integrated
strategies. Of those, almost half (47%) launched with a direct mail
campaign, typically followed by e-mail and then telemarketing.

1.4 Construction of Direct mail campaign:

• Objectives: Most direct marketers aim to receive an order from

prospects. A campaign’s success is judged by the response rate.
An order-response rate of 2 percent is normally considered good,
although this number varies with product category and price.

Direct mail can achieve other communication objectives as

well, such as producing prospects leads, strengthening customer
relationships, informing and educating customers, reminding
customers of offers, and reinforcing recent customer purchase
decisions.

• Target Markets and Prospects: Direct Marketers need to

identify the characteristics of prospects and customers who are
most able, willing and ready to buy. Most marketers apply the R-
F-M formulae (recency, frequency, monetary amount) for rating
and selecting customers. For any proposed offering, the company
selects customers according to how much time has passed since
their last purchase, how many times they have purchased, and
how much they have spent since becoming a customer. Suppose
the company is offering a leather jacket. It might make this offer
to customers who made their last purchase between 30 and 60
days ago, who make 3 to 6 purchases a year, and who have
spent at least Rs. 5000/- since becoming customers. Points are
established for varying R-F-M levels, and each customer is
scored. The higher the score, the more attractive the customer.
• Offer Elements: Nash sees the offer strategy as consisting of
five elements – the product, the offer, the medium, the
distribution method, and the creative strategy.

In addition to these elements, the direct mail marketer has

to decide on five components of the mailing itself: the outside
envelope, sales letter, circular, reply form, and reply envelope.

1. The outside envelope will be more effective if it contains an

illustration, preferably in color, or a catchy reason to open the
envelope, such as announcement of a contest, premium, or
benefit.

2. The sales letter should use a personal salutation and start with
a headline in bold type. The letter should be printed on good-
quality paper and be brief.

3. In most cases, a colorful circular accompanying the letter will

increase the response rate by more than its cost.

4. Direct mailers should feature a toll-free number and also send

recipients to their Web site.

5. The inclusion of a postage-free reply envelope will dramatically

increase the response rate.

• Testing Elements:

One of the great advantages of direct marketing is the ability

to test, under real marketplace conditions, different elements of
an offer strategy such as products, product features, copy
platform, mailer type, envelope, prices or mailing lists.

• Measuring Campaign Success- Lifetime Value:

By adding up the planned campaign costs, the direct marketer

can figure out in advance the needed break-even response rate.
This rate must be net of returned merchandise and bad debts.
The direct marketer needs to analyze the main causes of
returned merchandise (late shipment, defective merchandise,
damage in transit, not as advertised). By carefully analyzing past
campaigns, direct marketers can steadily improve their
performance.
Different Characteristics:

Advertising Public Sales Personal

Relation Promotion Selling
Communicati Indirect and indirect, indirect and Direct and
on Mode non-personal nonpersona nonpersonal facetoface
l
Communicati Low Moderate to Moderate to High
on Control Low Low
Feedback Little Little Little to Much
Amount moderate
Feedback Delayed Delayed varies Immediate
Speed
Message One-way One-way Mostly one- Two-way
Flow way
Direction
Message Yes No Yes Yes
Content
Control
Sponsor Yes No Yes Yes
Identification
Reaching Fast Usually fast Fast Slow
Large
Audience
Message Same Usually no Same Tailored to
Flexibility message to direct message to prospect
all audience control varied target

1.5 The AIDA Concept: (Attention, Interest, Desire, Action)

 It is a model that outlines the process for achieving promotional
goals in terms of stages of consumer involvement with the message.

1. The goal of any promotion is to get someone to buy a good or

service. A classic model for reaching promotional goals is called
the AIDA concept—attention, interest, desire, and action—the
stages of consumer involvement.

2. This model proposes that consumers respond to marketing

messages in a thinking, feeling, and doing sequence.

1. Advertising is most useful in gaining attention for goods. In

contrast, salespeople are more effective at creating customer
interest and in creating desire.

2. Public relations are best at gaining attention for a company, a

good or service. Sales promotion’s greatest strength is in
creating strong desire and purchase intent (action).

1.6 Permission Marketing:

Permission Marketing uses the interactivity of the internet to let

consumers have a say in what is sent to them. There are 5 permission
levels

1. No Permission Level: They want nothing to do with the

companies.
 2. Low Permission Level: They do not really know the companies,
but they might want to look at their offerings and prices.

3. Medium Permission Level: They know the companies. They have

neutral feelings about these companies and they are not sure
they want to spend any time in a dialogue but if companies asked
politely, they would probably let companies send them a catalog.

4. High Permission Level: They have not yet done any business with
these companies, but they are confident these companies will
send them something relevant and interesting to see, read or
hear. They are not reluctant to give companies a lot of data about
themselves to get some interesting offers or a special catalog.

5. Transaction Level: They do transactions with these companies.

They are customers. They are satisfied with the products and
services. They trust the companies, and the companies do not
hassle them or clutter up their mailboxes with junk mail.

1.7 Designing Sales Force:

McMurry has distinguished these six types of sales representatives

 1. Deliverer: A salesperson whose major task is the delivery of a

product (milk, bread, or fuel).

 2. Order taker: A salesperson who acts predominantly as an

inside order taker (the salesperson standing behind the counter)
or outside order taker (the soap salesperson calling on the
supermarket manager).

 3. Missionary: A salesperson whose major task is to build goodwill

or to educate the actual or potential user, rather than to sell (the
medical “detailer” representing an ethical pharmaceutical firm).

 4. Technician: A salesperson with a high level of technical

knowledge (the engineering salesperson who is primarily a
consultant to client companies).

 5. Demand creator: A salesperson who relies on creative

methods for selling tangible products (vacuum cleaners or siding)
or intangibles (insurance or education).
  6. Solution vendor: A salesperson whose expertise lies in solving
a customer’s problem, often with a system of the firm’s goods
and services (such as computer and communications systems).

In general, salespeople perform one or more of the following tasks:

 ➤ Prospecting: Searching for prospects, or leads,

 ➤ Targeting: Deciding how to allocate their time among prospects

and customers,

 ➤ Communicating: Communicating information about the

company’s products and services,

 ➤ Selling: Approaching, presenting, answering objections, and

closing sales,

 ➤ Servicing: Providing various services to customers—consulting

on problems, rendering technical assistance, arranging financing,
expediting delivery,

 ➤ Information gathering: Conducting market research and doing

intelligence work, and

 ➤ Allocating: Deciding which customers will get scarce products

during shortages.

1.8 Managing Sales Force:

1. Designing Salesforce Strategy and Structure

2. Recruiting and Selecting Salespeople

3. Training Salespeople

4. Compensating Salespeople

5. Supervising Salespeople

6. Evaluating Salespeople

1.9 Designing Sales Force Strategy and Structure:

Types of Sales Force Structure

1. Territorial Exclusive Territory to Sell the Company’s

Full Product Line
 2. Product Sales Force Sells Along Product Lines

3. Customer Sales Force Sells Along Customer/ Industry

Lines

4. Complex Combination of Above Types of Sales Force

Structures

Sales force is company’s personal link to the customers. Carefully need

to consider the following issues in sales force design – development of
sales force objectives, strategy, structure, size and compensation.

Other roles the sales person needs to do – allocating the product,

counseling the unhappy customers, communicating company plans for
remedying shortages, selling company products that are not in
shortage. During product abundance, try to win customer preference.

Call right customers at the right time in the right way. Sales
representatives work with customers in several ways:

 Sales representative to buyer

 Sales representative to buyer group

 Sales team to buyer group

 Conference selling

 Seminar selling – educational seminar for customers

More and more need for teamwork. Support from other personnel like
top management, technical people, customer service representatives,
office staff etc.

Maintain market focus, should know how to analyze sales data,

measure market potential, gather market intelligence and develop
marketing strategies and plans. Need analytical marketing skills.

A company can use –

 Direct sales force – full time or part time paid employees working
exclusively for company. Inside sales personnel and field sales
personnel.
 Contractual sales force – manufacturer’s reps, sales agents and
brokers. Paid commission based on sales.

Sales Force Structure

Most common sales force structure:

 Territorial: Each sales rep assigned to exclusive territory.

Advantages of this –

 Clear definition of responsibilities

 Increased incentive to cultivate local business and personal

ties

 Lesser travel expenses

Territory size – designed to provide equal sales potential or equal work

load. Equal potential gives same income opportunities means to
evaluate performance. It can vary widely in size as the customer
density varies with territory. Equal work load so that the territory can
be covered adequately.

Territory shape – formed by combining smaller units to give equal sales

potential or workload. It must take into account the natural barriers,
compatibility of adjacent areas, adequacy of transport. Influence cost
and ease of coverage. Criteria such as compactness, minimum travel
time and equal load or potential.

 Product: structure along product lines. Sales reps should know their
product. Products are technically complex, highly unrelated and
very numerous.

 Market: along the industry or customer lines. Advantage is that

each sales force becomes knowledgeable about specific customer
needs. Disadvantage is need for extensive travel as customers are
spread throughout the country.

 Complex: wide variety of products, many types of customers, broad

geographical area. Combined specialized structure.

Sales Force Size and compensation

Workload approach to establish sales force size –

1. Customers grouped into size classes according to annual sales
volumes.

2. Establish for each class desirables call frequencies (no of calls on an

account per year)

3. Total workload for the country in sales calls per year = no of

accounts in each class multiplied by corresponding call frequency

4. Determine average calls a sales rep can make per year.

5. No of sales reps = total annual calls / average annual calls per sales
rep

Attractive compensation package. Sales force would like income

regularity, extra rewards for above average performance and fair
payment for experience and longevity. Management would like to
achieve control, economy and simplicity.

Four components of sales force compensation –

 Fixed amount – salary. Satisfy income stability

 Variable amount – commissions, bonus or profit sharing. To

stimulate and reward greater effort.

 Expense allowance – enable to meet expenses involved in travel,

lodging, dining and entertaining.

 Benefits – paid vacations, sickness or accident benefits, pensions,

life insurance. Provide security and job satisfaction.

70% fixed + 30% in other elements.

Fixed compensation more emphasis in jobs where higher ratio of non-

selling to selling activities, technically complex selling task, involves
teamwork.

Variable compensation more emphasis in jobs where sales are cyclical

and depend on individual initiatives.

Three basic types of compensation plans –

 Straight salary – secure income, more willing to perform non-selling
activities and less incentive to overstock customers. Administrative
simplicity and lower turnover.

 Straight commission – higher sales performance, more motivation,

less supervision, control selling costs.

 Combination of two giving benefits of both reducing disadvantages.

1.10 Recruiting and Selecting Sales Representative

The top 27% of sales force bring in 52% of the sales. Beyond this is the
great waste in hiring and training the wrong person .The average
turnover in all industries is about 20%. A sales force with new people is
far less productive, the financial cost only being a part of it, apart from
the fringe benefits and cost the new sales man has to produce gross
margins too which at least cover the costs

Selecting them: -

Asking Customers what they would like to see in a salesperson e.g.

honest, reliable knowledgeable etc

Look for common traits of very successful salesmen. E.g.: -A high level
of Energy, abounding self confidence, chronic hunger for money, well
established habit of the industry and a challenging state of min

Conclusion is that two major characteristic a salesman should have is

empathy i.e. the ability to feel as the customer does and ego drive

After the management has set a selection criteria, it must start its
recruitment .To encourage selling as a profession organizations give
additional perks.

Training Sales Representative

Customers expect salespeople to have deep product knowledge to add

to customer operations and to be efficient and reliable, so what we
have is more inv in training. Today a few months is spent in training
them 28 weeks for industrial companies, 12 in service and 4 in
consumer products Training time varies with complexities of work ands
sales
The goals: -

• They need to know and identify with the company

• They need to know their company products

• They need to know their competitor and their products

• They need to know how to make effective presentations

• They need to understand field procedures and responsibilities

Sales automation is a new technology move and interactive trainings

are in vogue.

Supervising Sales Representative

New salesperson is given a territory compensation and training and

ALSO supervision

Norms on customer calls

How many calls to make? And whom should they focus on

Norms on prospects calls

Time spend in prospecting a new account

Another tool is time-and-duty analysis, which helps reps understand

how they spend their time and how they might increase their
productivity. Sales representatives spend their time in:

 Preparation: getting information and planning strategy

 Travel: sometimes amounts to 50% of the time

 Food & breaks

 Waiting: outside customer’s office

 Selling

 Administration

As a result face to face selling time reduced to as little as 25% of total

working time. To improve sales force productivity companies are
adopting methods like training sales rep to use phone-power, using
computer to develop call and routing plans an to supply customer and
competitive information. There has been a growth in the internal sales
force due the escalating cost of outside sales calls and the growing use
of computers and innovative telecommunications equipment.

Inside sales people are of 3 types:

 Technical support people

 Sales assistants: clerical backup for outside sales persons

 Telemarketers

Inside sales force frees outside reps to spend more time selling to
major accounts and other external tasks. Outside sales reps are paid
on incentive-compensation basis while internal on a salary & bonus
basis.

Another dramatic breakthrough is the new high-tech equipment.

Salesperson has truly gone “electronic”.

MOTIVATING SALES REPRESENTATIVES

Unlike some sales persons who are ambitious and self-starters,

majority of sales rep need encouragement and incentives especially in
the field of selling because:

 Field job is one of frequent frustration

 Most people work below capacity in absence of special incentives,

such as financial gain or social recognition

 Reps are occasionally preoccupied with personal problems

Higher motivation leads to greater effort which leads to greater

performance leading to greater rewards resulting in greater
satisfaction which again reinforces motivation. Thus,

 Sales managers must be able to convince salespeople that they can

sell more by working harder or by being trained to work smarter.

 Sales managers must be able to convince salespeople that the

rewards for better performance are worth the extra effort.
Reward with highest value was pay while liking, respect were least
valued. Importance of motivation varied with demographic
characteristics:

 Financial rewards were most valued by older, longer-tenured people

and those with large families

 Higher order rewards (recognition, liking, respect, etc) were most

valued by young, unmarried or having small families’ sales people.

1.11 Sales Quotas

Many companies must set sales quotas prescribing what reps should
sell during the year. Quotas can be set on dollar sales, unit volume,
margin, selling effort or activity, and product type. Compensation is
often tied to degree of quota fulfillment.

Quotas are set higher than the sales forecast to encourage managers
and sales people to perform at their best. If they fail to make their
quotas, the company nevertheless makes its sales forecast.

3 schools of thought on quota setting:

 High quota school sets quotas higher than what sales reps will
achieve but that are attainable to spur extra efforts.

 Modest quota school sets quotas that a majority can achieve

 Variable quota school thinks that individual differences among sales

reps warrant this kind of quota also for some.

Generally the salesperson’s quota should be at least equal to the

person’s last year’s sales plus some fraction of the difference between
territory sales potential and last year’s sales.

Supplementary motivators

Additional motivators to stimulate sales force effort. Eg periodic sales

meetings as a social occasion, chance to meet and talk with the
“company brass” and identify with a larger group. Sponsoring sales
contests with promise of reward to the winners but for fairplay the
contest period should not be announced in advance.

Evaluating sales representatives

Feed forward aspects of sales supervision- how management
communicates what the sales force should be doing and motivates
them to do it. Good feed forward requires good feedback, which
means getting regular information from reps to evaluate performance.

1.12 Sources of Information about representatives

Such as sales reports, personal observation, customer letters and

complaints, customer surveys and conversations with other sales
representatives.

Sales reports are divided between activity plans and write ups of
activity results. A best example of the former is salesperson’s work
plan, which sales reps submit a week or month in advance. The plan
describes intended calls or routing. This report forces the sales reps to
plan and schedule their activities, informs management of their
whereabouts, and provides a basis for comparing their plans and
accomplishments. Sales reps can be evaluated on their ability to “plan
their work and work their plan”

Many companies also want sales reps to develop an annual territory

marketing plan in which they outline their program for developing new
accounts and increasing business from existing accounts. This type of
report casts sales reps into the role of market managers and profit
centers. Sales managers study these plans, make suggestions and use
them to develop sales quotas.

Sales reps write up completed activities on call reports. Sales

representatives also submit expense reports, new business reports,
lost business reports and reports on local business and economic
conditions.

These reports provide raw data from where sales managers can
extract key indicators of sales performance. E.g. average no. of sales
calls per sales person per day, average sales call time per contact,
average cost per sales call, entertainment cost per sales call,
percentage of orders per sales call, no. of new/ lost customers per
period.

Formal Evaluation
One type of evaluation is to compare current performance with past
performance. This can be evaluated against sales increase across
products, gross profits, sales expense, lost customers, trend in sales
and gross profits per customer, annual number of calls, etc and then
analyzed.

The customer’s opinion of the salesperson, product and service can be

measured by mail questionnaires or telephone calls.

Evaluation can asses the sales person’s knowledge of the company,

products, customers, competitors, territory and responsibilities.
Personal characteristics can be rated such as general manner,
appearance, speech and temperament. The sales manager can also
review any problems in motivation and compliance.

Sales manager can check whether the representative knows and

observes the law. E.g. representative’s statements must match
advertising claims, giving bribe to influence sales, industrial espionage,
disparaging competitors through lies.

1.13 Principles of personal selling:

Three major aspects of personal selling:

 Sales professionalism

 Negotiation

 Relationship marketing

Professionalism:

All sales training approaches try to convert the salesperson from a

passive order taker to an active order getter.

There are 2 approaches in training salespersons to be order getters:

 Sales oriented approach:

The sales oriented approach trains the person in high-pressure

techniques. This form of selling assumes that customers are not likely
to buy except under pressure.

 Customer oriented approach

To train salespersons in customer problem solving. The person learns
how to listen and identify customer needs and come up with sound
product solutions

This assumes that customers have latent needs that constitute

opportunities and that they appreciate constructive suggestions and
that they will be loyal to sales reps who have their long term interests
at heart

Major steps in effective selling

 Prospecting and qualifying

Most companies leave this to sales person. But now companies are
taking this on and leaving salespersons to spend their expensive time
selling

Companies can generate leads thru

 Examining data sources like newspapers in search of

names

 Putting up booths at trade shoes to encourage drop

bys

 Inviting current customers to drop names of

prospective

 Cultivating referral sources

 Contacting organizations and associations to which

prospects belong

 Dropping in unannounced on various offices (Cold

canvassing)

 Pre-approach

The sales person needs to learn as much as possible about the

prospective company and its buyers and decide about the best
approach to approach the prospective customer

 Approach
The sales person should know how to greet the buyer to relationship
off to a good start.

 Presentation and Documentation

The salesperson now tells the product story to the buyer following the
AIDA formula of getting attention, holding interest, arousing desire and
obtaining action. The salesman uses A FABV approach that is features,
advantages, benefits and value approach

Features: basic characteristics

Advantage: why features are advantageous

Benefits: economic technical etc advantage

Value: Summative worth

Companies have three diff styles of sales presentation

 Canned approach: which is a memorized sale talk

covering the main points. Based on stimulus
response thinking

 Formulated approach: also uses stimulated

response thinking. However it identifies the buying
style and then uses a formulated approach to this
type of buyer

 Need Satisfaction approach: starts with a search of

the customers real needs by encouraging customer
to do most of the talking

 Overcoming objectives;

Customers always pose objections during presentations or when asked

to order. Psychological resistance includes resistance to interference,
preference for established supply sources of brands, apathy, and
reluctance to give up some association etc

Logical resistance is customer’s objections to price delivery scheduled

etc.

 Closing
Now the salesperson attempts to close the sale. Salespersons need to
recognize closing signs from a buyer.

 Follow up and maintenance:

This is important to ensure customer satisfaction and repeat business

Negotiation

Marketing is concerned with exchange activities and the manner in

which the exchange is established. In routine exchange administered
programs of pricing and distribution establish the terms

In negotiated exchange price and other terms are set via bargaining
behavior.

The skills requires in bargaining situations are preparation and

planning skill, knowledge of subject matter being negotiated, ability to
think clearly.

When to negotiate

According to Lee and Dobler:

 When many factors bear not only on price but also on quality
and service

 When business risks can not be accurately predicted

 When a long period id required to produce the items

purchased

 When production is frequently interrupted because of

numerous change

Negotiation is appropriate whenever a zone of agreement exists that is

when there are simultaneously overlapping acceptable outcomes for
the parties. The seller has a reservation price that is the lowest we will
accept and the buyer has a reservation price that is the maximum he
will pay.

Formulating a negotiation strategy

A negotiation strategy is a commitment to an overall approach that

has a good chance of achieving the negotiators objectives.
Fisher and Ury propose a strategy of “principled negotiation”

4 points under the same

 Separate the people from the problem: understand each others

view point

 Focus on interests not on positions: the distinction between

positions and interests is the similar to that between solutions
and desired outcomes or means and ends

 Invent options for mutual gain: search for a larger pie than
fighting for each others share

 Insist on objective criteria: this approach avoids a situation in

which one must yield to the position of the other. Instead both
reach amiable solutions.

Bargaining tactics are maneuvers made at specific points in the

bargaining process.

If the other party is stronger use BATNA: best alternative to a

negotiated agreement

Classic bargaining tactics:

Acting crazy: demonstrating Ur position thru emotional commitment

to Ur position

Big pot: leave yourself a lot of room to negotiate. Start with high
demands

Get a prestigious ally

The well is dry: you have no more concessions to make.

Limited authority: u pretend to act on someone’s behalf

Whipsaw/auction: u let them know I are negotiating with

competitors at the same time

Divide and conquer: sell one member with your proposals

We noodle: give no emotional or verbal response to the opponent

Be patient: outwait Ur opponent

Let’s split the difference: the person who suggests this has less to
loose

Trial balloon: u release your possible decision through a so called

reliable source before the decision is already made

Relationship marketing

Companies aim at creating long term relationships with their

customers. Neil Rackham adopted the SPIN selling that is Situation
problem implementation, need-payoff. He trains salesperson to raise 4
types of questions with a prospect

 Situation: ask about the buyers present situation

 Problem questions: deal with problems difficulties and

dissatisfaction that the buyer is facing

 Implication questions; they ask about the consequences or

effects of a buyers problems difficulties

 Need Payoff Questions: these ask about the value or usefulness

of a proposed solution.

More companies are moving from transaction marketing to relationship

marketing. Relationship marketing is based on the premise that
Customers need focused and continuous attention.

Advantages of Personal Selling:

1. Personal selling is direct communication between a sales

representative and prospective buyers in an attempt to influence
each other in a purchase situation.

2. Provides a detailed explanation or demonstration of product

3. Message can be varied to fit the needs of each prospective

customer

4. Can be directed to specific qualified prospects

5. Costs can be controlled by adjusting sales force size

6. Most effective method to obtain sales and gain satisfied

customer.
Websites:

1. http://en.wikipedia.org/wiki/direct_marketing

2. http://en.wikipedia.org/wiki/permission_marketing

3. http://en.wikipedia.org/wiki/negotiation

4. http://www.scribd.com