UNIT 3- PERSONAL SELLING

INTRODUCTION OF CONCEPT

Personal selling is when a company uses salespersons to build a relationship and

engage customers to determine their needs and attain a sales order that may not
otherwise have been placed.

Definitions of personal selling

1. Philip Kotler defines personal selling as ―a face -to-face interaction with

prospective purchasers for the purpose of making sale.

2. Irving J.Shaprio defines personal selling as ―an art of successfully persuading

prospects or customers to buy products or services from which they can derive
suitable benefits, thereby increasing their total satisfaction.

3. ―Personal selling is an oral presentation of goods to one or more prospective

customers to promote sales‖. It helps in the transfer of the title a face-to-face
interaction between the sales person and the buyers. The sales people become
aware of the problems of the buyers and suggest suitable products or services to
satisfy their wants

It Gives marketers:

 The greatest freedom to adjust a message to satisfy customers informational needs,

dynamic.
 Most precision, enabling marketers to focus on most promising leads. vs.
advertising, publicity and sales promotion
 Give more information
 Two way flow of information, interactivity.
 Discover the strengths and weaknesses of new products and pass this information
on to the marketing department.
 Highest cost. Businesses spend more on personal selling than on any other form of
promotional mix.
 Goals range from
o finding prospects
o convincing prospects to buy
o keeping customers satisfied--help them pass the word along.

Nature of Personal Selling

‘Personal Selling’ is a highly distinctive form of promotion. It is basically a two way

communication involving not only individual but social behaviour also. It aims at bringing
the right products to the right customers. It takes several forms including calls by
company’s sales representative, assistance by a sales clerk, an informal invitation from one
company executive to another. It is employed for the purpose of creating product
awareness, stimulating interest, developing brand preference, negotiating price etc.

The increase in complexity of products has increased the importance of personal selling.
Manufacturers of highly technical products such as computers, electronic typewriters,
digital phones, microwave kitchen appliances, remote control equipments etc. depend
more heavily on personal selling than do grocery or toiletry products manufacturers.

Ever growing competition from domestic and foreign sources have also increased the
importance of sales persons in the marketing effort of a firm. In personal selling,
company’s sales persons are often referred to as sales representative, salesman or sales
girl, they remain on the company’s payroll or work on commission basis or both to push
the product in the market by positively motivating the prospective customer through oral
presentation or demonstrating the product in question.

Consumers want all sorts of goods and services but inertia may keep them from buying.
Sales efforts stimulate the consumption process by reducing people’s inherent reluctance
to make purchase decision. In fact sales person act as catalyst in the market place. When
the nature of the product is such that the buyer needs special information in order to use it
properly, sales representative acts as a consultant to consumer, to apprise them of
products technicalities and usage. Sales person also work out the details of manner and
timing of given physical possession.

In case of industrial products, the promotion mix mostly consist of personal selling rather
than advertising. Being high value and complex product, personal contact with the
customer is essential to convince him of the product’s quality and utility. On the other
hand, consumer product companies use personal selling together with advertising, to
influence prospect to try their brand. But personal selling in this case cannot substitute for
advertising, it can only be used tactically to intensify marketing effort, mainly because it is
expensive.

Functions of Personal Selling

Personal selling is an oral presentation in face to face conversation with one or more
prospective customers for the purpose of making sales. The main functions of personal
selling are as follows:

1. Provide service to customers (Introduce the product, explain the right use, Convince
them etc.)

2. To sell the product

3. Maintain the sales record

4. Executive Function

5. Develop goodwill
Changing Face of Personal Selling

Modern sales approach is based on the following parameters

1. Value Sharing.

2. Relation Building.

3. Role Playing.

4. Changing Approach.

PERSONAL SELLING OBJECTIVES

The qualitative personal selling objectives are long term and concern the

contribution management expects personal selling to make in achieving long-term company

objectives. These objectives generally are carried over from one period’s promotional

program to the next. Depending upon company objectives and the promotional mix,

personal selling may be assigned such qualitative objectives as-

1. To do the entire selling job (as when there are no other elements in the
promotional mix).

2. To “service” existing accounts (that is, to maintain contacts with present

customers, take orders, and so forth).

3. To search out and obtain new customers.

4. To secure and maintain customers’ cooperation in stocking and promoting

the product line.

5. To keep customers informed on changes in the product line and other aspects
of marketing strategy.

6. To assist customers in selling the product line (as through “missionary

selling”).

7. To provide technical advice and assistance to customers (as with complicated

products and where products are especially designed to fit buyers’
specializations).
 8. To assist (or handle) the training of middlemen’s sales personnel.

9. To provide advice and assistance to middlemen on management problems.

10. To collect and report market information of interest and use to company
management.

The basic considerations in setting qualitative personal selling objectives are

decisions on sales policies and personal selling strategies and their role in the total
promotional program. After this role is defined, qualitative long-term personal selling
objectives are set. In turn, the qualitative personal selling objectives become the
major determinants of the quantitative personal selling objectives.

The quantitative objectives assigned to personal selling are short term and are adjusted

from one promotional period to another. The sales volume objective-the rupee or unit sales volume

management sets as the target for the promotional period-is the key quantitative objective. All other

quantitative personal selling objectives are derived from or are related to the sales volume

objective. Thus, discussion here focuses upon the setting of sales volume objectives. Setting the sales

volume objective influences the setting of other quantitative personal selling objectives, among

them the following:

1. To capture and retain a certain market share.

2. To obtain sales volume in ways that contribute to profitability (for example, by
selling the “optimum” mix of company products).
3. To obtain some number of new accounts of given types.
4. To keep personal selling expenses within set limits.
5. To secure targeted percentages of certain accounts’ business.

RELEVANT SITUATION FOR PERSONAL SELLING

Let us discuss some of the situations when personal selling in a company becomes more relevant.

1. Product situation: Personal selling is relatively more effective and economical in case:

(a) When a product is of a high unit value like Xeroxing machine, computers etc.
(b) When a product is in the introductory state of its life cycle and require creation of core
demand.
(c) A product requires personal attention to match specific consumer needs e.g. insurance policy.
(d) Product requires demonstration e.g. most of the industrial products.
(e) Product requires after-sales service.
(f) Product has no brand loyalty or very poor brand loyalty.

2. Market situation: Personal selling situation can be best utilized when:

(a) A company is selling to a small number of large-size buyers.

(b) A company sells in a small-local market or in government or institutional market.
(c) Desired middle men or agents are not available.
(d) An indirect channel or distribution is used for selling to merchant-middlemen only.

3. Company situation: Personal selling is relatively more effective and economical when:

(a) The company is not in a position to identify and make use of suitable non-personal
communication media.
(b) A company cannot afford to have a large and regular advertising outlay.

4. Consumer behaviour situation: Personal selling is more effective when:

(a) Purchases are valuable but infrequent.

(b) Consumer needs instant answers to his questions.
(c) Consumer requires persuasion and follow-up in the face of competitive pressure.

DIVERSITY OF SELLING SITUATIONS

All of us being consumers often come across variety of selling situations. Differences in

marketing factors cause each company to have individualized selling styles. Each different type of

selling job requires the sales person to perform a variety of different tasks and activities under

different circumstances. The job of a soft drink driver salesperson who calls in routine fashion on a

number of retail stores is different from that of a computer sales person who sells a system for

managing information to executive of a consultancy firm.

Before categorizing sales persons into basic selling styles, one convenient way to classify the

many different types of sales job is to array them on the basis of the creative skill required in the

job, from simple service-or repeat order selling to the complex developmental selling. Let us now

discuss the different kinds of selling positions prevalent in Indian companies.

Delivery sales person: The primary job of the delivery sales person is to deliver the product

e.g. soft drink, bread, milk etc. The selling responsibilities are secondary. Good service and a

pleasant personality may lead to more sales.

 Inside order taker: The retail sales person standing behind a counter is an inside order

taker. The customer comes to the sales person with the intention to buy a product or service, the

sales person only serves him or her. The sales person may use suggestion selling but ordinarily

cannot do much more.

Outside order taker: The soap or spices sales person calling on retailer is an outside order

taker. They do little creative selling. In contract with store personnel these representatives actually

may be discouraged from doing any hard selling. That task is left to executives higher in the

hierarchy.

Missionary sales people: These sales persons are not expected or permitted to solicit an

order. Their job is to build goodwill or to educate actual or potential user or provide services for the

customers, as in the case of Medical representatives, working for the pharmaceutical company.

Consultative sales person: Consultative sales are characterized by the product or service

that is sold at the higher level of an organization e.g. computer system or management consultancy

service. The decision to purchase such products involves higher capital outlay thus sales job

requires a low key, low pressure approach by the sales person. It would also require a very strong

knowledge about product, patience to discuss product with several people of organization and
potential benefits to the user. Even at times when the progress of sales slows down representative

has to make creative and sensitive efforts to resume interest but without appearing to exert

pressure on the prospect.

Technical sales personnel: The most distinctive characteristic of technical sales is the

product knowledge required by its sales person, unlike the consultative sales, where sophistication

in organization relationship and persuasive ability are sales persons’ most valuable assets. Even

time required to sell the product is relatively less than consultative sales. Most of the technical

purchasing requires approval of several people but only one or two people with technical

knowledge influence decision. If the sales representative is able to satisfy these people with product

characteristics, application, installation process, approval from higher management is usually

forthcoming. The technical sales persons though not strangers to the process of making a sale, are

trained to utilize the rational approach, by going into details of product utility and features.

Commercial sales person: This field generally includes non-technical sales to business,

industry, government and non-profit organization e.g. office equipment, wholesale goods, building

products, business services and others. Unlike the previous two types, it is customary for the

commercial sales person to make sales on first or second call. The process stresses approach to right

person (decision maker), making a smooth presentation and closing the sales.

The field is composed of order takers, to follow up and maintenance of accounts and order

getter, to develop new accounts. Since these require different approaches, they normally require

different personality traits e.g. the order getter are more aggressive and more highly motivated.

Direct sales people: Direct sales are primarily concerned with the sales of products and

services to ultimate consumers e.g. restaurants, door to door sales, insurance, encyclopaedias,

magazines etc. There is normally some emotional appeal associated with this type of selling, thus

sales persons are required to possess strong persuasive ability. Often length of time to close sales is

shortest in the case of above product categories. In fact, sales person are trained to close the sales

on the first visit because it is felt if consumers are given time, they will either cool off from buying

or will buy from competitor.

 PERSONAL SELLING PROCESS

All selling process contain the same basic steps, though the detail of each step and time

required to complete it will vary according to the product that is being sold. For example: a door to

door sales representative may go through all the steps from prospecting to closing of sale in a matter

of ten to fifteen minutes in contrast, the selling process for computer or electronic typewriter may
take several visits, even years, for getting an order.

1. Prospecting
• It is identifying or finding prospects i.e. prospective or potential customers.

The selling process begins with prospecting or finding qualified potential customers. Except

in retail selling, it is unlikely that customers will come to the sales person. In order to sell the

product, the sales person must seek out potential customers, prospecting involves two major

activities-

(a) identifying potential customers also known as prospects; and

(b) qualifying them in order to determine if they are valid prospects.
(a) Identifying prospects

The identification of potential customers is not an easy job, especially for a new sales person.
Rejection rate is quite high and immediate payoffs are usually minimal. In some consumer goods
businesses, identification of prospects usually come from friends and acquaintances, other sales
people, former customers, present customers etc. Few of the best sources and techniques for finding
prospects are discussed below.

i) Present customers: The best source of prospects is usually the sales person’s

existing satisfied customers. It is much easier to sell additional goods and services to

existing customers than to attract new customers. Indian companies are using this

method of selling successfully. For example person or an organization who has

purchased a portable typewriter from an office automation product company and is

pleased with it is usually more receptive to purchase a bigger typewriter and similar

product from the same company than someone else. This is the main reason, present

customers should get first priority by the company when new products and services

are introduced.

ii) Endless chain: This is also an effective prospecting tactics. In this method companies

use satisfied customers as source of referrals. Sales representatives ask current

customers for names of friends or business associates who might need similar

products or services. Then, as the sales person contacts and sells to these prospects,

more referrals are solicited. In this way the process continues further.

iii) Centre of Influence: Another effective prospecting technique based on referrals is

the center of influence approach. A center of influence is a person with information

about other people or influence over them that can help a sales person identify good

prospects. Some frequently used centers of influences are housewives, bankers, local

politicians etc.

iv) Spotters: Some companies use spotters as a source for prospecting potential

customers. Spotters are usually ‘sales trainees’ who help sales person identifying

prospects, thus saving time and qualifying sales lead.

 v) Cold call: Cold call is also known as unsolicited sales calls. This prospecting

techniques involves knocking on doors. The sales person makes contact with a

potential customers, introduces himself or herself, and asks if there is a use for the

product or service. This technique is utilized by the sales person when they have time

available between scheduled appointments.

vi) Directories: A wide variety of directories are full of prospect. The classified

telephone directory is the most obvious one. A sales person may also find that

membership directories of trade associations, professional societies, and civic and

social organizations are good sources for prospects.

vii) Mailing lists: In India, specialized companies compile lists of individuals and

organizations for direct mail advertisers. These lists may also be used to identify sales

prospects. The major advantages of mailing list are that they are often more current

and more selective than directories.

viii) Trade shows and exhibitions: A cost effective way to make personal contacts and

locate prospective buyer is to participate in trade shows and exhibitions. Now a days

more and more companies are increasing their participation in these shows and

exhibitions to company’s booth by mailing invitations or promising a gift. Advance

announcements sent to trade publications may also help to attract prospects. In view

of the rising costs of personal selling trade shows have become an increasingly

important source of prospecting. India International Trade Fair organized by Trade

Fair Authority of India every year provides a good example of usage of trade shows

for prospecting.

ix) company sources (website, ads., tradeshow, teleprospecting),

x) external sources (suppliers, intermediaries, trade associations),

xi) salespersons’ networking,

(b) Qualifying prospects

• Companies qualify sales leads to find their interests (or needs) and financial
capacity.
 • Leads are categorized as: Hot, Warm, and Cool

Once the sales person has identified potential customers, he or she must qualify them to

determine, if they are valid prospects. Unless this is done, time and energy is wasted in trying to sell

to people who cannot or will not purchase the product or service.

There are several factors to consider while qualifying a prospect. One approach to qualifying

often called MAN (Money, Authority and Need) approach is given below:

Money: Does the prospect have the money or resources to purchase a product or service?

Ability to pay is very critical factor in qualifying a prospect. The sales people must be familiar with

financial resources of a prospect.

Authority: Does the prospect have the authority to make commitment? This is a particular

concern when dealing with corporation, government agencies or other large organizations. Even

while selling to a married couple, it may be difficult to identify who actually makes the purchase

decision. A sales person must identify the key decision maker early to economise on selling time

more effectively.

Need: Does the prospect need the product or service? If a sales person cannot establish that

the customer will benefit from purchasing a product or service, there is no reason to waste a sales

call. The prospect either will refuse the offer or will end up dissatisfied with the purchase. Before

proceeding further the sales person should first appraise whether money, authority and need exist

with the prospect.

After a prospect has been identified and qualified, the sales person prepares for the sale of

product or service. The preparation stage involves the two key activities i.e. Pre-approach and

Call Planning.

2.Pre approach

a) Information gathering about the

prospect.
Sources of information: the Internet,
industrial directories, government
publications, intermediaries, etc.
• Precall planning
• Setting call objectives
• Tentative planning of sales strategy: which products, features and benefits may
meet the customer needs

The pre-approach step includes all the information gathering activities necessary
to learn relevant facts about the prospect and his or her needs and situations.

Four necessary steps of pre-approach are:

1. It should disclose the party need and ability to buy.

2. It should provide information that will enable the seller to tailor the
presentation to the prospect.

3. It should provide information that may keep the sales person from making
serious tactical errors during the presentation.

4. Finally, a good pre-approached increases the sales person confidence and

makes him confident to handle whatever may arise during the sales.

(b) Call planning

Call planning involves a specific planning sequence. The sales person defines the
objective of the call, devise a selling strategy to achieve this objective, and makes the
appointments. The primary objective of any sales effort is to get an order. For some sales
call intermediate objectives may be needed. Some examples of intermediate objectives are:

 To obtain more information about the prospect.

 To relate the prospects needs and concerns to features and benefits of the
product or service.
 To obtain permission for demonstration of the product.
 To introduce a new distributor.

The sales person must develop a strategy, or course of action to achieve his or her
objective. Careful consideration of the prospect’s background and needs is required in order
to able to formulate a tailor made strategy appropriate for the prospect. Since sales calls are
costly, they should be arranged in advance. Cold calls i.e. calls without specific appointment
may be appropriate for introducing the sales person or dropping off information. This
 method is generally inefficient for selling most products and services and is not consistent
with modern professional selling.

3. Approach

Approach is the process where the

salesperson meets and greets the buyer and
gets the relationship off to a good start and
involves the salesperson’s: Appearance
Opening lines Follow-up remarks Steps in the
Personal Selling Process

When the sales person has the name of the

prospect and adequate pre-approach information, the next step is the actual approach. It
frequently makes or breaks the entire presentation. If the approach fails, the sales person
often does not get a chance to give a presentation or demonstration. It gets the prospect
attention, it immediately inspires interest in hearing more about the proposition, and it makes
easy transition into the demonstration phase.

Key guidelines for successful approach

Prior Appointment
Timing
Command
Relaxed Atmosphere
Open Mindedness
Courtesies
Effective Presentation

• Make an appointment to meet the prospect

• Make favourable first impression
• Select an approach technique:
• Introductory
• Customer benefit
• Product
• Question
• Praise
• The approach takes a few minutes of a call, but it can make or break a sale

Four basic approaches are in common use:

1. The introductory approach, the sales person introduces himself to the prospect and

states what company he represents.

2. The product consists of handling the product to prospect with little conversation. It

can be most effective when the product is unique and creates interest on sight.
 3. The sales person starts the sale in a consumer-benefit approach by informing the

prospect of what the firm can provide in benefits. In other words, directs the

prospects attention toward the benefits the firm has to deliver.

4. Lastly, referral approach successful in getting an audience with prospect who is

difficult to see directly. It consists of obtaining the permission of a past or present

customer to use his or her name as a reference in meeting a new prospect.

4.Presentation

After establishing rapport with the

prospects through calls, the sales person
proceeds to the formal sales
presentation. The objective of the
presentation is to explain how the
product meets the special needs of the
consumer. The job of the sales person is to
inform the prospect about the characteristics, capabilities and availability of goods and
services that are for sale. In order to ensure that the presentation is understood by the
prospect, the sales person should be clear in his/her communication. Presentation should
also be interesting enough to keep the attention of the prospect focused on the proposal.

Sales presentations are classified into the different categories: Fully automated,

Semi-automated, Memorized, Organized, and Unstructured.

Fully automated: The fully automated presentation is the most highly structured

approach, based on film or slide presentations. The sales person simply answer questions

or clear up doubts. e.g. selling life insurance to the rural or semi-urban prospects.

Semi-automated: In this approach, the sales person reads from brochures or

literatures, adding comments to the prepared materials when necessary. A common

example is selling of pharmaceutical products by medical representatives.

Memorized: In memorized presentation, company message is presented, with few

changes initiated by the sales person.

 Organised presentation: The most popular and often the most effective sales

presentation method is the organized presentation. With this method the sales person has

complete flexibility in oral communication but follows a company prepared outline or

checklist. The organized approach best exemplifies the selling process in which customers

are moved through four stages to a purchase decision; i.e. attention, interest, desire and

action (AIDA).

Unstructured presentations: (Also referred to as problem solving) In this approach,

the buyer and seller together explore the problems that are the real sources of the

company’s needs. Although unstructured presentations are often effective and widely used,

they have a number of limitations. Such presentations tend to be not too well-focused. As a

result, points are often missed and time is wasted. Further, sales person do not usually

anticipate objections but may have to face surprise complaint from the prospects. Because

it is difficult to teach sales person how to use the unstructured method, the problem solving

presentation seems best suited to experienced, sales person who are selling to established

customers.

Demonstration

The demonstration is the core of the selling process. The sales person actually
transmits the information and attempts to persuade the prospect through product
demonstration to make a customer.

Two factors should be taken into consideration in preparing an effective product

demonstration:

i) The demonstration should be carefully rehearsed to reduce the possibility of

even a minor malfunction.

ii) The demonstration should be designed to give customers ‘hand on’ experience

with the product wherever possible. For example an industrial sales

 representative might arrange a demonstration before the purchaser’s technical

personnel.

In a demonstration the salesman can draw five influence strategies

a) Legitimacy : - emphasizing the reputation of his or her company.

b) Expertise : - showing deep knowledge of the buyer‘s situation and products.

c) Referent power:-building shared characteristics, interests and acquaintances.

d) Ingratiation : - providing personal favors such as a free lunch to strengthen reciprocity.

e) Impression management: - Conveying favorable impressions about him or her.

Presentation and Demonstration

There are four components:
 Understanding the buyer’s needs
 Knowing sales presentation methods / strategies
 Developing an effective presentation
 Using demonstration as a tool for selling

 Understanding the buyer’s needs

 Firms and consumers buy products / services to satisfy needs

 To understand buyer’s needs, ask questions and listen
 In business situations, problem identification and impact questions are important
E.G.
• Have you experienced any problems on quality and delivery from the existing supplies?
• What impact the quality and delivery problems will have on your costs and customer
satisfaction?
  Knowing Sales Presentation Methods/Strategies
Firms have developed different methods / styles / strategies of sales presentation

• Stimulus response method / canned approach.

It is a memorised sales talk or a prepared sales presentation.
The sales person talks without knowing the prospect’s needs.
E.G. Used by tele-marketing people

• Formula method / formulated approach.

It is also based on stimulus response thinking that all prospects are similar.
The salesperson uses a standard formula – AIDA (attention, interest, desire, and action).
It is used if time is short and prospects are similar.
Shortcomings are: prospects’ needs are not uncovered and uses same standard formula for
different prospects.

• Need – satisfaction method

Interactive sales presentation
First find prospect’s needs, by asking questions and listening
Use FAB approach: Features, Advantages, Benefits
Effective method, as it focuses on customers

• Consultative selling method / Problem-solving approach

Salespeople use cross-functional expertise
Firms adopt team selling approach
It is used by software / consulting firms

Developing an Effective Presentation

Some of the guidelines are:
• Plan the sales call
• Adopt presentation to the situation and person
• Communicate the benefits of the purchase
• Present relevant and limited information at a time
• Use the prospect’s language
• Make the presentation convincing – give evidence
• Use technology like multi-media presentation

Using Demonstration
• Sales presentation can be improved by demonstration
• Demonstration is one of the important selling tools EGs: Test drive of cars; demonstration of
industrial products in use
• Benefits of using demonstration for selling are:
• Buyers’ objections are cleared
• Improves the buyer’s purchasing interest
• Helps to find specific benefits of the prospect
• The prospect can experience the benefit

5. Handling objections

Overcoming Sales Objections / Resistances

• Objections take place during presentations / when
the order is asked
 Two types of sales objections:
• Psychological / hidden
• Logical (real or practical)
• Methods for handling and overcoming objections:
(a) ask questions,
(b) turn an objection into a benefit,
(c) deny objections tactfully,
(d) third-party certificate,
(e) compensation
 CUSTOMER
STATES
OBJECTION

CONFIRM
LISTEN
YOUR
CAREFULLY
RESPONSE

RESPOND TO
ASK
THE
QUESTIONS
OBJECTIONS

All sales person confront sales resistance i.e. actions or statements by a prospects that

postpone, hinder or prevent the completion of the sale. Normally sales resistance takes the form of
an objection which can be classified as stated or hidden. Prospects may state their objections to a
proposition openly and give the sales person a chance to answer them. This is an ideal situation

because everything is out in the open and the sales person does not need to read the prospect’s
mind. Unfortunately, in many instances prospects hide their real reasons for not buying. Beside
having hidden objections, their stated objection may be phoney. Unless one can determine the real
barrier to the sale one shall not be able to overcome it. There are two major techniques for

discovering hidden objections. One is to keep the prospect talking by asking probing questions. The
other is to use insights gained through experience in selling the product, combined with a
knowledge of the prospects situation, to perceive the hidden objection. Often objection to price and

product are also faced by sales person either in a form of unaffordable or too high price. Product
objections can be answered best when sales people have extensive product knowledge of both their
own products and competitors. Many times prospects may be misinformed or may not understand

some of the technical aspects of the proposition. In this case, the sales person should provide
additional information. Even the prospects objections can be met simply and effectively by altering
the product to suit the customer.
 2.5.5Closing

Trial close and Closing the sale

• Trial close checks the attitude or opinion of the prospect, before closing the sale (or asking for the
order)
• If the response to trial close question is favourable, then the salesperson should close the sale
• Some of the techniques used for closing the sale are:
(a) alternativechoice,
(b) minor points,
(c) assumptive,
(d) summary-of-benefits,
(e) T-account,
(f) special-offer,
(g) probability, and
(h) negotiation

Negotiation
• Salespeople, particularly in business to business selling, need negotiating
skills
• When to negotiate?
(a) When the buyer puts certain conditions for buying to the seller,
(b) When agreement between the buyer and the seller is needed on several
factors, (c) When the product is customised, (d) When the final price is to be
decided
• How to prepare for negotiation?
(a) planning, (b) building relationship, (c) purpose
• Styles of negotiation
(a) I win, you lose, (b) Both of us win (or win-win style), (c) You win,
I lose, and (d) Both of us lose

objective criteria may be market value, depreciated book value, competitive

prices, replacement costs, wholesale price index, and so on.
Classic Bargaining Tactics
Here are several standard bargaining tactics:
Acting Crazy:
Put on a good show by visibly demonstrating your emotional commitment to
your position. This increases your credibility and may give the opponent a
justification to settle on your terms.

Big Pot:
Leave yourself a lot of room to negotiate. Make high demands at the
beginning. After making concessions, you‘ll still end up with a larger payoff
than if you started too low.

Get a Prestigious:
The ally can be a person or a project that is prestigious. You try to get the
opponent to accept less because the person / object he or she will be involved
with is prestigious.

The well is Dry:

Take a stand and tell the opponent you have no more concessions to make.

Limited authority:
 You negotiate in good faith with the opponent, and when you‘re ready to sign
the deal, you say, ―I have to check with my boss.‖

Whipsaw / Auction:
You let several competitors know you‘re negotiating with them at the same
time. Schedule competitors‘ appointments with you for the same time and
keep them all waiting to see you.

Divide and Conquer:

If you‘re negotiating with the opponent‘s team, sell one member of the team
on your proposals. That person will help you sell the other members of the
team.

Get Lost / Stall for Time:

Leave the negotiation completely for a while.Come back when things are
getting better and try to renegotiate then. Time period can be long (Say you‘re
going out of town) or short (go to the bathroom to think).

Wet Noodle:
Give no emotional or verbal response to the opponent.
Don‘t respond to his or her force or pressure. Sit there like a wet noodle and
keep a ―poker face‖.

Be Patient:
If you can afford to outwait the opponent, you‘ll probably win big.
 Let’s Split the Difference:
The person who first suggests this has the least to lose.

Trial Balloon:
You release your decision through a so-called reliable source before the
decision is actually made. This enables you to test reactions to your decision.

After having answered and overcome objections, it is the stage for sales person to
ask for the order from the prospects. The entire effort is wasted unless the sales person
can get the prospect to agree to buy the product. There are several closing techniques

which are being used by sales person in India. Sales person should select among these
technique one that fits the specific prospect and selling situation. Now we would discuss
few effective closing techniques. In action close technique the sales person take an action

that will complete the sale e.g. in case of high priced products like Motorcar, photocopier
or industrial product the sales person may negotiate with the financial institution for
financial assistance for the prospects.

The gift close technique provides the prospect with an added incentive for taking

immediate buying action. In one more yes close techniques, the sales persons restates

the benefits of the products in a series of questions that will result in positive responses

by the prospects. The process may result in an order.

The direct close is clear and simple technique, many sales persons feel that this is

the best approach for closing, especially if there are strong positive buying motives, the
 sales person will summarise the major points that were made during presentation to the

prospects prior to asking for the sale.

Experienced sales people always try to close early. If they are not successful, they

continue the presentation and then try a different closing technique. Good sales person

know that if they have successfully completed all of the earlier steps, then the prospect

is worth an extra effort at closing. In most cases this simply means switching to a different

type of close. Closing is the most important aspect of the sales process. Unless the sales

person can close the sale, the other steps in the sales process are meaningless.

2.5.6Follow-up
Follow-up and Service
• Necessary for customer satisfaction
• Successful salespeople follow-up in different ways: For example,
• Check order details
• Follow through delivery schedule
• Visit when the product is delivered
• Build long-term relationship
• Arrange warranty service

The selling process is not completed by merely making the sale, as generally

assumed by many sales person. After sales activities are important part of the whole

selling process. Effective sales-follow-up reduces the buyer’s doubt about the product or

services and improves the chance that the person will buy again in the future. In addition

to post-sale activities, sales person are also required to maintain good customer

relations.
 Now-a-days many companies are evolving specific policies and practices to
ensure that customer’s needs are not neglected. No matter how efficient a company is,

there are always some customer complaints. The complaint should be taken seriously
and handled with concern. The customer must know that the company cares about
maintaining good customer relations. Reasonably frequent contacts with the present

customers are, an expected part of the sales person’s job. For important customers,
personal visit are appropriate. Letters, notes, phone calls, greetings are also good ways
to keep in touch with customers. Many good business house also offer customer
newsletter.

Successful sales person never stop serving customers. In addition to handling

complaints, they keep customer informed about the latest products or services, fulfil

reasonable request, and provide other forms of assistance. The sales people should also

appreciate the customer by thanking customers for their business. Small gifts can be

given after the sale and at appropriate times during the year. Sales person should try to

make self-analysis for evaluating their own selling performance and methods. A Sales

person should analyse every call to determine what factors influenced its eventual

outcome. Self-analysis is a very useful tool in improving overall sales effectiveness.

Importance of Personal Selling and Sales Management
• The only function / department in a company that generates revenue / income
• The financial results of a firm depend on the performance of the sales
department / management
• Many salespeople are among the best paid people in business
• It is one of the fastest and surest routes to the top management

Roles and Skills of a Modern Sales Manager

Some of the important roles of the modern sales manager are:
• A member of the strategic management team
• A member of the corporate team to achieve objectives
• A team leader, working with salespeople
• Managing multiple sales / marketing channels
• Using latest technologies (like CRM) to build superior buyer-seller
relationships
• Continually updating information on changes in marketing environment
Skills of a Successful Sales Manager
• People skills include abilities to motivate, lead, communicate, coordinate, team-oriented
relationship, and mentoring
• Managing skills consist of planning, organizing, controlling and decision making
• Technical skills include training, selling, negotiating, problem-solving, and use of
computers

Types of Sales Managers / Levels of Sales Management Positions

CEO

V. P. Sales /
V. P. Marketing

National Sales Manager

Regional / Zonal / Divisional Sales Managers

District / Branch / Area Sales Managers

Sales Trainee / Sales Person / Sales Representative

Sales Objectives, Strategies and Tactics

The main components of planning in a company are objectives, strategies and tactics. Their
relationship is shown below

E.G. A company wants to increase sales of electric motors by 15 percent, as one of the sales
objectives. (see next slide)

Emerging Trends in Sales Management

• Global perspective
• Revolution in technology
• Customer relationship management (CRM)
• Salesforce diversity
• Team selling approach
• Managing multi-channels
• Ethical and social issues
• Sales professionalism