chapter 17 and 16 revised

Personal Selling

and

Direct and Online Marketing: Building Direct Customer

Relationships

16 16 &17&17

After studying this chapter, you should be able to:1. Discuss the role of a company’s salespeople in creating

value for customers and building customer relationships

2. Identify and explain the six major force management steps

3. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing

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1. Personal Selling2. The Personal Selling Process

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The Nature of Personal Selling

Examples of people who do the selling include:• Salespeople • Sales representatives• District managers• Account executives• Sales engineers• Agents• Account development reps

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The Nature of Personal Selling

Salespeople can include an order taker such as someone standing behind the counter or an order getter whose position demands more creative selling and relationship building

Personal selling is the interpersonal part of the promotion mix and can include:

• Face-to-face communication• Telephone communication• Video or Web conferencing

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The Role of the Sales Force

Salespeople can be more effective than advertising

• Learn about customer problems and adjust the marketing offer and presentation accordingly to meet the special needs of each customer

• Representing the company to customers• Representing customers to the company

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Managing the Sales Force

Sales force management is the analysis, planning, implementation, and control of sales force activities and includes:

• Designing the sales force strategy and structure

• Recruiting• Selecting• Training• Compensating• Supervising• Evaluating

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Managing the Sales ForceSales Force Structure

• Territorial sales force structure• refers to a structure where each salesperson is assigned

an exclusive geographic area and sells the company’s full line of products and services to all customers in that territory

• Product sales force structure• refers to a structure where each salesperson sells along

product lines • Customer sales force structure

• refers to a structure where each salesperson sells along customer or industry lines

• Complex sales force structure • refers to a structure where a wide variety of products is

sold to many types of customers over a broad geographic area and combines several types of sales force structures

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Managing the Sales ForceSales Force Size

Salespeople are one of the company’s most productive and expensive assets

Increases in sales force size can increase sales and costs

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Managing the Sales ForceOther Sales Force Strategy and Structure Issues

Outside salespeople call on customers in the field

Inside salespeople conduct business from their offices

• Technical sales support people• Sales assistants

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Managing the Sales ForceOther Sales Force Strategy and Structure Issues

Team selling is used to service large complex accounts and can include experts from:

• Sales, Marketing, Technical , R&D, Engineering, Operations and Finance

Some challenges of team selling • Customers used to working with one salesperson may

become confused or overwhelmed• Salespeople used to working alone can have difficulties

working with and trusting teams• Evaluating individual contributions can lead to

compensation issues

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Recruiting and Selecting Salespeople

Issues in recruiting and selecting include:Careful selection • Increases sales performancePoor selection• Increases recruiting and training costs

• Lost sales• Disrupts customer relationships

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Compensating Salespeople

Compensation is made up of:• Fixed amounts - a salary, give the

salesperson some stable income

• Variable amounts - commission or bonus based on sales performance; rewards the salesperson for greater effort and success

• Expenses

• Fringe benefits

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Supervising and Motivating Salespeople

The goal of supervision is to help salespeople work smart by doing the right things in the right ways

The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals

Sales morale and performance can be increased through:

• Organizational climate - feelings• Sales quotas• Positive incentives – sales contest, sales

meeting16-26

Evaluating Salespeople and Sales Force Performance

• Sales reports• Call reports• Expense reports

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The goal of the personal selling process is to get new customers and obtain orders from them

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Steps in the Personal Selling Process

1. Prospecting and qualifying2. Pre-approach3. Approach4. Presentation and demonstration5. Handling objections6. Closing7. Follow-up

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Steps in the Personal Selling ProcessStep 1

Prospecting identifies qualified potential customers through referrals from:

• Customers• Suppliers• Dealers• Internet

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Qualifying is identifying good customers and screening out poor ones by looking at:

• Financial ability• Volume of business• Needs• Location• Growth potential

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Pre-approach is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers

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Objectives• Qualify the

prospect• Gather information• Make an immediate

sale

Approaches• Personal visit• Phone call• Letter

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In the pre-approach stage, the salesperson sets call objectives and the best 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

Salesperson must listen to customersPresentation, need satisfaction approach

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Handling objections is the process where salespeople resolve problems that are logical, psychological, or unspoken

When handling objections from buyers, salespeople should:

• Be positive• Seek out hidden objections• Ask the buyers to clarify any objections• Take objections as opportunities to provide more

information• Turn objections into reasons for buying

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Closing is the process where salespeople should recognize signals from the buyer, including physical actions, comments, and questions to close the sale

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Closing techniques can include:• Asking for the order• Reviewing points of agreement• Offering to help write up the order• Asking if the buyer wants this model

or another one• Making note that the buyer will lose

out if the order is not placed now• Offering incentives to buy, including

lower price or additional quantity

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Follow up is necessary if the salesperson wants to ensure customer satisfaction and repeat business

Personal Selling and Customer Relationship Management

Personal selling is a transaction-oriented approach to close a specific sale with a specific customer, with the long-term goal to develop a mutually profitable relationship

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After studying this chapter, you should be able to:

1. Define direct marketing and discuss its benefits to customers and companies

2. Identify and discuss the major forms of direct marketing

3. Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies

4. Discuss how companies go about conducting online marketing to profitably deliver more value to customers

5. Overview the public policy and ethical issues presented by direct marketing

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1. The New Direct-Marketing Model2. Growth and Benefits of Direct Marketing3. Customer Databases and Direct Marketing4. Forms of Direct Marketing5. Online Marketing6. Integrated Direct Marketing7. Public Policy Issues in Direct Marketing

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Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships

• No intermediaries• An element of the promotion mix• Fastest-growing form of marketing

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Benefits to Buyers

• Convenience• Ready access to many products• Access to comparative information about

companies, products, and competitors• Interactive and immediate

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Benefits to Sellers

• Tool to build customer relationships• Low-cost, efficient, fast alternative to

reach markets• Flexible• Access to buyers not reachable through

other channels

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Customer Database

Customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data

Uses:• Locate good and potential customers• Generate sales leads• Learn about customers• Develop strong long-term relationships

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• Personal selling direct marketing• Direct-mail direct marketing• Catalog direct marketing• Telephone marketing• Direct-response television marketing• Kiosk marketing• Digital direct marketing• Online marketing

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Direct-mail marketing involves an offer, announcement, reminder, or other item to a person at a particular address

• Personalized• Easy-to-measure results• Costs more than mass media • Provides better results than mass media

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Benefits of Web-based catalogs

• Lower cost than printed catalogs

• Unlimited amount of merchandise

• Real-time merchandising• Interactive content• Promotional features

Challenges of Web-based catalogs

• Require marketing• Difficulties in attracting

new customers

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Catalog direct marketing involves printed and Web-based catalogs

Telephone direct marketing involves using the telephone to sell directly to consumers and business customers

• Outbound telephone marketing sells directly to consumers and businesses

• Inbound telephone marketing uses toll-free numbers to receive orders from television and print ads, direct mail, and catalogs

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Benefits of telephone direct marketing

• Purchasing convenience

• Increased product service and information

Challenges of Web-based catalogs

• Unsolicited outbound telephone marketing

• Do-Not-Call Registry

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Direct-response television (DRTV) marketing involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase and 30-minute infomercials such as home shopping channels

• Less expensive than other forms of promotion• Easier to track results

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Kiosk marketing involves placing information and ordering machines in stores, airports, trade shows, and other locations

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Digital direct marketing technologies• Mobile phone marketing• Podcasts• Vodcasts• Interactive TV

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Mobile phone marketing includes:• Ring-tone giveaways• Mobile games• Ad-supported content• Contests and sweepstakes

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Podcasts and Vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or iPod and listening to them at the consumer’s convenience

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Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences

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Marketing and the Internet

Internet is a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository

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Online Marketing Domains

• Business to consumer (B2C)• involves selling goods and services online to final

consumers• Business to business (B2B)

• involves selling goods and services, providing information online to businesses, and building customer relationships

• Consumer to consumer (C2C)• occurs on the Web between interested parties over

a wide range of products and subjects, blogs• Consumer to business (C2B)

• involves consumers communicating with companies to send suggestions and questions via company Web sites

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Types of Online Marketers

• Click-only marketers• Operate only online without any brick and mortar

presence• E-tailers (Amazon), search engines and portals,

shopping or price comparison sites, Internet service providers (ISP)

• Click-and-mortar marketers• Companies are brick-and-mortar companies with

an online presence• Advantages of click and mortar companies include

known and trusted brand names, strong financial resources, large customer bases, industry knowledge, reputation etc

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Setting Up an Online Presence

Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site

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Types of sites• Corporate Web site• Marketing Web site

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Setting up an Online Presence

Corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the company’s products directly to:

• Provide information• Create excitement• Build relationships

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Marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

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Designing Effective Web Sites

To attract visitors, companies must:• Promote in offline promotion and online

links• Create value and excitement• Constantly update the site• Make the site useful

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The seven Cs of effective Web site design1. Context - is the site’s layout2. Content - is the site’s pictures, sound, and video3. Community - is the site’s means to enable user-to-

user communication4. Customization - is the site’s ability to tailor itself to

different users or to allow users to personalize the site

5. Communication - is the way the site enables user-to-user, user-to-site, or two-way communication

6. Connection - is the degree that the site is lined to other sites

7. Commerce - is the site’s capabilities to enable commercial transactions

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The eighth C

To keep customers coming back, the site needs to constantly change

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Placing Ads and Promotions Online

Forms of online advertising• Display ads• Search-related ads• Online classifieds

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Display ads • Banners are banner-shaped ads found on a Web

site• Interstitials are ads that appear between screen

changes• Pop-ups are ads that suddenly appear in a new

window in front of the window being viewed• Rich media ads incorporate animation, video,

sound, and interactivity

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Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion

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Other forms of online promotion include

Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information

Alliances and affiliate programs are relationships where online companies promote each other

Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends

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The Future of Online Advertising

Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix

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Creating or Participating in Web Communities

Web communities allow members to congregate online and exchange views on issues of common interest

• iVillage.com• MyFamily.com

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Using E-mail

Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment

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Integrated direct marketing involves the use of carefully coordinated multiple-media, multiple-stage campaigns

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• Customer irritation, unfairness, deception, and fraud

• Privacy• Security

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Irritation, Unfairness, Deception, and Fraud

Irritation includes annoying and offending customers

Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers

Deception includes “heat merchants” who design mailers and write copy designed to mislead consumers

Internet fraud includes identity theft and financial scams

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chapter 17 and 16 revised

Documents