Selling and sales management

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Selling and sales management

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The role of selling is continuing to change and evolve in response to dramatic moves in the way buyers and sellers interact. Individual knowledge, skills and abilities are still required, perhaps more than ever, but teamwork and technology are also vital ingredients in an effective organizational response to the needs and demands of customers. The salesforce have always been ambassadors for their firm, but in a turbulent business environment the information and persuasion role of salespeople is being absorbed into their relationship role. Salespeople must take responsibility for creating, developing and maintaining profitable relationships with their customers. This being so,...

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  1. CHAPTER 14 Selling and sales management BILL DONALDSON Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377 exchange situations. We then address some of Introduction the key issues in managing the salesforce as they relate to marketing. The role of selling is continuing to change and evolve in response to dramatic moves in the way buyers and sellers interact. Individual knowledge, skills and abilities are still required, The changing role of salespeople perhaps more than ever, but teamwork and technology are also vital ingredients in an Consider the following statistics. In 1970, 80 per effective organizational response to the needs cent of grocery products were sold to 1656 and demands of customers. The salesforce have buying points, the remaining 20 per cent to always been ambassadors for their firm, but in thousands of smaller units. By 1980, 80 per cent a turbulent business environment the informa- of grocery products were purchased from only tion and persuasion role of salespeople is being 656 buying points. Today, 80 per cent is bought absorbed into their relationship role. Sales- from only five major buying points (Keynote, people must take responsibility for creating, 1998). Less dramatic but similar trends can be developing and maintaining profitable relation- found across industries, and the effects on ships with their customers. This being so, the salespeople and on the efficiency of sales need is paramount to focus on how to win, operations has been radical. These changes develop and retain customers to achieve the imply a new perspective for integrating sales marketing and sales objectives of the firm. This and other forms of communication with the puts the spotlight once again on the role of operational side of the business. Driven by an selling in the marketing mix and on the urgency arising from more complex supply management of sales operations. Sales opera- chains, fewer and larger purchase points, the tions are the revenue generation engine of the availability and use of IT in customer contact organization and thus have a direct impact on operations, relative increased costs of labour, the success of the firm. In this chapter, we and the continuing internationalization of busi- consider how selling is changing and evolving. ness, sales operations are now different. These We examine the new role of salespeople and factors contribute positively to the need for redefine the sales encounter in different more efficient exchange and communication Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377
  2. Selling and sales management 361 systems between firms and their customers, be no guarantee of competitive advantage. predicated by increases in the costs of acquiring Purchasers will have to be convinced that the new customers, and the need to retain the company has correctly identified their needs existing customer base and stimulate the pur- and that the offer provides benefits over any chasing power of those customers already on other firm. Salespeople are part of this process the books. through persuasion and service. Personal selling can be defined as the A third role is relationship building, and personal contact with one or more purchasers salespeople must initiate, build and develop for the purpose of making a sale. To be effective, relationships between the firm and its custom- marketing management needs to integrate per- ers. Owing to their boundary-spanning role, sonal selling with other promotional elements, the salesforce of a company has traditionally with other organizational functions such as been a vital link between the firm and its distribution and production, and with the customers, and a prime platform for commu- customer and competitive structures prevailing nicating the firm’s marketing message and the in the market. The importance of personal voice of the customer to the firm. In the high- selling is such that expenditure on the salesforce tech world, it is easy to overlook the impor- usually exceeds the budget for all other market- tance of personal relationships and how the Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377 ing communications activities added together, interaction with customers has changed, if at with the possible exception of advertising in all. Salespeople have always realized the large, fast-moving consumer goods companies importance of relationships, but there is now or direct marketing organizations. evidence that salespeople’s and customer’s Personal selling has several interrelated understanding of each other may not be accu- roles within the communications mix. The rate (Sharma, 2000). Therefore, the manage- information role is part of a two-way process ment task is to re-engineer sales practices to whereby information about the company’s maximize the salesforce potential in this new product or offer needs to be communicated to environment. existing and potential customers and, in the The nature of the personal selling task is reverse direction, customers’ needs are cor- continuing to change in that selling to custom- rectly interpreted and understood by manage- ers has been replaced by co-operating with ment. Salespeople impart knowledge about customers. The goals and objectives for the products or services which provide benefits to salesperson have also changed from achieving customers, and also a range of information on or exceeding target, selling X products in Y promotional support, finance, technical advice, period and maximizing earnings, to that of service and other elements which contribute to building repeat business with the firm’s exist- customer satisfaction. Salespeople are also the ing and potential customer base. The emphasis face-to-face contact between purchasers and the has shifted from ‘closing’ the singular sale to company, and for good reason are referred to as creating the necessary conditions for a long- ‘the eyes and ears of the organization’, since term relationship between the firm and its senior management’s customer contact may be customers that breeds successful sales encoun- limited. ters in the long run. This shift renders obsolete A second role salespeople must fulfil is many of the currently available sales manage- persuasion. The importance of correctly identi- ment practices, and the sales philosophy and fying customers’ needs and market opportun- culture that has driven the development of the ities cannot be overstated. Nevertheless, in sales management field for decades. It also competitive markets, prospective customers are questions sales performance measures based on usually faced with an abundance of choice. As individual criteria and sales management prac- a result, adoption of the marketing concept can tices which reflect recruitment, training and Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377
  3. 362 The Marketing Book rewards based on sales volumes rather than product and many other factors. In some relationship performance. The role of the sales- situations the information or persuasion role person seems to have moved away from tradi- can be achieved by impersonal means of tional aggressive and persuasive selling, to a communication, particularly advertising. new role of ‘relationship manager’ and, in Advertising is impersonal, indirect and practice, we are witnessing a tendency to aimed at a mass audience, whereas selling is change the sales lexicon from salesforce to sales individual, direct and much more adaptable. counsellors, professional representatives or With advertising the message is more limited, sales consultants (Manning and Reece, 1992; cheaper per contact but unidirectional, relying DeCormier and Jobber, 1993). Perhaps the on a pull approach rather than personal selling, change in the title is designed to facilitate the which is two-way, but employs a push strategy transition of the salesforce’s tasks from selling and is relatively expensive per contact. Today, to advising and counselling, from talking to yet another dimension needs to be considered. listening and from pushing to helping, as This is the role and position of direct marketing suggested by Pettijohn et al. (1995). Recent as a form of communications. In Table 14.1, we evidence suggests that often the idea of syner- compare advertising, direct marketing and gistic relationships and partnerships is slower personal selling. Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377 than hoped for by participants. The expected Therefore, a primary task of management benefits from developing closer relationships is to be clear on the role of personal selling and also fail to materialize in the ways expected what exactly it is we want salespeople to do. (Marsh, 2000). This transition is not only a Information technology (IT) is the set of tech- matter of title. The new reality of relationship nologies related to the processing and commu- marketing directs salespeople and sales man- nication of information, including computer agers to develop long-lasting relationships with and electronic databases, advanced telecommu- their customers based on mutual trust and nications, CD-ROMs and the Internet. These commitment (Morgan and Hunt, 1994). technologies have led to new and powerful ways to reach customers and are changing the way firms interact. The use of marketing databases, telemar- The costs of personal selling keting and the Internet is having a significant impact on how sales operations are managed According to a 2001 survey, the average cost of and will continue to do so. For example, the an outside salesperson is in excess of £55 000 Internet is a powerful tool for providing infor- per annum (Reward Group/Institute of Sales mation and will be an important means of and Marketing Management, 2001). Yet the buyer–seller communication. Many traditional time actually spent face to face with customers intermediaries, particularly those who do not is typically around 20–30 per cent of working stock a physical product, will find that con- hours. This raises the question of what form of sumers empower themselves to collect infor- communication is both effective and efficient in mation and make the purchase decision. This today’s marketplace. The most significant dif- changes the information role of salespeople, ference between selling and other elements in and travel agencies, car dealerships and finan- the marketing communications mix is the per- cial intermediaries are likely to be most affected sonal contact, but this comes with a relatively by such a process. The demand for secondary high price tag. The need for this personal sources of information is passing from a num- contact will vary depending on such factors as ber of individual and independent sources to the scale of risk, size of investment, type of software programs which can browse the Inter- customer, frequency of purchase, newness of net and report the findings directly to users Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377
  4. Chapter extract To buy the full chapter, and for copyright information, click here http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377 The publisher detailed in the title page holds the copyright for this document All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recorded or otherwise, without the written permission of Spenford IT Ltd who are licensed to reproduce this document by the publisher All requests should by sent in the first instance to rights@download-it.org Please ensure you have book-marked our website. www.download-it.org
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