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Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377CHAPTER 14 Selling and sales management BILL DONALDSON Introduction T

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Buy this file from http://www.download-it.org/learning-resources.php?promoCode=&partnerID=&content=story&storyID=1377

CHAPTER 14

Selling and sales management

BILL DONALDSON

Introduction

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

informa-tion and persuasion role of salespeople is being

absorbed into their relationship role

Sales-people must take responsibility for creating,

developing and maintaining profitable

relation-ships with their customers This being so, the

need is paramount to focus on how to win,

develop and retain customers to achieve the

marketing and sales objectives of the firm This

puts the spotlight once again on the role of

selling in the marketing mix and on the

management of sales operations Sales

opera-tions are the revenue generation engine of the

organization and thus have a direct impact on

the success of the firm In this chapter, we

consider how selling is changing and evolving

We examine the new role of salespeople and

redefine the sales encounter in different

exchange situations We then address some of the key issues in managing the salesforce as they relate to marketing

The changing role of salespeople

Consider the following statistics In 1970, 80 per cent of grocery products were sold to 1656 buying points, the remaining 20 per cent to thousands of smaller units By 1980, 80 per cent

of grocery products were purchased from only

656 buying points Today, 80 per cent is bought from only five major buying points (Keynote, 1998) Less dramatic but similar trends can be found across industries, and the effects on salespeople and on the efficiency of sales operations has been radical These changes imply a new perspective for integrating sales and other forms of communication with the operational side of the business Driven by an urgency arising from more complex supply chains, fewer and larger purchase points, the availability and use of IT in customer contact operations, relative increased costs of labour, and the continuing internationalization of busi-ness, sales operations are now different These factors contribute positively to the need for more efficient exchange and communication

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Selling and sales management 361

systems between firms and their customers,

predicated by increases in the costs of acquiring

new customers, and the need to retain the

existing customer base and stimulate the

pur-chasing power of those customers already on

the books

Personal selling can be defined as the

personal contact with one or more purchasers

for the purpose of making a sale To be effective,

marketing management needs to integrate

per-sonal selling with other promotional elements,

with other organizational functions such as

distribution and production, and with the

customer and competitive structures prevailing

in the market The importance of personal

selling is such that expenditure on the salesforce

usually exceeds the budget for all other

market-ing communications activities added together,

with the possible exception of advertising in

large, fast-moving consumer goods companies

or direct marketing organizations

Personal selling has several interrelated

roles within the communications mix The

information role is part of a two-way process

whereby information about the company’s

product or offer needs to be communicated to

existing and potential customers and, in the

reverse direction, customers’ needs are

cor-rectly interpreted and understood by

manage-ment Salespeople impart knowledge about

products or services which provide benefits to

customers, and also a range of information on

promotional support, finance, technical advice,

service and other elements which contribute to

customer satisfaction Salespeople are also the

face-to-face contact between purchasers and the

company, and for good reason are referred to as

‘the eyes and ears of the organization’, since

senior management’s customer contact may be

limited

A second role salespeople must fulfil is

persuasion The importance of correctly

identi-fying customers’ needs and market

opportun-ities cannot be overstated Nevertheless, in

competitive markets, prospective customers are

usually faced with an abundance of choice As

a result, adoption of the marketing concept can

be no guarantee of competitive advantage Purchasers will have to be convinced that the company has correctly identified their needs and that the offer provides benefits over any other firm Salespeople are part of this process through persuasion and service

A third role is relationship building, and salespeople must initiate, build and develop relationships between the firm and its custom-ers Owing to their boundary-spanning role, the salesforce of a company has traditionally been a vital link between the firm and its customers, and a prime platform for commu-nicating the firm’s marketing message and the voice of the customer to the firm In the high-tech world, it is easy to overlook the impor-tance of personal relationships and how the interaction with customers has changed, if at all Salespeople have always realized the importance of relationships, but there is now evidence that salespeople’s and customer’s understanding of each other may not be accu-rate (Sharma, 2000) Therefore, the manage-ment task is to re-engineer sales practices to maximize the salesforce potential in this new environment

The nature of the personal selling task is continuing to change in that selling to custom-ers has been replaced by co-operating with customers The goals and objectives for the salesperson have also changed from achieving

or exceeding target, selling X products in Y period and maximizing earnings, to that of building repeat business with the firm’s exist-ing and potential customer base The emphasis has shifted from ‘closing’ the singular sale to creating the necessary conditions for a long-term relationship between the firm and its customers that breeds successful sales encoun-ters in the long run This shift renders obsolete many of the currently available sales manage-ment practices, and the sales philosophy and culture that has driven the development of the sales management field for decades It also questions sales performance measures based on individual criteria and sales management prac-tices which reflect recruitment, training and

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362 The Marketing Book

rewards based on sales volumes rather than

relationship performance The role of the

sales-person seems to have moved away from

tradi-tional aggressive and persuasive selling, to a

new role of ‘relationship manager’ and, in

practice, we are witnessing a tendency to

change the sales lexicon from salesforce to sales

counsellors, professional representatives or

sales consultants (Manning and Reece, 1992;

DeCormier and Jobber, 1993) Perhaps the

change in the title is designed to facilitate the

transition of the salesforce’s tasks from selling

to advising and counselling, from talking to

listening and from pushing to helping, as

suggested by Pettijohn et al (1995) Recent

evidence suggests that often the idea of

syner-gistic relationships and partnerships is slower

than hoped for by participants The expected

benefits from developing closer relationships

also fail to materialize in the ways expected

(Marsh, 2000) This transition is not only a

matter of title The new reality of relationship

marketing directs salespeople and sales

man-agers to develop long-lasting relationships with

their customers based on mutual trust and

commitment (Morgan and Hunt, 1994)

The costs of personal selling

According to a 2001 survey, the average cost of

an outside salesperson is in excess of £55 000

per annum (Reward Group/Institute of Sales

and Marketing Management, 2001) Yet the

time actually spent face to face with customers

is typically around 20–30 per cent of working

hours This raises the question of what form of

communication is both effective and efficient in

today’s marketplace The most significant

dif-ference between selling and other elements in

the marketing communications mix is the

per-sonal contact, but this comes with a relatively

high price tag The need for this personal

contact will vary depending on such factors as

the scale of risk, size of investment, type of

customer, frequency of purchase, newness of

product and many other factors In some situations the information or persuasion role can be achieved by impersonal means of communication, particularly advertising

Advertising is impersonal, indirect and aimed at a mass audience, whereas selling is individual, direct and much more adaptable With advertising the message is more limited, cheaper per contact but unidirectional, relying

on a pull approach rather than personal selling, which is two-way, but employs a push strategy and is relatively expensive per contact Today, yet another dimension needs to be considered This is the role and position of direct marketing

as a form of communications In Table 14.1, we compare advertising, direct marketing and personal selling

Therefore, a primary task of management

is to be clear on the role of personal selling and what exactly it is we want salespeople to do Information technology (IT) is the set of tech-nologies related to the processing and commu-nication of information, including computer and electronic databases, advanced telecommu-nications, CD-ROMs and the Internet These technologies have led to new and powerful ways to reach customers and are changing the way firms interact

The use of marketing databases, telemar-keting and the Internet is having a significant impact on how sales operations are managed and will continue to do so For example, the Internet is a powerful tool for providing infor-mation and will be an important means of buyer–seller communication Many traditional intermediaries, particularly those who do not stock a physical product, will find that con-sumers empower themselves to collect infor-mation and make the purchase decision This changes the information role of salespeople, and travel agencies, car dealerships and finan-cial intermediaries are likely to be most affected

by such a process The demand for secondary sources of information is passing from a num-ber of individual and independent sources to software programs which can browse the Inter-net and report the findings directly to users

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