Everything you need to know about what is personal selling. Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and techniques for building personal relationships with another party (e.g., those involved in a purchase decision) that results in both parties obtaining value.
In most cases the “value” for the salesperson is realized through the financial rewards of the sale while the customer’s “value” is realized from the benefits obtained by consuming the product.
Personal Selling means the performance of actual selling activity. It involves oral conversation between seller and buyer for the purpose of making sales.
The main purpose of personal selling is to sell the goods to their ultimate buyers by bringing right goods and services into contact with right customers.
1. What is Personal Selling 2. Definitions and Concept of Personal Selling 3. Characteristics 4. Objectives 5. Functions 6. Importance 7. Approaches 8. Strategies 9. Difference between Personal Selling and Salesmanship 10. Advantages 11. Disadvantages.
What is Personal Selling: Definitions, Concept, Characteristics, Objectives, Functions, Importance, Advantages and Disadvantages
- What is Personal Selling
- Definitions and Concept of Personal Selling
- Characteristics of Personal Selling
- Objectives of Personal Selling
- Functions of Personal Selling
- Importance of Personal Selling
- Approaches to Personal Selling
- Strategies for Personal Selling
- Difference between Personal Selling and Salesmanship
- Advantages of Personal Selling
- Disadvantages of Personal Selling
What is Personal Selling – Meaning and Introduction
The personal selling objectives of the company influence the personal selling strategy and the sales policies. In ordinary circumstances, personal selling strategies are designed on the basis of sales policies. While sales policies provide general guidelines for making personal selling decisions. Personal selling strategy determines the two important questions e.g., the nature of sales job and the size of the sales force. While the personal selling objectives and sales policies both influence these two factors i.e., nature of sales job and the kind of the sales force.
The nature of sales positions varies from company to company according to the nature of the product. It may be possible that nature of sales job may vary even though the duties and responsibilities of salesmen in two different companies are similar. For example, the task of a Brooke Bond travelling salesman is entirely different from that of salesman of a product of a technical nature.
In the first case, he is to get orders and supply the goods whereas in the latter situation, the salesman has to find out and convince the customer and aggressively seeks orders. The salesman in the first situation is demand satisfier whereas in the second situation, he is demand creator. Naturally, Personal selling strategy would substantially differ in each case.
Complexity of the product or product line also influences the Personal Selling Strategy. Sales policies and the nature of sales job. Product of highly technical nature and that of simple product may require different sales jobs. Consequently Personal selling efforts and strategy differ.
Similarly, sales jobs for different types of salesmen may also differ from each other. A trade salesman establishes long term relations with the customers whereas technical salesman assists the customers by providing technical assistance and advice which helps the company’s sales to go up. Thus, personal selling and sales strategy differ from time to time, place to place and from company to company.
Similarly, type of customer not only affects the personal selling objectives and sales strategy but also influences substantially the nature of the sales job. The industrial user of the company’s product will be required to be dealt with in a different way than the middleman buying the product for resale. Difference in salesman’s role and tasks call for difference in sales job descriptions. Nevertheless, sales jobs may be categorised into limited number of groups i.e., trade selling, missionary selling, technical selling and new business selling.
Thus, Personal selling, a very important element in the promotional mix, is greatly influenced by a number of factors. However, its success largely depends upon the salesman and his potentialities. Many companies compliment personal selling activities with advertisement and other sales promotion activities which work very well his promoting the sales of the company’s product.
What is Personal Selling – Definitions and Concept: Provided by Richard Buskirk, Cundiff and Still, William J. Stanton and American Marketing Association
Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and techniques for building personal relationships with another party (e.g., those involved in a purchase decision) that results in both parties obtaining value. In most cases the “value” for the salesperson is realized through the financial rewards of the sale while the customer’s “value” is realized from the benefits obtained by consuming the product.
However, getting a customer to purchase a product is not always the objective of personal selling. For instance, selling may be used for the purpose of simply delivering information. Because selling involves personal contact, this promotional method often occurs through face-to-face meetings or via a telephone conversation, though newer technologies allow contact to take place over the Internet including using video conferencing or text messaging (e.g., online chat).
Among marketing jobs, more are employed in sales positions than any other marketing-related occupation. In the U.S. alone, the U.S. Department of Labor estimates that over 14 million or about 11% of the overall labor force are directly involved in selling and sales-related positions.
Worldwide this figure may be closer to 100 million. Yet these figures vastly under-estimate the number of people who are actively engaged in some aspect of selling as part of their normal job responsibilities. While millions of people can easily be seen as holding sales jobs, the promotional techniques used in selling are also part of the day-to-day activities of many who are usually not directly associated with selling.
For instance, top corporate executives whose job title is CEO or COO are continually selling their company to major customers, stock investors, government officials and many other stakeholders. The techniques they employ to gain benefits for their company are the same used by the front-line salesperson to sell to a small customer. Consequently, our discussion of the promotional value of personal selling has implications beyond marketing and sales departments.
Personal Selling means the performance of actual selling activity. It involves oral conversation between seller and buyer for the purpose of making sales. The main purpose of personal selling is to sell the goods to their ultimate buyers by bringing right goods and services into contact with right customers.
Personal selling consists of contracting prospective buyer of product personally. – Richard Buskirk
“Personal selling is an oral presentation in conversation with one or more prospective purchases for the purpose of making sales”. – American Marketing Association
“Personal selling is basically a method of communication. It involves not only individual but social behaviour each of the person also in face contrast salesman and prospect influences the other”. – Cundiff and Still
“Personal selling consists of individual, personal communication, in contrast to mass relatively impersonal communication of advertising, sales promotion and other promotional tools.” – William J. Stanton
What is Personal Selling – 8 Important Characteristics
The following are the main characteristics of personal selling:
1. It is a method of direct selling, as the seller and the buyer come in a direct contact with each other.
2. It involves an oral conversation between the seller and the buyer regarding quality, price, characteristics, use, etc. of the product.
3. In personal selling, the seller wants to convince the buyer about the goods and services which he wants to sell.
4. It involves the sale of goods and services personally.
5. It is the most effective tool of increasing sales.
6. It gives marketers the greatest freedom to adjust a message to satisfy the customer’s information needs.
7. It helps provide a lot of important information to the enterprise regarding market.
8. It is essential for the survival and growth of business.
What is Personal Selling – 9 Qualitative Objectives
Long-term personal selling objectives contribute to long-term corporate objectives. These are mostly qualitative objectives.
The following objectives illustrate this:
1. To service the existing customers by maintaining a relationship with them, and by filling up their orders.
2. To get new customers.
3. To carry-out the selling task entirely, if other elements of the promotional mix are not at work.
4. To help the trade sell the company’s product line. To motivate trade to keep our product line in stock. To keep the trade informed about product line and changes therein. To help the trade redress its grievances.
5. To make the customers aware of our marketing strategy.
6. To act as technical consultants for complex products.
7. To provide feedback to the company about the markets and customers.
8. To help the middlemen’s sales force.
9. To help the trade in their administrative problems.
Sales policies and the place of personal selling in the whole promotional effort do have an influence on the personal selling objectives. Personal selling objectives of qualitative nature are formulated after considering all these. These objectives later lead to quantitative personal selling objectives.
Sales objectives are qualitative in terms of direction and quantitative in terms of goals. Quantitative personal selling objectives are short-term and keep on changing. Sales volume in rupees or units is a basic quantitative objective.
Other quantitative objectives are derived from the sales volume. The other objectives could be a certain amount of market share, a certain level of profits, a certain number of new accounts, a certain level of expenses and a certain percentage of business from specified accounts.
The quantitative aspects are related to the operating results that the company wants to achieve. These in turn are affected by overall corporate mission, goals and qualitative aspects. The quantitative goals are time bound and vary over a period of time.
What is Personal Selling – Functions: Making Sales, Advertise the New Product, Collect Statistics, Executive Functions, To Demonstrate Product, and a Few Others
A salesman has to perform several other functions as – training, record keeping, enhancing the popularity etc., apart from the selling.
These functions can be described as under:
1. Making Sales – It is the prime function of personal selling that it sells the products by attracting the consumers. The products are sold to old and prospective both buyers.
2. Advertise the New Product – The salesman sells in market, the new products with his skill and expertise and create their demand.
3. Collect Statistics – These salesman gives the manufacturers data pertaining to the product by due collection of them from the market.
4. Executive Functions – The experienced salesman provides training to the new salesmen and assist for the solving the problems related to the marketing.
5. To demonstrate product – The seller explains the utility of the product by keeping it directly before the buyers under personal selling. The buyer buys the product after being satisfied by the product.
6. Records of the Sales – Personal selling keeps the complete record of the sale. For example, to whom, when, how and to what quantum, the sale have been made. This record of sales is sent to manufacturer by the salesman.
7. To Develop the Goodwill – The salesman provides several services apart from selling under personal selling. These services increase the popularity of the institution and the salesman both.
What is Personal Selling – Importance: Helpful in Selling, Demonstrating the Product, Time Coordination, Finding out Prospective Customers and a Few Others
In the field of distribution of goods and services personal selling or salesmanship occupies a pivotal role. A salesman is a friend and a guide of the consumer and a supporter and aid to the producer.
Personal selling is a direct method of selling the product through salesman, while advertising and sales promotions are impersonal methods of promoting the sales.
The importance of personal selling can be described as under:
1. Helpful in Selling:
Personal selling is an art of selling goods. The salesman informs customers about the new products by suggesting to him their uses. The purchaser thinks himself as honorable person in whom the producer is interested. If the consumer has any doubt about the product, its use, etc., he can ask the seller about such doubts.
The salesman removes those doubts to the satisfaction of customers either by demonstrating the product or by explaining to his satisfaction. If the purchaser is convinced, he will either purchase or make up his mind to purchase goods. Thus personal selling inspires customers to purchase goods and services.
2. Demonstrating the Product:
It is necessary to demonstrate the product before customers so that they may be aware of the qualities and characteristics of that product. The main use of the method is that the seller gives the demonstration of the product before customers so that they may develop confidence about the utility and desire of that product.
3. Time Coordination:
In personal selling, customers and institutions are provided the products according to their timely requirements. In this way sellers and buyers develop deep relation and customers are informed about the arrival of products and products are supplied to them.
4. Finding out Prospective Customers:
It is easy to know about customers through personal selling. A seller with this art of selling, understanding and experience can find his prospective customers who come to his shop and those who are walking on the road. But it is not possible to find the real or prospective customers through advertising and sales promotion.
5. Meeting Specific Objections:
In personal selling, the seller and the buyer face each other and the product is also available. If the customer has any doubt about the product, that is removed after discussion and he feels assured about the type of product, its price and its utility.
6. Performs Non-Selling Functions:
In personal selling, a seller performs not only selling functions but also non-selling functions. For example, marketing research, repair services, solutions to consumers’ complaints and winning good-will etc.
7. Providing Information:
Personal selling plays an important role in providing information. Sellers get various types of information about the market, customers and competition and supply this information to the producer. In this way, the producer brings suitable changes in products and marketing policies according to the changing needs, interests and priorities of his customers.
8. Important from the Buyer’s Point of View:
Personal selling is an important method of demonstrating the product to customers and giving them full information about the product. It is easier to persuade a person to buy a product through personal explanation.
In most of the situations, there is a need for explaining the quality, uses and price of the product to the buyer to demonstrate and help him purchase the want-satisfying product. Thus, salesmanship is also very important from the point of buyers.
9. Important to Society:
Society also stands to gain through salesperson. They help increase the aggregate production and also increase the opportunity for employment. They are responsible for the improvement in the standard of living of the society by educating people about new products and making them available. They play an important role in maintaining equilibrium between the demand and supply of products and thus reduce the fluctuations in prices.
10. Effective Selling:
Compared to advertising and methods of sales promotion, personal selling is more effective because it stops the wastage of efforts. In an advertisement the message goes to those people who are not the real future customer, whereas in personal selling, the whole effort is concentrated on the future customers.
What is Personal Selling – Approaches: AIDAS Approach, Buying Formula Approach, Need Satisfaction Approach, Consultative Approach and a Few Others
Since the industrial age, selling has been regarded as the most potent promotional tool to entice the target customers to buy products and services. Whichever approach has been evolved, they all speak about creating awareness for the customers, generating interests, and enhancing the buying intentions as the main objectives of personal selling.
With the passage of time, increase in competition, and customer demand, the approaches have taken recourse to customer relationship, partnership, collaboration, etc., to justify the sustainable issues in selling. Keeping this in mind, an attempt has been made to discuss the various approaches to illustrate the journey of selling on theoretical routes which also gives us a brief understanding of the evolutionary transition of selling practices.
Following are the approaches of selling that are discussed in this regard:
1. AIDAS approach.
2. Right set of circumstances approach.
3. Buying formula approach.
4. Behavioural equation approach.
5. Need satisfaction approach.
6. Consultative approach.
7. Customer relationship-based approach.
8. Problem-solving approach.
9. Team selling approach.
In the following paragraphs, we will discuss these approaches in detail:
Approach # 1. AIDAS Approach:
AIDAS (attention, interest, desire, action, satisfaction), a popular acronym in the lexicon of selling, stands for the universal concept of selling and for guidelines for the sales training programme since the late 1950s. It is prescribed as an updated version of AIDA (attention, interest, desire, action) which was introduced in the 1920s as a communication model to depict the structure of the selling process (Strong 1925). AIDA, in fact, was coined from the term AIDR (attention, interest, desire, resolve), a selling formula sequence that evinced from the works of Arthur Sheldon, published in 1902.
AIDAS theory of selling suggests that a prospective buyer passes through five mental stages of attention, interest, desire, action, and satisfaction. These are arranged sequentially to complete the buying process. It, thus, directs the selling process to design as well as implement the communication programmes that are consistent with the needs of each mental stage.
A customer demands an effort from the salesperson to kindle an urge in the former for learning and understanding the features and attributes of the products or services. A salesperson is supposed to generate the right cognition and knowledge in customers that can lead them to traverse through the successive stages in a stepwise manner. Therefore, AIDAS selling is also known as formula-selling approach.
Following are the five mental stages of AIDAS:
Getting the customer’s attention fruitfully sets the ball rolling automatically along the mental hierarchy, which is evident from the subsequent reactions of the customers. In fact, this leads to the customers wanting to know more about the products or services and buying privileges. Therefore, it is said that the initial session with the prospects is vital for salespeople as that is the stage where the customers can be motivated and an enthusiasm can be built towards selling.
The entire discourse is expected to be adroitly managed by the salespeople with conversational skill, openness, assertiveness, risk-taking propensity, rapport- building ability coupled with physical appearance and mannerism. Then this takes a positive turn to facilitate continuity of discussion with the fullest cooperation and support from the prospects.
The aim of the salespeople is not merely to project the tangible and the intangible features of the products/services but also to emphasize on their abilities to solve problems of the prospects, as well as, render adequate benefits to them.
The second mental stage is to get the prospect interested to know more about the sales offer. It is believed that if the stage of attention is going successfully, then interest building is spontaneous. Sometimes, the prospect may overtly express interest to ease the job of the salesperson. In other cases, a covert attitude of the prospect needs to be understood from non-verbal cues and body language. Demonstration of the product by handing a sample of product or showing illustrations, pictures, flipcharts or videos can also enhance the degree of interest amongst prospective buyers, and intensify their eagerness and earnestness for the offer.
The prospect then reaches the third stage of mental process, i.e., desire. This is a step closer to the buying decision. Gaining interest and instilling a desire should be sequenced intelligently by the salesperson. This can be achieved by handling objections and enquiries of the prospects and by predicting more about the conviction in their minds.
Salespeople should clearly manifest all the selling points to remove even miniscule doubts that the prospects might have and reply to all questions with confidence. A complete control over the sales presentation incites the prospects to take the buying decision. This leads to the fourth stage of mental buying, which is satisfaction.
A customer’s first time acceptance of a product is no assurance of a second or successive buying. Indeed, customer satisfaction of the product or service also sets the tone of opportunities of future buying or selling for the same organization. Often, a psychological strain of having taken a wrong or a right decision puts the customer into an anxiety syndrome known as cognitive dissonance.
This dichotomy of the customer should be delicately warded off by the salespeople so that no sense of negativity may creep in the minds of the customers. A customer’s satisfaction of a product or service depends on the match between the actual and the expected performance. If the expected level of performance is not met by the product, the customer is dissatisfied. In contrast, if the actual performance exceeds the expected level, the salesperson gets a delighted customer.
Approach # 2. Right Set of Circumstances Approach:
The right set of circumstances approach is also known as the situation-response theory. According to this theory, the circumstances prevailing in a given situation leads a prospect to behave in a particular way. This means that a situation is the psychological driver which evokes a response (positive or negative) from the customer. The theory suggests that a persuasive-selling situation should be created by salespeople to influence the prospects in their favour.
Creating and managing a situation is the building block of this theory. Some prominent internal and external factors or stimuli may act as facilitators to evolve a selling situation. Both internal and external factors create circumstances that influence the customers to take a buying decision. A buying decision directs buying behaviour. Most salespeople are able to exchange information on external factors quite easily but find it difficult to highlight information on internal factors. As a result, a responsive sales situation does not emerge.
It also propounds that all factors are not equally persuasive and they contribute differently in stimulating customers. Salespeople should be trained to learn the efficacies of various factors to manage the selling situations and treat them in the selling process accordingly. An experienced and skilled salesperson does not find it difficult to create the right circumstances favourable to the prospects in taking a buying decision. This is a seller-oriented theory because the success of selling depends entirely on the deft handling of circumstances by the salespeople.
Assume a situation where a company allows one of its salesperson to invite a major prospect for dinner being organized in a banquet hall of a five-star hotel. The external factors affecting the buying decision include the salesperson himself, the invitation for dinner as well as the ambience of the dinner hall. All these factors are quite conducive to spearhead a nice sales conversation between the prospect and the salesperson. The internal factors are the acceptance of the invitation, whether the customer is accompanied by the salesperson to go to the hotel or take dinner or is interested to take part in the sales conversation during dinner.
Both the internal and the external factors are important in building the right sales situation. But there are a few problems that are quite common in these situations.
First, the external factors may not create the right circumstances, if the internal factors are under-emphasized.
Second, the internal factors are very difficult to identify in many selling situations.
Third, all factors are not equally important. Salespeople should know which factors are to be given major thrust and which ones moderate or minor.
Fourth, managing and controlling the sales situation needs subtle handling by the salespeople, otherwise a good sales opportunity may be lost.
Approach # 3. Buying Formula Approach:
The buying formula theory suggests that the prospective buyers take initiative to fructify a buying-selling intercourse. The needs or problems of the buyers are the starting points of this theory where the salespeople can assist them in finding suitable solutions to their problems. The second assumption is that the buyer passes through stages that are the step-by-step occurrences of mental events to finally reach the buying decision.
Selling sustains through establishing a relationship with the customers on a continuous basis. Customer satisfaction is the key to endure such a relationship with the seller. Therefore, the mental process does not end with purchase but with satisfaction.
A customer finds a solution to the need or problem in product/service and/or trade name (name of the company, manufacturer or salesperson). Again, upon perception of the solution, a customer may experience satisfaction or dissatisfaction and thus create a favourable or an unfavourable impression about the company as well as the product/service.
Both the product or service and the trade name must be adequate for the prospective buyer to take or rather confirm their decision. The feeling of anticipated satisfaction on the adequacy or inadequacy of the product or service and/or trade name (name of the supplier) to solve their problem guides the prospect’s buying behaviour. Adequacy can be viewed as a matter of liking or disliking.
In many situations, adequacy ensures a pleasant feeling but it is not always true. A product or service may appear inadequate to a customer in comparison to a competing product but is still liked. Similar explanation is applicable to the trade name as well. In fact, presence of adequacy of product features and benefits, patronage of trade name and consequent present feelings of customers enhances the probability of purchase.
Once the decision to buy a product/service is taken, that product/service then becomes a habit. This ultimately leads to a pleasant feeling as well as an adequacy about that particular product or service and/or trade name. These feelings are cemented psychologically in the buyer’s mind. Both create a defensive aura surrounding the product or service and/or a trade name which cannot be distorted by products of any competitor, their presentation or advertisement.
Adequacy and a pleasant feeling in the buyer’s frame of reference can complement each other to facilitate repeat buying behaviour so long as these act upon the minds of the buyer. These two are represented by dotted lines to show the effects in the buyer’s psychological world. The major elements in the buying formula are connected by solid lines/arrows.
Few implications of the buying formula theory are discussed below:
i. In some situations, buyers may not be concerned about the need or problem. In such cases, if some products or services satisfy their needs, companies should emphasize more on them during the sales presentation.
ii. If a prospect feels or recognizes a problem but does not have any idea about the product or service, then the companies should highlight the association between the needs or problems and the products or services.
iii. This means that the prospects have needs or problems but no idea about trade names. In such cases, companies should focus on the relationship between the needs or problems and their trade names.
iv. Once the association between products or services or trade names, and needs or problems is well-established, efforts should be made to facilitate the purchase and use of such products or services.
v. Under competitive situations, emphasis should be laid upon adequacy of products or services and their trade names to provide solutions to problems and pleasant feelings of the prospects.
vi. For selling products or services to the prospects, every element in the buying formula should be highlighted in the sales presentation.
vii. Old customers of the company should be reminded of every element in the buying formula, if the company wants more sales from them.
Approach # 4. Behavioural Equation Approach:
The behavioural equation approach is based on J. A. Howard’s (1963) stimulus- response model of buying behaviour where the buying decision process was envisaged as phases of learning process.
Four essential elements of the learning process are:
iii. Response, and
Drives are strong internal stimuli that propel a buyer’s response. They are of two kinds-innate drives and learned drives. Innate drives source from psychological needs, e.g., hunger, thrust, pain, etc. Learned drives arise from the striving for the fulfilment of social needs such as – status, social recognition, etc.
Cues are weak stimuli that determine the responsive patterns of the buyer. Cues are of two types – triggering cues and non-triggering cues. Triggering cues are the stimulators of the decision process for any purchase situation. Non-triggering cues do not activate the buying decision process but influence them. It may operate at any moment even at a time when a buyer is not thinking of a purchase.
Non- triggering cues are further divided into two kinds-product cues and informational cues. Product cues are external stimuli of the product that are directly perceived by the buyers, e.g., colour, size, price, etc. Informational cues are also external stimuli but symbolic in nature of the product. Such stimuli come from advertising, interaction with salespeople, etc.
Response is the buying action of the buyer.
Reinforcement is the psychological event that consolidates the efforts of the buyer to take a particular responsive action.
These four elements, when combined generate the act of buying or endorsing a supplier’s product or service. J.A. Howard (1963) combined the four elements in a form of multiplicative equation.
Some corollaries can be deduced from the equation:
i. If any independent variable assumes a zero value, B will be zero and there will be a null response.
ii. For unmotivated buyer (D=0), B will be zero, irrespective of internal response tendency or force of habit (P).
iii. Whenever a purchase gives a buyer enough satisfaction (K) leading to yield reward, the internal response tendency (P) will increase and enhance the possibility of future purchase. It means satisfaction leads to reinforcement of learning that triggers future action or behaviour.
iv. A salesperson influences the buyer in terms of the aforesaid equation. A salesperson influences P or internal response, also called pre-disposition directly through interaction with the buyer in ways rewarding the buyer. However, the greatest effect on P comes from usage experience.
v. A salesperson tries to influence the level of motivation (D) of the buyer. The tendency of a buyer to seek more information indicates the success of the salesperson to motivate the buyer.
vi. Triggering cues are more meaningful to influencing buyers.
vii. When the buyer has few sellers under consideration, a salesperson should emphasize more on merits of the company’s brand and in the process influence the value of the product or the potential satisfaction (K) of the buyer.
viii. A salesperson can vary the intensity of the efforts and thus make differences in the intensity of cues.
Approach # 5. Need Satisfaction Approach:
The need-satisfaction approach is based on the notion that a buyer buys a product or service in order to satisfy a specific need or a set of needs. The approach intends to meet –
i. Need identification,
ii. Need fulfillment, and
iii. Need satisfaction.
A salesperson should actively listen to the need(s) of the prospective customer. If the prospects are not able to express their needs but show need-oriented anxiety or tension, a salesperson should help the prospect to articulate their needs. Suppose a human resource manager finds it difficult to maintain the payroll of employees in an organization.
In such a case, a salesperson of a software company that designs and develops software packages for financial accounting can advise him on how to avert such a crisis of payroll development, maintenance, and updating. This is known as need development or identification.
Proper presentation of goods or services and handling objections of the prospects by the salespeople can fructify sales objectives of the firm. This is known as need fulfilment. Need satisfaction denotes getting expected benefits from the product or service. A salesperson can also assist a customer on how to get maximum benefits from the product or service.
For example, an insurance agent should properly explain to the customer about how to carry out a full term of the policy and how a nominee can make claims in case of necessities. Thus, the presentation skills and demonstration ability of a salesperson resolves all sorts of concerns and queries of the prospects.
The need satisfaction approach is customer-oriented. How a salesperson adds value and benefits to the customer by least affecting their financial interests is the crux of this approach.
Approach # 6. Consultative Approach:
The consultative approach of selling is based on the philosophy that salespeople act as consultants to the prospects/customers and help them achieve strategic goals. Consultative selling emphasizes on giving solutions to the problems of the customers. Helping the prospects to identify and meet their needs, and handle problems in post-purchase situations are the tasks of consultative selling.
Proper diagnosis of the needs of the prospects is the starting point of consultative selling. A salesperson examines the needs and wants of the prospects and understands the various dimensions of their problems to find suitable solutions to their crises. For example, a retail salesperson in a garment store can guide a potential customer, who is in quandary to select dress materials that are best suited and are within budget.
Under consultative selling, a salesperson helps a prospect to solve the following problems:
i. Need problem (A salesperson identifies the need deficiency that is known or unknown to the customer.)
ii. Choice problem (A salesperson directs and advises the customer to choose the right offer.)
iii. Helping in deciding the choice criteria (Knowing the problem, a salesperson helps the customer to select products with those buying criteria that will obviate the problem.)
iv. Product installation (A salesperson looks at the proper installation of a product in the customer’s premise.)
v. Product-use problem (A salesperson stands by the side of customer when the customer encounters difficulties on product application.)
vi. Product-maintenance problem (A salesperson offers after-sales service at regular basis.)
vii. Customer-feedback problem, e.g., future communication, reporting to the company, etc.
viii. Problems related to quick redress of defects in products within and beyond warranty periods.
Approach # 7. Customer Relationship-Based Approach:
Customer-centred personalized approach is the major thrust in this approach. It emphasizes more on relationship building between salespeople and prospects rather than over transactions in buying-selling dyad. Selling is not just a process of engaging in economic relationship with the buyer but is also means to generate social and psychological relationships with the buyer. A customer’s service on a continuous basis obviously helps to prolong such relationship. Service is a link of relationship. A customer does not buy a product but a set of benefits. A product gives no meaning until it renders service to the customer.
For instance, a vacuum cleaner is a mere showpiece if it does not remove dirt effectively. Thus, a value-added service from the seller to the buyer and earnest response from the buyer to fulfil all the conditions of buying binds the two in an enduring relationship. A relationship helps in –
i. Eliciting fullest information and quarries from both sides,
ii. Reducing doubts from both sides,
iii. Driving out or marginalizing communication barrier,
iv. Handling future problems at ease,
v. Reducing post-purchase anxiety of customers,
vi. Diminishing media expenditure,
vii. Staving-off competitive action, and
viii. Meeting future requirements of both sides easily.
Rapport building is the key to customer relationship approach. Acceptance of each other’s points of view, problems and prospects, concerns and consents, appreciation and criticism, treating each other as part of the business condense the relationship between the two. Social relationship overrides business relationship. Mutual gain is the basic string of a relationship.
Approach # 8. Problem-Solving Approach:
Problem-solving approach is the extension of need satisfaction approach. It starts not with the identification of needs but with the root of the problems. Problem definition is the basic aspect of this approach. For example, a problem of the security and safety of employees in an organization is a core problem for the owner of a firm. He feels a need for insuring the employees under a suitable insurance scheme. In such a situation, a salesperson of an insurance company can solve his problem by helping them to purchase a group insurance policy for the employees.
In some cases, solutions provided are for more than one particular problem. Working women can solve their problem of washing clothes either themselves, sending dirty clothes to the dry cleaners or buying a washing machine. The salesperson selling washing machine should understand the exact nature of the problem and persuade them to buy the product. The salesperson should explain how a one-time investment can economically and effectively help solve their problems. With high-quality washing, the machine also dries clothes adding value to the product.
Similarly, a salesperson representing an insurance company dealing in mutual funds may guide and incite an individual to invest in the right scheme where returns can be high at minimum risk. A salesperson representing a radial tyre manufacturing company can apprise customers to get friction resistant, resilient, high-shelf life tyres for tensionless and smooth driving on the road.
Therefore, solving problems is a thinking process and is the intellectual part of selling. Problem-solving skills of the salespeople help to resolve the problems of the customers. Expertise and knowledge on products or services sharpens this skill and facilitates better dealing with the buying decision of the customer.
A salesperson with problem-solving skills helps a prospect:
i. To identify genesis of a buying problem.
ii. To define a buying problem.
iii. To provide alternative solutions to the problem.
iv. To help in evaluating alternative solutions to the problem.
v. To help prospects in selecting a specific solution, i.e., purchase decision.
Approach # 9. Team Selling Approach:
Team selling is a coordinated selling effort that uses multiple personnel to solve complex buying problems of the customers. Team selling is appropriate when customers have complex needs that demand an all-round servicing in which an individual salesperson is incapable of fulfilling all the need deficiencies. It finds large use in case of highly technical buying situations.
Furthermore, team-based selling is advised when handling national or key accounts of the company. Team effort is needed to maximize the value of the customers when dealing with complex selling situations.
A team may consist of company salespeople, technical support people, research and development personnel, product use experts or application specialists, representatives of manufacturing units, representative of purchase departments, etc., who are expected to provide solutions to the varying need problems and multiple objections of the customers. With a team consisting of members from all departments, the team is able to respond to production, marketing, technology, purchase, service, logistics, warranty, finance, and insurance-oriented questions.
Depending on the nature of questions, a member representing a specific functional unit of the organization can rise to the occasion and respond to the customers. It places the right people to tackle the specific need(s) of the customers. However, the team composition may change during post-selling when maintenance and service-oriented personnel are required more to address the post-purchase activities including operational problems, repair and overhauling, and provide after-sales service to the customers.
Team selling, if intelligently executed, can solve many complex problems of the customers that individualized selling may not be able to provide. It gives a holistic view of the company-customer interface and lends competitive advantage to both parties. It is a powerful means to win customers if managed correctly. But, coordination among team members is very important to make it successful. Otherwise, the team will lose its credibility.
Boress (2007) advocated ten rules of effective team selling.
These are as follows:
i. Select team members carefully.
ii. Have an orchestrator. In fact a team leader must act at the helm of the team, who moderates the team effort.
iii. Stage a pre-briefing session. This is important because a pre-briefing or pre-meeting session specifically defines the job for each member and helps in knowing the sphere of interaction. It also creates a sense of liaison and cooperation among team members.
iv. Hold a debriefing. After interaction with the customers, members must appraise what worked and what did not work. It helps to ease the following sessions with the customers.
v. Be prepared with questions. Questions are prepared during pre-briefing.
vi. Keep the number of members to a minimum level. A sales team should consist of only those who are absolutely necessary.
vii. Succulently answer questions of the customers.
viii. Be flexible in the agenda.
ix. Team members must be at the same wavelength. There should be an absolute mental cohesion and team spirit. Do not include members in the team who do not like each other.
x. Sell something. This should be the goal. The team should be committed to sell something every time.
What is Personal Selling – Strategies: Personal Selling in Pure Competition, Monopolistic Competition, Oligopolistic Competition and No Direct Competition Setting
Element of competition —the struggle among various firms for their market share —is a fundamental aspect of a free economy, individual companies operate in different competitive settings. Differences exist from company to company with respect to the maturity of the industry and the number of competitors. These differences result in different types of Competitive Settings. Economists have identified four types of competitive settings i.e., (1) Pure competition, (2) Monopolistic competition, (3) Oligopolistic competition, and (4) Monopoly or no direct competition.
Marketing strategy and consequently the personal selling strategy differ in different Competitive Settings.
I. Personal Selling in Pure Competition:
Pure competition, as defined by economists is a market situation where there are a large number of buyers and sellers in the market place and none of them is too powerful to control or influence the prevailing market price.
This situation is based on certain assumptions that:
(1) No single buyer seller is so large relative to the market that can influence the product’s total demand or supply;
(2) The products of all sellers in the market are identical, so buyers are indifferent to which seller they buy. There is no product differentiation.
(3) There is no artificial restraint on prices exist, (no administering of prices or control on prices by trade association, labour unions, or companies etc.)
(4) All buyers are fully informed about all sellers’ prices. As there is no product differentiation, the buyers shall purchase from the seller who sells at lower prices;
Under this competitive setting, no market strategy is required because all products are identical and prevailing price in the market is the same for all sellers hence buyer has no preference of any seller over others. No seller can cut the price to gain business at the cost of others and if does so, he would immediately match the cut.
No seller would push the sale of the product through advertising or personal selling because all buyers buy the goods on price basis that is the same in all cases and moreover they are fully informed about the prices. The sellers are not worried about the channels of distribution or physical distribution.
This type competitive setting is hypothetical and not present in any part of the —world. Consequently, it requires no marketing or personal selling strategy.
II. Personal Selling in Monopolistic Competition:
In monopolistic competitive situation, same or all of the assumptions of pure competition do not hold good. Under monopolistic competition, there is a large number of sellers of a generic kind of product but product of each seller is relatively heterogeneous to consumers.
Each seller’s brand is in some way differentiated from every other seller’s brand. They all are competitors and new competitors are not refrained from entering the market. Each seller wants to gain the market share through a combination of price and non-price factors.
Every seller’s brand is different in the minds of the buyers from competing brands. The consumer is convinced that all brands of the product though identical are not alike atleast in buyers’ mind. By influencing brand preferences of buyers, every sellers wants to gain market. Most of the buyers are not fully informed of the products or brands, of the same product offered by various sellers.
Sellers of different brand (of the same product) differentiate their offerings through individualizing one or several components of overall marketing strategy. Unique packaging, an unusual distribution method (such as house to house distribution), pricing gimmicks (such as bargain offer may differentiate the product pricing.
However, in growth and maturity stages of product life cycle, sellers of the products differentiate them promotional strategy. Advertising is extensively used to differentiate the brand in the minds of buyers and to stimulate selective demand. Personal selling tries to maintain and strengthen the supply line and sees to it that desired distribution intensity is secured and maintained and that middlemen provide the needed push.
Monopolistic competition setting provides a new look to the overall marketing strategy. This type of setting provides marketing opportunities and requires skill in planning and implementing overall marketing strategy. The key element in planning the overall marketing strategy is to differentiate the product even if ever so slightly in some way.
Appropriate promotion (usually some blend of advertising and personal selling) is the critical element in implementing the such an overall marketing strategy. The role of advertising in such type of setting, is communicating, the message to final buyers and the role of personal selling is servicing the distribution network and stimulating Promotional efforts by the middlemen’.
III. Personal Selling in Oligopolistic Competition:
Under Oligopolistic competition, the number of marketers is small but each one is large enough to dominate the market. They are individually identified and known to each other and it is difficult for a new competitor to enter the market. Each competitor owns a large organisation and occupies a large market. Any change in overall, marketing strategy of one seller has repercussion on the others. Each one must weigh the possible reactions of other marketing strategy while planning its own overall marketing strategy.
Under this type of competition, a stiff competition exists in the market. If one acts in a particular way to dominate the market, others follow the suit. If one introduces an improved product, others will possibly lose the market share unless they respond appropriately and immediately. For this reason, each competitor watches closely, the changes brought about by other competitors in their products and such changes are either matched or countered.
One’s action towards increasing ones market share is initiated, improved upon, or otherwise countered by other competitors as rapidly as possible. Similarly, price cut of his product by one competitor, may result industry-wide price adjustments so quickly that they appear to result from collusion.
Personal selling play very important roles in building and maintaining dealers co-operation, in servicing the distribution network and in gathering information about the competitors’ actions. On the basis of information so gathered, counter offensives can be planned and implemented within no time just to safeguard company’s own interests.
Under Oligopolistic situation, advertising and personal selling play very critical roles in communicating the message to the prospective buyers to influence their minds in favour of product brand. It is even more important to counter competitors move through advertising. Both Advertising and Personal selling help in implementing the overall marketing strategy.
IV. Personal Selling in Monopoly Setting or No Direct Competition Setting:
Monopoly is a market situation where only one firm dominates the market and there is no close substitute for the product. Prices are fixed by the firm on the basis of what the traffic can bear. Barring a few public utility concerns, such firms are very rare in our economy. Some other companies which are not actually monopolist but are innovators of a new product sell their product in monopoly like conditions and they have directly no competition at all.
Both monopolist and innovating marketer must initiate and stimulate primary demand i.e., demand for the product category through promotional (Personal selling and advertising) strategies aimed at influencing the final buyers and middlemen. Both (monopolist and innovating marketer) need distribution strategies providing for marketing channels, middlemen’s cooperation, and the product’s physical distribution, and putting into effect of these distribution strategies requires the effective implementation of personal selling strategy in terms of both kind and number of Sales personnel.
Both require a pricing strategy. The Monopolist is free to charge any price on the basis of ‘what the traffic will bear’ to maximise his profits. The innovating marketer chooses between either a price skimming or a penetration pricing strategy, depending mainly upon how soon he expects direct competition to enter the market.
Putting into effect the chosen pricing strategy calls for the effective implementation of Personal selling strategy by sales executives and sales personnel. Both seek to integrate their product, distribution, promotion (including personal selling and advertisement) and pricing strategies into overall marketing strategies consistent with their long term goals.
Thus, Personal Selling Strategy differs in different competitive situation.
What is Personal Selling – Personal Selling System and Terms
Personal selling can be flexible and adapted to specific consumer needs.
For example – A real estate broker can use one sales presentation with a first time buyer and another with a person who has already bought a home. A sales person can also apply as much persuasion as needed and balance it against the need for information.
Personal selling targets a more defined and concentrated audience, which means less waste than with ads. In addition, people who enter a store or who are contacted by a sales person are more apt to buy than those watching a TV ad. Since, ads stimulate interest, those who make it to the personal selling stage are often in the target market. When unsolicited, direct selling has the most waste in personal selling.
Selling clinches sales and is usually conducted during the purchase stage of the consumer’s decision process, taking place after information search and exposure to ads. It holds repeat customers and those already convinced by advertising and resolves any concerns of undecided consumers by answering questions about price, warranty and other factors.
It settles service issues, like delivery and installation. Feedback is immediate and clear-cut. Consumers may be asked their feelings about product features or they complain, and sales people may unearth a marketing program’s strengths and weaknesses.
On the negative side, selling is ineffective for generating awareness because sales people can handle only a limited number of customers. Sales personnel who call on customers can handle even fewer accounts, due to travel. Personal selling costs per customer can be very high due to the one-on-one nature of selling.
An in-store furniture salesperson who talks to customers daily might cost a firm much more an amount than an ad’s cost per-customer contact.
For outside sales people, hotel stays, meals and transportation can amount large amount of money in addition to their compensation amount.
Finally, personal selling, especially among final consumers, has a poor image. It is criticized for a lack of honesty and use of presence tactics.
What is Personal Selling – Difference between Personal Selling and Salesmanship As Per Professor Philip Kotler
Personal Selling and Salesmanship:
As per Prof. Kotler, personal selling is a broader concept and involve oral presentation in a conversation with one or more prospective buyers for the purpose of making sales.
The purpose of personal selling is to bring the right products into contact with the right customers, and to make certain that ownership transfers take place.
Salesmanship may or may not be an important part of personal selling and it is never all of it. Personal selling is a means through which marketing programmes are implemented.
Personal selling brings the right products into contact with the right customers, and make ownership transfer.
Salesmanship is one of the skills used in personal selling, it is a direct face-to-face, seller to buyer influence which can communicate the facts necessary for marketing a buying decision.
Salesmanship is seller-initiated effort that provides prospective buyers with information and motivates them to make favorable buying decisions concerning the seller’s products or service.
Salesmanship may be implemented not only through personal selling but through advertising. Thus, advertising is described as ‘salesmanship in print’.
The objectives of Personal Selling are:
1. To obtain a specified sales volume.
2. To obtain sales volume in ways that contribute to profit objectives, by selling proper mix of products.
3. To keep personal selling expenses within specified limits.
4. To secure and retain a specified share of the market.
What is Personal Selling – Advantages: Sources of Research Information, Tailoring of the Message, Allowing for Two-Way Interaction, lack of Distraction and a Few Others
Advantage # 1. Source of Research Information:
The sales persons and representatives have vast knowledge about competitors’ products and services, promotion, pricing as well as the needs and wants of the actual and potential customers of the product. Thus, in a well-integrated marketing/sales department, sales force become the ‘eyes and ears’ of the firm.
Advantage # 2. Tailoring of the Message:
Due to the direct interaction, messages can be tailored to the receiver. It lets the sender address the consumer’s specific concerns, problem and needs. The sales representation can also determine when to move on to the next selling point, ask for the sale, or close the deal.
Advantage # 3. Allowing for Two-Way Interaction:
The ability to interact with the receiver permits sender to determine the impact of the message. Problems in understanding objections can be resolved and in-depth discussions of certain selling points can be provided immediately. In mass communications this direct feedback is unavailable and such information cannot be obtained immediately (if at all),
Advantage # 4. Involvement in the Decision Process:
By the means of consultative selling and relationship marketing, the seller becomes more of a parte:-he buying decision process, acting in conjunction with the buyer to solve problems, leading the buyer to rely more on the salesperson and his or her prod acts and services. An added benefit maybe increasing the involvement of the organisation’s own employees.
Advantage # 5. Lack of Distraction:
Under certain personal selling situations, a one-to-one presentation is conducted. Generally, the likelihood of distractions is minimized and the buyer is paying close attention to the sales message. Even when the presentation is made by a group of salespeople or more than one decision maker is present, the setting is less distracting than those in which non-personal mass media are used.
What is Personal Selling – Disadvantages: Sales Force/Management Conflict, Potential Ethical Problems, High Cost, Poor Reach and Inconsistent Messages
Disadvantage # 1. Sales Force/Management Conflict:
Unluckily, there arise situations in even the best companies when one is forced to wonders if the sales staff and marketing staff know they work for the same company and for the same goals. Due to failure to communicate, corporate politics, and myriad other reasons, the sales force and marketing may not be working as a team.
The marketing staff might not be able to understand the problems faced by the sales staff, or the salespeople might be able to understand why marketing people do things the way they do.
The result is that the sales force may not use materials provided from marketing, marketing may not be responsive to the field’s assessment of customer needs, and so forth. The bottom line is that the communications process is not as effective as it could be due to faulty internal communications and/or conflicts,
Disadvantage # 2. Potential Ethical Problems:
As there is a lack of complete control of manager over the messages the salespeople communicate and due to income and advancement directly tied to sales, sometimes sales reps bend the rules themselves. They may say and do things they know are not entirely ethical or in the best interest of the firm in order to get a sale.
Disadvantage # 3. High Cost:
When cost per sales call continues to climb, the marketer finds mass communications a more cost-effective alternative.
Disadvantage # 4. Poor Reach:
Unlike other elements personal selling fails to reach as many members of the target audience. Even if money were no object (not a very likely scenario!), the sales force has only so many hours and so many people it can reach in a given time. Further, the frequency with which these accounts are reached is also low.
Disadvantage # 5 Inconsistent Messages:
Generally, the message to be communicated is designed by the marketing staff with a particular communications objective in mind. Once this message has been determined, i.t is communicated to all receivers. But the salesperson may alter this message in ways the marketer did not intend. Hence, the marketing staffs are at the mercy of the sales force with respect to what exactly is communicated.