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Encyclopedia of Small Business Encyclopedia of Business and Finance, 2nd ed. Further reading

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Personal Selling

Personal Selling

In the language of sales and marketing, "personal selling" singles out those situations in which a real human being is trying to sell something to another face-to-face. One might well ask what other type of genuine selling there is. The answer is that personal selling has a functional equivalent. The modern differentiation between "personal" and other selling arises from the fact that a very substantial volume of ordinary purchasing of food, textiles, household goods, entertainment, travel, subscriptions, fuel, books, etc., takes place without the presence of a live facilitator. The only human contact is usually the check-out clerk; and corporations are laboring hard to replace even this humble functionary by machines that read barcodes and recognize credit cards. In the vast majority of these situations whatever persuasion has been applied to the shopper has been delivered by disembodied images on television, radio, in print, by coupons, by signage, and by packaging. Thus "impersonal selling" is by advertising, sales promotion and public relations.

THE BUYING-SELLING SITUATION

In personal life few people buy a house, a car, or a life insurance policy after reading an ad or looking at a flashy brochure left hanging on the door knob. Major work on the house is approved after personal selling has taken placeand so does the choice of a retirement village for a grandparent. These situations, first of all, are not routine occurrences; second, they are transactions of some magnitude; third, many choices are usually available; one might say that the situations have a high "information density." In these cases interacting with the seller's knowledgeable representative in a prolonged exploratory give-and-take is both necessary and reassuring. Indeed, arguably, personal selling is also helpful when making smaller purchases provided that the decision is difficult for the buyer, as in a bride-to-be selecting a wedding gown or a man purchasing jewelry for his wife's birthday. In certain categories of retailluggage stores and furniture stores come to mindsales people are usually provided by the business, and on busy days customers get fidgety when no one is there to help them.

In business-to-business buying and selling the same rules apply. A business will typically obtain its office supplies from catalogs, but most of its other purchases involve personal selling by the vendor even if buying the commodity or services later becomes routine; in the latter cases, periodic calls from the sales person will continue to maintain the relationship. Business purchases are very often "technical" in nature, not necessarily because the goods are mechanical or electronic but because they have specialized aspects.

Psychological

Aspects The psychological aspects of the buying-selling situation are highlighted in the purchase of more expensive items. Buying something is a decision in which the buyer must decide between opposing tendencies. There is desire for the object and reasons lined up to support a Yes. There is a cost involved and reasons present why it should be avoided. The buyer must ultimately persuade him or herself to say Yes or No. The importance of personal selling lies in tilting the balance toward a Yes. Only an interactive situation gives the seller this opportunity. Its abuse leads to

Negative Attitudes

In ancient times people feared that they would be cheated in sales transactions, hence the Latin proverb, caveat emptor, meaning let the buyer beware. From pre-industrial times comes the admonition not to buy a "pig in a poke." Again the emphasis is on deception because a "poke" is archaic for "bag." The hidden pig might have defects. We say: "Don't look a gift horse in the mouth," implying that in a buying situation looking at the horse's mouth (to determine its age from its teeth) was highly recommended. The modern attitude toward direct sales, however, emphasizes aggression or bullying with phrases like "high-pressure sales" or "the hard sell." In the old days people only bought what they genuinely wanted. The range of products competing for buyers was limited; supplies were never very abundanthence people tried to move defective goods by deception. In our time great surplus reigns; there is too much of everything. A good deal of psychological force is routinely deployed to persuade people to buy, on credit if necessary. The savings rate, consequently, has virtually disappeared; people are in debt; and selling has acquired a negative reputationwhether it is indirect like advertising or direct. In direct selling telephone or door-to-door prospecting is particularly disliked by the public.

CHARACTERISTICS OF SALESMANSHIP

The hard sell is unlikely to disappear until its cause does too, but experts on salesmanship are virtually unanimous in viewing it as negatively as the public. The job of the salesperson is to discover what the buyer wants, to present the goods that match the desire as closely as possible, to answer questions about the product (or service, or contract, etc.), to deal effectively with objections, and finally to close the sale. When this job is done correctly, the buyer will be well served even if he or she does not buy.

The sales work is a complex activity in which many characteristics must be simultaneously present, hence it is misleading to single out or rank particular traits. The starting assumption, however, is that the salesperson has integrity and will not sell something he or she knows to be defective or inferior, will have character, honesty, and be emotionally stable. Beyond that, the salesperson must have deep product knowledge and good communications skills, must internalize the customer's point of view, and must remain both unobtrusive and yet accessible. He or she must have a good sense for all kinds of people and a good sense of timing; thus he or she will know when to attend and when to leave the customer alone, when to press and when to withdraw. Salesmanship thus calls for a balanced, well rounded, outgoing, and knowledgeable person. Some experts also emphasize physical strength and energybecause sales work often requires many hours of standing about, travel, and exertions of one sort or another. Other emphasize a straightforward and candid attitude. Problems with products or contract contingencies should be discussed frankly. Pricing discussions should not be hedged. Maintenance issues should be discussed with candor.

Selling and entrepreneurship have a good deal in commonindeed are the same fundamental activity at the core. Both require active engagement with the market environment. But while an entrepreneur is often a person whose motivation springs from some type of interest, body of knowledge, or cluster of skills, salesmanship often manifests as a more generalized interest in interaction with the customer, so that skilled sales people readily adapt to selling anything at all while some entrepreneurs are only comfortable in narrow areas.

The very qualities that make sales people effectiveenthusiasm for working with people one-on-onemake some of them less effective in activities that require patience, working alone, meticulous attention to detail, and certain types of concentration. For this reason personal selling staffs frequently require backup to ensure good order, organization, and follow-through.

TYPES OF PERSONAL SELLING

Sales positions or their equivalents range between the sales clerk with minimal selling skills up to the chief executive officer in public and in private enterprises. At the bottom of the sales-pyramid the primary skill is taking an order and guiding customers to the product; at the top great ability to present complex, often controversial and abstract cases persuasively, usually as just a part of other functions, is required. Most personal selling takes place in the middle.

Sales positions are classified as "inside" and "outside." Inside sales above the clerk level involve telephone sales, mainstream retail sales in stores where product knowledge and presentation skills are required, and auto sales and similar equipment sales where customers visit the dealership. Inside sales may be combined with other functions such as scheduling and early information gathering for an outside agent.

Outside sales take place either at the prospective client's residence or place of business or in a third-party location: real estate sales have this form. Outside sales may be combined with estimating tasks as in the case of bidding on construction work; it may also be combined with product delivery. The driver-salesperson has a stocking function sometimes combined with sales responsibilities. A special category is the sales engineer highly skilled in some aspect of industrial operations and thus able both to understand requirements and to provide technical support.

In many types of financial, consulting, market research, engineering, construction, and equipment sales categories personal selling may be both inside and out. In the consulting industry the manager likely to oversee a contract is likely to be the leading salesperson for the job. In such situations buyers may call on the seller and vice-versa depending on the circumstances.

The Reps

An important category of personal selling is provided by manufacturers' representatives, usually called rep organizations or selling agents. These individuals, sometimes working in groups, are independent sellers representing a manufacturer, usually in exclusive territories, compensated by commissions only. Hiring a rep firm allows a small business to avoid the cost of an in-house sales force. In addition, an established rep may provide the business instant access to an established sales territory. Agents are particularly helpful for businesses with seasonal sales; the rep is only paid when sales are made. The chief disadvantage of selling agents is that they usually work for several different firms and do not devote all of their time to one client.

TRENDS

A broad movement is discernible in modern commerce to replace personal selling in all areas except those in which the service is indispensable or pricing permits its continuance: because personal selling is expensive. Packaging, promotion, and lower-cost and lower-skill clerks are replacing the sales person even in technical fields. An example of this is the distribution of computers and software. More and more such products are sold in standard packaged forms, even in retail outlets; the sales function is reduced to clerking aimed to help customers findnot to understandproducts. Servicing products (including their installation) is being transferred overseas to lower labor-cost markets; the service is provided by telephone. Private selling remains central in selling financial products, real estate, and major consumer durables (autos, appliances, boats, furniture, carpeting, etc.). It is also used in service categories like construction and maintenance. And personal selling continues to be present in up-scale retail where high prices not only justify but require attention to customer needs. It also survives in analogous distribution systems attempting to reach more modest income levels with high margin but hard-to-sell (because expensive) products. In business-to-business or business-to-institution sales personal selling remains the principal mode of selling capital goods, raw materials, and parts, as well as services.

Personal selling is thus used either where it cannot be avoided or where it is paid for as a service but as part of the product. The absence of attentive sales assistance itself constitutes a kind of hidden demand in the economy which some small businesses have learned effectively to exploit. But doing so requires products able to carry its costs. Paradoxically, one might say, selling itself has to be sold as part of an ambiance or shopping experience. But it can be a hard sell. The erosion of personal selling owes as much to the collusion of the consumer (who is willing to put up with impersonal sales environments in order to save a little money) as to the cost-avoidance reflex of those intent on maximizing profits.

BIBLIOGRAPHY

Freedman, David H. "Meet Your New Executives. They're every bit as clever as your old ones. The difference? They may not be human." Inc. Magazine. January 2006.

"Good Personal Selling." American Salesman. December 2004.

"The Importance of Personal Selling." Dealernews. January 2005.

Ingram, Thomas N. et al. Sales Management; Analysis and decision making. South-Western College Publication, 2006.

"Job PerformanceProductivityEffectivesEffortFailure." Journal of Personal Selling and Sales Management. Winter 2005.

Marks, Ronald. Personal Selling: A Relationship Approach. Atomic Dog Publishing, 2005.

                                                     Darnay, ECDI

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Personal Selling

PERSONAL SELLING

Personal selling, sometimes called professional selling or professional personal selling, is the person-to-person interaction between the representatives of a sales organization and the representatives of a buying organization resulting in the sale of a good, such as a product, service, or idea. Selling can take place through a retail transaction, a business-to-business transaction, or through telemarketing. Business-to-business professional selling is a process beginning with the sales representative identifying potential customers and potentially culminating in a long-term, mutually beneficial relationship between the seller and buyer. This process, called the sales process, can be separated into seven specific steps: prospecting, preparation, the approach, the presentation, handling objections, closing the sale, and the follow-up.

PROSPECTING

Prospecting involves identifying and qualifying potential customers. Several techniques are available to sales representatives to help them identify potential customers, such as the endless chain, center of influence, and cold calling methods. The endless chain prospecting method is where the sales representative, at the end of a call, asks the buyer for names of other buyers who might be interested in the product. When the sales representative gains additional contacts by getting to know the most influential buyers in the sales territory, this is known as the center of influence prospecting technique. In the cold calling method, the sales representative goes through the territory knocking on doors to identify potential customers.

When qualifying a prospect, a sales representative needs to determine if there is a want or a need for a product, if the company is financially able to buy, if the company is eligible to buy, and if the person interacting with the sales representative has the authority to buy.

PREPARATION

The second step of the sales process is the preparation step. In this step, the sales representative prepares for the sales call in two ways. First, the sales representative gathers general knowledge that is needed to make any call, such as product information, prices, delivery information, and competitive information. Second, the sales representative prepares a plan for calling on each individual customer. The precall plan is often called a sales call plan, essentially an outline of how the sales representative would like the sales presentation to flow. During a sales representative's early tenure with a company, the sales call plan is often a written process; as a sales representative gains experience, however, planning the call becomes a


mental process. The better prepared sales representatives are for each call, the greater their success.

APPROACH

The third step of the sales process is the approach step. The approach is the sales representative's first face-to-face interaction with the customer. There are several techniques available for effectively approaching customers, such as the premium approach, the question approach, and the product approach. The premium approach, sometimes called the free gift approach, involves the sales representative giving the buyer something of value at the beginning of a call. The question approach is when the sales representative's presentation begins with a question to get the buyer involved. In the product approach, the sales representative hands a sample of the product to the buyer at the beginning of the presentation, once again involving the buyer right away.

An important aspect of the approach step is the concept of personal space. Sales representatives need to be aware of cultural differences and not make the buyer feel uncomfortable during the sales call. In some countries, it may be natural for the buyer and seller to communicate almost nose to nose, while this is completely unacceptable in other countries.

PRESENTATION

The fourth step of the sales process is the presentation. Sales representatives need to realize the importance of presenting the sales information in a professional manner. In the presentation step, the sales representative should relate customer benefits for each product feature presented. The sales representative should also ask questions to assess needs and involve the buyer, and use active listening, which is listening carefully to the buyer and using what the buyer says to help guide the direction of the sales presentation.

HANDLING OBJECTIONS

The fifth stage of the sales process is handling objections. In this stage, sales representatives anticipate objections that can be encountered during a sales call, such as those relating to price, product, source (company), and service. Sales representatives should learn to welcome objections because it shows that the buyer is involved in the presentation and because objections help focus the presentation on the buyer's concerns. If sales representatives successfully overcome a buyer's concerns, they are that much closer to a sale. There are no magical techniques for over-coming objections. Sales representatives overcome objections by being prepared and knowing the appropriate information about the company, products, and related services.

THE CLOSE

The close is the sixth, though not final, step of the sales process. When trying to close the sale, sales representatives need to observe the customer and use active listening to recognize buyers' closing signals. Closing signals can be verbal or nonverbal. Once sales representatives identify a closing signal, they use one of a variety of closing techniques to try to close the sale, such as the alternative choice, extra-inducement, or standing room only close. The alternative choice close is when the sales representative closes by offering the buyer choices, such as "Will that be MasterCard or Visa?" With the extra-inducement close, the sales representative attempts to close the sale by offering to give the buyer something extra of value if the buyer agrees to buy; while in the standing room only close, the sales representative informs the buyer that some future event will change the terms of the product offering, for example, an upcoming price increase.

FOLLOW-UP

The final step of the sales process is the follow-up. The follow-up step is essential for building a long-lasting relationship with the customer. A sales representative can build a good relationship with the buyer in many ways. A sales representative can send the buyer a thank-you note for a purchase or make sure that a purchase is delivered when expected. Follow-ups can be e-mails, telephone calls, letters, or personal interactions. A sales representative can contact the buyer to see if there are any questions or concerns about a purchase, to make sure the buyer received the delivery, to make sure the product was properly installed and in good working condition, or to give the buyer additional requested information.

Follow-ups do not always have to be business related. For example, if a sales representative discovers that the buyer is an avid golfer, the sales representative can mail the buyer an article about an upcoming golf event in the buyer's area. The idea of the follow-up is to satisfy the customer's needs and to build a strong business relationship.

SALES INTERACTIONS

Sales representatives have three basic types of sales interactions with buyers: transactional, consultative, and relationship selling situations. Transactional selling is where the sales representative does not have an established relationship with the buyer. Transactional selling tends to happen when sales representatives are first calling on buyers or when buyers intentionally avoid developing a relationship with the sales representative.

Consultative selling occurs when the sale representative is beginning to build a stronger working relationship with the buyer. The buyer begins to trust the sales representative, but still tends to use the sales representative as just an adviser.

With relationship selling, the sales representative has developed a strong trusting relationship with the buyer. The sales representative becomes almost like a partner with the buyer, working side by side with the buyer to help solve the buyer's problems. In return, the sales representative gains long-run sales from the relationship. As a sales representative progresses from transactional selling to relationship selling, the number of competitive sales representatives seen by the buyer tends to decrease.

see also Marketing

bibliography

Anderson, Rolph E., and Dubinsky, Alan J. (2004). Personal selling: Achieving customer satisfaction and loyalty. Boston: Houghton Mifflin.

Futrell, Charles (2005). ABC's of relationship selling through service (8th ed.). New York: McGraw-Hill/Irwin.

Manning, Gerald L., and Reece, Barry L. (2004). Selling today: Creating customer value (9th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Weitz, Barton A., Castleberry, Stephen B., and Tanner, John F., Jr. (2004). Selling: Building partnerships (5th ed.). Boston: McGraw-Hill/Irwin.

Joseph D. Chapman

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Chapman, Joseph. "Personal Selling." Encyclopedia of Business and Finance, 2nd ed.. 2007. Encyclopedia.com. 1 Jul. 2016 <http://www.encyclopedia.com>.

Chapman, Joseph. "Personal Selling." Encyclopedia of Business and Finance, 2nd ed.. 2007. Encyclopedia.com. (July 1, 2016). http://www.encyclopedia.com/doc/1G2-1552100250.html

Chapman, Joseph. "Personal Selling." Encyclopedia of Business and Finance, 2nd ed.. 2007. Retrieved July 01, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-1552100250.html

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