Personal Selling and Sales Management

Although there are many ways of marketing products and services to prospective customers, personal selling -- the process of communicating with the customer on a one-to-one basis with the intention of persuading him/her to purchase a product or service -- continues to represent a significant share of marketing activities. Although other marketing methods may reach more customers more cheaply, there are numerous advantages to personal selling. To optimize the effectiveness of the sales force, most organizations employ a system of sales management. This function is responsible for enabling and monitoring the sales force in the performance of its tasks. Although there are a number of automated tools available to ease the burden on sales representatives and sales managers alike, these are not a panacea and often do not bring sufficient return to justify their cost.

Business organizations use a number of different methods to try to sell their goods and services to consumers. A commercial on the television or radio may be supplemented by print advertisements in various newspapers, magazines, or other publications.

The organization may develop a sales promotion and send advertisements or coupons through the mail or generate publicity to raise the prospective customer's awareness of the organization and its products or services. Stores where a product is sold may position a display to catch the customer's eye and encourage a purchase. The salesperson in the retail store may help the customer make a selection, often stressing the advantages of one particular product over another. Each of these approaches is effective in given circumstances, and many organizations develop an integrated marketing sales campaign utilizing multiple sales techniques to impress the benefits of the product or service in the minds of potential consumers.

Although there are many ways to attempt to persuade a current or prospective customer to buy the business's products or services, many sales are done through personal selling. These are situations in which a sales representative or team communicates with the customer on a one-to-one basis with the intention of persuading him/her to purchase a product or service. Personal selling tasks include developing a relationship with the customer, collecting and analyzing data formally or informally to determine the customer's needs, determining the best match between the customer's needs and the business's products or services, and effectively communicating this information in an attempt to persuade the customer to make a purchase. Personal selling can occur in many different situations ranging from the sales clerk in the retail store who assists a customer in making a purchase to a team of sales representatives who market a document control system to a major corporation.

Personal selling is more than persuading the potential customer to buy a product or service. As shown in Figure 1, consistently effective personal selling requires that the salesperson work with the customer to determine what the customer actually needs in terms of technical capabilities, price, delivery time, and other relevant factors. Based on an analysis of these factors, the salesperson can then determine which combination of the organization's products or services will best meet these needs. The sales representative then demonstrates to the customer that his/her proposed solution will cost-effectively meet the customer's needs, and work with the customer to answer any questions and develop a mutually satisfactory solution to the customer's problem.

Even though at first glance it may not appear to be cost effective compared with other marketing techniques, personal selling is used in many marketing situations. For example, whereas a print advertisement in a magazine or newspaper may cost only pennies per person reached, the average cost of a sales call is hundreds of dollars. Personal selling persists, however, because it is effective. Because the process involves one-on-one communication with the potential customer, the sales representative can pay more attention to the needs of the customer and tailor the presentation to better demonstrate that the product or service meets those needs. In addition, in personal sales, not only does the sales representative present information, but the customer is allowed the opportunity to ask questions, thereby getting a better understanding of what the product or service does and how it meets the needs of the customer. Further, this two-way communication also gives the sales representative better feedback on how the sales presentation is being received by the potential customer. Nonverbal cues such as yawning, closed off body language, or an angry look can help the sales representative take a different tack in an attempt to salvage the sale.

Another advantage of personal sales is that it allows the organization to present a large amount of complex or technical information about its products, services, policies, and experience in the field. The personal sales approach also allows the sales representative to work with the customer to find ways to adapt the standard product or service to better fit the customer's needs, develop an integrative solution to the customer's problem, or answer customers' questions regarding the comparison of the organization's products to those of its competitors. Although to some extent such information can be conveyed through other media, it is more effectively and efficiently done through the one-on-one contact of personal sales.

Personal sales are usually accomplished by sales departments with a sales force that works either as individuals or as teams to reach current and prospective customers and persuade them to purchase the products or services of the organization. As with other functions in the organization, the sales function requires effective management in order to enable the sales force to do its job. Sales management is the process of efficiently and effectively making sales through the planning, coordination, and supervision of others. Effective sales management involves much more than performing administrative tasks to coordinate the activities of the sales force. To be successful, the good sales manager is involved in a wide range of activities, including planning; organizing, recruiting, and selecting sales personnel; enabling and motivating the sales force to sell (e.g., training, print materials or samples); supervising and coordinating sales efforts (e.g., assigning territories or routes); and controlling, and monitoring the sales force. Each of these functions is necessary for the successful operation of a sales function within the organization.

Like any other function within the organization, the sales department is not given unlimited resources to persuade customers to buy the organization's goods or services. Therefore, the sales manager must make the best use of both the human and financial resources available to sell the organization's goods and services to potential customers. To do this well requires planning. Sales managers must determine how to use the resources available in the best way to optimize the effectiveness and efficiency of the sales force as a whole. This requires understanding the qualifications, abilities, and experience of the sales force. For example, it would be imprudent to send an experienced sales person to basic sales training or to give an inexperienced salesperson a large region to cover. To better understand how best to deploy the sales force, the sales manager also needs to understand the target market including its demographics, needs, and motivations. Data on sales force capabilities and prospective customer needs can then be put together and analyzed in order to come up with a plan that leverages the strengths of the individual sales personnel and enables each to reach his/her optimal sales potential.

After the sales manager has developed a workable plan to help optimize sales performance, the next step in sales management is to organize the sales force to best match the requirements of customers and potential customers. These planning activities occur not only when a new sales department is being set up, but should be part of a continuing effort to improve the effectiveness and efficiency of the sales force. To determine how best to do this, the sales manager needs to ask several questions. First, how many customers and prospective customers can each salesperson be reasonably be expected to call on within a given time period? There are only so many hours in the day, of course, but different sales people have different selling styles; radically different styles can be equally effective in different situations. The sales manager needs to understand these differences to better know how to deploy the sales force. To do this, the sales manager needs to take the characteristics of the customer pool and the styles and abilities of individuals on the sales force into account and match them appropriately. Second, the sales manager needs to determine the average number of sales calls each category of sales will require. For example, a sales call to a long-time satisfied customer to replenish a consumable product or update a piece of equipment will more than likely take less of a sales representative's time than would a cold call to a prospective customer who has not used the organization's goods or services before. A third piece of data needed by the sales manager in developing an optimal sales plan is the average call rate per salesperson. Some salespeople are able to make a sale quickly while others require more time to establish a relationship with the customer or to gather the information needed to close the sale. This information, along with the number of work dates per year, will help the sales manager determine how many sales representatives to employ and how these individuals should be deployed.

In addition to analyzing the sales needs of the organization and the needs and motivations of the target market, the sales manager needs to develop a capable sales force that can sell the organization's products or services. With the help of the human resources department, the sales manager develops a job description that specifies the duties and tasks related to a job. Job descriptions may also specify the knowledge, skills, and abilities necessary to do the job as well as the performance standards that differentiate acceptable from unacceptable performance. Candidates for the sales positions are then recruited, their application forms analyzed to determine how well they meet the requirements for the job, and their references checked. From the pool of applicants, the sales manager then interviews those who appear best able to perform the job. The data from all these sources is analyzed in conjunction with the other applicant data, and the sales force is hired.

Once the sales force is hired, it is the sales manager's responsibility to train these individuals to do the tasks of their new job. Although sometimes the human resources department will acquire general training through a third party vendor, it is the sales manager's job to train new employees on the specifics of the job and the requirements of the organization that differentiate this sales job from other sales jobs. The sales manager is also responsible for updating the sales staff on any changes in organizational policy that affect them and for providing new information about the organization's products or services so that they can better do their jobs. Although the sales manager may not do the training him/herself, it is the sales manager's job to determine what needs to be taught (e.g., basic vs. advanced sales skills, technical training for specific products), where it should be taught (e.g., in the sales office or other on-site venue; in an outside training center), and who should teach it (e.g., the sales or other manager, the human resources department, a consultant or outside vendor).

In addition, it is the sales manager's responsibility to motivate the sales force. Although the factors that motivate differ from individual to individual, there are some general motivators that help encourage sales representatives to do their best. Financial incentives are one of the most common motivators. A reasonable salary in relation to comparable jobs at other companies and the possibility of predictable raises and bonuses for doing one's job well all tend to be motivators. For this reason, many organizations pay their sales staff on commission -- a set fee or percentage of the sale that is given to a sales representative for convincing a customer to make a purchase -- in addition to a set salary. One of the reasons that sales commissions are an effective motivator is because they tie rewards directly to performance on the job. Other ways to motivate the sales staff are through connecting job performance with various perquisites such as a company car for making sales calls or trips or paid vacations for being a top seller. In addition, job security and status (such as through a promotion, job title, or other award or recognition) can motivate the sales staff.

In addition to these functions, the sales manager is also responsible for controlling the sales operation and monitoring the activities of the sales staff to make sure that they are effective and successful. To help ensure that the sales force is effective, it is important for the sales manager to set performance objectives for the sales force and set up ways to help enable the sales force to meet those objectives. This activity includes setting standards for behavior (e.g., number of sales calls required during a given period of time), implementing ways to collect data on how well the standards are being met and making sure that the data are collected, analyzing the data to determine where objectives are not being met and why, and determining a plan of action for correcting these situations.

Applications

Although the field of personal sales revolves around the personal communication and relationship between the customer and the sales representative, not all communication with the customer needs to be done face-to-face. Twenty-first century technology has transformed the way we do many things both at home and at work, including the function of personal sales. For example, the Internet is an invaluable tool for generating sales leads. A visit to a potential customer's website can eliminate hours of work spent tracking down the correct contact person and gathering other information vital to developing a tailored marketing approach. PowerPoint and other presentation software can help boost an organization's image by creating professional-looking, targeted presentations for the customer. Virtual tours of the organization's facilities can be enabled through web-hosted videos and simulations can help customers better understand the advantages and disadvantages of the organization's product or service. The use of technology in this way is not a mere prop or toy, however: it allows sales representatives to talk to prospective customers in their own language using their own tools, thereby showing themselves to better understand the customer's needs.

Sales representatives' lives can be made easier with other technologies that are common to the business world. Instant messaging and e-mail allow the sales representative to respond to customer queries in a timely manner no matter where they are, as well as to carry on parts of conversations that previously had to be done in person. Smart phones can help the sales representative receive e-mail and other communications instantaneously.

However, the application of technology to sales tasks goes well beyond these common tools. Organizations spend billions of dollars in various sales technologies to help in tasks such as customer relationship management and sales force automation in an effort to improve the effectiveness and efficiency of the sales team. Customer relationship management tools help identify prospective customers, acquire data concerning these prospective and current customers, build relationships with customers, and influence their perceptions of the organization and its products or services. Customer relationship management software can also be used to manage interactions and transactions with customers. However, as with any software application program, the outputs are only as good as the inputs. Customer relationship management software is only a tool; the salesperson cannot necessarily be taken out of the loop. As a result, the effect on sales of this technology may be insufficient to justify the investment.

Although there are a host of information technologies available to assist the sales representative and the sales manager in their tasks, they are not panaceas. The needs of the sales team must be carefully analyzed and compared with the capabilities of the tool before investing significant financial resources into sales technology. In the end, some tasks will always need to be performed by a human being. However, repetitive tasks, arduous data searches, and database management tasks can frequently be made less labor intensive through the application of sales technology, thereby freeing the sales representative or manager to get on with the business of personal selling.

Terms & Concepts

Advertising: Non-personal communication used by a business to persuade prospective customers to buy their goods or services. Advertising may be done through any number of media including television or radio; newspapers, magazines, or other publications; direct mail; billboards; catalogs; or the Internet.

Body Language: The communication of thoughts or feelings through physical expression such as posture, gesture, facial expression, or other movements. Body language may reinforce or contradict the verbal message being given by the person.

Commission: A set fee or percentage of the sale that is given to a sales representative for convincing a customer to make a purchase.

Consumer: A person or organization that acquires goods or services for direct use rather than for resale or use in a manufacturing process.

Customer Relationship Management: The process of identifying prospective customers, acquiring data concerning these prospective and current customers, building relationships with customers, and influencing their perceptions of the organization and its products or services.

Perquisites ("perks"): Something given to the employee in return for work over and above regular pay or compensation. Perks may include such things as health insurance, a company car, or a private office.

Personal Selling: The process of communicating with the customer on a one-to-one basis with the intention of persuading him/her to purchase a product or service. Personal selling may include developing a relationship with the customer, collecting and analyzing data formally or informally to determine the customer's needs, determining the best match between the customer's needs and the business' products or services, and effectively communicating this information in an attempt to persuade the customer to make a purchase.

Persuasion: The process of convincing someone to take a particular course of action or hold a particular point of view by argument, reasoning, or entreaty.

Publicity: Non-personal communication about the business or its products or services that is transmitted through mass media (e.g., television, radio, newspaper, websites) at no cost to the organization. Publicity includes such items as news articles about new products, store openings, new management, or new policies.

Sales Management: The process of efficiently and effectively making sales through the planning, coordination, and supervision of others. The activities of sales management include recruiting and selecting sales personnel, enabling the sales force to sell (e.g., training, print materials or samples), supervising and coordinating sales efforts (e.g., assigning territories or routes), and other motivating and human resource activities.

Sales Promotion: A set of activities and concomitant materials intended to attract the attention of potential customers and persuade them to purchase the organization's product or service. Sales promotions frequently offer an incentive to the customer to make a purchase such as coupons, discount prices, rebates, free samples, or contests. Sales promotions are often categorized into two classifications: those that target the ultimate user and those that target the wholesaler or reseller of a product.

Target Market: The people or businesses to whom the organization wishes to sell goods or services.

Bibliography

Asare, A. K., Yang, J., & Alejandro, T. (2012). The state of research methods in personal selling and sales management literature. Journal of Personal Selling & Sales Management, 32 (4), 473-490. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=84086218&site=ehost-live

Churchill, G. A. Jr., Ford, N. M., & Walker, O. C. Jr. (1993). Sales force management (4th ed.). Homewood, IL: Richard D. Irwin, Inc.

Erevelles, S., & Fukawa, N. (2013). The role of affect in personal selling and sales management. Journal of Personal Selling & Sales Management, 33 (1), 7-24. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=84461725&site=ehost-live

Hunter, G. K & Perreault, W. D. (2007). Making sales technology effective. Journal of Marketing, 71 (1), 16-34. Retrieved May 4, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=23368366&site=ehost-live

Kennedy, L. (2000). "Smart" tools will shape the way we sell. Paperboard Packaging, 85(5), 48. Retrieved May 4, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3129749&site=ehost-live

Peterson, R. (1978). Personal selling: An introduction. New York: John Wiley & Sons.

Shannahan, R. J., Bush, A. J., Moncrief, W. C., & Shannahan, K. J. (2013). Making sense of the customer's role in the personal selling process: A theory of organizing and sensemaking perspective. Journal of Personal Selling & Sales Management, 33 (3), 261-276. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=88834638&site=ehost-live

Strafford, J. & Grant, C. (1993). Effective sales management (2nd ed.). Oxford: Butterworth-Heinemann Ltd.

Suggested Reading

Adamson, B., Dixon, M., & Toman, N. (2013). Dismantling the sales machine. Harvard Business Review, 91 (11), 102-109. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=91571500&site=ehost-live

Hunter, G. K. & Perreault, W. D. Jr. (2006). Sales technology orientation, information effectiveness, and sales performance. Journal of Personal Selling & Sales Management, 26(2), 95-113. Retrieved May 4, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21065989&site=ehost-live

Jacoby, J. & Craig, C. S. (1984). Personal selling: Theory, research, and practice. Lexington, MA: LexingtonBooks.

Krantz, B. (2003). Ramping up with new sales technologies. Gases & Welding Distributor, 47(4), 52-54. Retrieved May 4, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=10840675&site=ehost-live

Shepherd, C., Tashchian, A., & Ridnour, R. E. (2011). An investigation of the job burnout syndrome in personal selling. Journal of Personal Selling & Sales Management, 31(4), 397-410. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=66715138&site=ehost-live