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Charles M. Futrell, Texas A & M University--College Station
FUNDAMENTALS OF SELLING: Customers For Life Through Service, 8e is one of McGraw-Hill’s best-selling texts in the Selling discipline. Its approach is classic and practical and emphasizes role-play. FUNDAMENTALS, written by a salesperson turned teacher, draws widely from Charles Futrell’s experience as a sales professional rather than from a staid theoretical perspective. The text is filled with practical tips and business-examples gleaned from years of experience in sales with Colgate, Upjohn, and Ayerst and from the author’s sales consulting business. Charles Futrell focuses on improving communication skills and emphasizes that no matter what career a student pursues, selling skills are a valuable asset.
Book-specific videos feature a variety of short ethical videos and "A Day in the Life" videos to illustrate what salespeople do everyday. 1. Day in the Life--Roerig Running time: 6:11 2. Day in the Life--3M Running time: 10:23 3. Ethical Selling Running time: 5:06 4. Steve Santana Running time: 5:09 5. Dumping Inventory Running time: 4:02 6. Sales Hype Running time: 3:53 7. Suggestive Selling--Chili's Running time: 12:02 8. Cereal Consumer Sales Running Time: 9. ACT! Distributor Sales Running Time: 10. Copier Business-To- Business Sales. Running Time:
Contains the Instructor’s Manual, test bank, computerized test bank, and PowerPoints. Print IM available on demand. The PowerPoint presentation features images and graphics from the book as well as video clips from the text specific video segments, adding a powerful resource for class lectures.
Chapter 1 The Life, Times, and Career of the Professional Salesperson
Chapter 2 Relationship Marketing: Where Personal Selling Fits
Chapter 3 Ethics First…Then Customer Relationships
Chapter 4 The Psychology of Selling: Why People Buy
Chapter 5 Communication for Relationship Building: It’s Not All Talk
Chapter 6 Sales Knowledge: Customers, Products, and Technologies
Chapter 7 Prospecting—The Lifeblood of Selling
Chapter 8 Planning Your Sales Call is a Must!
Chapter 9 Carefully Select Which Sales Presentation Method to Use
Chapter 10 Begin Your Presentation Strategically
Chapter 11 Elements of a Great Sales Presentation
Chapter 12 Welcome Your Prospect’s Objections
Chapter 13 Closing Begins the Relationship
Chapter 14 Service and Follow-up for Customer Retention
Chapter 15 Time, Territory, and Self-Management: Keys to Success
Chapter 16 Planning, Staffing, and Training Successful Salespeople
Chapter 17 Motivation, Compensation, Leadership, and Evaluation of Salespeople
Appendix A Sales Call Role-Plays
Appendix B Personal Selling Experiential Exercises
Appendix C Sale Technology Directory and www. Exercises
Appendix D Comprehensive Sales Cases
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You will notice a slight change to the title of the book in this eighth edition. We have added the word service, which refers to making a contribution to the welfare of others. Why? It is time to make the bold statement that salespeople exist to help others.
Since the last edition we have seen the worst of American business. Gallup (one of America's leading pollsters) has found that some categories of salespeople's jobs are the lowest-rated job categories for perceived honesty and ethical standards. Chances are, the majority of students have a negative attitude about salespeople.
We can correct this image by illustrating the wonderful things professional salespeople do. This edition emphasizes helping others through the application of the Golden Rule of Personal Selling. This simple sales philosophy is based upon treating others unselfishly, as you would like to be treated.
Fundamentals of Selling is written by a salesperson turned teacher. For eight years I worked in sales with Colgate, Upjohn, and Ayerst. As an academic, I have taught selling to thousands of college students, businesspeople, and industry sales personnel, developing and using the strategies, practices, and techniques presented in this textbook. Moreover, each year I continue to spend time in fieldwork with sales personnel. In my classes and programs, I stress "learning by doing" examples and exercises and videotape role playing of selling situations. This book is the result of these experiences.
When students ask me why I moved out of sales, I always reply, "I really haven't. I'm just selling a different product in a different industry." We are all selling, whether it's a product, an idea, our parents, a friend, or ourselves—as when interviewing for a job.
Fundamentals' Approach
Fundamentals of Selling was conceived as a method of providing ample materials that allow readers to construct their own sales presentations after studying the text. This allows the instructor the flexibility of focusing on the "how-to-sell" approach within the classroom. Covering the basic foundations for understanding the concepts and practices of selling in a practical, straightforward, and readable manner, it provides students with a guide to use in preparing sales presentations and role-playing exercises.
The Philosophy behind This Book
The title should help you understand the philosophy of this book. A student of sales should understand the fundamentals—the basics—of personal selling. All of them. I do not advocate one way of selling as the best route to success! There are many roads to reaching one's goals.
I do feel a salesperson should have an assortment of selling skills and should be very knowledgeable, even an expert, in the field. Based on the situation, the salesperson determines the appropriate actions to take for a particular prospect or customer. No matter what the situation, however, the basic fundamentals of selling can be applied.
There is no place in our society for high-pressure, manipulative selling. The salesperson is a problem solver, a helper, and an advisor to the customer. If the customer has no need, the salesperson should accept that and move on to help another person or firm. If the customer has a need, however, the salesperson should and must go for the sale. All successful salespeople I know feel that once they determine that the customer is going to buy someone's product—and that their product will satisfy that customer's needs—it is their job to muster all their energy, skill, and know-how to make that sale. That is what it's all about!
It is my sincere hope that after the reader has studied this book, he or she will say, "There's a lot more to selling than I ever imagined." I hope many people will feel that this material can help them earn a living and that selling is a great occupation and career.
At the end of the course, I hope all the students will have learned how to prepare and give a sales presentation by visually, verbally, and nonverbally communicating their message. I know of no other marketing course whose class project is so challenging and where so much learning takes place.
Finally, I hope each student realizes that these new communication skills can be applied to all aspects of life. Once learned and internalized, selling skills will help a person be a better communicator throughout life.
Basic Organization of the Book
The publisher and I worked hard to ensure that Fundamentals of Selling would provide students with the basic foundation for understanding all major aspects of selling. The 17 chapters in the text are divided into four parts:
In This Edition
New Emphasis. Unselfish and ethical service to the customer underscores the new Golden Rule of Personal Selling—a sales philosophy of unselfishly treating others as you would like to be treated without expecting reciprocity. This is how to build long-term relationships with customers.
Sales Call Role-Plays. Actually used in my classes by hundreds of students, these role-plays are created from information used by today's top sales forces.
Comprehensive Cases. At the end of the book are comprehensive sales cases. These cases approach sales from the broader sales management perspective.
World Wide Web. At the end of the book, these Web exercises introduce prospective salespeople to the use of the World Wide Web.
ACT! Customer Contact. Using software to maintain contact with customers and prospects is a necessity in the 21st century.
Student Application Learning Exercises (SALES). Chapters directly related to creating the role-play have SALES that aid students in better understanding how to construct this popular class project. These were first used in Professor Futrell's classes in the fall of 1997. Students unanimously felt they were great in helping them correctly construct their role-plays.
Sales Careers. Career information has been expanded throughout so students will better understand that there are sales jobs in all organizations—business, service, and nonprofit.
Selling Experiential Exercises. These end-of-chapter exercises help students to better understand themselves and/or the text material. Many can be done in class or completed outside and discussed in class.
Selling Globally. Many of these new box items were written by friends and colleagues from countries around the world.
Technology in Selling. A central theme within each chapter shows the use of technology and automation in selling and servicing prospects and customers.
Sales World Wide Web Directory. This resource contains the URLs for the Sales World Wide Web Exercises and for other useful websites.
Text and Chapter Pedagogy
Many reality-based features are included in the eighth edition to stimulate learning. One major goal of this book is to offer better ways of using it to convey sales knowledge to the reader. To do this, the book includes numerous special features:
Photo Essays. The book features many full-color photographs accompanied by captions that describe sales events and how they relate to chapter materials.
Chapter Topics and Objectives. Each chapter begins with a clear statement of learning objectives and an outline of major chapter topics. These devices provide an overview of what is to come and can also be used by students to see whether they understand and have retained important points.
Sales Challenge/Solution. The text portion of each chapter begins with a real-life challenge sales professionals face. The challenge pertains to the topic of the chapter and will heighten students' interest in chapter concepts. The challenge is resolved at the end of the chapter, where chapter concepts guiding the salespersons' actions are highlighted.
Making the Sale. These boxed items explore how salespeople, when faced with challenges, use innovative ideas to sell.
Selling Tips. These boxes offer the reader additional selling tips for use in developing their role-plays.
Artwork. Many aspects of selling tend to be confusing at first. "What should I do?" and "How should I do it?" are two questions frequently asked by students in developing their role-plays. To enhance students' awareness and understanding, many exhibits have been included throughout the book. These exhibits consolidate key points, indicate relationships, and visually illustrate selling techniques. They also make effective use of color to enhance their imagery and appeal.
Chapter Summary and Application Questions. Each chapter closes with a summary of key points to be retained. The application questions are a complementary learning tool that enables students to check their understanding of key issues, to think beyond basic concepts, and to determine areas that require further study. The summary and application questions help students discriminate between main and supporting points and provide mechanisms for self-teaching.
Key Terms for Selling/Glossary. Learning the selling vocabulary is essential to understanding today's sales world. This is facilitated in three ways. First, key concepts are boldfaced and completely defined where they first appear in the text. Second, each key term, followed by the page number where it was first introduced and defined, is listed at the end of each chapter. Third, a glossary summarizing all key terms and definitions appears at the end of the book for handy reference.
Ethical Dilemma. These challenging exercises provide students an opportunity to experience ethical dilemmas faced in the selling job. Students should review Chapter 3's definition and explanation of ethical behavior before discussing the ethical dilemmas.
Further Exploring the Sales World. These projects ask students to go beyond the textbook and classroom to explore what's happening in the real world. Projects can be altered or adapted to the instructor's school location and learning objectives for the class.
Cases for Analysis. Each chapter ends with brief but substantive cases for student analysis and class discussion. These cases provide an opportunity for students to apply concepts to real events and to sharpen their diagnostic skills for sales problem solving. Comprehensive cases are found in the back of the book.
As you see, the publisher and I have thoroughly considered how best to present the material to readers for maximizing their interest and learning. Teacher, reviewer, and student response to this revision has been fantastic. They are pleased with the readability, reasonable length, depth, and breadth of the material. You will like this edition better than the previous one.
Teaching and Learning Supplements
McGraw-Hill/Irwin has spared no expense to make Fundamen-tals of Selling the premier text in the market today. Many instructors face classes with limited resources, and supplementary materials provide a way to expand and improve the students' learning experience. Our learning package was specifically designed to meet the needs of instructors facing a variety of teaching conditions and for both the first-time and veteran instructor.
ProSelling Video. Several hours of student role-plays, exercises, examples of selling techniques, and industry sales training programs show students how to prepare their role-plays and how course content relates to the sales world.
Inc. Business Resources Video Package. A new feature from Inc. demonstrates key features of relationship selling.
Instructor's Manual. Loaded with ideas on teaching the course, chapter outlines, commentaries on cases, answers to everything—plus much more—the Instructor's Manual is a large, comprehensive time-saver for teachers.
Test Bank. The most important part of the teaching package is the Test Bank. We gave the Test Bank special attention during the preparation of the eighth edition because instructors desire test questions that accurately and fairly assess student competence in subject material. Prepared by Dr. Thomas K. Pritchett, Dr. Betty M. Pritchett of Kennesaw State College and myself, the Test Bank provides hundreds of multiple-choice and true/false questions. Professor Tom Pritchett also uses the book for his selling classes. The test items have been reviewed and analyzed by Texas A & M University's Measurement and Testing Center and class tested to ensure the highest quality. Each question is keyed to chapter learning objectives, has been rated for level of difficulty, and is designated either as factual or application so that instructors can provide a balanced set of questions for student exams.
Instructor CD-Rom: A course preparation CD including:
Course Website. At http://www.mhhe.com/futrell, you can access downloadable versions of instructor support materials, as well as a student tutorial and student self-assessment quizzes.
New! ACT!™ Express Software. For many businesspeople, staying in touch with prospects, customers, clients, vendors, and suppliers—people outside the company—is critical to success. And that success depends on managing those contacts for highly productive business relationships.
Included with this textbook is ACT!™ Express, a tool that will help students entering the business world. Based on the best-selling ACT! contact management system, ACT! Express shows students how to become more productive—resulting in better business relationships and greater business opportunities.
Whether in sales, a small or start-up company, a consulting practice, a professional services firm, or another business setting, students will become more proficient at effectively managing their contacts.
But what is a contact manager?
A contact manager will help the student manage all of the tasks and information critical to building effective business relationships such as these:
Effective contact management means making the most of contacts with prospects, customers, clients, vendors, and suppliers.
ACT! Express includes the following features:
Students who become proficient with ACT! Express may want to explore more advanced functions available in the full ACT! contact management system.
Students desiring more information about either ACT! Express or ACT! are encouraged to visit www.act.com/students.
Acknowledgments
Working with the dedicated team of professionals at McGraw-Hill/Irwin, who were determined to produce the best personal selling book ever, was a gratifying experience.
In overseeing this revision, Associate Editor Barrett Koger and Editorial Coordinator Scott Becker offered ideas for improvements to the eighth edition package. Judy Kausal and Mary Reeg oversaw the selection of new photographs for this edition. Project Manager Destiny Rynne ably guided the manuscript and page proofs through the production process.
Another group of people who made a major contribution to this text were the sales experts who provided advice, reviews, answers to questions, and suggestions for changes, insertions, and clarifications. I want to thank these colleagues for their valuable feedback and suggestions:
I also want to again thank those people who contributed to earlier editions, because their input is still felt in this eighth edition. They were Ramon A. Avila, Ball State University; Duane Bachmann, Central Missouri State University; Ames Barber, Adirondack Community College; John R. Beem, College of DuPage; Milton J. Bergstein, Pennsylvania State University; Marjorie Caballero, Baylor University; Norman Cohn, Milwaukee Tech; Gerald Crawford, University of North Alabama; William H. Crookston, California State University-Northridge; Gary Donnelly, Casper College; Sid Dudley, Eastern Illinois University; Dennis Elbert, University of North Dakota; Earl Emery, Baker Junior College of Business; O.C. Ferrell, Colorado State University; Myrna Glenny, Fashion Institute of Design and Merchandising; Ric Gorno, Cypress College; Kevin Hammond, Community College of Allegheny County; John Hawes, University of Akron; Deborah Jansky, Milwaukee Area Technical College; Albert Jerus, Northwestern College; Donna Kantack, Elrick & Lavidge; Dennis Kovach, Community College of Allegheny County; Deborah Lawe, San Fransicsco State University; James E. Littlefield, Virginia Polytechnic Institute & State University; Lynn J. Loudenback, New Mexico State University; Leslie E. Martin, Jr., University of Wisconsin-Whitewater; Brian Meyer, Mankato State University; Ken Miller, Kilgore College; Harry Moak, Macomb Community College; Dick Nordstrom, California State University-Fresno; James Ogden, Kutztown University; Roy Payne, Purdue University; Robert Piacenza, Madison Area Technical College; Alan Rick, New England Institute of Technology; John Ronchetto, University of San Diego; Jeff Sager, University of North Texas; Donald Sandlin, East Los Angeles College; Camille P. Schuster, Xavier University; Richard Shannon, Western Kentucky University; Dee Smith, Lansing Community College; Robert Smith, Illinois State University; Ed Snider, Mesa Community College; William A. Stull, Utah State University; Ruth Taylor, Southwest Texas State University; Albert J. Taylor, Austin Peay State University; James L. Taylor, University of Alabama; Robert Thompson, Indiana State University; Rollie Tilman, University of North Carolina at Chapel Hill; John Todd, University of Tampa; Glenna Urbshadt, British Columbia Institute of Technology; Bruce Warsleys, Trend Colleges; Dan Weilbaker, Northern Illinois University; Timothy W. Wright, Lakeland Community College; and George Wynn, James Madison University.
I would also like to thank the many Texas A & M students who have used the book in their classes and provided feedback. Thanks also to the many instructors who call me each year to discuss the book and what they do in their classes. While we have never met face-to-face, I feel I know you. Your positive comments, encouragement, and ideas have been inspirational to me.
In addition, salespeople and sales managers have provided photographs, selling techniques, answers to end-of-chapter exercises and cases, and other industry materials that enrich the reader's learning experience. They include the following:
Kim Allen, McNeil Consumer Products Company; Alan Baker, Noxell Corporation; Michael Bevan, Parbron International of Canada; Richard Ciotti, JC Penney Company; John Croley, The Gates Rubber Company; Terry and Paul Fingerhut, Steamboat Party Sales, Inc., Tupperware; Bill Frost, AT&T Communications; Steve Gibson, Smith Barney; Gary Grant, NCR; Jerry Griffin, Sewell Village Cadillac—Sterling, Dallas; Martha Hill, Hanes Corporation; Debra Hutchins, Sunwest Bank of Albuquerque; Mike Impink, Aluminum Company of America (ALCOA); Bob James, American Hospital Supply Corporation; Morgan Jennings, Richard D. Irwin, Inc.; Patrick Kamlowsky, Hughes Tool Company; Cindy Kerns, Xerox Corportion; Alan Killingsworth, FMCCorporation; Santo Laquatra, SmithKline Beecham; Stanley Marcus; Gerald Mentor, Richard D. Irwin, Inc.; Jim Mobley, General Mills, Inc.; George Morris, The Prudential Insurance Company of America; Vikki Morrison, First Team Walk-In Realty, California; Greg Munoz, The Dow Chemical Company; Kathleen Paynter, Campbell Sales Company; Bruce Powell, Richard D. Irwin, Inc.; Jack Pruett, Bailey Banks and Biddle; Emmett Reagan, Xerox Corporation; Bruce Scagel, Scott Paper Company; Linda Slaby-Baker, The Quaker Oats Company; Sandra Snow, The Upjohn Company; Matt Suffoletto, International Business Machines (IBM); Ed Tucker, Cannon Financial Group, Georgia.
For the use of their selling exercises and sales management cases, I am especially grateful to these people:
Finally, I wish to thank the sales trainers, salespeople, and sales managers who helped teach me the art of selling when I carried the sales bag full time. I hope I have done justice to their great profession of selling.
I hope you learn from and enjoy the book. I enjoyed preparing it for you. Readers are urged to forward their comments on this text to me. I wish you great success in your selling efforts. Remember, it's the salesperson who gets the customer's orders that keeps the wheels of industry turning. America cannot do without you.
Charles M. Futrell
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Learning Objectives Chapter Outline Chapter Summary |
Chapter One introduces you to the professional and rewarding career of selling. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
Personal selling is an old and honorable profession. It has helped improve this country’s standard of living and provided benefits to individual buyers through the purchase of products. Millions of people have chosen sales careers because of the opportunity to serve others, the availability of sales jobs, the personal freedom sales provides, the challenge, the multitude of opportunities for success, and the nonfinancial and financial rewards.
A person can become a successful salesperson through company and personal training and by properly applying this knowledge while developing skills and abilities that benefit customers. Also important are believing in the product or service being sold, working hard, wanting to succeed, and maintaining a positive outlook toward both selling and oneself. In addition, a successful salesperson should be knowledgeable, able to plan, and efficient in using selling time. Effective salespeople are good listeners who provide service to customers. En route to success, salespeople develop a range of skills through study and practice, enhancing their ability to think strategically, relate to others, and understand the technical aspects of their business.
For the future, salespeople will need to be well versed in diverse international markets, able to ethically develop customer partnerships, and ready to utilize technology. The remainder of this book expands on these topics to provide you with the background either to improve your present selling ability or to help you decide if a sales career is right for you.
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The sales force is but one part of an organization's marketing effort; you should understand the role and importance of the sales force in a firm's total marketing effort. After studying this chapter, you should be able to:
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Most people today associate marketing with selling. Yet, the act of selling is only one part of the overall marketing activities of the firm. The task of providing products that satisfy consumers’ wants forms the basis for our current marketing systems. Marketing is an exchange process between buyers and sellers, the purpose of which is to satisfy the buyer’s needs and wants through the purchase of the seller’s products.
This marketing concept evolved over the years, developing as American business matured. Initially, production-oriented American business assumed that people would buy whatever was efficiently produced. This concept gradually evolved into a sales-oriented approach in which firms generally depended on effective sales approaches to stimulate consumer demand for a product. Today’s marketing-oriented philosophy focuses on a firm’s desire to increase sales while anticipating and satisfying consumer needs. Progressive businesses today are much more consumer oriented than firms have been in the past.
The marketing mix consists of four variables—product, price, distribution (or place), and promotion. The product variable encompasses its physical attributes. Pricing involves the marketing manager, who establishes each product’s price as well as overall pricing policies. Getting that product to the right place at the right time is the distribution variable. The promotion variable increases demand by communicating information to potential customers via personal selling, advertising, publicity, and sales promotion.
Firms must carefully consider the role of the sales force in their promotional program or promotional aspect of the marketing mix. A firm has to decide if a sales force is a viable direct-marketing tool; and if so, which types of selling activities optimally promote its products. The different levels of relationship marketing (transaction selling, relationship selling, and partnering) allow salespeople to create customer loyalty. In this manner, they can keep today’s customers while generating new customers for tomorrow.
The new consultative selling requires the salesperson to take on the roles of a team leader, business consultant, and long-term ally. By performing these three roles the salesperson can reduce the relationship gap so the customer is satisfied with doing business with the seller.
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This chapter is one of the most important in this book. Social, ethical, and legal issues for sales personnel are often personal and technical in nature, yet they are essential for understanding how to be an outstanding professional. After studying this chapter, you should be able to:
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Ethics and social responsibility are hot topics for managers. Ethical behavior pertains to values of right and wrong. Ethical decisions and behavior are typically guided by a value system. For an individual manager, the ability to make correct ethical choices will depend on both individual and organizational characteristics. An important individual characteristic is one’s level of moral development. Corporate culture is an organizational characteristic that influences ethical behavior.
Corporate social responsibility concerns a company’s values toward society. How can organizations be good corporate citizens? The model for evaluating social performance uses four criteria: economic, legal, ethical, and discretionary.
Social responsibility in business means profitably serving employees and customers in an ethical and lawful manner. Extra costs can accrue because a firm takes socially responsible action, but this is a part of doing business in today’s society, and it pays in the long run.
What should an individual base her or his values upon? Could the Golden Rule serve as a universal, practical, helpful standard for salespeople’s conduct? What about your ethical and moral conduct?
Salespeople and managers realize that their business should be conducted in an ethical manner. They must be ethical in dealing with their salespeople, their employers, and their customers. Ethical standards and guidelines for sales personnel must be developed, supported, and policed. In the future, ethical selling practices will be even more important to conducting business profitably. Techniques for improving social responsiveness include leadership, codes of ethics, ethical structures, whistle-blowing, and establishing control systems. Finally, research suggests that socially responsible organizations perform as well as—and often better than—organizations that are not socially responsible.
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Learning Objectives Chapter Outline Chapter Summary |
What do people really buy? They buy the benefits of a product. This chapter examines why and how individuals buy. It emphasizes the need for salespeople to stress benefits in their presentations. After studying this chapter, you should be able to:
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As a salesperson, be knowledgeable about factors that influence your buyer’s purchase decision. You can obtain this knowledge, which helps to increase the salesperson’s self-confidence and the buyer’s confidence in the salesperson, through training and practice.
A firm’s marketing strategy involves various efforts to create exchanges that satisfy the buyer’s needs and wants. The salesperson should understand the characteristics of the target market (consumer or industrial) and how these characteristics relate to the buyer’s behavior to better serve and sell to customers.
The individual goes through various steps or stages in the three buying situations of routine decision making, limited decision making, and extensive decision making. Uncover who is involved in the buying decision and the main factors that influence the decision. These factors include various psychological and practical buying influences.
Psychological factors include the buyer’s motives, perceptions, learning, attitudes, beliefs, and personality—all of which influence the individual’s needs and result in a search for information on what products to buy to satisfy them. Established relationships strongly influence buying decisions, making satisfied customers easier to sell to than new prospects. Customers evaluate the information, which results in the decision to buy or not to buy. These same factors influence whether the buyer is satisfied or dissatisfied with the product.
Realize that all prospects will not buy your products, at least not all of the time, due to the many factors influencing their buying decisions. You need to uncover buyers’ needs, solve buyers’ problems, and provide the knowledge that allows them to develop personal attitudes toward the product. These attitudes result in positive beliefs that your products fulfill their needs. Uncovering prospects’ needs is often difficult because they may be reluctant to tell you their true needs or may not really know what and why they want to buy. You can usually feel confident that people buy for reasons such as to satisfy a need, fulfill a desire, and obtain a value. To determine these important buying needs, you can ask questions, observe prospects, listen to them, and talk to their associates about their needs.
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The ability to effectively communicate both verbally and nonverbally is crucial to sales success. This chapter introduces this important sales skill. After studying this chapter, you should be able to:
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Communication is defined as transmission of verbal and nonverbal information and understanding between salesperson and prospect. Modes of communication commonly used in a sales presentation are words, gestures, visual aids, and nonverbal communication.
A model of the communication process is composed of a sender (encoder) who transmits a specific message via some medium to a receiver (decoder) who responds to that message. The effectiveness of this communication process can be hampered by noise that distorts the message as it travels to the receiver. A sender (encoder) can judge the effectiveness of a message and media choice by monitoring the feedback from the receiver.
Barriers, which hinder or prevent constructive communication during a sales presentation, may develop or already exist. These barriers may relate to the perceptional differences between the sender and receiver, cultural differences, outside distractions, or how sales information is conveyed. Regardless of their source, these barriers must be recognized and either overcome or eliminated if communication is to succeed.
Nonverbal communication has emerged as a critical component of the overall communication process within the past 10 or 15 years. Recognition of nonverbal communication is essential for sales success in today’s business environment. Awareness of the prospect’s territorial space, a firm and confident handshake, and accurate interpretation of body language are of tremendous aid to a salesperson’s success.
Overall persuasive power is enhanced through development of several key characteristics. The salesperson who creates a relationship based on mutual trust with a customer by displaying true empathy (desire to understand the customer’s situation and environment), a willing ear (more listening, less talking), and a positive attitude of enthusiastic pursuit of lasting solutions for the customer’s needs and problems increases the likelihood of making the sale.
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Successful salespeople are knowledgeable individuals. Many salespeople are experts in their field. After studying this chapter, you should be able to:
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Company knowledge includes information about a firm’s history, development policies, procedures, products, distribution, promotion, and pricing. A salesperson also must know the competition, the firm’s industry, and the economy. This knowledge can even be used to improve one’s self-concept. A high degree of such knowledge helps the salesperson build a positive self-image and feel thoroughly prepared to interact with customers.
Wholesalers and retailers stock thousands of products, which often makes it difficult to support any one manufacturer’s products as the manufacturer would like. This situation may result in conflicts between members of the channel of distribution. To reduce these conflicts and aid channel members in selling products, manufacturers offer assistance in advertising, sales promotion aids, and pricing allowances. Additionally, many manufacturers spend millions of dollars to compel consumers and industrial buyers to purchase from channel members and the manufacturer.
National, retail, trade, industrial, and direct-mail advertising create demand for products and are a powerful selling tool for the salesperson in sales presentations. Sales promotion activities and materials are another potential selling tool for the salesperson to use in selling to consumer and industrial buyers. Samples, coupons, contests, premiums, demonstrations, and displays are effective sales promotion techniques employed to help sell merchandise.
Price, discounts, and credit policies are additional facts the salesperson should be able to discuss confidently with customers. Each day, the salesperson informs or answers questions customers pose in these three areas. Customers always want to know the salesperson’s list and net price, and if there are any transportation charges. Discounts (quantity, cash, trade, or consumer) represent important buying incentives the manufacturer offers to the buyer. The buyer wants to know the terms of payment. The salesperson needs to understand company credit policies to open new accounts, see that customers pay on time, and collect overdue bills. See the appendix at the end of this chapter for additional discussions on pricing.
Finally, success in sales requires knowledge of the many technologies used to sell and service customers. Computers, word processing, e-mail, faxes, pagers, cellular phones, the Internet, and the World Wide Web have quickly become part of the professional’s sales kit. Proper knowledge of the courteous manner in which these many technologies should be used is a necessity.
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Here we begin to discuss the steps within the sales process. This chapter examines the first step - prospecting. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
The sales process involves a series of actions beginning with prospecting for customers. The sales presentation is the major element of this process. Before making the presentation, the salesperson must find prospects to contact, obtain appointments, and plan the entire sales presentation.
Prospecting involves locating and qualifying the individuals or businesses that have the potential to buy a product. A person or business that might be a prospect is a lead. These questions can determine if someone is qualified: Is there a real need? Is the prospect aware of that need? Is there a desire to fulfill the need? Does the prospect believe a certain product can be beneficial? Does the prospect have the finances and authority to buy? and Are potential sales large enough to be profitable to me?
Several of the more popular prospecting methods are cold canvass and endless chain methods, public exhibitions and demonstrations, locating centers of influence, direct mailouts, and telephone and observation prospecting. To obtain a continual supply of prospects, the salesperson should develop a prospecting method suitable for each situation.
Once a lead has been located and qualified as a prospect, the salesperson can make an appointment with that prospect by telephone or in person. At times, it is difficult to arrange an appointment, so the salesperson must develop ways of getting to see the prospect. Believing in yourself and feeling that you have a product the prospect needs are important
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Planning the sales call is the second step in the selling process. It is extremely important to spend time planning all aspects of your sales presentation. After studying this chapter, you should be able to:
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Most salespeople agree that careful planning of the sales call is essential to success in selling. Among many reasons why planning is so important, four of the most frequently mentioned are that planning builds self-confidence, develops an atmosphere of goodwill, creates professionalism, and increases sales. By having a logical and methodical plan, you can decide what to accomplish and then later measure your accomplishments with your plan.
There are four basic elements of sales call planning. First, you must always have a sales call objective—one that is specific, measurable, and beneficial to the customer. Second, as a salesperson, you must also develop or review the customer profile. By having relevant information about your customer, you can properly develop a customized presentation. You can find information on the background, needs, and competitors of your potential buyer by reviewing your company’s records or by personally contacting the buyer and the company.
The third step in planning your sales call involves developing your customer benefit plan. To do this, look at why the prospect should purchase your product and develop a marketing plan to convey those reasons and the benefits to your prospect. Then, develop a business proposition by listing your price, percent markup, return on investment, and other quantitative data about your product in relation to your prospect. Lastly, develop a suggested purchase order and present your analysis, which might include suggestions on what to buy, how much to buy, what assortment to buy, and when to ship the product.
Finally, plan your whole sales presentation. Visual aids can help make your presentation informative and creative. In making your call, think in terms of the phases that make up a purchase decision—the mental steps: capturing the prospect’s attention, determining buying motives, creating desire, convincing the person that your product is best suited to her or his needs, and then closing the sale.
By adhering to these guidelines for planning your sales presentation, you may spend more time planning than on the actual sales call. However, it will be well worth it.
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To know the best way to begin the sales presentation, first determine the type of sales presentation to use for each prospect or customer. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
To improve your chances of making a sale, you must master the art of delivering a good sales presentation. An effective presentation will work toward specifically solving the customer’s problems. The sales presentation method you select should be based on prior knowledge of the customer, your sales call objective, and your customer benefit plan.
Because prospects want to know how you and your product will benefit them and the companies they represent, you must show that you have a right to pre-sent your product because it has key benefits for them. Many different sales presentation methods are available. They differ from one another depending on what percentage of the conversation is controlled by the salesperson. The salesperson usually does most of the talking in the more structured memorized and formula selling techniques, while more buyer–seller interaction occurs in the less structured methods.
In the memorized presentation, or stimulus–response method, the salesperson does 80 to 90 percent of the talking, with each customer receiving the same sales pitch. Although this method ensures a well-planned presentation and is good for certain nontechnical products, it is also somewhat inflexible, allowing little prospect participation. The formula presentation, a persuasive selling presentation, is similar to the first method, but it takes the prospect into account by answering questions and handling objections.
The most challenging and creative form of selling uses the need-satisfaction presentation. This flexible method begins by raising questions about what the customer specifically needs. After you are aware of the customer’s needs, you can then show how your products fit these needs. You must be cautious because many people don’t want to open up to the salesperson.
When selling highly complex or technical products like computers or insurance, a problem–solution presentation consisting of six steps is a good sales method. This method involves developing a detailed analysis of the buyer’s specific needs and problems and designing a proposal and presentation to fit these needs. This customized method often uses a selling team to present the specialized information to the buyer.
In comparing the four presentation methods, there is no one best method. Each one must be tailored to meet the particular characteristics of a specific selling situation or environment.
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You have selected your prospect, planned the sales call, and determined the appropriate presentation method. Now, you must determine how to begin the sales presentation. This step in the selling process is called the approach. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
As the first step in your sales presentation, the approach is a critical factor. To ensure your prospects’ attention and interest during a memorized or formula mode of presentation, you may want to use a statement or demonstration approach. In more technically oriented situations in which you and the prospects must agree on needs and problems, a questioning approach (SPIN, for instance) is in order. Generally, in developing your approach, imagine your prospects asking themselves, “Do I have time to listen to, talk with, or devote to this person? What’s in it for me?”
Words alone will not ensure that you are heard. The first impression that you make on a prospect can negate your otherwise positive and sincere opening. To ensure a favorable impression in most selling situations, dress conservatively, be well groomed, and act as though you are truly glad to meet the prospect.
Your approach statement should be especially designed for each prospect. You can choose to open with a statement, question, or demonstration by using any one of the techniques. You should have several alternative approaches ready in case you need to alter your plans for a specific situation.
Carefully phrased questions are useful at any point in a sales presentation. Questions should display a sincere interest in prospects and their situations. Skillfully handled questions employed in a sales approach can wrest a prospect’s attention from distractions and center it on you and your presentation. Questions are generally used to determine prospect wants and needs, thereby increasing prospect participation in the sales presentation. Four basic types of questions discussed in this chapter are direct, nondirective, rephrasing, and redirect questions.
In using questions, ask the type of questions that you can anticipate the answer to. Also, remember to allow prospects time to completely answer the question. Listen carefully to their answers for a guide as to how well you are progressing toward selling to them. Should you determine that your prospect is not listening, do something to regain attention. Techniques such as offering something or asking questions can refocus the prospect’s attention long enough for your return to the presentation
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The fourth step in the sales process is the presentation. Here, you discuss with the buyer the product's features, advantages, and benefits, your marketing plan, and the business proposition. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
The sales presentation is a persuasive vocal and visual explanation of a proposition. While there are numerous methods for making a sales presentation, the four common ones are the memorized, formula, need-satisfaction, and problem-solution selling methods. Each method is effective if used for the proper situation.
In developing your presentation, consider the elements of the sales presentation mix that you will use for each prospect. The proper use of persuasive communication techniques, methods to develop prospect participation, proof statements, visual aids, dramatization, and demonstrations increases your chance of illustrating how your products will satisfy your prospect’s needs.
It is often not what we say but how we say it that results in the sale. Persuasive communication techniques (questioning, listening, logical reasoning, suggestion, and the use of trial closes) help to uncover needs, to communicate effectively, and to pull the prospect into the conversation.
Proof statements are especially useful in showing your prospect that what you say is true and that you can be trusted. When challenged, prove it by incorporating facts in your presentation on a customer’s past sales—guaranteeing the product will work or sell, testimonials, and company and independent research results.
To both show and tell, visuals must be properly designed to illustrate features, advantages, and benefits of your products through graphics, dramatization, and demonstration. This allows you to capture the prospect’s attention and interest; to create two-way communication and participation; to express your proposition in a clearer, more complete manner; and to make more sales. Careful attention to development and rehearsal of the presentation is needed to ensure it occurs smoothly and naturally.
Always prepare for the unexpected, such as a demonstration that falls apart, interruptions, the prospect’s questions about the competition, or the necessity to make your presentation in a less than ideal place, such as in the aisle of a retail store or in the warehouse.
The presentation part of the overall sales presentation is the heart of the sale. It is where you develop the desire, conviction, and action. By giving an effective presentation, you have fewer objections to your proposition, which makes for an easier sale close.
If you want to be a real professional in selling, acquire or create materials that convey your message and convince others to believe it. If you try to sell without using the components of the sales presentation mix, you are losing sales not because of what you say but how you say it. Exhibits, facts, statistics, examples, analogies, testimonials, and samples should be part of your repertoire. Without them, you are not equipped to do a professional job of selling.
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When you learn how to skillfully handle your prospect's questions, resistance, and objections, you are a professional. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
People want to buy, but they do not want to be misled, so they often ask questions or raise objections during a sales presentation. Your responsibility is to be prepared to logically and clearly respond to your prospect’s objections whenever they arise.
Sales objections indicate a prospect’s opposition or resistance to the information or request of the salesperson. Basic points to consider in meeting objections are to (1) plan for them, (2) anticipate and forestall them, (3) handle them as they arise, (4) listen to what is said, (5) respond warmly and positively, (6) make sure you understand, and (7) respond using an effective communication technique.
Before you can successfully meet objections, determine if the prospect’s response to your statement or close is a request for more information, a condition of the sale, or an objection. If it is a real objection, determine whether it is minor or major. Respond to it using a trial close, and if you have answered it successfully, continue your presentation based on where you are in the sales presentation. For example, if you are still in the presentation, then return to your selling sequence. If you have completed the presentation, move to your close. If you are in the close and the prospect voices an objection, then you must decide whether to use another close or return to the presentation and discuss additional benefits.
Be aware of and plan for objection. Objections are classified as hidden, stalling, no-need, money, product, and source objections. Develop several techniques to help overcome each type of objection, such as stalling the objection, turning the objection into a benefit, asking questions to smoke out hidden objections, denying the objection if appropriate, illustrating how product benefits outweigh the objection drawbacks, or developing proof statements that answer the objection.
Welcome your prospect’s objections. They help you determine if you are on the right track to uncover prospects’ needs and if they believe your product will fulfill those needs. Valid objections are beneficial for you and the customer. A true objection reveals the customer’s need, which allows a salesperson to demonstrate how a product can meet that need. Objections also show inadequacies in a salesperson’s presentation or product knowledge. Finally, objections make selling a skill that a person can improve constantly. Over time, a dedicated salesperson can learn how to handle every conceivable product objection—tactfully, honestly, and to the customer’s benefit.
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If everything has been done to properly develop and give a sales presentation, then closing the sale is the easiest step in the presentation. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
Closing is the process of helping people make decisions that will benefit them. You help people make those decisions by asking them to buy. The close of the sale is the next logical sequence after your presentation. At this time, you finalize details of the sale (earlier, your prospect was convinced to buy). Constantly look and listen for buying signals from your prospect to know when to close. It is time to close the sale any time the prospect is ready, whether at the beginning or end of your presentation.
As you prepare to close the sale, be sure you have presented a complete story on your proposition and that your prospect completely understands your presentation. Tailor your close to each prospect’s personality and see the situation from the prospect’s viewpoint. Remember that you may make your presentation and close too early, which causes a prospect to say no instead of “I don’t understand your proposition and I don’t want to be taken advantage of.” This is why you should never take the first no. It is another reason to use a trial close immediately before the close. But, no matter when or how you close, do so in a positive, confident, and enthusiastic manner to better serve your prospect. Learn and follow the 12 steps to a successful closing.
Plan and rehearse closing techniques for each prospect. Develop natural closing techniques or consider using closes such as the alternative, compliment, summary, continuous-yes, minor-decision, assumption, T-account, or the standing-room-only close. Consider the situation and switch from your planned close if your prospect’s situation is different than anticipated.
A good closer has a strong desire to close each sale. Rarely should you accept the first no as the final answer. If you are professional, you should be able to close a minimum of three to five times.
Do not become upset or unnerved if a problem occurs when you are ready to close. Keep cool, determine any objections, overcome them, and try to close again—you can’t make a sale until you ask for the order!
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Providing service to the customer is extremely important in today's competitive marketplace. After studying this chapter, you should be able to:
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Salespeople increase sales by obtaining new customers and selling more product to current customers. Customer referrals are the best way to find new prospects. Thus, it’s important to provide excellent service and follow-up to customers. By building a relationship and partnership, you can provide a high level of customer service.
Customers expect service. When you deliver service, customers are satisfied and continue to buy; this results in retention and loyalty. Providing service to customers is important in all types of selling. Follow-up and service create goodwill between salesperson and customer that allows the salesperson to penetrate or work throughout the customer’s organization. Account penetration helps the salesperson to better service the account and uncover its needs and problems. A service relationship with an account leads to increases in total and major brand sales, better distribution on all product sizes, and customer cooperation in promoting your products.
To serve customers best, improve account penetration. Contact each customer frequently and regularly; promptly handle all complaints. Always do what you say you will do, and remember to serve customers as if they were royalty. Finally, remember to sincerely thank all customers for their business, no matter how large or small, to show you appreciate them.
Should customers begin to buy from a competitor or reduce their level of cooperation, continue to call on them in your normal professional manner. In a friendly way, determine why they did not buy from you, and develop new customer benefit plans to recapture their business.
Always strive to help your customers increase their sales of your product or to get the best use from products that you have sold to them. To persuade a customer to purchase more of your products or use your products in a different manner, develop a sales program to help maximize sales to that customer. This involves developing an account penetration program; increasing the number and sizes of products the customer purchases; maintaining proper inventory levels in the customer’s warehouse and on the shelf; achieving good shelf space and shelf positioning; clear communication with persons who directly sell or use a product; a willingness to assist wholesale and retail customers’ salespeople in any way possible; a willingness to help customers; and an overall effort to develop a positive, friendly business relationship with each customer. By doing these eight things, your ability to help and properly service each customer increases.
Today’s professional salesperson is oriented to service. Follow-up and service after the sale maximize your territory’s sales and help attain personal goals.
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A salesperson's ability to manage time and territory is important to success. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SELLING ISSUES
How salespeople invest their sales time is a critical factor influencing territory sales. Due to the increasing cost of direct selling, high transportation costs, and the limited resource of time, salespeople have to focus on these factors. Proper time and territory management is an effective method for the salesperson to maximize territorial sales and profits.
A sales territory comprises a group of customers or a geographical area assigned to a salesperson. It is a segment out of the company’s total market. A salesperson within a territory has to analyze the various segments, estimate sales potential, and develop a marketing mix based on the needs and desires of the marketplace.
Companies develop and use sales territories for a number of reasons. One important reason is to obtain thorough coverage of the market to fully reach sales potential. Another reason is to establish salespeople’s responsibilities as territory managers.
Performance can be monitored when territories are established. A territory may also be used to improve customer relations so that customers receive regular calls from the salesperson. This helps to reduce sales expenses by avoiding duplicated effort in traveling and customer contacts. Finally, territories allow better matching of salespeople to customer needs and ultimately benefit salespeople and the company.
There also are disadvantages to developing sales territories. Some salespeople may not be motivated if they feel restricted by a particular territory. Also, a company may be too small to segment its market or management may not want to take time to develop territories.
Time and territory management is continuous for a salesperson; it involves seven key elements. The first major element is establishing the territory sales quota. The second element is account analysis, which involves identifying current and potential customers and estimating their sales potential. In analyzing these accounts, salespeople may use the undifferentiated-selling approach if they view accounts as similar; or, if accounts have different characteristics, they use the account-segmentation approach.
Developing objectives and sales quotas for individual accounts is the third element. How salespeople allocate time in their territories is another key element. Salespeople have to manage time, plan schedules, and use spare time effectively.
The fifth element of time and territorial management is developing the sales-call objective, profile, benefit program, and selling strategies for individual customers. Salespeople have to learn everything they can about customers and maintain records on each one. Once this is done, they can create the proper selling strategies to meet customers’ needs.
Another major element is scheduling sales calls at specific times and places and routing the salesperson’s movement and travel pattern around the territory. Finally, established objectives and quotas are used to determine how effectively the salesperson performs. Actual performance is compared to these standards for evaluation purposes.
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Many salespeople strive to move up to management positions in their organizations. Typically, this is the job of sales manager. After studying this chapter, you should be able to:
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SUMMARY OF MAJOR SALES MANAGEMENT ISSUES
A salesperson who is promoted to sales manager becomes involved in sales planning, staffing, training, directing, and evaluating sales force activities. This chapter discussed the need to understand how to make sales forecasts and budgets, how to determine the number of salespeople to hire, how to recruit and train salespeople, and the legal aspects of staffing. The sales manager uses this knowledge to achieve the sales volume, profits, and growth higher levels of management desire.
Today, firms structure their organizations to best serve their customers. Small companies use a simple line organizational design, whereas large firms design specialized structures based on geography, the products they market, customers, or a combination of these elements.
Sales managers are frequently involved in forecasting their firm’s sales. They are also involved in developing budgets and allocating money to various sales units, all of which ultimately serve as input into planning and aid in coordinating and controlling sales unit activities.
The contemporary sales manager is knowledgeable in personnel practices involving the recruiting and hiring of salespeople. Government laws need to be considered so that the firm can abide by EEOC guidelines. The staff function involves both personnel planning—the determination of the kind and number of needed salespeople — and employment planning—the locating, recruiting, evaluation, and hiring of applicants for the sales job.
Once the hiring is done, the sales manager becomes involved in training salespeople on things such as product knowledge and selling skills. Training begins immediately, usually in the salesperson’s territory and at company training facilities.
The sales manager is a salesperson first, but also something of a jack-of-all-trades due to the various functions required for the job. The next chapter discusses directing and evaluating functions.
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Learning Objectives
Motivation, compensation, leadership, and evaluation of salespeople are four of the most important parts of the sales manager's job. After studying this chapter, you should be able to:
Chapter Outline
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Chapter Summary
SUMMARY OF MAJOR SALES MANAGEMENT ISSUES
An important challenge of the sales manager is to motivate salespeople using financial and nonfinancial methods. Salary, commissions, contests, bonuses, and travel awards are common financial motivators. Achievement awards, challenging work assignments, recognition, leadership techniques, and performance evaluations are nonfinancial methods used as motivators.
Today, salespeople are paid by several methods, but most firms use a combination of salary and financial incentives rather than straight salary or straight commission plans. This provides salespeople with a guaranteed salary and helps motivate them to reach their sales goals to earn commissions and bonuses or to win contests.
The sales manager needs to understand the principles of leadership and apply them to salespeople based on their individual personalities and territorial situations. Managers need to be people oriented and job oriented toward salespeople to help them reach sales goals. This ultimately helps to reach the manager’s goals.
The performance of sales personnel is evaluated by comparing their quotas and objectives to actual sales and job activities to determine their success. The salesperson’s immediate manager implements periodic evaluations each year using both quantitative and qualitative performance criteria.
To effectively evaluate salespeople, managers should develop procedures to ensure fair treatment. By being prepared for the interview and having a positive attitude, the salesperson will be receptive to the manager’s critique. The manager should evaluate each performance criterion and explain the evaluation to the salesperson. A discussion of the salesperson’s past performance concludes the interview. Future performance quotas and objectives can now be established to serve as goals to reach for the upcoming sales period.
This chapter concludes the discussion of the challenging fundamentals of selling and sales management.
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