Personal Selling Strategies
Personal selling strategies should be derived from the marketing strategy and should be consistent with other elements of marketing mix. The following variables should be considered while formulating sales strategy.
- Call Rates
- Percentage of Calls on Existing and Potential Accounts
- Discount Policy
- Percentage of Resources Targeted at New and Existing Products
- Percentage of Resources Targeted at Different Types of Customers
- Improving Customer and Market Feedback from Sales Force
- Improving Customer Relationships
Below are few Personal Selling Strategies
If the intensity of competitive rivalry is high in the industry, salespersons involved in personal selling should be calling on their customers more frequently. If the rate of technological changes in the industry is high, the customer is more likely to change equipment frequently and may require the services of the sales team more often to evaluate options. Also when the buyer is expanding his facilities or is venturing into a new business, salespersons should be calling on the buyer more often.
Percentage of Calls on Existing and Potential Accounts
A salesperson has to divide his time between existing and potential customers in a way that maximizes sales or profits of the company. Some salespeople fix some formula for themselves so that they do not spend excess time with either type of the customers i.e. he will spend 40 % of his time with existing customers and the rest with prospective customers. But this may not be a good strategy all the time.
Division of time between the existing and potential accounts should depend upon the type of industry and the state of business in the industry. If the industry has big buyers and the salesperson’s company has a sufficient number of those big accounts, focus should be on retaining those accounts. But if the salesperson’s company has only a few of these accounts, the salesperson should divide his time between serving existing accounts and acquiring new ones.
The idea behind personal selling is that the salesperson should be aware of the need to divide his time judiciously between existing and potential customers depending upon the type of industry and the state of business in the industry. But he should be flexible because a formula will become irrelevant when the state of business changes.
Sales people are prone to announcing discounts at every hurdle in the personal selling process. It is important to provide flexibility in prices that salespersons can offer to customers because many deals can be clinched by offering small discounts. Many a time discounts have to be given to demonstrate to customers that they are important. But there should be guidelines prescribing the amount of discounts that can be offered to customers under exceptional circumstances.
When discounts become pervasive, customers start expecting discounts as a routine part of their buying process and the list price loses its sanctity. The company should reduce its list price under such circumstances to restore its sanctity. The company will be in a better position to know the realized price. Salespeople should be able to sell on the merits of the product and on the strength of the relationship that they have with the customers. Discounts should be provided in exceptional circumstances only.
Percentage of Resources Targeted at New and Existing Products
New products will require a push from salespeople and it should be ingrained in salespeople that at the time of launch of a new product they have to travel those extra miles and give those extra hours to make the launch successful. If the launch is very important for the future of the company, salespeople can afford to spend less time in selling the old products for some time.
But eventually the customers’ response towards the product will decide the amount of attention that the new product will get. If the new product is liked by customers, salespersons will pay more attention to it but if customer response is lukewarm their attention will shift back to their old products.
Percentage of Resources Targeted at Different Types of Customers
Some companies are competent to serve big accounts, i.e. they can afford to charge lower prices and give lot of services to their customers. These companies dedicate multifunctional sales teams to such accounts. Retaining the existing customers is the major responsibility of the sales force. Some other companies prefer to serve small accounts which pay full price and do not expect much service from their suppliers. These companies expect their salespeople to spend more time in looking for prospective customers than in serving existing customers.
Improving Customer and Market Feedback from Sales Force
Some companies compete by launching innovative products. Salespeople of such companies have to be adept at sensing customer response to the new launches of the company. Detailed and early feedback is important for improving the product. They also have to be alert to latent and emerging needs of customers that they can feed to their development team.
But even in companies which are only moderately focused on bringing new solutions to customers needs, collecting feedback and information from customers is important, if the new product has to be suitable for the customers. In mature industries, where customers’ needs and enabling technologies are not changing perceptibly, the sales force can almost exclusively concentrate on selling what its company makes.
Improving Customer Relationships
Developing and maintaining relationships with customers is expensive and a company need not incur this expenditure on every customer it does business with. There are customers who will always buy from the supplier who offers the lowest price. Some of them buy too little. And more importantly there are industries in which relationships with customers are not important at all.
A company competing on the basis of technological sophistication of its products will buy from a supplier who has the latest technology. The supplier would be better off putting money in R&D than investing in relationship with the customer. A company has to deliberate if it needs to develop and maintain customer relationships in its industry, and if it has to, it should identify the accounts that deserve the investment in developing and maintaining relationship with them.
In general, the importance of key account selling is increasing. Diversion strategy can be used to win new accounts. A company can distract a rival into focusing its resources on defending one account and thereby neglecting another, which can be won.
Photo by: Widener University
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