Value of Personal Selling
Personal selling minimizes wasted effort, measures marketing ROI better than most tools, promotes sales, and boosts word of mouth marketing.
LEARNING OBJECTIVES
Discuss the advantages and disadvantages of personal selling
KEY TAKEAWAYS
Key Points
- Since the effects of marketing are difficult to measure, personal selling gives insight into customer habits and responses to a particular marketing campaign or product offer.
- Sales people can tailor their presentations to fit the needs, motives, and behavior of individual customers. As sales people see the prospect’s reaction to a sales approach, they can immediately adjust as needed.
- High cost is the primary disadvantage of personal selling. With increased competition, higher travel and lodging costs, and higher salaries, the cost per sales contract continues to increase.
Key Terms
- marketing mix: A business tool used in marketing products; often crucial when determining a product or brand’s unique selling point. Often synonymous with the four Ps: price, product, promotion, and place.
Personal selling aims to improve the interaction between the customer and the sales facility, and/or salesperson. Since the effects of marketing are difficult to measure, personal selling gives insight into customer habits and responses to a particular marketing campaign or product offer.
Making the Sale: Personal selling allows flexibility in presentation to generate sales.
Advantages of Personal Selling
The most significant strength of personal selling is its flexibility. Salespeople can tailor their presentations to fit the needs, motives, and behavior of individual customers. As sales people see the prospect’s reaction to a sales approach, they can immediately adjust as needed.
Personal selling also minimizes waste effort. Advertisers typically expend time and money to send a mass message about a product to many people outside the target market. In personal selling, the sales force pinpoints the target market, makes a contact, and expends effort that has a strong probability of leading to a sale.
Consequently, an additional strength of personal selling is that measuring effectiveness and determining the return on investment are far more straightforward for personal selling than for other marketing communication tools, where recall or attitude change is often the only measurable effect.
The fourth benefit of personal selling is that a salesperson is in an excellent position to encourage the customer to act. The one-on-one interaction of personal selling means that a salesperson can effectively respond to and overcome objections (customers’ concerns or reservations about the product) so that the customer is more likely to buy. Sales people can also offer many specific reasons to persuade a customer to buy, in contrast to the general reasons that an ad may urge customers to take immediate action.
A final strength of personal selling is the multiple tasks the sales force can perform. For instance, in addition to selling, a sales person can collect payment service or repair products, return products, and collect product and marketing information. In fact, sales people are often best at disseminating negative and positive word-of-mouth product information.
Disadvantages of Personal Selling
High cost is the primary disadvantage of personal selling. With increased competition, higher travel and lodging costs, and higher salaries, the cost per sales contract continues to increase. Many companies try to control sales costs by compensating sales representatives based on commission only, thereby guaranteeing that salespeople get paid only if they generate sales. However, commission-only salespeople may become risk-averse and only call on clients who have the highest potential return. These sales people, then, may miss opportunities to develop a broad base of potential customers that could generate higher sales revenues in the long run.Companies can also reduce sales costs by using complementary techniques, such as telemarketing, direct mail, toll-free numbers for interested customers, and online communication with qualified prospects. Telemarketing and online communication can further reduce costs by serving as an actual selling vehicle. Both technologies can deliver sales messages, respond to questions, take payment, and follow up.
A second disadvantage of personal selling is the problem of finding and retaining high quality people. First, experienced sales people sometimes realize that the only way their income can outpace their cost-of-living increase is to change jobs. Second, because of the push for profitability, businesses try to hire experienced salespeople away from competitors rather than hiring college graduates, who take three to five years to reach the level of productivity of more experienced salespeople. These two staffing issues have caused high turnover in many sales forces.
Another weakness of personal selling is message inconsistency. Many salespeople view themselves as independent from the organization, so they design their own sales techniques, use their own message strategies, and engage in questionable ploys to create a sale. Consequently, it is difficult to find a unified company or product message within a sales force, or between the sales force and the rest of the marketing mix.
A final weakness is that sales force members have different levels of motivation. Sales people may vary in their willingness to make the desired sales calls each day; to make service calls that do not lead directly to sales; or to use new technology, such as a laptop, e-mail, or the company’s Web site. Finally, overzealous sales representatives may tread a thin line between ethical and unethical sales techniques. The difference between a friendly lunch and commercial bribery is sometimes blurred