Реферат: Sales Management Essay Research Paper Question 1a1a1
Sales Management Essay, Research Paper
Question 1a1a.1 The definition and the
role of personal face-to-face selling. According to Fill (1999)
personal selling can be defined as:?An
interpersonal communication which involves face to face activities undertaken by
individuals, often representing an organisation, in order to inform, persuade
or remind am individual or group to take appropriate action, as required
by the sponsors representative.?It implies a life two-way
interactive dialogue between buyer and seller.?
The quote from Fill, suggests that personal selling may well ultimately
be about making a sale, but that is not its only function.? It can contribute considerably to the organisation
both before and after a sale has been made.?
Personal face-to-face selling is about finding information, persuading
customers through two-way communication. In terms of customer
management ?personal selling is a crucial element in ensuring customers past
purchase satisfaction, and in building profitable long term buyer seller
relationships built on trust and understanding.?? (Miller & Heinemarn 1991) ??????????????????????????????? Personal face-to-face
selling is important in the life assurance industry.? If for example you do not like a TV advertisement you can turn it
off, if an envelope looks like a mailshot, you can put it in the bin
unopened.? But if a sales representative
was on your doorstep, it is a little more difficult to switch off.? A person has a much greater chance of
engaging your initial attention, than an advertisement does. Life assurance can be very
complicating to perspective clients, and they may have questions, which the
sales rep can answer, or respond to situation sales rep may find themselves in
to prevent themselves from being shut off completely.Advertising can be targeted
within broad parameters, but even then there will be many wasted contacts, and
each of those wasted contacts will cost the company selling life assurance
money. Therefore utilising sales
reps will allow the company to weed out inappropriate contacts earlier on and
concentrate its efforts on those who offer a real prospect of making a
sale.? Thus the personal selling effort
can begin properly with persistence until satisfactory answers are received. Various means of life
assurance advertising cannot tell the impact it will be having on the
perspective clients whether they understand it, or whether they think it is
relevant to them.? Therefore personal
face-to-face interaction will help overcome these problems.? The representative will make sure the client
understands, and industry jargon or facts and figures, and go over it again and
again from different angle.? The
representative can also see if something has caught the attention of the
client, such as product developments linking life assurance with unit trusts or
mortgages for example pension plans, investment bonds, health insurance, and
endowment policies.? The sales rep
therefore will be able to tailor the message to emphasise that feature or
benefit. Due to the sales rep selling
life assurance and the perspective client being face to face, the sales rep can
create a unique approach that matches the moods and needs of each perspective
client. Personal face to face
selling also helps implement customer relationships management areas, an the
creation of long term mutually beneficial buyer? seller relationships is
recognised an extremely important to the health and profitability of the life
assurance industry.? The life assurance
market is huge and there are a combination of financial institutions offering a
diversified product range, as well independent financial advisors, direct sales
forces appointed reps, banks selling life assurance products, the therefore
market is very competitive.? Sales reps
at this point are the public face of the organisation, and their ability to
carry out the organisations message professionally and confidently can affect
judgement of that organisation and what it stands for.? The sales force has a crucial role to play
in both creating, maintain and developing personal relationships with
clients.? This will aid the life
assurance company information gathering as it will become easier, as the sales
rep will be able to find out more about the client purchasing philosophy by
having a friendly chat over a drink, than any formal inquiry or survey. Personal face-to-face
selling is affected by various direct marketing techniques such as
telemarketing and Internet marketing.?
Telemarketing can be defined as a planned and controlled activity that
creates and exploits a direct relationship between the customer and seller,
using the telephone.? Telemarketing can
either be inbound or where the potential customer to call the organisation,
which is used not only for direct response advertising but also for customer
care lines, competitions and other sales promotions. Or outbound telemarketing,
where the organisation contacts the potential customer. 1a.2 Telemarketing Personal face to face
selling is expensive as it is extremely labour intensive, and costs include,
travel, accommodation and other expenses, that is why in the life assurance
industry organisations have to be sure what the sales force is for, and what it
is actually doing cannot be achieved by any other means.? As telemarketing is not simply about high
pressure selling, but telemarketing is providing a whole range of marketing
tasks such as: ●generating leads ●screen leads before
follow up ●arrange appointments
for sales reps ●direct sales ●encourage cross up
selling ●dealer support ●account servicing ●market research ●Test marketing and
brand developmentOn an operational level
telemarketing improves customer service, to build trust, empathising with the
customer and understanding and being able to communicate with confidence the
product benefits relevant to the listener.?
Telemarketing does provide
the services that a sales rep does, selling face to face, as long as the call
centre staff are well trained, and the basis for using this method is that
selling by telephone will reduce the cost of providing life assurance products,
and research from data monitor (European Business Teleculture 98) found that
many people do accept these calls and in some cases actually enjoy them.? MORI however conducted research and found
that 75% of respondents preferred face-to-face contact with sales agents.? Personal selling face to
face however helps builds relationships between the buyer and seller, and
because there is a high turnover of staff in telemarketing relationship
building becomes more difficult, with clients in the life assurance industry. 1a.3 Internet Marketing The potential audience for
Internet usage is very high and more and more homes and businesses are
connected to the Internet.? The Internet
has revolutionised the way in which transactions are done, and has reduced
transaction costs for life assurance companies, when sales reps formed a major
part of the selling process.? The
internet is also available 24 hrs a day, 7 days a week, which gives life
assurance companies flexibility in terms of getting the men across to potential
clients.? Therefore the Internet
improves the service information and advice given to customers.? There has been a reduction in the number of
sales reps in the life assurance industry, due to internet marketing providing
the following benefits: – ●relatively
inexpensive to create compared to high costs associated with sales reps. ●equal access
opportunities ●quick and easy to
refresh and update, therefore saving time and money with training ●open all hours with
no constant support staff required ●can provide cost
efficiencies e.g. collecting information via the web reduces staff for other
activities. ●global reach ●the Internet can act
as an aid to the selling process rather than a replacement.Using telemarketing and
Internet marketing can provide a sales manager with sustainable competitive
advantage. Question 1b1b.1The life assurance industry
is perceived to be ridden with con people, as a report by the securities and
investments board (SIB) suggests that 1.5million people may have been wrongly
advised to opt out of company pensions. This reflects badly on sales management
and sales people involved in the life assurance industry, as motivation of
selling in the industry is perceived as being commission based advisers who
offer unsound advice for the purpose of making a sale.? Due to the public unease
with regards to the financial services the Personal Investment Authority (PIA)
was set up in 1994 to regulate all types of investment business conducted
within the private sector. The services offered by PIA
ensured that investors received appropriate investment advice from a firm
regulated by the PIA.? The PIA also
ensured that members operate to the highest professional standards including
life assurance and, provides a mechanism for redress (PIA Ombudsman) if members
provide poor investment advice.Taking into consideration
the negative of the sales person it is important that the selling techniques
and sales approaches are improved in the assurance industry, to win back
customer confidence. 1b.2 Selling services The selling approach of life
assurance will depend upon the customer needs, and because life assurance in an
intangible service, the task of selling life assurance is more difficult than
selling services.? Therefore the
providers of the services must be highly trained in sales techniques and sales
negotiation.? Also attention should be
paid to image building, so that the life assurance company is seen as stable
reliable institutions with a friendly and no-intimidating attitude, therefore
creating an atmosphere of trust between the buyer and seller, thus implementing
a customer benefit approach. For the customer benefit
sales approach to be successful it is important that the company selling life
assurance has a customer based structure, which is designed to reflect the
needs of the different types of customers.?
The reason for implementing this strategy is due to the fact that
financial institution selling life assurance are now full financial
institutions, offering a range of services.?
This approach has an attractive logic on the sales representative can
develop detailed industry knowledge and form long-term personal relationships
with the customer.? The customer based
sales approach ensures a better match between the support and expertise needed
by the customer and the skills of the sales rep selling life assurance. Research by Pards (1997)
suggests that the customer based approach from the customers perspective found
that, due to developing a relationship between the buyer and seller, meant the
seller?s attention being focussed on the customer, which gave real added
value.? This make the selling of life
assurance a more augmented product, as more is on offer than the service
itself. 1b.3 ?Relationship selling Selling techniques in the
life assurance industry can be improved substantially by developing
relationships with customers, so that a relationship is based on trust, where
the life assurance company having full regard of customers need this will
enable customer retention, as life is about acquisition and retention. The relationship with the
customer is the most important asset a company has, therefore the sales manager
must understand what happens when the sales rep meets the client.? This will allow the sales rep to identify the
relevant stages in consumer behaviour and adapt to the most appropriate selling
approach.? By implementing this tactic
it will perceive the life assurance company as having similar values as the
customer, allowing the relationship to develop further. As mentioned earlier, that
research from Pardo suggested a customer-based approach, as it gave the selling
approach a value added dimension.? To
take research from Pards even further, so as to enhance the customer benefit
approach and relationship selling, by companies offering life assurance to
implement follow up and account management, as the relationship with the
customer stills needs to be cultivated and managed.? In order to maintain the relationship, the sales rep or even a
customer care manager will ensure that the client is regularly sent new product
information.Personal contacts maintains
relationship with customers, and as clients will be passing over confidential
information for assessment, this will be made easier an there will be a history
of experience, trust and respect which has been built through personal
contacts. Question 2No matter how good the life
assurance is or other promotional elements are, the sales rep has to show the
customer the benefits of dealing with the life assurance company that is why
the management of the sales force is very important.Sales management will
provide an essential link between the organisations strategic marketing plans
and the achievement of sales objectives by the sales reps. Therefore it is
essential that the sales manager ensures that the selling effort fits with the
overall tasks specified in the marketing plans and strategy. 2.1 Sales planning and strategy The sales plan will outline
the objectives of the selling effort and details of how the plan should be
implemented.? The plan will arise from
the marketing objectives set for the life assurance products and market share
etc.The sales plan will
interrelated by three factors (i) sales objectives (ii) sales organisation and
(iii) sales coverage and deployment. 2.1.1 Sales objective A general sales objective is
the sales target to be achieved by the sales force as a whole, and a more
specific objective will be for individuals within the sales force. Sales objectives are
essential to measure progression and motivation of the sales force selling life
assurance.? The general sales objectives
will be a quantitative measure, i.e. to gain 30% of life assurance industry
market share by 2002.? This is to avoid
the dangers of chasing low profit or to lesson the temptation to reduce margins
to generate more sales volume. The life assurance sales rep
as an individual will be given sales quotes, i.e. ?x number of life
assurance polices to be sold in a year.? However, due to the negative
image of the industry, performance targets in terms of follow up sales calls,
call frequency should be implemented, to develop relationship with the client. 2.1.2 The sales organisation
The sales organisation of
the company selling life assurance will already be created, therefore the sales
manager will have to organise the sales force in terms of a customer benefit
approach, as described in question 1b. By developing relationships with
customers so it becomes easier to sell other financial products and services to
them. 2.1.3 Sales coverage and
deploymentThe life assurance market is
very large, therefore the sales force should be sufficient to cope with the
market.? A number of factors need to be
considered her, such as calling frequency required for each customer, the sales
representatives time division between administration, selling and repeat calls.
Taking these factors into
consideration, the size and deployment of the sales force will not be fixed,
but varied according to opportunities. 2.2 TelemarketingThe
growth of telemarketing along with increasingly cost per personal sales calls
have made companies selling life assurance policies think more carefully about
when, where and how to employ the sales team.Therefore
calls centres will be created and a system, which is used by Abbey National
Direct which recognises the telephone number from which an inbound call
originates, and can route the call to the staff member who dealt with that
customer the last time they called.This
will allow personal relationships to develop with the customer and the life
assurance seller as well as providing consistency. As the one to one
relationship develops it becomes easier for the staff member to sell other
financial products to that customer i.e. PEPs and Equity Plans.Outbound
calls will also be made, as a care call, or to take any corrective action,
which will aid the life assurance policy holder to be loyal.Depending
upon the distribution channels used for selling the life assurance polices,
call centres can be within the company or specialist call centre can be hired
to handle outbound telemarketing.? A
company called ADS Telemarketing provides a range of services including data
enhancement, mailing follow up, customer reactivation, lead generation,
appointment selling, market research and brand development. 2.3 Methods of distributionDue
to the vast range and complexity of product channel combinations, there are six
main types of channels used for selling life assurance products:1)
The independent
financial advisor. (IFA?s) 2)
Direct sales forces. 3)
Appointment
representatives 4)
Bancassurance 5)
Mail and advertising 6)
TelephoneFor
the purpose of selling life assurance three main distribution channels should
be implemented.●Bancassurance ●Mail
and Advertising ●TelephoneReasons
for not using distribution channels 1, is that there has been accusations that
IFA?s sold policies on the basis of most lucrative commission.Reasons
for not using distribution channel 2, is that their loyalty changes depending
which company they work for. There is also the danger of high-pressure sales.Reason
for not using distribution channel 3, is because Bancassurance is preferable,
as they sell only life assurance products, which will be the company I am the
sales manager of.Mail
and Advertising reflect the importance of marketing, as the life assurance
industry faces growing competition for people?s savings from other financial
institutions. Marketing will also help in cleaning the tarnished image of the
life assurance industry. 2.4 Direct MarketingDirect
marketing has grown to be the significant element of the communication mix, as
it will add on extra dimension to elements of the promotional mix.My
purpose for using direct marketing will be used as a direct response mechanism,
as we will engage in a number of TV and print advertisements. This strategy
will be used as a means of attracting and retaining customers.Our
direct marketing activities will consists of direct mail, telemarketing,
Internet marketing and direct response mechanism.The
biggest benefit of using direct marketing is to build an on-going relationship
with an individual customer, so that the customers trust and confidence grows
with my company. We will also capitalise on this by analysing the customer
needs and purchasing habits in order to tailor future offerings to fit that
customer profile.Direct
marketing will also enable to create loyal customers, as we have entered into a
dialogue with them, and have their needs and wants met through tailoring
offerings, which will make it hard for competitors to poach them. Direct
mail will allow us to communicate at length and in depth with our customers
personally.The
Internet will make easier for us to locate our target segment, and also it will
be cost effective for us to build direct responses mechanisms, as a higher
proportion of the audience reached will be interested, then a relatively high
response rate can be expected.2.4.1 Sales costsCommunication
is becoming very expensive, therefore direct response advertising, followed by
direct mail activity will prompt the customer into action, which will be cost
effective for us.2.5 No
matter how good the life assurance is, or other promotional elements, the
representatives will have to show the customer the benefits of dealing with our
life assurance company. That is why management of the sales force is very
important, which is part of the sales plan involving recruiting, training,
management, motivation and compensation of my sales force. 2.5.1 RecruitmentIt
is important to begin recruitment by developing a profile of the type of person
we are looking, which will lead to a list of ideal skills characteristics of
the representative to be recruited.2.5.1.1 Job Analysis The
job will involve selling, as well as concentrating highly on customer
relationship management. The applicant should therefore be able to perform
sales tasks in line with company policies.2.5.1.2. ManpowerAfter
the job analysis, manpower planning is important, in order to achieve the
organisations objectives. The life assurance market is huge, therefore staff
will be required, to perform personal selling activities, telemarketing and
Internet marketing activities. The most commonly used formula to asses the size
of sales force is described below as an example.The Inputs C
= number of customers F
= average frequency of calls per customer year L
= average number of calls per representative day N
= average number of selling days per representative per year The
Calculations Stage
1 T = C x F = total number of calls per year Stage
2 D = T / L = total number of selling days required per year Stage
3 S = D / N = number of sales representatives required Source:Russel, F. A (1997) Textbook of salesmanshipIt
will not be necessary for new recruits to have experience as they will be
trained in our own methods, as experienced sales reps may come with bad habits
and other organisation weaknesses.2.5.1.3 Source of Sales recruitsRecruits
will be mainly from educational establishments. Reason being that a
relationship is developed between the company and the new recruit, which will
help enhance the relationship of the sales rep and the customer.2.5.1.4 SelectionThe
selection process will be designed to draw out evidence of the ability that the
candidate can perform the specified tasks.?
In view of making the right choice, in addition to normal interviews and
reference procedures psychological tests to access the personality of the
candidate as the job entails a lot of customer interaction.2.6 TrainingThe
recruitment process only provides the raw material, therefore training will be
given for better sales performance. Training will not only be for new recruits,
but for existing staff, even well established staff for skills refinement and
upgrading.? For
new recruits training will given in knowledge of life assurance products, so
they understand what they are selling.Selling
skills are also important, therefore depending on where the recruits are based
i.e. call centre, on the road, appropriate training will given to improve
standards in the selling of life assurance products, in a customer benefit
approach. 2.6.1 Competency testing for sales people.All
people involved in selling life assurance products must take an independent
test to assess their level of knowledge of the life assurance industry and its
products and services.Anyone
who actively engages, advices or assists in completing a proposal for a member
of the public has to pass the course.?
This includes sales staff of life assurance companies who give advice.The
only exemptions apply to holders of certain equivalent or higher qualifications
(eg.A.C.I.I) or sellers of ?limited? products ranges.2.6.2 RegistrationAnyone
who sells a life assurance product is included in a central Registry of Life
Assurance Sales people. The objective of the register is to protect the
customer by establishing and maintaining sales standards and to improve the
standing of those who sell life assurance.The
included on the register are: Sales staff employed by the life assurance
company Anyone assisting or advising the public. The
register includes information on the name, address, and date of birth of each
salesman as well as his or her status, qualifications, details of current
employment. Each
salesperson is also assigned an individual registration number which is carried
with him/her from one employer to another. Every proposal form filled out by the
salesperson will quote the number. 2.7 ManagementHaving
a mixture of telemarketing, and having a team of sales reps visiting the
customers will accomplish the management of the sales force. The telemarketing
will be more focused on building relationships.Territory
management will be configured and sales reps will be assigned to certain
territories. Potential customers will receive direct mail, which will require a
response from them to matters further.Territory
management will allow us to strengthen our customer relationships as 9/10
repeats sales occur due to good relationships. It will also help in evaluating
the sales force and co-ordinating selling with other functions.The
sales reps time will be structured to maximise productive time and minimise
wasted time i.e. maximising customer contact time, which will allow the company
to maximise sales and profit potential of each territory.2.8 MotivationAny
sales effort requires motivated sales people, as the motivated seller will sell
better.New
recruits joining the sales force will be sufficiently rewarded for their
achievements so that are not easily poached by the competition. Besides
financially based motivation factors other methods will be used.Team
activities will take place to create a sense of belonging to a team can be
important.? Bringing the representatives
back to HQ for regular team meetings, seminars and briefing will help foster
team spirit. This will allow an opportunity for the team to share the views and
experiences. Training programmes will also play a part in reaching employees
that they are valued. Representatives
whether on the road or in the call centres will be involved in managerial
activities, such as developing their own sales plan, an it will give the sales
rep a greater sense of control over their own working as well as there is an
open an co-operative management.Mechanisms
for regular feedback will also be devised through a direct data link, which
will make them feel they are offering more than just selling expertise.I
as the sales manager will create healthy rivalry between sales rep, through
sales contests, items that are seen as valuable and achievable. Contest will
not be focused on sales figures, but on a range of important activities, such
increased penetration of existing accounts.2.9 CompensationsThe
compensations method to be employed will be straight salary compensation plan,
as it is more appropriate on our aim is to encourage the representation to
spend time developing relationships with the customers.? However bonuses will be awarded similar as a
profit sharing scheme. This is to find an appropriate balance between income
and incentives.Fringe
benefits will include free medical insurance, a generous expense account, paid
holidays and sickness leave, to keep the staff happy.2.9 Performance EvaluationMonitoring
and controlling an individuals selling activity is vital therefore there will
be a systematic means of gathering account information on a weekly basis from
the sales rep. From a strategic point of view, this will help is assessing the
general impact of marketing policies at account level.Performance
will be measured in qualitative and quantitative terms, which will allow me to
find explanations for a particularly good or bad performance, which will
indicate the need on training or motivation. Section B Sales Force
automation Because the cost of
maintaining a direct sales force is high, sales force productivity is an
important issue for sales managers.? In
many industrial organisations, sales force costs are the largest single
marketing expense item.? A typical sales
rep will have a car, mobile phone, expense account and bonus scheme, but there
are limits to the number of customers that can be met in any particular
day.? Many organizations complain that: ·
Sales force
effectiveness is difficult to measure; ·
Potential business
leads slip through the net; ·
Vital customer
information remains hidden on scraps of paper or in the sales representative?s
head; ·
If a sales
representative leaves the company, important customer information also leaves; ·
Sales representative
are always busy but the sales results are often mediocre; ·
Bonus schemes fail to
encourage sales teams to greater efforts.In response, companies
have looked at various methods of automating the sales force (SFA) to improve
productivity and increase sales.? The
technologies and tools that companies use to automate their sales forces vary
significantly, it is like creating a virtual office in the car.The Yankee Group, a
consultancy company, has identified three separate generations of SFA tools: ·
Generation 1: personal
information and contact management.? The
first generation of SFA tools, products such as ACT!, Goldmine and Maximzer,
was designed to help sales representatives to manage contacts and time and
increase their selling effectiveness.?
Such powerful time- and contact-management tools had not existed
previously and were accepted quickly and enthusiastically. ·
Generation 2: networked
contact management.? The second
generation of tools was essentially networked versions of the first, connecting
the contact-tracking database and personal productivity tools of the sales
force with the corporate network, contact and prospect database.? Sales representatives were equipped with
laptop computers that they synchronised or ?replicated? with the corporate
network each day. ·
Generation 3:
technology-enabled selling.? The third
generation of SFA has its primary focus on making the sales force effective
where it matters most: in front of the customer.? The new generation of tools allows sales representatives to
configure products, prepare proposals, give illustrations and quotes, and track
orders, using their laptops.The benefits of SFA can be
significant. ?HP foods, for example,
which sells a variety of food products through shops and supermarkets, replaced
its traditional sales force of 100 representatives with 12 business development
executives equipped with mobile phones and computers, thus making significant
cost savings without compromising service quality.? The business case for automating the sales force does not have to
stop with the sales representatives.? If
it is extended further into the organisation, the benefits are far more wide
reaching.? Campbell?s Soup, for example,
invested $30mn in SFA for some 1000 sales representatives, sales
administration, marketing, operations and IT employees in the USA and
Canada.? The New Jersey-based company,
with customers including supermarket chains, other grocery retailers and food
service vendors such as KFC and McDonald?s, targeted savings of more than $18mn
annually through shorter order-cycle times, more accurate invoicing and better
control of funds used for product promotions.?
Campbell?s efforts cut across a wide range of functions; distribution,
pricing, invoicing, settlement and accounting.SALES MANAGEMENT BS535-3 FROM: FAYAZ PATEL TO?: JOHN WARD