To fully appreciate the positive potential of personal selling in the promotiona
ID: 390386 • Letter: T
Question
To fully appreciate the positive potential of personal selling in the promotional mix, it helps to first understand the downsides of this increasingly rare form of marketing. Think about just these few risks:
Cost – in some industries, the cost of a single sales call can be as high as $300. This includes compensation for the sales representative (salary, commission, benefits), plus sales support materials, entertainment spending, telecommunications and more. This can only make financial sense in a situation where “big ticket” products and significant sales revenues are involved.
Training – especially for technical products, extensive product training is required, as well as training in sales and customer service techniques. The costs of formal training programs can be steep, especially when development, delivery, and travel costs are considered.
Turnover – even among professional sales people, job turnover can be high as low-performers depart and high-performers seek more lucrative commission plans. High turnover contributes to difficulty in building and maintaining strong customer relationships.
Despite these negatives, personal selling is still a common form of marketing in many industries, including pharmaceuticals. Let’s think about why pharmaceutical sales reps are effective – starting with a review of the Career Profile for a Pharmaceutical Sales Rep.
Selling pharmaceuticals requires better-than-average intelligence and education.
Extensive training is required to understand and effectively communicate the data, benefits and risks associated with a specific pharmaceutical. It is critical that questions be answered quickly, confidently and completely, as can only be done face-to-face.
Both insurers and individual physicians may act as “gatekeepers” who stand between the pharmaceutical company and potential customers. This means it is even more important that a pharmaceutical sales rep be able to build positive, long-term, trusting relationships with decision-makers in his territory.
The relatively high compensation for pharmaceutical sales reps is offset somewhat by the rigors of a career as a traveling “road warrior.”
In a 2013 Wall Street Journal interview, Joseph Jimenez, CEO of Swiss drug maker Novartis AG, concludes that even in the lucrative pharmaceutical industry, there are pressures to reduce sales and marketing costs while increasing research & development spending. In an era of health care reform, centralized purchasing, government regulation and growing market share for generic drugs, it may be difficult to justify the costs of a personal selling approach.
As a marketer considering the use of personal selling, ask yourself a few critical questions: Can I afford personal selling as a promotional approach? Will the incremental revenues offset the significant costs? Does my product offer specific benefits that must be demonstrated or discussed to be fully understood? Are there long-term profits likely from building an on-going relationship with the customer? Only if you can respond “yes” to all of these questions should you consider use of this expensive yet powerful selling and promotional tactic.
Assignment:
Although personal selling has become a very expensive marketing tactic, it still can make sense in certain very specialized situations. Think about the last time you met face-to-face with a sales representative: Were you buying a new car? Considering a change to your life insurance? Maybe attending a jewelry party at a friend’s home? In each of these situations, the availability of a sales representative to ask and answer questions, or to demonstrate the features and benefits of the product/service, can add value to the interaction.
Think about a specific time (recently, please) when you were the customer in a personal selling situation. It will be more fun if you choose a particularly good or particularly bad sales experience!
In your first post, describe the process of the “sales call” – think about where, when, how and why it happened. It’s especially important to comment on how the sales call was initiated (did you reach out to the sales rep, or did the rep contact you?). Then, describe:
What functions did the sales representative perform during your time together? Think about whether s/he was trying to understand your needs, build rapport, describe features/benefits, “close the sale,” or other activities.
What were your reactions to the sales rep’s efforts? Do you believe s/he added value to the transaction, and if so, how?
If the roles were reversed, and you were the sales rep in this situation, what might you have done differently or better?
Explanation / Answer
A recent experience in which I was a customer in a personal selling situation was when I was buying a car for myself. I was quite interested in owning one certified pre-owned Ford Fiesta and had put an online enquiry on Ford’s website for my location. After that the sales representative of the nearest Ford pre-owned outlet contacted me and a visit was scheduled. On my visit to Ford’s pre-owned outlet my appointed sales representative performed various functions starting with informing me about the different pre-owned Fiestas that the outlet had, their age (in years) and their mileage (in miles). He then informed me what role does Ford play to certify a pre-owned car and how quality checks are done before selling a pre-owned car. Thus the sales representative was performing the function of removing my doubts that I had regarding quality concerns and service issues of a pre-owned vehicle. The sales representative further informed me that all Ford certified pre-owned cars comes with a standard two years warranty and three free servicing of the vehicle. This detailed information by the sales representative removed all my fears and concerns of buying a pre-owned car. The next function that the sales representative performed was that of a decision enabler. He understood my daily driving requirements, my budget, my preferences and on the basis of these factors he helped me shortlist few cars (from their inventory of over 200 pre-owned cars) that suited best to my requirements. To help me make my final decision he explained to me the parameters and factors that I should look out for in a pre-owned car before buying it.
I reacted quite positively to the efforts of the sales representative who was attending me. He helped mo quell all my queries and concerns effectively and thus I become confident of buying a pre-owned car. I was even able to zero down my final choice on the basis of selection parameters suggested by the sales representative. Thus the sales representative added a significant amount of value in the transaction and without his guidance, information and knowledge I would not have been able to select a car that optimally met all my requirements and preferences.
If the roles were reversed and I was in the shoes of the sales representative I would have been more aggressive when closing the sale. In my case the sales representative with whom I interacted was very forthcoming in the initial stages and left the eventual decision on me in the final phase of closing the sale. He gave me a space of my own. If I was in his shoes and situation I would have been equally aggressive throughout the deal, especially in the closing stages. This would ensure that all the hard work done by me earlier (as a sales representative) is not wasted and is translated into a tangible deal and sale.