Collectively, as a society, we are invited everyday to buy something for various reasons. For instance, we see an ad on TV for a car; so later we go to the dealership and pick-up some information about the car, with the objective being to purchase one. The advertisement on TV is the business marketing the product to us. Once we enter the dealership, we are now engaged in a process of personal selling.
Personal selling is when businesses use people to “sell” the product to a customer face-to-face. These sales people promote the product with every aspect of themselves, including their appearance, attitude and special knowledge of the product. Sales people are not only selling the product, but they are selling themselves as well. The purpose of personal selling is to encourage the customer to buy the product (or at least try it out), and to keep the customer coming back. There are specific rules and strategies to follow to execute the deal, along with certain boundaries that can make selling the product more complex.
Personal Selling is usually the most expensive stage of the sales process – this is the step where a dedicated salesperson is focusing on one specific deal (as opposed to general marketing campaigns, which target many potential customers at once).
Steps in the Personal Selling Process
In order to gain the most beneficial outcome from this expensive advertising tool, one must follow a precise process. Personal selling can be adjusted in the way knowledge is communicated based on questions that are being asked to the customer. The 8 steps to be followed for an effective sale and relationship are as follows:
This is the first step in the Personal Selling Process which is the process of looking for and checking leads. When we look for a lead, we’re trying to find individuals that could potentially become customers. A qualifying prospect is a lead whose name is on a list. Let’s go back to the car dealership example, if we were to request a quote on a website for a car, we are considered a qualifying prospect because we have already shown interest in the product. A qualified prospect has a need and they can benefit from the product so it’s important to focus attention on these clients.
Fun Fact: About 20% of a business’ customer base is lost due to death, dissatisfaction, transfers, and competition. So, a growing list of prospects is important!
Here, sellers gather as much relevant information as possible prior to the appointment with the customer. This focuses on new customers where information is collected in such a way that it has enough applicability and usefulness for effective use. This can be looking up a customer on their social media accounts and finding their likes, dislikes, and needs to present this information in relation to the product.
This is known as the FAB technique where the seller focuses on the products Features and Advantages that can Benefit the customer.
- Features refer to the physical characteristics of the product such as size, gadgets and engine.
- Advantages refer to the performance that is provided by the physical characteristics, the engine is a 4-cylinder.
- Benefits refer to the benefits for the customer, the 4-cylinder engine can save you 10% on gas.
The Sales Presentation
Once the customer’s interest is grabbed, the sales presentation is executed. This involves a visual and persuasive vocal explanation of the product and it should be done in such a way that encourages the customer to share personal information (small talk) to reduce tension and to establish their requirements in the product.
The Trial Close
In this very important step, (part of step 4) the seller sets a temperature question so they can understand what the customer’s position is on the product so far.
This is an important step because when a customer comes into the dealership (still on the car example), they want to purchase a car, but may not be fully convinced yet and may have some issues that are preventing them from buying. The customer is in fact requesting additional information to help them justify their decision to buy. This also helps the seller establish what is on the customer’s mind, and what they’re looking for in their car.
Closing the Sale
The last part of the presentation and the most fearful for the seller. But have no fear! Closing the sale is only confirming and understanding, the fear will disappear if the seller TRULY believes that the customer will enjoy the benefits after they made the purchase.
Just because the product is sold, doesn’t mean the selling process is complete! Following-up with the customer is imperative to establish and keep long-term relationships. Following-up to get feedback on the product and the customer’s satisfaction shows the customer that you are concerned with their needs and will do anything to meet them. This builds lasting relationships and can in turn bring in more prospects.
The seller just followed all 8 steps, and made their sale. This is great, but it’s very important for that seller to retain a relationship with the customer that just drove off in their new car! For most businesses, most profit does not come from the initial sale, but from repeat customers and referrals, so building a rapport with customers makes this happen. Remember – the personal selling process is the most expensive aspect of marketing, and repeat clients cuts the time (and therefore cost) each salesperson needs to spend on each sale.
The role of the seller when building relationships starts with the quality of the product/service being sold, and the quality provided by the company builds trust: this is essential for every relationship. Staying true to their word, showing high interest in the customers needs, fixing complaints, incentives and having respect for the customer not only keeps customers coming back, but brings in new repeating business.
Impact of Technology on Personal Selling
Improvements in technology are drastically changing the communication between buyers and sellers. This phenomenon is referred to as a revolution in sales. Technology is an amazing factor in the personal selling process, and allows for products and services to be sold in a variety of different ways. Social Media and the Internet contributed a great deal to this revolution. Customers still want relationships, but look for it in different ways. With more and more people buying online, relationships and repeating customers have to be brought in – in a completely different way. Sellers are no longer meeting face to face with each customer, and need another way to build trust. You might have already seen one way companies address this – many websites have an online chat feature that allows a potential customer to communicate with a seller and then partake in the 8-step process above.
Social Media is a major key in executing the personal selling process. If used correctly, Social Media can yield positive results for any business. In today’s society, no one seems to have time to walk into a store and buy, or pick up the phone and ask a question. When a business has a user friendly Social Media accounts and a website, it gives them a massive boost in the pre-call prospect phase. When businesses track their websites and Social Media, they can see who visited, and in turn can lead to a sale (if the prospect did not already buy).
Every sale made by a seller needs to address a real need from the buyer at a price the buyer can afford – if the seller tries to get a potential customer to buy something they do not want, or pressure them into buying something they cannot afford, an ethics barrier is broken. Ethics is important for businesses and employees of the business. Unethical selling is never good for a business in the long term. Customers feel cheated, referrals and repeat business massively suffer, and unethical practices tend to doom business growth. As icing on the cake, most unethical sales tactics are outright illegal, and can land the seller in a lot of trouble if discovered. These are some of the biggest ethical pitfalls to avoid.
A false statement of a material fact made by the seller to the customer who was included to enter into a contract. Three types include:
- Fraudulent misrepresentation which happens if the seller makes a claim they know is false.
- Negligent misrepresentation is when a false statement is made without reasonable grounds for belief (the seller might not know for a fact it is untrue, but greatly suspects it is).
- Innocent misrepresentation is when a false statement is made with reasonable grounds for its belief. Ethical sellers will fact-check any claims they make to their prospective clients before making any promises.
When a seller has no license to sell the product or the service of the company but is doing so anyway (e.g. buying insurance from the receptionist at the brokerage firm). It is important that the seller has the capability and qualifications to be selling the product/service and provides relevant information. Unlicensed selling is almost always illegal (which is why those licenses exist).
This is an attempt of the seller to convince the customer to purchase a product/service that is not appropriate for that client. The car salesman persuaded a 75-year-old man to purchase the jalopy, knowing they wanted a reliable vehicle. Customer dissatisfaction will arise because it is not what the customer wanted.
When the seller is being extremely aggressive to convince the customer to make the purchase with no regard for the customer’s ability to afford the product or their needs.
This is an immoral way to achieve a goal and is used to break the rules for advantages in a competitive situation. By forging invoices and receipts, the seller can receive bonuses that they have not earned.
Culture and Personal Selling
Negotiating in the U.S. and around the world may seem different, but they are actually pretty similar. Although cultural differences exist, the skills and principles remain the same. The major difference lies in the seller showing respect to the customer’s culture. In personal selling, it is crucial to have some knowledge about other cultural norms other than their own American culture. This can make or break a sale, because if a customer is offended by something as little as too much eye contact, a sale can be lost. A few things to keep in mind include:
- Be careful of the small talk, some cultures believe that it makes someone appear untrustworthy. In America, although tedious to some, small talk is normal. However, in some other cultures, talking about personal life before talking about a business deal can cause the customer to feel uneasy about the seller and may view them as mischievous.
- Be aware of collective decision making! With many Eastern cultures, collectivism focuses on giving everyone a turn in fear of offending others. This is not unique to the East – Belgians are also famous for seeking “consensus” with most important decisions. Many sellers in America work by finding a “champion” in an organization and working specifically through that outlet, but some buyers may be more sensitive towards a sales approach that focuses on the organization as a whole.
- How Confrontational Are You? “Confrontation” in sales refers to the act of trying to make the potential buyer make a decision sooner rather than later. In North and Latin America, sellers are more confrontational when it comes to making a sale or a deal. For some people, adding a sense of urgency to the sales process can help bring the matter at hand to attention, and move along the sales process. For others, adding any confrontational aspect will be a massive turn-off, and kill the sale very quickly.
- Be Aware of Language Barriers. When speaking to a customer where English is their second language, it’s important to stay away from fancy words and just keep the dialogue short, simple, and to the point. The sale may be lost if the seller uses technical jargon that the customer does not understand.
- Eye contact is respectful in the Western Culture, but in Asian or Arab cultures, too much eye contact is seen as impolite. Some cultures speak in a louder tone, use their hands more, and are more emotional. It’s important to keep in mind that different cultures communicate differently.
- Negotiating on price in America is what they do. It’s very common to go back and forth on pricing in order to close a deal, whereas in Germany, the price is the price and that’s that!
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!Learn More