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,