Chapter 14: Personal Selling and Direct Marketing

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Ever wonder how your favorite brands manage to reach you directly?

Not just with a big ad, but in a way that feels personal, almost like they know you.

It's a great question, because it's definitely not random.

It's about building relationships, really, ones that go way beyond just one purchase.

Absolutely.

And today, we're diving deep into that very world.

We're cracking open a crucial chapter from marketing management by Kotler, Keller, and Chernev.

That's right.

Specifically focusing on personal selling and direct marketing.

Yeah.

And our mission for this deep dive is pretty clear.

We want to unearth the core concepts, those frameworks and strategies behind these direct connections, make them clear, accessible.

And connect the theory to what's happening in business today, because these methods, even the traditional ones, are constantly evolving.

Especially with digital trends and how we all behave as consumers now.

Exactly.

So you'll hear about the whole sales process, how companies actually design and manage their sales teams.

And we'll explore those diverse channels, direct marketing uses, like mail, email, websites,

all that stuff.

You might be surprised by some of the companies we mentioned, from classics like Avon and Tupperware to maybe less obvious ones, like Progressive Insurance or even Amway.

OK.

So let's jump right in.

Let's explore this art of direct connection, starting with personal selling.

At its heart, this is about direct interaction, that one -on -one, or sometimes one -to -many engagement with potential buyers.

Right.

The salesperson is there making presentations, answering questions, and ultimately trying to get that order.

What makes it unique, though?

Well, the book points out three key things.

First, it's highly customized.

Unlike a big ad blast, the message can be tweaked for each individual buyer.

Second, it's relationship -oriented.

These interactions can range from just a simple transaction to deep, long -term partnerships.

And third, it's response -oriented.

Buyers are actually encouraged to respond, ask questions, object.

It's a two -way street.

Which makes it super effective later in the buying process, when you're trying to sway preferences or get someone to actually buy.

Exactly.

It's powerful for influencing decisions and driving action.

You see this with companies like Electrolux, selling directly, or that classic Tupperware party model.

Or Mary Kay, that one -to -many approach.

And then you have Amway, which is huge globally.

They combine direct selling with a multi -level structure where people earn from their own sales and from the sales of people they recruit and mentor.

Interesting.

So, okay, there's a process to this, right?

It's not just random conversations.

Definitely not.

The source lays out six major steps.

Prospecting, pre -approach, presentation, persuasion, closing, and servicing.

Though maybe we can focus on, say, prospecting, presentation, and closing for now.

They're pretty key.

Sounds good.

So, prospecting and qualifying.

This is step one, finding potential leads and figuring out if they're actually worth pursuing.

Right.

And lots of companies, IBM, for example, have historically used that BANT acronym.

BANT, Budget, Authority, Need, and Timeline.

Does the prospect have the money, the power to buy, a real need, and a time frame?

Exactly.

But what's really changed here is the tech.

Companies are now using data analytics, even AI, to sift through potential leads.

How so?

They're looking at all sorts of signals, hiring patterns, website activity, social media mentions, to figure out who's genuinely interested and ready.

It's about finding that sweet spot between getting enough leads, the quantity, and getting the right leads, the quality.

So salespeople aren't just chasing ghosts.

Precisely.

It makes the whole pre -approach figuring out how to contact someone much more targeted.

Should it be a visit, a call, an email?

The data helps decide.

Okay.

Then comes the presentation and demonstration.

How do you actually tell the story?

A really common and effective way is the FABV approach, features, advantages, benefits, and value.

FABV.

Right.

Features are what it is.

Advantages are why that's good.

Benefits are what the customer gets.

And value is what it's worth to them, often in money terms.

But the crucial thing here isn't just knowing the letters, it's the shift it represents.

What shift?

From just talking about the product listing features to really focusing on the customer.

What are the economic, technical, social benefits?

What's the overall value to them?

In competitive markets, that's what matters.

So less about processor speed, more about how it saves the client time and money.

Exactly.

That's the customer orientation piece.

Which naturally leads to persuasion because buyers don't just say yes immediately.

They have questions, objections.

For sure.

And these objections usually fall into two buckets.

Psychological resistance, maybe they just prefer a brand they know, or they hate making decisions.

Or logical resistance, real concerns about price, delivery schedule, things like that.

So how do good salespeople handle that?

They don't just bat them away.

They see them as opportunities, really.

To clarify, to reinforce the value, there's this great concept of selling the price rather than selling through price.

Meaning justify the cost instead of just discounting.

Exactly.

One company actually retrained its team to focus on the value proposition, armed them with better data, and guess what?

Margins went up significantly, not just revenue.

Objections can actually strengthen the sale if handled well.

Okay, makes sense.

Then the moment of truth.

Closing.

Absolutely critical.

No close, no sale, right?

Skilled reps learn to read the closing signs.

Hi, quiet.

Physical actions, maybe leaning forward and nodding.

Or statements like, so, delivery would be.

Or asking specific questions about terms.

And then they ask for the order.

Directly ask or maybe summarize the key benefits again, or offer a small incentive, like a service add -on or a token gift, just to nudge them over the line.

And it doesn't end there.

They're servicing.

Right.

This is huge for long -term success.

It's all about follow -up and maintenance after the sale.

Making sure the customer is happy, finding any problems early.

And building that relationship for repeat business.

Exactly.

It solidifies the buyer's decision and keeps them loyal.

Some companies use structured approaches, like speed selling here.

Asking about situation, problem, implication, need payoff, especially for managing complex long -term accounts.

Got it.

So that's the weight of personal selling.

Now, how do companies build and manage the actual team that does this?

The sales force?

Yeah.

This is a massive area.

As Jim Cock from Boston Beer said, without sales, there is no business to manage.

It's the company's direct link to customers.

It's also really expensive, right?

Hugely expensive.

So designing it right is critical.

The book highlights five key areas, objectives, strategy, structure, size, and compensation.

It's like getting all the gears meshing correctly.

Okay.

Let's take sales force objectives first.

What are they actually trying to achieve?

It's way beyond just sell, sell, sell these days.

Modern reps are expected to be problem solvers.

They diagnose customer issues, propose solutions, maybe even offer insights the customer hadn't thought of.

So more consultants.

Very much so.

Their tasks include gathering market info, targeting the right customers, communicating value, selling, servicing, even managing allocation if products are scarce.

And what about that classic tension between marketing and sales?

Ah, yes.

Marketing thinks sales drops a ball on leads.

Sales thinks marketing sends junk leads.

It's common.

Jim Farley at Ford argues it's often better to have one person overseeing both, or at least ensure a much closer collaboration.

Getting them aligned can seriously boost results.

Okay, next.

Sales force strategy.

This is about using your own employees versus hiring independent reps.

Exactly.

A direct company sales force means full -time employees.

You have inside sales, working from the office, and field sales out meeting customers.

And the alternative.

A contractual sales force.

These are manufacturers reps, agents, brokers.

They work on commission.

What drives that choice?

Cost and control, mainly.

Think about a furniture maker entering a new territory.

An agent might be cheaper initially because you only pay commission on actual sales.

Lower volume, lower cost.

But as sales volume grows, those commissions add up fast.

Eventually, having your own salaried plus commission team becomes more cost effective.

Plus, with your own team, you have more control over training, focus, what they prioritize.

Agents might push the products that give them the highest commission, not necessarily yours.

Finding that break -even point is key, then.

It is.

And managing the control aspect.

Alright.

Sales force structure.

How do you organize the team?

It really depends on the business, product lines, industries, customer types.

Common structures are geographic, product based, or market based.

I see.

And what about leveraging different types of salespeople?

Yeah, that's becoming really common.

A leveraged sales force.

You have your top tier field reps focus on the big, complex accounts and high value products.

Wow.

While inside sales teams or even online channels handle the more routine sales, smaller accounts, or lower margin products, it's about efficiency and focusing resources.

Teamwork is also huge now, especially for major accounts.

Which leads nicely into major account management.

What's that about?

These are your critical customers.

Key accounts, national accounts, global accounts.

Often large companies with multiple divisions buying from you.

But they're vital.

So you assign someone special?

Often, yes.

A major account manager or sometimes a whole team.

Their job is to be the single point of contact, understand that complex customer inside out, and coordinate everything they need from your company.

P &G is a famous example.

They have hundreds of people working at Walmart's headquarters.

Wow.

Embedded.

Totally.

As buyers get bigger and want more integrated solutions, this approach is growing.

Okay, so structure matters.

What about Salesforce size?

How many reps do you actually need?

Companies often use what's called the workload approach.

It's fairly logical.

How does it work?

You basically group customers by how much they buy or their potential.

Then you decide how often each group needs a sales call.

Maybe top A accounts need 36 calls a year, B accounts need 12.

Then you calculate the total number of calls needed across all customers for the whole year.

Then figure out how many calls one average rep can realistically make in a year.

And divide the total needed calls by the calls per rep.

You got it.

That gives you the number of reps required.

It helps ensure you have enough coverage without being overstaffed.

Makes sense.

Finally, Salesforce compensation.

Always a tricky one.

Definitely.

You need to attract, retain, and motivate good people.

A typical package has four parts.

A fixed amount, like a salary.

For stability.

Right.

A variable amount commissions, bonuses linked to effort, and results.

The incentive part.

Exactly.

Then, expense allowances for travel, lodging, etc.

And benefits like health insurance, retirement plans.

Are most plans just salary or just commission?

Some are.

Straight salary is good when reps do lots, non -selling tasks, or teamwork is key.

Straight commission really motivates high performers, but they might neglect relationship building or push less profitable products.

The most used mix.

Yeah.

Combination plans are most common, trying to balance security and incentive.

The big trend now, though, is linking that variable pay, not just to sales volume, to strategic goals, like gross profitability on sales, customer satisfaction scores, customer retention rates, maybe even team or overall company performance.

It signals a move away from just closing deals to building sustainable, profitable customer relationships.

Interesting.

Okay.

Let's shift to actually managing this force day -to -day.

Driving performance.

Right.

This involves five key activities, according to the text.

Recruiting and selecting, training, supervising, motivating, and evaluating.

So recruiting and selecting, finding the right people sounds crucial, especially if turnover is high.

It's huge.

Sales rep turnover can be almost 20 % annually in some industries.

And hiring the wrong person is incredibly expensive.

Lost sales, training costs, recruitment costs again.

So how do companies get it right?

Is it just about experience?

Not anymore, really.

They're moving beyond just looking at resumes.

Many use composite tests, personality assessments, and even assessment centers where candidates go through simulations of real job tasks.

Trying to see them in action.

Exactly.

And there's a growing focus on needing analytical marketing skills, too.

Reps need to understand the market, the data, not just be smooth talkers.

Okay.

Once hired,

training and supervising.

Customers expect more now, don't they?

They absolutely do.

They expect reps to have deep product knowledge, understand their industry, and be efficient.

That means companies have to invest more in continuous training.

What kind of training?

All sorts.

Product knowledge, sales techniques like role playing, maybe even empathy training to better understand customer perspectives.

Supervision is about ensuring productivity, making sure reps are spending time wisely.

Like focusing on the right accounts.

Yeah, and prospecting effectively.

Using tools like time and duty analysis helps reps see where their time actually goes.

Travel, admin, waiting, selling so they can become more efficient.

You mentioned inside sales earlier.

Is that part of supervision?

It's definitely a major trend impacting how sales courses are managed.

The inside sales force is growing rapidly.

They're less expensive than field reps because there's less travel.

And they use tech.

Tons of tech.

Web conferencing like WebEx or Zoom, CRM systems, LinkedIn sales navigator, social media.

They can do a lot of selling remotely.

This frees up the field reps to focus on those larger, more complex accounts that really need face -to -face interaction.

Makes sense.

Okay, motivating the team.

Sales can be tough.

Lots of rejection.

It really can.

So encouragement and incentives are vital.

Interestingly, research shows what salespeople value most is often pay,

opportunities for promotion, personal growth, and just feeling like they're accomplishing something.

More than just being liked.

Yeah, things like liking the boss or job security often rank lower than those core motivators.

Sales contests are also common, providing short -term boosts and recognition.

And finally, evaluating performance.

How do managers know who's doing well?

It's about feedback.

You need good information.

Sources include sales reports.

Reps usually submit activity plans, call reports, expense reports, plus personal observation, maybe riding along on calls.

Customer feedback through letters or surveys is also valuable.

What kind of metrics do they track?

Key performance indicators or KPIs.

Things like average number of calls per day, average revenue per call, cost per call, percentage of orders per hundred calls, number of new customers, number of lost customers.

Lots of data points.

Yeah.

And good practice encourages reps to do self -analysis too.

After a call, think.

What went well?

What didn't?

How can I improve next time?

Okay.

That covers the personal selling side really well.

Let's switch gears now to the other half.

Reaching you directly.

Direct marketing.

This feels like it's exploded, especially online.

It really has.

Direct marketing is essentially using channels that go straight to the consumer, no intermediaries like retailers, to reach them and deliver products or services.

What are the big advantages?

Well, it can be more cost effective, like we discussed with Salesforce's cutting out middlemen.

You also get incredibly valuable customer data because you are the direct contact point.

Right.

You know who's buying what.

Exactly.

Which lets you provide better service, tailor offers, and build a stronger brand image through that direct interaction.

The goal is usually pretty clear.

Get a measurable response, often in order.

That's why it's sometimes called direct order marketing.

What channels are we talking about here?

All sorts.

The classics like direct mail and catalogs, telemarketing, newer stuff like interactive TV kiosks, obviously websites,

and mobile devices.

You mentioned Ambit Energy earlier as an example.

Yeah, they're interesting because they used a massive network of independent consultants for direct selling.

Their growth was explosive, banking on the idea that people trust recommendations from friends.

But there were issues.

There were controversies.

Allegations about misrepresentation, concerns about the model pressuring customers to become salespeople themselves.

It just highlights that direct marketing, especially network marketing models, can sometimes operate in a gray area and requires careful management and ethics.

Okay, let's break down some of those key channels.

Direct mail feels a bit old school.

It might feel that way, but it's still widely used.

Sending physical offers, announcements, reminders directly to someone's home or business.

Why does it stick around?

Its strengths are target market selectivity.

You can pick exactly who gets it, personalization, flexibility, and format, and you can easily test different versions.

Marketers often use that RFM formula.

Recency, frequency, monetary amount, who bought recently, who buys often, who spends the most.

Right, those are usually your best prospects for another mailer.

Companies can buy lists or, better yet, build their own database.

And the digital version is email marketing.

Which is huge, super cost effective, very productive.

Some studies say it drives purchases way more effectively than social media ads.

But we all get so much email.

That's the challenge.

It has to be timely, targeted, and relevant.

Think about guilt groups sending different emails based on your past purchases, or FTD reminding you about birthdays and anniversaries.

Permission is key, though.

People hate spam, so opt -in lists are crucial.

Privacy concerns are a big deal here.

Okay, what about catalog marketing?

Still getting those thick catalogs in the mail sometimes.

Full -line catalogs, specialty ones, business -to -business catalogs, WW Granger is a good example, massive print catalog, but also a powerful online searchable version.

What makes catalogs work?

Managing your mailing list carefully, controlling inventory, ensuring product quality, and projecting a really distinctive brand image.

And of course, online catalogs offer global reach and save massively on print and postage.

Then there's telemarketing.

The dreaded phone calls.

Huh.

Well, yes and no.

Using phones and call centers.

Outbound telemarketing to consumers has definitely declined in effectiveness, partly due to do -not -call lists and regulations against robocalls for selling.

But it's still used.

Increasingly, in B2B, for generating leads, qualifying prospects, setting up appointments for field reps, or managing existing accounts.

Inbound telemarketing customers calling toll -free numbers is still very important for taking orders and handling questions.

And infomercials.

Those long TV ads.

Exactly.

Those 30 or 60 minute programs that mix commercials with information and sometimes entertainment.

They work well for products that need a good demonstration or explanation.

Like Proactive or workout gear like P90X or the George Foreman grill back in the day.

Those are perfect examples.

And you also have the dedicated at -home shopping channels like QVC or HSN.

So why is direct marketing in all these forms still growing so much?

Several reasons.

Markets are fragmenting into smaller niches, which direct marketing can target effectively.

Consumers love the convenience toll -free numbers.

Websites open 24 -7 fast delivery.

And maybe traditional stores don't carry everything.

That's another factor.

Chained stores often drop slower -moving specialty items, opening the door for direct marketers who cater to those specific interests.

And for the companies selling.

What are the benefits for them?

They can build highly targeted lists, customize messages, build ongoing relationships like sending relevant offers to new parents as their child grows.

They can easily test different offers and messages to see what works best.

And it's maybe less visible to competitors than a big ad campaign.

A bit more under the radar, yeah.

And crucially, the responses are highly measurable.

You know exactly how many orders came from that specific mailing or email campaign.

It sounds powerful, but it needs to connect with everything else the company does, right?

Absolutely.

Integration is key.

Direct marketing shouldn't be siloed.

Think about companies like Land's End or Eddie Bauer.

They built their brands initially through catalogs and direct mail.

Before they had stores.

Right.

And now they skillfully integrate their retail stores, catalogs and websites, cross -promoting channels.

You can order online and return in -store, for instance.

So every interaction is a chance to learn more and sell more.

Exactly.

Every customer interaction, whether it's a purchase, a query,

a website visit, is an opportunity for upselling, cross -selling, deepening the relationship.

It feeds into building those long -term lifetime marketing plans for valuable customers.

Let's look at Progressive Insurance as an example.

How do they use direct marketing?

Progressive is fascinating.

They really built their brand on direct marketing and unique offerings,

drive -through claims, letting you compare their rates with competitors, those immediate response vehicles.

And Flow.

Can't forget Flow.

Flow is central.

She's brilliant because she makes an intangible service insurance feel tangible and relatable.

And she's everywhere.

TV, mobile ads, apps, social media, even chatbots now.

She connects all their direct channels.

They use tech well too, right?

Definitely.

Online claims, rate tickers on their site, plus sophisticated tools for the independent agents who also sell their policies.

They really embrace the direct model across the board.

OK, another classic example.

Avon.

A true pioneer.

Founded way back in 1886, it was one of the first companies offering women a real chance to earn their own income.

The Avon Lady became iconic.

Totally.

That direct -selling model, the starter kits, the commission structure, it empowered generations of women.

But they struggled later on.

They did.

They faced really stiff competition from traditional retailers and newer brands.

And honestly, they were slow to adapt to the rise of online marketing and social networking.

Didn't connect with younger customers online.

Not effectively enough initially.

They realized they needed a major digital overhaul, so they invested heavily in revamping their website,

partnered with Salesforce for CRM, poured money into IT and digital tools.

Training their reps too.

Big time.

Training reps on how to use social media like Facebook and Instagram for selling, developing personalized beauty apps, really trying to modernize that relationship -selling model.

And they were acquired eventually.

Yes.

By Natron Co.

in 2020, another large direct -seller, it strengthened their global position and reinforced their focus on relationship -selling, but now blending the online and offline much more effectively.

So wrapping up, we've seen the power of both personal selling and direct marketing.

That ability to form direct connections drives sales.

And how they're constantly adapting, aren't they?

Technology, consumer behavior, it keeps changing the game.

It really does.

The world of direct connection is just getting more intricate, more personal.

Which leaves us with a thought.

As technology makes it easier and easier to connect directly,

what is the next frontier in truly personalizing that sales experience?

And maybe more importantly, how will companies strike that balance between technological efficiency and genuine human connection?

That's a really good question.

Balancing the tech with the touch,

definitely something to ponder.

Well, thanks for diving deep with us today on personal selling and direct marketing.

It was great.

We hope you keep exploring and keep diving deep into new knowledge.