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Fundamentals of Selling Customers for Life Through Service

T W E L F T H E D I T I O N

CHARLES M. FUTRELL Texas A & M University

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FUNDAMENTALS OF SELLING: CUSTOMERS FOR LIFE THROUGH SERVICE

Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2011, 2009, 2008, 2006, 2004, 2002, 1999, 1996, 1993, 1990, 1988, 1984 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 RJE/RJE 1 0 9 8 7 6 5 4 3 2 1 0

ISBN 978-0-07-352999-8 MHID 0-07-352999-0

Vice president and editor-in-chief: Brent Gordon Publisher: Paul Ducham Executive director of development: Ann Torbert Managing development editor: Laura Hurst Spell Editorial coordinator: Jonathan Thornton Vice president and director of marketing: Robin J. Zwettler Marketing director: Rhonda Seelinger Associate marketing manager: Jaime Halteman Vice president of editing, design and production: Sesha Bolisetty Project manager: Dana M. Pauley Senior buyer: Michael R. McCormick Design coordinator: Joanne Mennemeier Senior photo research coordinator: Keri Johnson Photo researcher: Ira C. Roberts Media project manager: Suresh Babu, Hurix Systems Pvt. Ltd. Typeface: 10/12 Times New Roman Compositor: Laserwords Private Limited Printer: R. R. Donnelley

Library of Congress Cataloging-in-Publication Data

Futrell, Charles. Fundamentals of selling : customers for life through service / Charles M. Futrell.—12th ed. p. cm. Includes index. ISBN-13: 978-0-07-352999-8 (alk. paper) ISBN-10: 0-07-352999-0 (alk. paper) 1. Selling. I. Title. HF5438.25.F87 2011 658.85—dc22

2010038114

www.mhhe.com

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To my Father, who calls us all to a life of unselfish love for all people of our world.

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ABOUT THE AUTHOR

Marketing Honor Society, recognized Charles for exceptional scholarly contributions to the sales profession in 2000. This is only the fourth time this recognition has been bestowed since its creation in 1988. Charles was the recipient of Sales & Mar- keting Executives International’s (SMEI) Educator of the Year in 2007. Among many other things, SMEI founded Pi Sigma Epsilon (PSE), the only national, co-educational, professional fraternity in marketing, sales management, and selling. PSE has more than 45,000 members at 123 campuses. From January 1997 to August 2007, he was the Federated Professor in Mar- keting Studies at Texas A&M University.

In the spring of 2001, Dr. Futrell was chosen as a Fish Camp (Texas A&M University’s Freshman Orientation Camp) Namesake. Fish Camps are named after faculty members who have made a significant impact on Texas A&M, and nomina- tions for the award are made by students, which makes it a very prestigious honor for instructors. He has been an associate fac- ulty adviser for Impact, a four-day Christian summer camp for entering freshmen involving 1,000 freshmen and 300 advis- ers. Charles was on the leadership team of TAMU’s officially recognized Christian Faculty Network of over 250 scholars. Finally, in 2010 Charles was selected by students to represent Texas A&M as Guest Coach for the baseball game against the University of Texas.

Dr. Futrell has written or co-written eight successful books for the college and professional audience. Two of the most popular books are Fundamentals of Selling: Customers for Life through Service, twelfth edition, and ABC’s of Relation- ship Selling through Service, twelfth edition, both published by McGraw-Hill/Irwin. These books are used in hundreds of American and international schools. Over 300,000 students worldwide have learned from Professor Futrell’s books.

In 1997 Dr. Futrell began using his Web site and group e-mails in his sales classes. Students sign up for both a lecture period and lab time. In each semester’s six labs, students are videotaped in activities such as making a joint sales call, panel interview, selling oneself on a job interview, product sales pre- sentations, and various experiential exercises.

Professor Futrell’s books, research, and teaching are based on his extensive work with sales organizations of all types and sizes. This broad and rich background has resulted in his being invited to be a frequent speaker, researcher, and consultant to industry.

Charles M. Futrell is a Professor of Marketing in the Mays Business School at Texas A&M University in College Station, Texas. Texas A&M University has approximately 45,000 stu- dents with 5,000 business majors and 800 marketing majors. Dr. Futrell has a B.B.A., M.B.A., and Ph.D. in marketing. He is a former salesperson turned professor. Before beginning his academic career, Professor Futrell worked in sales and market- ing capacities for eight years with the Colgate Company, The Upjohn Company, and Ayerst Laboratories.

Dr. Futrell’s research in personal selling, sales manage- ment, research methodology, and marketing management has appeared in numerous national and international journals, such as the Journal of Marketing and the Journal of Marketing Research. An article in the summer 1991 issue of the Journal of Personal Selling & Sales Management ranked Charles as one of the top three sales researchers in America. He was also recog- nized in Marketing Education, Summer 1997, as one of the top 100 best researchers in the marketing discipline. His work has earned him several research awards.

Presently Charles is conducting research on how faith relates to salespeople’s organizational behavior. He also is investigat- ing how students’ faith helps them cope with the tremendous stresses experienced in college life. For his work, faith relates to any and all faiths of the world. Professor Futrell, as well as others, feels there is a mental health crisis on America’s col- lege campuses as well as in America’s general population. Read the newspaper and watch television for proof of the stresses people are experiencing in their lives and the often devastat- ing impact it has on their lives and the lives of others. Please contact him if you would like to work in either of these two areas. He would love to help you investigate these two under- researched areas in your country and college, no matter what part of the world.

Professor Futrell served as the American Marketing Asso- ciation’s Chair of the Sales and Sales Management Special Interest Group (SIG) for the 1996–97 academic year. He was the first person elected to this position. Charles was elected Finance Chair for the Sales SIG’s 1998–99 term. In 2005, this AMA group presented Charles with its Lifetime Achievement Award for commitment to excellence and service in the area of sales. In 1999, the Association of Former Students awarded him the Lowry Mays College and Graduate School of Business Distinguished Teaching Award. Mu Kappa Tau, the National

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product. Arguably, no other personal selling textbook presents a sales process or system in a logical sequence: from planning and the approach, to closing and follow-up for exceptional cus- tomer service. Scores of sales personnel in the industry today comment on how this textbook reflects what they do on sales calls with prospects and customers. The goal of Fundamentals of Selling has always been to demonstrate to students the order of steps within the selling process; provide numerous examples of what should be in each step; and how the steps within the selling process interact with one another. If a student under- stands the sales system by the end of the course, the class has successfully contributed to their education.

Fundamentals of Selling is a market leader in sales classes worldwide, and its materials can be found in four international versions. Numerous sales trainers around the globe use our sell- ing process to prepare their salespeople.

The Uniqueness of Fundamentals of Selling

The appendix to Chapter 1: “The Golden Rule of Personal Sell- ing as Told by a Salesperson,” reveals this textbook’s unique central focus—serving others unselfishly. To aid in this mes- sage, the acclaimed worldwide Golden Rule was incorporated in order to stress treating others as you would like to be treated in the marketplace and workplace.

The textbook’s foundation is based upon service. Its cor- nerstone is love (caring) of others. Fundamentals of Selling ’s values are supported by the pillars of an organization’s—and individual’s—integrity, trustworthiness, and character (see Exhibit 3.13). The center of business and personal life revolves around personal interactions; as a result, a theme of this text- book is that ethical service, based upon truth between people, builds strong long-term relationships.

Fundamentals of Selling seeks to prepare people for the 21st century’s demand for moral and ethical treatment—a universal declaration for human rights. It is a calling for a higher standard than what previously exists in many organizations worldwide. The General Assembly of the United Nations has proclaimed that humans possess reason and conscience and should act toward one another in a spirit of brotherhood. Organizations should not be engaged in war within the marketplace, but com- mitted to serving mankind.

Many people seem to separate their personal life from their business life. Some individuals, when entering the business

Welcome to the Twelfth Edition of Fundamentals of Selling

A megatrend in today’s business world involves going to extreme efforts to meet consumer needs. Organizations cannot afford to lose customers. It is always easier to sell to a satisfied customer than an unsatisfied one. The cost of acquiring a new customer is higher than keeping a present customer.

Obtaining new customers and retaining present ones are the main challenges of salespeople. Increase in sales and profits is up to the sales personnel—the people who represent their employers through interacting with present or prospective cus- tomers. Sales professionals strive to create a long-term business relationship, which implies that personal relationships with cli- ents are formed. Consumers want to buy from someone who cares about their needs. People do business with the people they trust, and they trust the people they know.

This textbook focuses on taking care of the customer through exceptional customer service. Service means making a contri- bution to the welfare of others. Salespeople exist to help others.

New Additions, Expansions, and Reexaminations to This Edition

Using this textbook each year in my sales classes has resulted in a constant study of the text by students who provide feedback on its content. Present users of the textbook have offered detailed critiques providing direction for revision of the book, as have the reviewers noted in the Acknowledgments. The relationships and interactions in the various steps of the selling process have been carefully examined to form a more seamless flow from one chapter to the next, and special emphasis is placed on the importance of ethical behavior in working with prospects and customers. Other changes include:

■ Many examples with some illustrated using new photographs.

■ New videos, including national companies such as Johnson & Johnson and Hormel.

■ Updates in the PowerPoint's, instructors manual, and test bank.

■ A careful reading.

Fundamentals of Selling trains readers on a specific, yet generic, step-by-step selling process that is universal in nature. Once learned, a student has the basic background to sell any

PREFACE

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viii Preface

Basic Organization of the Book

The publisher and I worked hard to ensure that Fundamentals of Selling would provide students with the basic foundation for understanding all major aspects of selling. The 17 chapters in the text are divided into four parts:

■ Selling as a Profession. Emphasizes the history, career, rewards, and duties of the professional salesperson and illus- trates the importance of the sales function to the organiza- tion’s success. It also examines the social, ethical, and legal issues in selling.

■ Preparation for Relationship Selling. Presents the back- ground information salespeople use to develop their sales presentations.

■ The Relationship Selling Process. At the heart of this book, this part covers the entire selling process from prospecting to follow-up. State-of-the-art selling strategies, practices, and techniques are presented in a “how-to” fashion.

■ Managing Yourself, Your Career, and Others. The impor- tance of the proper use and management of one’s time and sales territory is given thorough coverage. Two chapters cover the fundamentals of managing salespeople. For many students, this is their only exposure to what a sales manager does in this challenging job.

Special to This Edition

Expanded Emphasis. Unselfish and ethical service to the customer underscores the Golden Rule of Personal Selling—a sales philosophy of unselfishly treating others as you would like to be treated without expecting reciprocity. This is how to build long-term relationships with customers.

The Tree of Business Life Icon. Beginning with Chapter 3, The Tree of Business Life icon is used to remind the reader of one of the main themes of the book. This theme emphasizes that by providing ethical service you build true relationships. This section was developed in hopes of having the reader consider how a salesperson would incorporate ethical service into the chapter’s topic.

The Golden Rule Icon. The Golden Rule icon appears in each chapter to help reinforce the Tree of Business Life. The combination of the Golden Rule and the “Tree” guidelines for business and selling form the core theme of this textbook. Unselfishly treating prospects/customers as you would like to be treated without expecting something in return results in ethical service which builds true long-term relationships. If you think about it, this is how you build true personal friendships. Why not build your business relationships on this rock?

Comprehensive Cases. At the end of the book are compre- hensive sales cases. These cases approach sales from the broader sales management perspective.

world, tend to follow the example of others to generate sales. The use of this textbook in your classroom may provide some students with a final opportunity to discuss how to enter the rat race without becoming a rat.

Fundamentals’ Approach

Fundamentals of Selling was conceived as a method of pro- viding ample materials that allow readers to construct their own sales presentations after studying the text. This allows the instructor the flexibility of focusing on the “how-to-sell” approach within the classroom. Covering the basic founda- tions for understanding the concepts and practices of selling in a practical, straightforward, and readable manner, it provides students with a guide to use in preparing sales presentations and role-playing exercises.

The Philosophy behind This Book

The title should help you understand the philosophy of this book. A student of sales should understand the fundamentals— the basics—of personal selling. All of them. I do not advocate one way of selling as the best route to success! There are many roads to reaching one’s goals.

I do feel a salesperson should have an assortment of sell- ing skills and should be very knowledgeable, even an expert, in the field. Based on the situation, the salesperson determines the appropriate actions to take for a particular prospect or customer. No matter what the situation, however, the basic fundamentals of selling can be applied.

There is no place in our society for high-pressure, manipula- tive selling. The salesperson is a problem solver, a helper, and an adviser to the customer. If the customer has no need, the salesperson should accept that and move on to help another per- son or firm. If the customer has a need, however, the salesper- son should and must go for the sale. All successful salespeople I know feel that once they determine that the customer is going to buy someone’s product—and that their product will satisfy that customer’s needs—it is their job to muster all their energy, skill, and know-how to make that sale. That is what it’s all about!

It is my sincere hope that after the reader has studied this book, he or she will say, “There’s a lot more to selling than I ever imagined.” I hope many people will feel that this material can help them earn a living and that selling is a great occupation and career.

At the end of the course, I hope all the students will have learned how to prepare and give a sales presentation by visually, verbally, and nonverbally communicating their message. I know of no other marketing course whose class project is so challeng- ing and where so much learning takes place.

Finally, I hope each student realizes that these new commu- nication skills can be applied to all aspects of life. Once learned and internalized, selling skills will help a person be a better communicator throughout life.

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Preface ix

Photo Essays. The book features many photographs accom- panied by captions that describe sales events and how they relate to chapter materials.

Chapter Topics and Objectives. Each chapter begins with a clear statement of learning objectives and an outline of major chapter topics. These devices provide an overview of what is to come and can also be used by students to see whether they understand and have retained important points.

Sales Challenge/Solution. The text portion of each chapter begins with a real-life challenge sales professionals face. The challenge pertains to the topic of the chapter and will heighten students’ interest in chapter concepts. The challenge is resolved at the end of the chapter, where chapter concepts guiding the salespersons’ actions are highlighted.

Making the Sale. These boxed items explore how salespeople, when faced with challenges, use innovative ideas to sell.

Selling Tips. These boxes offer the reader additional selling tips for use in developing their role-plays.

Artwork. Many aspects of selling tend to be confusing at first. “What should I do?” and “How should I do it?” are two questions frequently asked by students in developing their role-plays. To enhance students’ awareness and understanding, many exhibits have been included throughout the book. These exhibits consolidate key points, indicate relationships, and visually illustrate selling techniques.

Chapter Summary and Application Questions. Each chapter closes with a summary of key points to be retained. The application questions are a complementary learning tool that enables students to check their understanding of key issues, to think beyond basic concepts, and to determine areas that require further study. The summary and application questions help students discriminate between main and supporting points and provide mechanisms for self-teaching.

Key Terms for Selling/Glossary. Learning the selling voca- bulary is essential to understanding today’s sales world. This is facilitated in three ways. First, key concepts are boldfaced and completely defined where they first appear in the text. Second, each key term, followed by the page number where it was first introduced and defined, is listed at the end of each chapter. Third, a glossary summarizing all key terms and definitions appears at the end of the book for handy reference.

Ethical Dilemma. These challenging exercises provide stu- dents an opportunity to experience ethical dilemmas faced in the selling job. Students should review the definition and explanation of ethical behavior in Chapter 3 before discussing the ethical dilemmas.

Video Cases. Cases 3.1, 3.2, 5.3, 6A.5, 8.3, 11.3, 13.4, and 14.3 can be used independently or with eight of the videos accom panying this book. Each of the eight cases highlights a tough ethical dilemma often faced by sales personnel in today’s com petitive marketplace. Use any or all of these cases to emphasize ethics in your sales class.

Sales Call Role-Plays and Videos. The first three of the four role-plays in Appendix A at the back of this book have videos created incorporating our selling process. The two people featured in the three role-plays completed my selling course. The professional selling materials in Chapters 8, 9, 10, 11, 12, and 13 do a great job in illustrating. Actually used in my classes by hundreds of students, these role-plays are created from information used by today’s top sales forces.

Sell Yourself on a Job Interview. This all-time favorite role- play is in Appendix B with other experiential exercises. For years I have used this student pleaser in both my personal selling and sales management classes. When students see themselves on video they quickly realize what needs to be done for a professional interview. You have to try this exercise one time!

Student Application Learning Exercises (SALES). Chapters directly related to creating the role-play have SALES that aid students in better understanding how to construct this popular class project. These were first used in my classes in the fall of 1997. Students unanimously felt they were great in helping them correctly construct their role-plays. SALES appear at the end of Chapters 4, 6A, 8, 10, 11, 12, and 13.

Sales Careers. Career information has been expanded thr oughout so students will better understand that there are sales jobs in all organizations—business, service, and nonprofit.

Selling Experiential Exercises. These end-of-chapter exer- cises help students to better understand themselves and/or the text material. Many can be done in class or completed outside and discussed in class.

Selling Globally Appendix. Many of these situations were written by friends and colleagues from countries around the world. They are at the back of the book.

Technology in Selling. A central theme within each chapter shows the use of technology and automation in selling and servicing prospects and customers.

Text and Chapter Pedagogy

Many reality-based features are included in the twelfth edition to stimulate learning. One major goal of this book is to offer better ways of using it to convey sales knowledge to the reader. To do this, the book includes numerous special features:

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x Preface

ProSelling Videos. Several hours of student role-plays, exer- cises, examples of selling techniques, and industry sales training programs show students how to prepare their own role-plays, and how textbook content relates to the sales world. Several of the student’s video role-plays were produced especially for this book. They take people through the 10-step selling process.

Instructor’s Manual. Loaded with ideas on teaching the course, chapter outlines, commentaries on cases, answers to everything—plus much more—the Instructor’s Manual is a large, comprehensive time-saver for teachers.

Test Bank. The most important part of the teaching package is the Test Bank. We gave the Test Bank special attention during the preparation of the twelfth edition because instructors desire test questions that accurately and fairly assess student competence in subject material. The Test Bank provides hundreds of multiple-choice and true/false questions. Each question has been rated for level of difficulty and designated with page number in the text to locate the correct answer so that instructors can provide a balanced set of questions for student exams.

Course Web Site. At http://www.mhhe.com/futrell11e, you can access downloadable versions of instructor support mate- rials, as well as a student tutorial and student self-assessment quizzes.

■ A PowerPoint Presentation. A state-of-the-art program offering hundreds of lecture slides. These slides can be cus- tomized for any course. They are great!

■ Computerized Test Bank. The Computerized Test Bank allows instructors to select and edit test items from the printed Test Bank and to add their own questions. Various versions of each test can be custom printed.

■ Electronic Version of the Instructor’s Manual

Further Exploring the Sales World. These projects ask students to go beyond the textbook and classroom to explore what’s happening in the real world. Projects can be altered or adapted to the instructor’s school location and learning objectives for the class.

Cases for Analysis. Each chapter ends with brief but sub- stantive cases for student analysis and class discussion. These cases provide an opportunity for students to apply concepts to real events and to sharpen their diagnostic skills for sales problem solving. Comprehensive cases are found in the back of the book.

As you see, the publisher and I have thoroughly considered how best to present the material to readers for maximizing their interest and learning. Teacher, reviewer, and student response to this revision has been fantastic. They are pleased with the read- ability, reasonable length, depth, and breadth of the material. You will like this edition better than the previous one.

Teaching and Learning Supplements

McGraw-Hill/Irwin has spared no expense to make Funda- mentals of Selling the premier text in the market today. Many instructors face classes with limited resources, and supple- mentary materials provide a way to expand and improve the students’ learning experience. Our learning package was specif- ically designed to meet the needs of instructors facing a variety of teaching conditions and for both the first-time and veteran instructor.

Professor Futrell—Your Number One Resource. Contact me any time with questions, comments, or just to say “hello.” Numerous instructors, students, and industry sales trainers worldwide contact me each year. If you are teaching the course, especially for the first time, and want me to look over your syllabus, I am here to serve.

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ACKNOWLEDGMENTS

Working with the dedicated team of professionals at McGraw-Hill/Irwin, who were determined to produce the best personal selling book ever, was a gratifying experience.

In overseeing this revision, Publisher Paul Ducham, Sponsoring Editor Laura Spell, and Editorial Coordinator Jonathan Thornton offered ideas for improvements to the twelfth edition package. Keri Johnson oversaw the selection of new photographs for this edition. Project Manager Dana Pauley ably guided man- uscript and page proofs through the production process. Designer Matt Diamond updated the interior to make the visual elements exciting for students and instructors.

Another group of people who made a major contribution to this text were the sales experts who provided advice, reviews, answers to ques- tions, and suggestions for changes, insertions, and clarifications. I want to thank these col- leagues for their valuable feedback and sugges- tions: Dan Cassler, University of Houston; Paul W. Clark, Indiana State University; Fred H. Fusting, Loyola University Maryland; Virginia H. Johnson, University of Alabama; Les Led- ger, Central Texas College; Barbara L. Sleeper, Dallas Baptist University.

I also want to again thank those people who contributed to earlier editions, because their input is still felt in this twelfth edition. They were Katrece Albert, Southern University;

Ramon A. Avila, Ball State University; Duane Bachmann, Central Missouri State University; Ames Barber, Adirondack Community Col- lege; John R. Beem, College of DuPage; Dawn Bendall-Lyon, University of Montevallo; Mil- ton J. Bergstein, Pennsylvania State University; George Boulware, Lipscomb University; Chris Brandmeir, Highline Community College; Dan Cassler, University of Houston; Michael Cicero, Highline Community College; Norman Cohn, Milwaukee Tech; Marjorie Cooper, Baylor Uni- versity; Gerald Crawford, University of North Alabama; William H. Crookston, California State University–Northridge; Gary Donnelly, Casper College; Casey Donoho, Northern Arizona University; Sid Dudley, Eastern Illi- nois University; Dennis Elbert, University of North Dakota; Earl Emery, Baker Junior Col- lege of Business; O. C. Ferrell, Colorado State University; Fred H. Fusting, Loyola College in Maryland; Douglas E. Gatton, Dallas Baptist University; Myrna Glenny, Fashion Institute of Design and Merchandising; Ric Gorno, Cypress College; David Gripp, Milwaukee Area Techni- cal College; Kevin Hammond, Community Col- lege of Allegheny County; LeaAnna Harrah, Marion Technical College; Jon Hawes, Uni- versity of Akron; Deborah Jansky, Milwaukee Area Technical College; Albert Jerus, North- western College; Donna Kantack, Elrick & Lavidge; Dennis Kovach, Community College

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of Allegheny County; Deborah Lawe, San Fran- sicsco State University; James E. Littlefield, Virginia Polytechnic Institute & State Univer- sity; Lynn J. Loudenback, New Mexico State University; Michael L. Mallin, The University of Toledo; Leslie E. Martin, Jr., University of Wisconsin–Whitewater; Brian Meyer, Mankato State University; Ken Miller, Kilgore College; Harry Moak, Macomb Community College; Dick Nordstrom, California State University– Fresno; James Ogden, Kutztown University; Becky Oliphant, Stetson University; Roy Payne, Purdue University; Charles E. Peterson, Uni- versity of Connecticut; Robert Piacenza, Madi- son Area Technical College; Alan Rick, New England Institute of Technology; John Ronch- etto, University of San Diego; Jeff Sager, Uni- versity of North Texas; Donald Sandlin, East Los Angeles College; Todd Saville, Kirkwood Commu nity College; Allen Schaefer, Missouri State University; Ian J. Scharf, University of Miami-Coral Gables; Joseph Schubert, Dela- ware Technical & Community College; Camille P. Schuster, Xavier University ; Lisa Sciulli, Indiana University of Pennsylvania; Richard Shannon, Western Kentucky University; Dee Smith, Lansing Community College; Robert Smith, Illinois State University; Ed Snider, Mesa Community College ; Amita Sood, Ameri- can Inter Continental University. William A. Stull, Utah State University; Robert Tangsrud, Jr., University of North Dakota; Albert J. Taylor, Austin Peay State University; James L. Taylor, University of Alabama; Ruth Taylor, Southwest Texas State University; Robert Thompson, Indi- ana State University; Rollie Tilman, University of North Carolina at Chapel Hill; John Todd, University of Tampa; Glenna Urbshadt, British Columbia Institute of Technology; Bruce Wars- leys, Trend Colleges; Dan Weilbaker, Northern Illinois University; Raymond Wimer, Syra- cuse University; Timothy W. Wright, Lakeland

Community College; and George Wynn, James Madison University.

I would also like to thank the many Texas A&M students who have used the book in their classes and provided feedback. Thanks also to the many instructors who call me each year to discuss the book and what they do in their classes. While we have never met face-to-face, I feel I know you. Your positive comments, encouragement, and ideas have been inspira- tional to me.

In addition, salespeople and sales managers have provided photographs, selling techniques, answers to end-of-chapter exercises and cases, and other industry materials that enrich the reader’s learning experience. They include the following:

Kim Allen, McNeil Consumer Products Company; Alan Baker, Noxell Corporation; Michael Bevan, Parbron International of Can- ada; Richard Ciotti, JCPenney Company; John Croley, The Gates Rubber Company; Terry and Paul Fingerhut, Steamboat Party Sales, Inc., Tupperware; Bill Frost, AT&T Com- munications; Steve Gibson, Smith Barney; Gary Grant, NCR; Jerry Griffin, Sewell Vil- lage Cadillac–Sterling, Dallas; Martha Hill, Hanes Corporation; Debra Hutchins, Sunwest Bank of Albuquerque; Mike Impink, Aluminum Company of America ( ALCOA ) ; Bob James, American Hospital Supply Corporation; Morgan Jennings, Richard D. Irwin, Inc. ; Patrick Kam- lowsky, Hughes Tool Company; Cindy Kerns, Xerox Corporation; Alan Killingsworth, FMC Corporation; Santo Laquatra, SmithKline Bee- cham; Stanley Marcus; Gerald Mentor, Richard D. Irwin, Inc. ; Jim Mobley, General Mills, Inc. ; George Morris, Prudential Insurance Com- pany of America; Vikki Morrison, First Team Walk-In Realty, California; Greg Munoz, Dow Chemical Company; Kathleen Paynter, Camp- bell Sales Company; Bruce Powell, Richard

xii Acknowledgments

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D. Irwin, Inc. ; Jack Pruett, Bailey Banks and Biddle; Emmett Reagan, Xerox Corporation; Bruce Scagel, Scott Paper Company; Linda Slaby-Baker, The Quaker Oats Company; San- dra Snow, The Upjohn Company; Matt Suffo- letto, International Business Machines ( IBM ) ; Ed Tucker, Cannon Financial Group, Georgia.

For the use of their selling exercises and sales management cases, I am especially grateful to these people:

■ Gerald Crawford, Keith Absher, Bill Stewart, University of North Alabama

■ Fred W. Kniffin, University of Connecticut ■ Zarrell V. Lambert, Southern Illinois Univer-

sity at Carbondale ■ Dick Nordstrom, California State University–

Fresno ■ Jeffrey K. Sager, University of North Texas

■ James L. Taylor, University of Alabama ■ George Wynn, James Madison University

I hope you learn from and enjoy the book. I enjoyed preparing it for you. Readers are urged to forward their comments on this text to me. I wish you great success in your selling efforts. Remember, it’s the salesperson who gets the cus- tomer’s orders that keeps the wheels of industry turning. America cannot do with out you.

Finally, I wish to thank the sales trainers, salespeople, and sales managers who helped teach me the art of selling when I carried the sales bag full time. I hope I have done justice to their great profession of selling.

Charles M. Futrell

c-futrell@tamu.edu

http://futrell-www.tamu.edu

Acknowledgments xiii

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GUIDED TOUR

A goal of Fundamentals of Selling is to teach students the order of steps within the selling process; pro- vide numerous examples of what should be in each step; and demonstrate how the steps within the selling process interact within one another in a logical, seamless flow. Arguably, no other per- sonal selling textbook presents a sales process in such a manner from planning the approach, to closing and follow-up for exceptional customer service. Futrell’s Selling Process trains readers in a specific, yet generic, step- by-step selling process that is universal in nature. Once learned, a student has the basic background to sell any product.

p p

As the sales manager of a printing company, you are about to invest in a car leasing program that involves 18 company cars for your sales staff. Together with your comptroller, you have examined several leasing programs. You have narrowed down your selection to two leasing companies that offer very similar terms. You are meeting with the president of Equilease, a company with which you have never done business. You know from your own prospect fi les that one of your sales representatives has tried to call on the purchasing manager of Equile- ase before to get some of their printing business; however, he could not sell the account.

As you meet with the president for lunch, you gently steer the conversation in the direc- tion of printing services. Since he is very knowledgeable about printing services and prices, you ask him about ballpark prices charged by his existing supplier. You believe you could provide his company with higher-quality service at a better price.

Since the president of Equilease is in a good mood, you think about setting up a win–win situation. You are considering making this offer: Let’s make this a double win. I’ll give you 100 percent of our leasing business if you’ll consider giving us 50 percent of your printing business. Fair enough?

Is there an ethical confl ict in this situation? Would it be ethical to propose such a deal?

Sales personnel constantly are involved with social, ethical, and legal issues. Yet if you think about it, everyone is—including you. If you found a bag full of $100 bills lying on the side of the road, would you keep it? Would you say you were sick to get extra time off work? Would you use the company car to run a personal errand? Have you ever broken the speed limit? Have you ever gone home with one of your employer’s pens in your purse or jacket pocket?

These sorts of questions may be diffi cult for the average person to answer. Some people will respond with an unequivocal yes or no. Others may mull it over a while. Still others may feel compelled to say “it depends” and qualify their response with a “yes, but . . .” or a “no, but . . .” Maybe that was what you did with the Sales Chal- lenge feature.

Newspapers, radio, and television frequently have news stories of individuals and organizations involved in both good and bad practices. This chapter addresses many of the important social, ethical, and legal (SEL) issues in selling. It begins by discussing management’s social responsibilities. Then it examines ethical behavior followed by the ethical issues involved in dealing with salespeople, employers, and consumers. The chapter ends by presenting ways an organization can help its sales personnel follow ethical selling practices.

An organization’s environment is a major infl uence on how the fi rm sells its prod- ucts. As pictured in Exhibit 3.1 , social, ethical, and legal (SEL) infl uences and con- siderations surround the fi rm’s product, price, place, and promotion.

Due to the environmental turmoil in the world of commerce, this chapter is argu- ably the most important in the entire book. Let’s begin by asking, “Does an organi- zation have any responsibilities to society?”

In one sense, the concept of corporate social responsibility is easy to understand; it means distinguishing right from wrong and doing right. It means being a good cor- porate citizen. The formal defi nition of social responsibility is management’s obli- gation to make choices and take actions that contribute to the welfare and interests of society as well as to those of the organization.

FACING A SALES CHALLENGE

FACING A SALES CHALLENGE

SOCIAL, ETHICAL, AND LEGAL

INFLUENCES

SOCIAL, ETHICAL, AND LEGAL

INFLUENCES

MANAGEMENT’S SOCIAL

RESPONSIBILITIES

MANAGEMENT’S SOCIAL

RESPONSIBILITIES

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The Facing a Sales Challenge fea- ture at the beginning of each chapter presents students with real-life chal- lenges sales professionals face. The challenge pertains to the topic of the chapter and will heighten students’ interest in chapter concepts. The chal- lenge is then resolved at the end of the chapter where chapter concepts guiding the salesperson’s actions are highlighted.

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Ethics in personal selling is a pri- mary focus of this text. The Ethical Dilemma boxes in each chapter are meant to be challenging exercises that provide students with an oppor- tunity to experience ethical dilemmas faced in the sales field.

ETHICAL DILEMMA

Mexico Here I Come

A s you come to the end of your presentation, you real-ize one of your best customers—John Adams—may not buy. John and you have become friends over the last three years. Losing this sale will result in your missing out on a $500 bonus, forfeiting a chance to win a trip to Mexico, and failing to reach your sales quota for the year.

When you fi nish, John says, “We can’t buy.” You then explain your situation to John. He says, “Well, why don’t you ship the merchandise to me. After the contest is over but before it’s time to pay for it, I will ship it back to your company or you can transfer it in small quantities to several of your customers. That way you’ll get credit for the sale.” You know that your boss will not mind because if you reach your sales quota he will also look good and be rewarded.

What do you do? In selecting your action, consider the discussion of ethical behavior in Chapter 2.

1. Accept John’s offer without consulting your boss and send the merchandise to his store—in turn, receiving a $500 bonus, a possible trip to Mexico, and praise from your boss for making the sale and reaching your sales quota.

2. Talk to your boss about the situation and explain John’s offer. Let your boss be the ultimate decision maker (taking responsibility instead of you), knowing that he will tell you to take the “sale” from John.

3. Thank John for trying to be a supportive friend but decline his offer because it would not be right to falsify sales for your own benefi t.

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Creativity and innovation are char- acteristics that any successful salesperson has. Making the Sale boxes illustrate how salespeople, when faced with challenges, use new ideas to sell their products.

Chapter Two Relationship Marketing: Where Personal Selling Fits 55

MAKING THE SALE

Salespeople Have Made America Great!

H e came on muleback, dodging outlaws as he went, with a pack full of better living and a tongue full of charms. For he was the great American salesman, and no man ever had a better thing to sell.

He came by rickety wagon, one jump behind the pio- neers, carrying axes for the farmer, fancy dress goods for his wife, and encyclopedias for the farmer’s ambitious boy. For he was the great practical democrat, spreader of good things among more and more people.

He came by upper berth and dusty black coupe, selling tractors and radios, iceboxes and movies, health and leisure, ambition and fulfi llment. For he was America’s emissary of abundance, Mr. High-Standard-of-Living in person.

He rang a billion doorbells and enriched a billion lives. Without him there would be no American ships at sea, no busy factories, and fewer jobs. For the great American sales- man is the great American civilizer, and everywhere he goes he leaves people better off.5

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Every salesperson will be faced with unique selling issues, whether it be a specific client objection or negotiating a sale. The Selling Tips boxes provide extra tips for students to use in certain situations that require adept commu- nication skills. These boxes also help to create additional class role-plays.

SELLING TIPS

Using Trial Closes

T he trial close is an important part of the sales presenta-tion. It asks for the prospect’s opinion concerning what you have just said. The trial close does not ask the person to buy directly. Here are examples:

■ How does that sound to you?

■ What do you think?

■ Are these the features you are looking for?

■ That’s great—isn’t it?

■ Is this important to you?

■ Does that answer your concern?

■ I have a hunch that you like the money-saving features of this product. Did I guess right?

■ It appears that you have a preference for this model. Is this what you had in mind?

■ I can see that you are excited about this product. On a scale from 1 to 10, how do you feel it will fi t your needs?

■ I notice your smile. What do you think about . . . ?

■ Am I on the right track with this proposal?

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GUIDED TOUR

In the past, warranty work accounted for as much as 70 percent of an auto dealer- ship’s service load.8 That number is steadily dropping to around 30 percent. Because of this large decline, dealerships must now proactively target service retention and loyalty among new car buyers. That’s where the sales team of Reynolds & Reynolds comes in.

Reynolds helps dealerships become more effective at retaining new car buyers as service customers and building loyalty among the customers to keep them coming back. They help dealers to better understand their customer base, figure out who their most profitable customers are, and then target them with focused incentives to get the customers back into the dealerships when service is needed.

The Opportunity

Bob Sherman, a Minneapolis-area sales associate with Reynolds, and his regional sales manager, Tim O’Neill, along with Chuck Wiltgen, marketing specialist, met with representatives from Ben Frothingham’s American Ford Dealership. American Ford was in need of a new retention plan to boost service sales, and Reynolds pro- vided them with one. The group effectively presented their marketing strategies and tied up the deal successfully.

Sherman established the contact with American Ford’s service department and discussed their options. His next call was more promising and he talked with them more about a new initiative from Ford called “Quality Care Maintenance.” They gave him negative feedback, so he suggested that they meet with his boss, Tim O’Neill. By the close of the third meeting, American Ford agreed to have reports run on their customer retention rate and their database system.

Precall Planning

Before the call, Sherman, O’Neill, and Wiltgen discussed details of the opportunity, roles each would play, and any possible concerns that they anticipated. They decided that Sherman would discuss the reports with the customer, and Chuck would be the implementation guy. Tim would be there for backup. Because they had been working together so long, they basically already knew how to present their information.

Stage 1: Report

After two reports were run to determine just who the dealership’s customer base was, the three met with Carol Bemis, the dealership’s new parts and service direc- tor, and Brad Greenberg, service manager. Sherman opened the meeting by recap- ping the set of mutual expectations and handing out copies of the reports. Sherman

CASE 2.1

Reynolds & Reynolds TEAM SELLING

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Cases for Analysis appear at the end of each chapter, plus the back of the book has several comprehen- sive sales cases for those wanting to emphasize both personal selling and sales management within the course.

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Another helpful tool included for use in Fundamentals of Selling, 12th edition is the text’s appendixes. Responding to the need for more practical resources, the five appendixes provide students with additional role-plays, ACT! Express exercises, sales cases, global selling illustrations, and answers to chapter crossword puzzles.

Appendix A: Sales Call Role-Plays

How would you like to take a computer class without ever using a computer? To learn, you need an instructor, a textbook, and a computer. To learn to sell, you need an instructor, a text- book, and one or more role-plays. Role-plays are where the true learning takes place, where you see how to use all of the classroom instruction materials your instructor and textbook provided.

I have worked with thousands of people to help them develop role-plays similar to those presented in a sales training class. The following role-plays have been created from actual organizations’ sales information provided to their salespeople. The names of the companies and their products have been changed to provide anonymity.

You are a salesperson for a multi-billion-dollar consumer goods manufacturer. Today you will be calling on Amy, the cereal buyer for ABC Grocery Stores. ABC is a chain of 20 large grocery stores. You have known Amy since last year about this time, when she became the buyer. Since then you have called on Amy about every month to sell her your various new items, talk about reordering your other products ABC currently carries, and create marketing plans for your major items.

Amy’s offi ce is in the largest city in your area. ABC currently carries about 100 different products of yours, with each of these 100 products available in various sizes and fl avors. Thus ABC has 450 SKUs (stock-keeping units) of yours that it sells. (Each item carried in the store is given a tracking, or stock-keeping, number referred to as an SKU.)

You will be selling Amy one size of a new ready-to-eat cereal. For your role-play choose any cereal in your favorite grocery store to use in this exercise. Carefully analyze the features, advantages, and benefi ts of the cereal you select. Incorporate the FAB s into your presentation as if this were a new cereal. The following infor- mation relates to the role-play’s product, promotion, pricing, and sales objectives.

Select any ready-to-eat (RTE) cereal of your choice to use in your role-play.

■ Ready-to-eat cereal is the largest dry grocery category, with sales of $8 billion.

The following information is based on AC Nielsen information and test markets.

■ 93 percent of consumers will buy your cereal in addition to their normal cereal.

■ Your cereal focuses on people nine years of age to older adults.

ROLE-PLAY ONE: CONSUMER

SALES

ROLE-PLAY ONE: CONSUMER

SALES

Product Description

Product Description

Category/Segment Performance

Category/Segment Performance

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Appendix A: Sales Call Role-Plays provide complete information on four sales situations that students can use to create their class role-plays. The first three role-plays have an accompany ing video illustrating our ProSelling Pro- cess using Professor Futrell’s students selling a consumer or business product.

Appendix B: Personal Selling Experiential Exercises

■ Sell Yourself on a Job Interview explains how to incorporate sales communication and tech- niques into a job interview. This is a favorite role-play of students.

■ How to Create a Portfolio shows students how to create information for the job interview high- lighting their abilities, accomplishments, and experiences.

■ Sales Team Building is great for the instructor wanting to incorporate a team selling assignment into class.

■ What’s Your Style has students determine their core personality style in order to become a better communicator.

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GUIDED TOUR

Appendix C: Comprehensive Sales Cases are provided especially for the class wanting to combine personal selling and sales management.

Appendix D: Selling Globally illustrates 14 situations in various countries in the world for class discussion.

Appendix D: Selling Globally

Imagine an American salesperson, Harry Slick, starting out on his overseas business trip. The following events occur on his trip:

1. In England, he phones a long-term customer and asks for an early breakfast business meeting so that he can fl y to Paris at noon.

2. In Paris, he invites a business prospect to have dinner at La Tour d’Argent and greets him with, “Just call me Harry, Jacques.”

3. In Germany, he arrives 10 minutes late for an important meeting. 4. In Japan, he accepts the business cards of his hosts and, without looking at them,

puts them in his pocket.

How many orders is Harry Slick likely to get? Probably none, although his com- pany will face a pile of bills.

International business success requires each businessperson to understand and adapt to the local business culture and norms. Here are some rules of social and business eti- quette that managers should understand when doing business in other countries.

France Dress conservatively, except in the south where more casual clothes are worn. Do not refer to people by their fi rst names—the French are formal with strangers.

Germany Be especially punctual. An American businessperson invited to someone’s home should present fl owers, preferably unwrapped, to the hostess. During introductions, greet women fi rst and wait until they extend their hands before extending yours.

Italy Whether you dress conservatively or go native in a Giorgio Armani suit, keep in mind that Italian businesspeople are style conscious. Make appointments well in advance. Prepare for and be patient with Italian bureaucracies.

United Toasts are often given at formal dinners. If the host honors you Kingdom with a toast, be prepared to reciprocate. Business entertaining is

done more often at lunch than at dinner.

Saudi Although men kiss each other in greeting, they never kiss a woman Arabia in public. An American woman should wait for a man to extend

his hand before offering hers. When a Saudi offers refreshment, accept; declining it is an insult.

Japan Don’t imitate Japanese bowing customs unless you understand them thoroughly—who bows to whom, how many times, and when. It’s a complicated ritual. Presenting business cards is another ritual.

WHEN IN ROME, DO WHAT THE

ROMANS DO

WHEN IN ROME, DO WHAT THE

ROMANS DO

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Appendix E: Answers to Crossword Puzzles are given for puzzles that are at the back of each chapter.

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Supplements

The Online Learning Center houses resources for both students and instruc- tors. Students will find quizzes, key terms, chapter outlines, and chapter summaries on the Web site. Instruc- tors can access materials such as the Instructor’s Manual, PowerPoint slides, Test Bank, and Computerized Test Bank, and can also find a link to McGraw-Hill’s course management system, PageOut.

Videos: ProSelling Videos provide several hours of role-plays, exercises, examples of selling techniques, and indus- try sales training programs. These segments illustrate how students will incorporate text materials into creating their class sales role-plays and show how textbook content relates to the sales world. There are also several segments that are new to the twelfth edi- tion video package that give real-life profiles of sales- persons in different companies and industries.

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PART I

Selling as a Profession 3 1 The Life, Times, and Career of the Professional

Salesperson 4

2 Relationship Marketing: Where Personal Selling Fits 43

3 Ethics First . . . Then Customer Relationships 70

Preparation for Relationship Selling 109 4 The Psychology of Selling: Why People Buy 110

5 Communication for Relationship Building: It’s Not All Talk 146

6 Sales Knowledge: Customers, Products, Technologies 180

PART II

BRIEF TABLE OF CONTENTS

PART III

The Relationship Selling Process 225 7 Prospecting—The Lifeblood of Selling 226

8 Planning the Sales Call Is a Must! 254

9 Carefully Select Which Sales Presentation Method to Use 277

Managing Yourself, Your Career, and Others 469 15 Time, Territory, and Self-Management: Keys to

Success 470

16 Planning, Staffing, and Training Successful Salespeople 493

17 Motivation, Compensation, Leadership, and Evaluation of Salespeople 525

Appendix A: Sales Call Role-Plays 556

Appendix B: Personal Selling Experiential Exercises 566

Appendix C: Comprehensive Sales Cases 584

Appendix D: Selling Globally 601

Appendix E: Answers to Crossword Puzzles 611

Glossary of Selling Terms 617

Notes 627

Photo Credits 632

Index 634

PART IV

10 Begin Your Presentation Strategically 303

11 Elements of a Great Sales Presentation 335

12 Welcome Your Prospect’s Objections 368

13 Closing Begins the Relationship 404

14 Service and Follow-Up for Customer Retention 439

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CONTENTS

Selling as a Profession

CHAPTER 1 The Life, Times, and Career of the Professional Salesperson 4

What Is Selling? 5 Personal Selling Today 6

How Some Salespeople Are Viewed 6 What about You? 7

A New Definition of Personal Selling 7 Think of Your Grandmother 7

The Golden Rule of Personal Selling 7 Salesperson Differences 8

Everybody Sells! 8 What Salespeople Are Paid to Do 9 Why Choose a Sales Career? 10

Service: Helping Others 10 A Variety of Sales Jobs Are Available 10 Freedom of Action: You’re on Your Own 13 Job Challenge Is Always There 14 Opportunities for Advancement Are Great 14 Rewards: The Sky’s the Limit 15 You Can Move Quickly into Management 16

Is a Sales Career Right for You? 16 A Sales Manager’s View of the Recruit 16

Success in Selling—What Does It Take? 17 S—Success Begins with Love 18 S—Service to Others 18 U—Use the Golden Rule of Selling 18 C—Communication Ability 18 C—Characteristics for the Job 18 E—Excels at Strategic Thinking 18 S—Sales Knowledge at the M.D. Level 18 S—Stamina for the Challenge 18

C—Characteristics for the Job Examined 19 Caring, Joy, and Harmony 19 Patience, Kindness, and Moral Ethics 20

Faithful, Fair, Self-Controlled 20 Self-Control Involves Discipline 20

Do Success Characteristics Describe You? 22 Relationship Selling 22 Sales Jobs Are Different 23 What Does a Professional Salesperson Do? 24

Reflect Back 26 The Future for Salespeople 27

Learning Selling Skills 27 Preparing for the 21st Century 28 Ethical Megatrend Shaping Sales and Business 30 Selling Is for Large and Small Organizations 31

The Plan of This Textbook 31 Building Relationships through the Sales Process 31 Summary of Major Selling Issues 33 Key Terms for Selling 33 Sales Application Questions 33 Further Exploring the Sales World 34 Selling Experiential Exercise: Aerobic, Strength, and

Flexibility Exercise Guidelines 34

CASE 1.1 What They Didn’t Teach Us in Sales Class 36 Appendix: The Golden Rule of Personal Selling as Told

by a Salesperson 38 The Golden Rule of Selling 38 Others Includes Competitors 38 Sales Is Your Calling to Serve 38 To Serve, You Need Knowledge 39 Customers Notice Integrity 39 Personal Gain Is Not Your Goal 40 Others Come First 40 The Golden Rule Is Not 40

Corruptible It Is Not 40 Self-Serving It Is Not 41 Comprehensive It Is Not 41 Easy to Follow It Is Not 41

The Great Harvest Law of Sales 41 A Corny Example 41

The Common Denominator of Sales Success 42 The Fruits of the Selling Spirit 42

PART I

Preface vii

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CHAPTER 2 Relationship Marketing: Where Personal Selling Fits 43

What Is the Purpose of Business? 44 The Primary Goal of Business 44

What Is Marketing? 44 Marketing’s Definition 44 Marketing’s Not Limited to Business 45 Exchange and Transactions 45

Customer Orientation’s Evolution 45 The Production Concept 45 The Selling Concept 46 The Marketing Concept 46

Marketing’s Importance in the Firm 47 Marketing Generates Sales 48 Marketing Provides Quality Customer Service 48

Essentials of a Firm’s Marketing Effort 48 Product: It’s More Than You Think 48 Price: It’s Important to Success 49 Distribution: It Has to Be Available 50 Promotion: You Have to Tell People about It 51

Relationship Marketing 53 Relationship Marketing and the Sales Force 53

Personal Selling Builds Relationships 53 Salespeople Implement Relationship Marketing 55

Levels of Relationship Marketing 56 Partnering with Customers 56 The New Consultative Selling 57

Three Roles of Consultative Selling 57 E-Selling: Technology and Information Build

Relationships 60 What’s a Salesperson Worth? 60 The Key to Success 62 Summary of Major Selling Issues 63 Key Terms for Selling 64 Sales Application Questions 64 Further Exploring the Sales World 64 Selling Experiential Exercise: What Should Your

Children’s College Majors Be? 64

CASE 2.1 Reynolds & Reynolds 67

CHAPTER 3 Ethics First . . . Then Customer Relationships 70

Social, Ethical, and Legal Influences 71 Management’s Social Responsibilities 71

Organizational Stakeholders 72 An Organization’s Main Responsibilities 73 How to Demonstrate Social Responsibility 74

What Influences Ethical Behavior? 75 The Individual’s Role 75 The Organization’s Role 76

Are There Any Ethical Guidelines? 77 What Does the Research Say? 77 What Does One Do? 77 Is Your Conscience Reliable 77 Sources of Significant Influence 78 Three Guidelines for Making Ethical Decisions 78 Will the Golden Rule Help? 79

Management’s Ethical Responsibilities 80 What Is Ethical Behavior? 80

What Is an Ethical Dilemma? 80

Ethics in Dealing with Salespeople 81 Level of Sales Pressure 81

Decisions Affecting Territory 82

To Tell the Truth? 83

The Ill Salesperson 83

Employee Rights 83

Salespeople’s Ethics in Dealing with Their Employers 86

Misusing Company Assets 86

Moonlighting 86

Cheating 86

Affecting Other Salespeople 86

Technology Theft 86

Ethics in Dealing with Customers 87 Bribes 87

Misrepresentation 87

Price Discrimination 92

Tie-in Sales 92

Exclusive Dealership 92

Reciprocity 92

Sales Restrictions 92

The International Side of Ethics 93 Managing Sales Ethics 94

Follow the Leader 94

Leader Selection Is Important 94

Establish a Code of Ethics 94

Create Ethical Structures 95

Encourage Whistle-Blowing 95

Create an Ethical Sales Climate 95

Establish Control Systems 96

Ethics in Business and Sales 96 Helpful Hints in Making Career Decisions 96

Do Your Research! 97

The Tree of Business Life 99 Ethics Rule Business 100

Summary of Major Selling Issues 100 Key Terms for Selling 101

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Sales Application Questions 101 Further Exploring the Sales World 102 Selling Experiential Exercise: Ethical Work Climates 102

CASES 3.1 Ethical Selling at Perfect Solutions: The Case of

the Delayed Product 105 3.2 Sales Hype: To Tell the Truth or Stretch It, That Is

the Question 107

Information Evaluation 131 Purchase Decision 132 Postpurchase 133

Satisfied Customers Are Easier to Sell To 134 To Buy or Not to Buy—A Choice Decision 134 Summary of Major Selling Issues 136 Key Terms for Selling 137 Sales Application Questions 137 Further Exploring the Sales World 140 Student Application Learning Exercises (SALES) 141

SALE 1 of 7—Chapter 4 141 Selling Experiential Exercise: Is Organizational Selling

for You? 141

CASES 4.1 Economy Ceiling Fans, Inc. 143 4.2 McDonald’s Ford Dealership 144

CHAPTER 5 Communication for Relationship Building: It’s Not All Talk 146

The Tree of Business Life: Communication 147 Communication: It Takes Two 148

Salesperson–Buyer Communication Process Requires Feedback 148

Nonverbal Communication: Watch for It 150 Concept of Space 150 Communication through Appearance and the

Handshake 152 Body Language Gives You Clues 155

Barriers to Communication 158 Master Persuasive Communication to Maintain Control 160

Feedback Guides Your Presentation 160 Remember the Trial Close 161 Empathy Puts You in Your Customer’s Shoes 161 Keep It Simple 162 Creating Mutual Trust Develops Friendship 163 Listening Clues You In 163 Your Attitude Makes the Difference 167 Proof Statements Make You Believable 167

Summary of Major Selling Issues 168 Key Terms for Selling 168 Sales Application Questions 169 Further Exploring the Sales World 170 Selling Experiential Exercise: Listening Self-Inventory 170

CASES 5.1 Skaggs Manufacturing 173 5.2 Alabama Office Supply 174 5.3 Vernex, Inc. 175 Appendix: Dress for Success . . . and to Impress

for Business Professional and Business Casual Occasions! 176

PART II

Preparation for Relationship Selling

CHAPTER 4 The Psychology of Selling: Why People Buy 110

The Tree of Business Life: Benefits 111 Why People Buy—The Black Box Approach 111 Psychological Influences on Buying 112

Motivation to Buy Must Be There 112 Economic Needs: The Best Value for the Money 112 Awareness of Needs: Some Buyers Are Unsure 113

A FAB ulous Approach to Buyer Need Satisfaction 114 The Product’s Features: So What? 114 The Product’s Advantages: Prove It! 114 The Product’s Benefits: What’s in It for Me? 115

How to Determine Important Buying Needs—A Key to Success 117

The Trial Close—A Great Way to Uncover Needs and SELL 118

SELL Sequence 119 Your Buyer’s Perception 121 Perceptions, Attitudes, and Beliefs 122

Example of a Buyer’s Misperceptions 123 The Buyer’s Personality Should Be Considered 124

Self-Concept 124 Adaptive Selling Based on Buyer’s Style 125

Personality Typing 125 Adapt Your Presentation to the Buyer’s Style 125 What Is Your Style? 128

You Can Classify Buying Situations 128 Some Decisions Are Routine 129 Some Decisions Are Limited 129 Some Decisions Are Extensive 129

Technology Provides Information 130 View Buyers as Decision Makers 130

Need Arousal 131 Collection of Information 131

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CHAPTER 6 Sales Knowledge: Customers, Products, Technologies 1 80

The Tree of Business Life: Knowledge 181 Sources of Sales Knowledge 181 Knowledge Builds Relationships 182

Knowledge Increases Confidence in Salespeople . . . 182 . . . and in Buyers 182 Relationships Increase Sales 183

Know Your Customers 183 Know Your Company 183

General Company Information 183 Know Your Product 184 Know Your Resellers 185 Advertising Aids Salespeople 185

Types of Advertising Differ 186 Why Spend Money on Advertising? 187

Sales Promotion Generates Sales 188 Point-of-Purchase Displays: Get Them Out There 188 Shelf Positioning Is Important to Your Success 188 Premiums 189

What’s It Worth? Pricing Your Product 189 Know Your Competition, Industry, and Economy 190 Personal Computers and Selling 192 Knowledge of Technology Enhances Sales and

Customer Service 192 Personal Productivity 193 Communications with Customers and Employer 195 Customer Order Processing and Service Support 197

Sales: Internet and the World Wide Web 198 The Internet 198 World Wide Web 198

Global Technology Provides Service 199 Technology Etiquette 200

Netiquette 200 Cell Phones 201 Voice Mail 202 Faxes 202 Speakerphones and Conference Calls 202

Summary of Major Selling Issues 202 Key Terms for Selling 203 Sales Application Questions 204 Further Exploring the Sales World 205 Selling Experiential Exercise: How Is Your

Self-Confidence? 205 Appendix: Sales Arithmetic and Pricing 208 Types of Prices 208 Discounts Lower the Price 209

Quantity Discounts: Buy More, Pay Less 209 Cash Discounts Entice the Customer to Pay on Time 209

Trade Discounts Attract Channel Members’ Attention 210 Consumer Discounts Increase Sales 210 Resellers: Markup and Profit 211 Markup and Unit Price 212 Markup and Return on Investment 212

Organizations: Value and ROI 214 Compare Product Costs to True Value 215 Unit Costs Break Down Price 216 Return on Investment Is Listened To 216

Key Terms for Selling 216 Sales Application Questions 216 Student Application Learning Exercises (SALES) 218

Sale 2 of 7—Chapter 6 218

CASES 6A.1 Claire Cosmetics 220 6A.2 McBath Women’s Apparel 220 6A.3 Electric Generator Corporation 221 6A.4 Frank’s Drilling Service 222 6A.5 FruitFresh, Inc. 222

The Relationship Selling Process

CHAPTER 7 Prospecting—The Lifeblood of Selling 226

The Tree of Business Life: Prospecting 227 The Sales Process Has 10 Steps 228 Steps before the Sales Presentation 228 Prospecting—The Lifeblood of Selling 229 The Leaking Bucket Customer Concept 230 Where to Find Prospects 230 Planning a Prospecting Strategy 230 Prospecting Methods 231

E-Prospecting on the Web 231 Cold Canvassing 232 Endless Chain Customer Referral 232 Orphaned Customers 233 Sales Lead Clubs 233 Prospect Lists 233 Getting Published 234 Public Exhibitions and Demonstrations 234 Center of Influence 235 Direct Mail 236 Telephone and Telemarketing 236 Observation 237 Networking 237

PART III

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Prospecting Guidelines 238 Referrals Used in Most Prospecting Methods 239 The Prospect Pool 239

The Referral Cycle 240 The Parallel Referral Sale 240 The Secret Is to Ask Correctly 241 The Preapproach 241 The Presentation 242 Product Delivery 242 Service and Follow-Up 243 Don’t Mistreat the Referral 244

Call Reluctance Costs You Money! 244 Obtaining the Sales Interview 244

The Benefits of Appointment Making 245 Wireless E-Mail Helps You Keep in Contact and

Prospect 248 Summary of Major Selling Issues 249 Key Terms for Selling 250 Sales Application Questions 250 Further Exploring the Sales World 250 Selling Experiential Exercise: Your Attitude toward

Selling 251

CASES 7.1 Canadian Equipment Corporation 253 7.2 Montreal Satellites 253

CHAPTER 8 Planning the Sales Call Is a Must! 254

The Tree of Business Life: Planning 255 Begin Your Plan with Purpose! 255 Plan to Achieve Your Purpose 255 What’s a Plan? 256 What Is Success? 256

Strategic Customer Sales Planning—The Preapproach 258

Strategic Needs 259 Creative Solutions 259 Mutually Beneficial Agreements 259 The Customer Relationship Model 259 Reasons for Planning the Sales Call 260 Elements of Sales Call Planning 261 Always Have a Sales Call Objective 261

The Prospect’s Mental Steps 267 Attention 268 Interest 268 Desire 268 Conviction 268 Purchase or Action 268

Overview of the Selling Process 268 Summary of Major Selling Issues 269

Key Terms for Selling 270 Sales Application Questions 270 Further Exploring the Sales World 271 Selling Experiential Exercise: SMART Course Objective

Setting 271 Student Application Learning Exercises (SALES) 272

SALE 3 of 7—Chapter 8 273

CASES 8.1 Ms. Hansen’s Mental Steps in Buying Your

Product 274 8.2 Machinery Lubricants, Inc. 275 8.3 Telemax, Inc. 276

CHAPTER 9 Carefully Select Which Sales Presentation Method to Use 277

The Tree of Business Life: Presentation 278 Sales Presentation Strategy 279 Sales Presentation Methods—Select One Carefully 280

The Memorized Sales Presentation 280 The Formula Presentation 282 The Need-Satisfaction Presentation 284 The Problem–Solution Presentation 287 Comparison of Presentation Methods 287 What Is the Best Presentation Method? 288

The Group Presentation 288 Give a Proper Introduction 289 Establish Credibility 289 Provide an Account List 289 State Your Competitive Advantages 289 Give Quality Assurances and Qualifications 289 Cater to the Group’s Behavioral Style 289

Negotiating So Everyone Wins 291 Phases of Negotiation 292

Sales Presentations Go High-Tech 294 Select the Presentation Method, Then the Approach 294 Let’s Review before Moving On! 295

What’s Important to Know? 295 The Golden Rule Makes Sense 296 Dale Carnegie Gives a Word of Warning! 296

Summary of Major Selling Issues 297 Key Terms for Selling 298 Sales Application Questions 298 Further Exploring the Sales World 298 Selling Experiential Exercise: What Are Your

Negotiation Skills? 298

CASES 9.1 Cascade Soap Company 300 9.2 A Retail Sales Presentation 301 9.3 Negotiating with a Friend 302

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CHAPTER 10 Begin Your Presentation Strategically 303

The Tree of Business Life: The Beginning 304 What Is the Approach? 305 The Right to Approach 306 The Approach—Opening the Sales Presentation 306

Your Attitude during the Approach 306 The First Impression You Make Is Critical to

Success 308 Approach Techniques and Objectives 309 Small Talk Warms ’em Up 309 The Situational Approach 309 Opening with Statements 310 Demonstration Openings 312 Opening with Questions 313

Technology in the Approach 320 Is the Approach Important? 320 Using Questions Results in Sales Success 321

The Direct Question 321 The Nondirective Question 322 The Rephrasing Question 322 The Redirect Question 322 Three Rules for Using Questions 323

Is the Prospect Still Not Listening? 324 Be Flexible in Your Approach 324 Summary of Major Selling Issues 325 Key Terms for Selling 326 Sales Application Questions 326 Further Exploring the Sales World 328 Selling Experiential Exercise: Plan Your Appearance—

It Projects Your Image! 328 Student Application Learning Exercises (SALES) 330

SALE 4 of 7—Chapter 10 330

CASES 10.1 The Thompson Company 331 10.2 The Copy Corporation 331 10.3 Electronic Office Security Corporation 332

CHAPTER 11 Elements of a Great Sales Presentation 335

The Tree of Business Life: Presentation 336 The Purpose of the Presentation 336 Three Essential Steps within the Presentation 339

Remember Your FAB s! 340 The Sales Presentation Mix 340

Persuasive Communication 341 Participation Is Essential to Success 345 Proof Statements Build Believability 346 The Visual Presentation—Show and Tell 348

Visual Aids Help Tell the Story 349

Dramatization Improves Your Chances 349 George Wynn the Showman 350

Demonstrations Prove It 351 A Demonstration Checklist 352 Use Participation in Your Demonstration 352 Reasons for Using Visual Aids, Dramatics, and

Demonstrations 353 Guidelines for Using Visual Aids, Dramatics, and

Demonstrations 353 Technology Can Help! 354 The Sales Presentation Goal Model 354 The Ideal Presentation 355 Be Prepared for Presentation Difficulties 355

How to Handle Interruptions 355 Should You Discuss the Competition? 356 Where the Presentation Takes Place 358 Diagnose the Prospect to Determine Your Sales

Presentation 358 Summary of Major Selling Issues 358 Key Terms for Selling 359 Sales Application Questions 359 Further Exploring the Sales World 360 Student Application Learning Exercises (SALES) 361

SALE 5 of 7—Chapter 11 361

CASES 11.1 Dyno Electric Cart Company 363 11.2 Major Oil, Inc. 363 11.3 Dumping Inventory: Should This Be Part of Your

Presentation? 366

CHAPTER 12 Welcome Your Prospect’s Objections 368

The Tree of Business Life: Objections 369 Welcome Objections! 369 What Are Objections? 370 When Do Prospects Object? 370 Objections and the Sales Process 370 Basic Points to Consider in Meeting Objections 371

Plan for Objections 372 Anticipate and Forestall 372 Handle Objections as They Arise 373 Be Positive 373 Listen—Hear Them Out 373 Understand Objections 373

Six Major Categories of Objections 376 The Hidden Objection 376 The Stalling Objection 377 The No-Need Objection 379 The Money Objection 380 The Product Objection 383 The Source Objection 383

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Techniques for Meeting Objections 385 The Dodge Neither Denies, Answers, nor Ignores 385 Don’t Be Afraid to Pass Up an Objection 385 Rephrase an Objection as a Question 386 Postponing Objections Is Sometimes Necessary 387 Send It Back with the Boomerang Method 388 Ask Questions to Smoke Out Objections 389 Use Direct Denial Tactfully 392 The Indirect Denial Works 392 Compensation or Counterbalance Method 393 Let a Third Party Answer 393

Technology Can Effectively Help Respond to Objections! 394

After Meeting the Objection—What to Do? 394 First, Use a Trial Close—Ask for Opinion 394 Move Back Into Your Presentation 395 Move to Close Your Sale 396 If You Cannot Overcome the Objection 396

In All Things Be Guided by the Golden Rule 397 Summary of Major Selling Issues 397 Key Terms for Selling 398 Sales Application Questions 398 Further Exploring the Sales World 399 Student Application Learning Exercises (SALES) 400

SALE 6 of 7—Chapter 12 400

CASES 12.1 Ace Building Supplies 402 12.2 Electric Generator Corporation (B) 402

CHAPTER 13 Closing Begins the Relationship 404

The Tree of Business Life: Closing 405 When Should I Pop the Question? 406 Reading Buying Signals 406 What Makes a Good Closer? 407

Ask for the Order and Be Quiet 408 Get the Order—Then Move On! 409

How Many Times Should You Close? 409 Closing under Fire 410 Difficulties with Closing 411 Essentials of Closing Sales 411 Prepare Several Closing Techniques 413

The Alternative-Choice Close Is an Old Favorite 414 The Assumptive Close 415 The Compliment Close Inflates the Ego 415 The Summary-of-Benefits Close Is Most Popular 416 The Continuous-Yes Close Generates Positive

Responses 417 The Minor-Points Close Is Not Threatening 417 The T-Account or Balance-Sheet Close Was Ben

Franklin’s Favorite 418

The Standing-Room-Only Close Gets Action 420 The Probability Close 420 The Negotiation Close 421 The Technology Close 421

Prepare a Multiple-Close Sequence 422 Close Based on the Situation 422 Research Reinforces These Sales Success Strategies 422 Keys to Improved Selling 426 The Business Proposition and the Close 426

Use a Visual Aid to Close 426 Closing Begins the Relationship 426 When You Do Not Make the Sale 428 Summary of Major Selling Issues 429 Key Terms for Selling 430 Sales Application Questions 430 Further Exploring the Sales World 432 Student Application Learning Exercises (SALES) 432

SALE 7 of 7—Chapter 13 433

CASES 13.1 Skaggs Omega 435 13.2 Central Hardware Supply 435 13.3 Furmanite Service Company—A Multiple-Close

Sequence 436 13.4 Steve Santana: Pressured to Close a Big Deal 437

CHAPTER 14 Service and Follow-Up for Customer Retention 439

The Tree of Business Life: Service 440 The Importance of Service and Follow-Up 441

Words of Sales Wisdom 442 True Caring Builds Relationships and Sales 443

Building a Long-Term Business Friendship 444 What Is a Business Friendship? 444 How to Build a Business Friendship 444 What Is Most Important? 446 How Many Friends? 447

Relationship Marketing and Customer Retention 447 Relationship Marketing Builds Friendships 447

The Product and Its Service Component 447 Expectations Determine Service Quality 448

Customer Satisfaction and Retention 448 Excellent Customer Service and Satisfaction Require

Technology 449 So, How Does Service Increase Your Sales? 449 Turn Follow-Up and Service into a Sale 450 Account Penetration Is a Secret to Success 451 Service Can Keep Your Customers 452 You Lose a Customer—Keep on Trucking 455 Returned Goods Make You a Hero 456 Handle Complaints Fairly 456 Is the Customer Always Right? 456

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This Customer Is Not in the Right! 456 Dress in Your Armor 457

Build a Professional Reputation 457 Do’s and Don’ts for Business Salespeople 458 The Path to Sales Success: Seek, Knock, Ask, Serve 459 Summary of Major Selling Issues 461 Key Terms for Selling 462 Sales Application Questions 462 Further Exploring the Sales World 462 Selling Experiential Exercise: What’s Your Attitude

toward Customer Service? 463

CASES 14.1 California Adhesives Corporation 465 14.2 Sport Shoe Corporation 465 14.3 Wingate Paper 466

15.2 Sally Malone’s District—Development of an Account Segmentation Plan 491

CHAPTER 16 Planning, Staffing, and Training Successful Salespeople 493

The Tree of Business Life: Management 494 Transition from Salesperson to Sales Manager 495

What Changes Occur? 495 The Experience of Being Promoted 496 Problems New Managers Experience 496 The Key to Making a Successful Transition 497

Technology Is Needed in the Job 498 Being a First-Line Sales Manager Is a Challenging

Job 498 What Is the Salary for Management? 498 Overview of the Job 499 Sales Management Functions 500 Sales Force Planning 500

Sales Forecasting 501 The Sales Manager’s Budget 501 Organizing the Sales Force 502

Staffing: Having the Right People to Sell 503 People Planning 504 Employment Planning 506 The Multicultural Sales Organization 508 Recruitment—Finding the Right People 508 A Sales Manager’s View of the Recruit 509 Interview Follow-Up 512

Training the Sales Force 513 Purposes of Training 513 Training Methods 514 Where Does Training Take Place? 515 When Does Training Occur? 516 Who Is Involved in Training? 517

Summary of Major Sales Management Issues 519 Key Terms for Managing 520 Sales Application Questions 520 Further Exploring the Sales World 520 Selling Experiential Exercise: What Are Your People

Skills? 521

CASE 16.1 The Wilson Company: Is a Sales Manager’s Job

Really for Me? 523

CHAPTER 17 Motivation, Compensation, Leadership, and Evaluation of Salespeople 525

The Tree of Business Life: Management 526 Motivation of the Sales Force 526

PART IV

Managing Yourself, Your Career, and Others

CHAPTER 15 Time, Territory, and Self-Management: Keys to Success 470

The Tree of Business Life: Time 471 Customers Form Sales Territories 472

Why Establish Sales Territories? 472 Why Sales Territories May Not Be Developed 473

Elements of Time and Territory Management 473 Salesperson’s Sales Quota 474 Account Analysis 474 Develop Account Objectives and Sales Quotas 477 Territory–Time Allocation 477 Return on Time Invested 478 Customer Sales Planning 481 Scheduling and Routing 481 Using the Telephone for Territorial Coverage 484 Territory and Customer Evaluation 484

Summary of Major Selling Issues 486 Key Terms for Selling 487 Sales Application Questions 487 Selling Experiential Exercise 488 Further Exploring the Sales World 489

CASES 15.1 Your Selling Day: A Time and Territory

Game 490

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The Motivation Mix: Choose Your Ingredients Carefully 527

Compensation Is More Than Money 528 Straight Salary Plans 528 Straight Commission Plans 530 Combination Plans 534

The Total Compensation Package 535 Nonfinancial Rewards Are Many 536 Leadership Is Important to Success 537

The Leader’s Task and Relationship Behavior 537 Choosing a Leadership Style 539 On-the-Job Coaching 539

Performance Evaluations Let People Know Where They Stand 540

Performance Evaluation—What Is It? 540 Reasons for Performance Evaluation 541 Who Should Evaluate Salespeople? 541 When Should Salespeople Be Evaluated? 541 Performance Criteria 541 Quantitative Performance Criteria 541 Qualitative Performance Criteria 542 Conducting the Evaluation Session 542

Sales Managers Use Technology 545 To Manage Customers 545 To Manage Salespeople 546

Summary of Major Sales Management Issues 547 Key Terms for Managing 548 Sales Application Questions 548 Further Exploring the Sales World 548 Selling Experiential Exercise: A Failure to

Communicate? 548 Sales Management Quiz 549

CASES 17.1 Baxter Surgical Supplies Incorporated 551 17.2 The Dunn Corporation 552

APPENDIX A: Sales Call Role-Plays 556

Role-Play One: Consumer Sales 556 Role-Play Two: Distributor Sales 558 Role-Play Three: Business-to-Business 561 Role-Play Four: Business-to-Business 563

APPENDIX B: Personal Selling Experiential Exercises 566

Sell Yourself on a Job Interview 566 Résumé, Follow-Up Letter, E-Mail 568

How to Create a Portfolio 576 Sales Team Building 579 What’s Your Style—Senser, Intuitor, Thinker,

Feeler? 579

APPENDIX C: Comprehensive Sales Cases 584

CASES 1 Zenith Computer Terminals, Inc.: Development

of a Total Business Plan 584 2 Wallis Office Products: Defining New Sales

Roles 588 3 United Cosmetics, Inc.: Creating a Staffing

Program 591 4 Mead Envelope Company—Is a New

Compensation Plan Needed? 593 5 McDonald Sporting Goods Company:

Determining the Best Compensation Program 595

APPENDIX D: Selling Globally 601

When in Rome, Do What the Romans Do 601 Customer Gift Giving in Japan 602 Respecting the Traditions of India 602 Wanted: Global Sales Managers and Salespeople 603 A Typical Sales Day in China: What to Expect 603 Little Cold Calling in Japan 604 Chinese Culture: Don’t Shy Away from

Negotiating 605 Salespeople Are Making It Happen in China 606 Watch Out in Russia and China—They May Bug Your

Room to Find Out Your Secrets 606 French versus American Salespeople 607 Israel—The Home Court Advantage 608 Working a Deal in the Arab World 608 The Japanese Take Relationship Selling

Seriously 608 Europe and IBM—Changes Had to Be Made 609 Selling Experiential Exercise 610

APPENDIX E: Answers to Crossword Puzzles 611

Glossary of Selling Terms 617 Notes 627 Photo Credits 632 Index 634

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xxx

THE ILLUSTRATED OVERVIEW OF SELLING

Even before you begin a formal study of selling, you probably already know a few things about the subject. You know, for example, that selling is about persuading others to buy your product. And you may understand that it is also about helping others satisfy their needs. But that is only part of what you will be studying in selling. The Illustrated Overview of Selling gives you an introduction to the major concepts and issues that are part of selling:

■ Selling as a Profession

■ Preparation for Relationship Selling

■ The Relationship Selling Process

■ Managing Yourself, Your Career, and Others

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Today’s salesperson is a professional manager involved in building long-term relationships with customers.

An organization's marketing mix includes its products, prices, distribution, and promotional efforts. Personal selling is one very important element of a firm's promotional activities.

By tailoring a presentation to an individual customer, the salesperson can better help solve problems and satisfy needs.

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It takes expertise to sell today’s complex goods and services. Whether selling soap or computer chips, salespeople must know their business.

The ability to communicate effectively influences a salesperson’s success. Using a combination of verbal, nonverbal, and visual communication techniques greatly increases the likelihood of making a sale.

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From beginning to end, the sales presentation should be a well-planned and executed discussion of how to help the prospect.

The sales presentation is a persuasive vocal and visual explanation of a business proposition. The salesperson presents the information needed for the buyer to make a well-informed decision.

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Properly managing one’s time is essential to being successful. Computers, telephones, mail, and contacting decision makers on planned intervals helps sell and service customers.

Sales managers are responsible for helping their salespeople generate sales. In a joint sales call, a manager provides valuable on-the-job training that can help the sales rep improve selling skills.

You are your company’s representative. Customers rely on you to provide updated information and suggestions on how to solve their problems, and service. Your employer relies on you to generate sales. As a salesperson you are involved in a highly honorable, challenging, rewarding, and professional career.

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Fundamentals of Selling Customers for Life Through Service

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CUSTOMER

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3

CHAPTER 1 The Life, Times, and Career of the Professional Salesperson

CHAPTER 2 Relationship Marketing: Where Personal Selling Fits

CHAPTER 3 Ethics First . . . Then Customer Relationships

PART I

Selling as a Profession

Part 1 provides an overview of the sales profession. Chapter 1 examines the sales career and introduces the 10-step selling process used throughout the book. Chapter 2 explains how personal selling fits into a firm’s marketing program. Chapter 3 illustrates the impact of social, ethical, and legal issues on a firm’s operations.

A central theme of your book involves how sales personnel analyze needs of the customers, present benefits, gain commitment for purchase, and provide service after the sale. The sales firm provides the product to sell, sets price, determines how the customer can receive the product, and promotes the product. All of the activities must take into consideration the many social, ethical, and legal issues that affect how the organization operates.

As you study the three chapters in Part 1, continually refer back to the exhibit. It will help you remember each chapter’s core contents and their relationships.

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The Life, Times, and Career of the Professional Salesperson

4

1

MAIN TOPICS

What Is Selling?

Personal Selling Today

A New Definition of Personal Selling

The Golden Rule of Personal Selling

Everybody Sells!

What Salespeople Are Paid to Do

Why Choose a Sales Career?

Is a Sales Career Right for You?

Success in Selling—What Does It Take?

C—Characteristics for the Job Examined

Do Success Characteristics Describe You?

Relationship Selling

Sales Jobs Are Different

What Does a Professional Salesperson Do?

The Future for Salespeople

The Plan of This Textbook

Building Relationships through the Sales Process

C H

A P

T E

R O

N E

LEARNING OBJECTIVES

This chapter introduces you to the profes- sional and rewarding career of selling. After studying this chapter, you should be able to

■ Define and explain the term selling.

■ Explain why everyone sells, even you.

■ Explain the relationship between the definition of personal selling and the Golden Rule of Personal Selling.

■ Discuss the reasons people might choose a sales career.

■ Enumerate some of the various types of sales jobs.

■ Describe the job activities of salespeople.

■ Define the characteristics that salespeople believe are needed for success in building relationships with customers.

■ List and explain the 10 steps in the sales process.

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Chapter One The Life, Times, and Career of the Professional Salesperson 5

Debra Hutchins majored in French, with a minor in English literature, at Washington University in St. Louis. After graduation she began work as a secretary in the marketing department at Sunwest Bank in Albuquerque, New Mexico.

“I had never considered a sales job while in school and sales didn’t appeal to me when I began work at the bank. I always felt you would have to be an extrovert. I’m more the shy, intellectual type. I don’t see myself in the role of a salesperson.

“Someday I do want a more challenging job. I’m a very hard worker; long hours don’t bother me. I’ve always had a need to achieve success. One of the things I like about being a secretary is helping customers when they call the bank. It is important to carefully listen to their problems or what they want in order to provide good customer service. Maybe one day I’ll find a job that has more challenge, professionalism, and reward.”

If you were in Debra’s position, what would you do? What types of jobs would you recommend she consider?

Debra Hutchins is like many people in that while she was in school a career in sales did not seem like the thing to do. Most people are unfamiliar with what salespeople do.

As you learn more about the world of sales, a job selling goods or services may become appealing. The salesperson makes valuable contributions to our quality of life by selling goods and services that benefit individuals and industry. Red Motley, former editor of Parade magazine, once said, “Nothing happens until somebody sells something.” Selling brings in the money and causes cash registers across the country to ring. For centuries, the salespeople of the world have caused goods and services to change hands.

More than ever, today’s salespeople are a dynamic power in the business world. They generate more revenue in the U.S. economy than workers in any other profes- sion. The efforts of salespeople have a direct impact on such diverse areas as these:

■ The success of new products. ■ Keeping existing products on the retailer’s shelf. ■ Constructing manufacturing facilities. ■ Opening businesses and keeping them open. ■ Generating sales orders that result in the loading of trucks, trains, ships, air-

planes, and pipelines that carry goods to customers all over the world.

The salesperson is engaged in a highly honorable, challenging, rewarding, and professional career. In this chapter, you are introduced to the career, rewards, and duties of the salesperson. The chapter begins by defining selling and examining why people choose sales careers.

Many people consider selling and marketing synonymous terms. However, selling is actually only one of many marketing components, as we will see in Chapter 2. In business, a traditional definition of personal selling refers to the personal communi- cation of information to persuade a prospective customer to buy something—a good, service, idea, or something else—that satisfies that individual’s needs.

This definition of selling involves a person helping another person. The salesper- son often works with prospects or customers to examine their needs, provide infor- mation, suggest a product to meet their needs, and provide after-the-sale service to ensure long-term satisfaction.

FACING A SALES CHALLENGE

Nothing happens until someone sells

something.

WHAT IS SELLING?

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6 Part One Selling as a Profession

The definition also involves communications between seller and buyer. The sales- person and the buyer discuss needs and talk about the product relative to how it will satisfy the person’s needs. See, for example, Exhibit 1.1 . If the product is what the person needs, then the salesperson attempts to persuade the prospect to buy it.

Unfortunately this explanation of personal selling does not explain the best sell- ing philosophy for the 21st century. Why?

In the early 2000s the worst side of American business became obvious. Corporate corruption, misstated financials, and the personal profit of chief executives as their companies went out of business all contributed to the public’s negative attitude toward most, if not all, business professions. 1 Unethical business practices resulted in bank- ruptcies, which in turn led to massive layoffs across the country. This had an impact on all Americans and their families, leaving no person or organization untouched.

For the last two decades, Gallup (one of America’s leading pollsters) has found that insurance salespeople, advertising practitioners, and used car salespeople are the three lowest-rated job categories on perceived honesty and ethical standards. Which of the three would you say rated the lowest each year? Yes, it was the used car sales- person! 2 Unfortunately, people tend to generalize from such research findings that most salespeople are not honest or ethical, which is not the case. I know used car salespeople with the highest of ethical standards. Be careful in making a hasty deci- sion about a salesperson. You cannot judge a book by its cover. You may be dealing with a sheep in wolf’s clothing. 3

PERSONAL SELLING TODAY

How Some Salespeople Are Viewed

A sheep in wolf’s clothing.

In personal selling, a sales- person can tailor a presentation to the needs of an individual customer.

EXHIBIT 1.1

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Chapter One The Life, Times, and Career of the Professional Salesperson 7

How do you view the honesty and ethical standards of today’s businesses and sales- people? For the last several years, at the beginning of my classes, I have asked sales students the following three questions on a poll found on my Web site:

1. What does the general public think about salespeople? Only 9 percent of the over 2,700 respondents had a positive attitude.

2. What do you think about salespeople? Thirty-two percent had a positive attitude. 3. After graduation, would you accept a sales job? Forty-four percent said yes.

These percentages do not represent high marks from my students. What are your answers to these three questions? Please take a few minutes to answer the poll at http://futrell-www.tamu.edu.

What would you say is the number one reason for salespeople’s low ratings on honesty and ethics? It is trust. Many people feel they may not be able to trust a sales- person. Why? Greed is often the answer! The love of money is the root of all kinds of problems. From the least of us to the greatest, we all seem to be greedy to some extent, and greed can make some people blind to all else around them. Given all that has gone on in America as we are revising this textbook, we will use a different definition of selling in your book from the traditional view. This difference is very important given the present status of business in America and the public’s—maybe even your—view of salespeople.

The new definition inserts the word unselfish into the traditional definition discussed earlier. It is that simple! Personal selling refers to the personal communication of information to unselfishly persuade a prospective customer to buy something—a good, a service, an idea, or something else—that satisfies that individual’s needs.

This definition of selling involves the many things we discussed before, such as a person helping another person through selling. However, when the word unself- ishly is added to the definition, it makes a big difference in how someone might look at selling. The word unselfish tells salespeople to be caring toward customers and to serve—help—the person or organization without expecting to get something in return. If you are still wondering about the “unselfish” approach to selling, think of the analogy of selling to your grandmother.

Think of your, or your best friend’s, grandmother. Would you treat her in a selfish manner? Would you sell her something just to make a sale? No way! You would not take advantage of granny (grandmother). Salespeople should handle their customers with unselfish and ethical service. How are you going to build a long-term relation- ship with customers unless you treat them unselfishly by placing their interests first?

Tell the truth about what the product will do, give the best price on the best prod- uct for the need, deliver on time, and provide outstanding follow-up service to make sure the customer is delighted with the purchase. If it is not the right product for the need expressed, tell the customer. If she or he still wants to buy—sell it to them! After all, you, the salesperson, may be wrong.

When asked, “What would you like to learn in this course?” Steven Osborne, a stu- dent in my personal selling class, said “I would like to know how to believe in a profession that many people do not trust.” I sincerely hope you will be a believer in

What about You?

What are your answers to the poll questions?

A NEW DEFINITION OF PERSONAL

SELLING

Think of Your Grandmother

THE GOLDEN RULE OF PERSONAL

SELLING

“Would you mistreat your grand- mother in a sales transaction?”

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8 Part One Selling as a Profession

the value of sales integrity at the end of this sales course and be able to give Steven a positive perspective.

Part of your answer will involve your understanding the definition of personal sell- ing discussed earlier and the Golden Rule of Personal Selling. A rule is a prescribed guide for conduct or action. The Golden Rule of Personal Selling refers to the sales philosophy of unselfishly treating others as you would like to be treated. Reciprocity is not expected. Read the short essay at the back of this chapter in Appendix A titled “The Golden Rule of Personal Selling as Told by a Salesperson.” This short story illustrates the importance of helping people through our jobs and our lives.

Exhibit 3.7 in Chapter 3 provides examples of how people around the world view the Golden Rule. As you study the various statements of the Golden Rule in Exhibit 3.7, be sure to note that all are phrased negatively except for one—the last one. The negative form would teach behavior in this way: If you do not like to get cheated in a purchase, don’t cheat others. The positive form, on the other hand, would say that if you like to receive the best price, then offer the best price to your customers.

To help you understand the concept better, consider how the Golden Rule applies to a litter of kittens. One child watched in delight as the tiny kittens snuggled together in the cardboard box where her cat had just delivered the litter. “Aw, isn’t that cute?” she exclaimed. “They love each other so much that they’re trying to keep each other warm.” “Well not exactly,” replied her mother. “Actually they’re trying to keep themselves warm.” The Golden Rule is all about trying to keep somebody else warm, even if it means that we get cold in the process. 4 Stop a minute and think about how this applies to your life and the business world. This important concept will be applied to personal selling throughout the textbook. It is especially effective in explaining differences in salespeople and why so many people may have a nega- tive view of some salespeople and a positive view of other salespeople.

Garry Smith, a former consumer goods sales manager, and your author illustrate some of the differences between salespeople’s approaches to personal selling today. In general, Exhibit 1.2 shows that differences can be explained by the extent of the person’s self-interest. As Gallup’s survey poll of Americans indicates, people view traditional salespeople as having their self-interest as a priority. 5 This type of sales- person is preoccupied with his or her own well-being—usually defined in terms of making money—and thus is selfish and cannot be trusted.

The salesperson following the Golden Rule of Personal Selling, however, places the interests of others before self-interest. Professional salespeople fall somewhere in between the traditional and Golden Rule salesperson in terms of how they view prospects and customers. As Exhibit 1.2 illustrates, as interest in serving others improves, a person’s self-interest lessens. The more the salesperson considers the customer’s interest, the better the customer service.

If you think about it, everyone sells. From an early age, you develop communica- tions techniques for trying to get your way in life. You are involved in selling when you want someone to do something. For example, if you want to get a date, ask for a pay increase, return merchandise, urge your professor to raise your grade, or apply for a new job, you are selling. You use personal communication skills to persuade someone to act. Your ability to communicate effectively is a key to success in life.

Salesperson Differences

Would you want to be the traditional, profes- sional, or Golden Rule

salesperson? Why?

EVERYBODY SELLS!

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Chapter One The Life, Times, and Career of the Professional Salesperson 9

This is why so many people take sales courses. They want to improve their com- munication skills to be more successful in both their personal and business lives. The skills and knowledge gained from a selling course can be used by a student who plans to go into virtually any field, such as law, medicine, journalism, the military, or his or her own business.

Selling is not just for salespeople; it is a must for everyone. In today’s competitive environment, where good interpersonal skills are so valued, the lack of selling capa- bility can put anyone at a disadvantage. So as you read this book and progress through the course, think about how you can use the material both personally and in business.

In the short term, on a day-to-day, week-to-week basis, salespeople are paid to sell— that is their job. When a sales manager sees one of her salespeople, the question is always, “Did you sell anything today?” Salespeople need to sell something “today” to meet the performance goals for

■ Themselves, in order to serve others, earn a living, and keep their jobs. ■ Their employer, because without the generation of revenues the company fails. ■ Their customers, because their products help customers fulfill their needs and

help their organizations to grow.

In the long run—month to month, year to year—salespeople must build positive long-term relationships with their customers. Why? Because they know, and now you know, that up to 80 percent or more of the future sales of many organizations come from present customers and customer referrals.

Salespeople need to close sales and at the same time maintain a great relation- ship with the buyer. Think about that last sentence. It is a very important thing to understand and learn. Salespeople want to sell to their present customers today, more tomorrow, and even more the day after that. How do you sell someone something and remain his or her business friend? You need to know how the Golden Rule of Personal Selling applies to the sales job. That is what this textbook is about.

Your sales class will help make you a better

communicator.

WHAT SALESPEOPLE

ARE PAID TO DO

Future sales come from present customers and

customer referrals.

EXHIBIT 1.2 Interest in serving the customer improves as our self-interest decreases.

➀ Traditional Salespeople ➁ Professional Salespeople ➂ Golden Rule Salespeople

Do what they think they can get away with.

Do what they are legally required to do.

Do the right thing.

Guided by self-interests. Take care of customers. Find others’ interests most important.

Attribute results to personal efforts.

Attribute results to personal efforts, employer, customers, economy.

Attribute results to others.

Seek recognition for efforts; sharing not important. Pride and ego driven.

Enjoy recognition, may share if it suits their purpose. Pride and ego driven.

Feel that an individual’s performance is due to others, thus not motived by pride and ego.

Money is life’s main motivator.

Money is important, but not to the customer’s detriment.

Service most important; money is to be shared.

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10 Part One Selling as a Profession

Six major reasons for choosing a sales career are (1) the opportunity to provide ser- vice to others; (2) the wide variety of sales jobs available; (3) the freedom of being on your own; (4) the challenge of selling; (5) the opportunity for advancement in a company; and (6) the rewards from a sales career (see Exhibit 1.3 ).

When asked what she will look for in a career after graduating from college, a stu- dent of your author’s, Jackie Pastrano, said “I’d like to do something that helps other people.” The sales career provides the opportunity for service and an emotional pur- pose in life gained from helping others. That is why this book’s central core value is “service.” Service is a major reason for choosing a sales career! For many, service is the number one reason.

Service refers to making a contribution to the welfare of others. All of us want to do what Jackie hopes to do—help others! Would you like to help others? There are millions of sales jobs and thus many opportunities to help people and organizations.

As members of a firm’s sales force, salespeople are a vital element in the firm’s effort to market goods and services profitably. Personal selling accounts for major expen- ditures by most companies and presents a large number of career opportunities. There are millions of sales jobs, and the probability that at one time during your life you will have a sales job is high.

There are also hundreds, maybe thousands, of different types of sales positions. Think about this! Almost every good or service you know of has a salesperson who sells it to one or more people in order to get the product to the final user. That is why so many sales jobs are available.

Types of Sales Jobs—Which Is for You?

Although there are numerous specific types of sales jobs, most salespeople work in one of three categories: as a retail salesperson, a wholesaler’s salesperson, or a manufacturer’s sales representative. These categories are classified according to the type of products sold and the salesperson’s type of employer.

Selling in Retail. A retail salesperson sells goods or services to consumers for their personal, nonbusiness use. Retail selling is so important to a society that this book has numerous examples of it. Three common types of sellers who sell at retail are the (1) in-store salesperson, (2) direct seller who sells face-to-face away from a fixed store location, and (3) telephone salesperson.

Look back at the definition of a retail salesperson. Think of all the different types of retail organizations selling something—retailers such as bakeries, banks, caterers, hotels, video stores, travel agents, and stores selling clothes, electronics, flowers, food, and furniture (see Exhibit 1.4 ). Each customer contact person takes your money and provides a good or service in return. Customer contact person is another name for a salesperson. Although the title may be different, their job is the same—to help you buy.

WHY CHOOSE A SALES CAREER?

Service: Helping Others

“I’d like to do something that helps other people.”

JACKIE PASTRANO

A Variety of Sales Jobs Are Available

There is a sales job perfect for you but it may be like finding a needle in a haystack.

Six major reasons for choosing a sales career.

EXHIBIT 1.3 Service to

others

Variety of sales

jobs Freedom Challenge Advancement Rewards

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Chapter One The Life, Times, and Career of the Professional Salesperson 11

Direct sellers sell face-to-face to consumers—typically in their homes—who use the products for their personal use. 6 An organization could have one salesperson or 3 million salespeople, like Amway.

As in any type of job—including accountants, mechanics, and politicians—some retail salespeople do very little to help their customers. However, many retail sales- people are highly skilled professionals, commanding exceptionally high incomes for their ability to service their customers. I personally know retail salespeople earning $40,000 a year selling shoes; $80,000 selling furniture; $110,000 selling jewelry; and $150,000 selling automobiles.

Selling for a Wholesaler. Wholesalers (also called distributors) buy products from manufacturers and other wholesalers and sell to other organizations. A wholesale salesperson sells products to parties for

■ Resale, such as grocery retailers buying items and selling to consumers. ■ Use in producing other goods or services, such as a home builder buying

electrical and plumbing supplies. ■ Operating an organization, such as your school buying supplies.

Firms engaged in wholesaling are called wholesaling middlemen. Classifying wholesaling middlemen is difficult because they vary greatly in (1) the products they sell, (2) the markets to which they sell, and (3) their methods of operation. As there are so many different types, the discussion of types of wholesalers is beyond the scope of this book.

Selling for a Manufacturer. Manufacturers’ salespeople work for organizations producing the product. The types of manufacturer’s sales representative positions range from people who deliver milk and bread, to specialized salespeople selling highly technical industrial products. The salesperson working for a manufacturer

Retail salespeople are becoming well-rewarded professionals.

EXHIBIT 1.4

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12 Part One Selling as a Profession

may sell to other manufacturers, wholesalers, retailers, or directly to consumers. There are five main types of manufacturer sales positions:

1. An account representative calls on a large number of already established cus- tomers in, for example, the food, textile, and apparel industries. This person asks for the order.

2. A detail salesperson concentrates on performing promotional activities and introducing new products rather than directly soliciting orders. The medical detail salesperson seeks to persuade doctors, the indirect customers, to specify a pharmaceutical company’s trade name product for prescriptions. The actual sale is ultimately made through a wholesaler or directly to pharmacists and hospitals who fill prescriptions.

3. A sales engineer sells products that call for technical know-how and an ability to discuss technical aspects of the product. Expertise in identifying, analyzing, and solving customer problems is another critical factor. This type of selling is com- mon in the oil, chemical, machinery, and heavy equipment industries because of the technical nature of their products.

Greg Munoz, a sales engineer for the Dow Chemical Company, says,

Our sales technique typically takes the team approach. Several of Dow’s finest staff (technical, production, marketing, and support) and I work in unison to address the customer’s specific needs. I am responsible for building the business relation- ship with the customer and directing resources and information toward securing a customer’s plastic-resin business. Market managers and district sales managers coordinate pricing and positioning as the customer relates to the industry as a whole. Dow technicians engineer materials to meet or exceed the requirements specified for the application and work with the customer’s production department to see that they perform accordingly. Customer service representatives handle order placement and product-delivery logistics while servicing the customer’s information needs. Once the sale is closed, I follow up and maintain our profile while serving as the first line of communication and interface for the customer.