Question 1 a 1 a. 1 The definition and the role of personal face-to-face selling. According to Fill (1999) personal selling can be defined as: An interpersonal communication which involves face to face activities undertaken by individuals, often representing an organisation, in order to inform, persuade or remind am individual or group to take appropriate action, as required by the sponsors representative. It implies a life two-way interactive dialogue between buyer and seller. The quote from Fill, suggests that personal selling may well ultimately be about making a sale, but that is not its only function. It can contribute considerably to the organisation both before and after a sale has been made.

Personal face-to-face selling is about finding information, persuading customers through two-way communication. In terms of customer management personal selling is a crucial element in ensuring customers past purchase satisfaction, and in building profitable long term buyer seller relationships built on trust and understanding. (Miller & Heinemann 1991) Personal face-to-face selling is important in the life assurance industry. If for example you do not like a TV advertisement you can turn it off, if an envelope looks like a mailshot, you can put it in the bin unopened. But if a sales representative was on your doorstep, it is a little more difficult to switch off.

A person has a much greater chance of engaging your initial attention, than an advertisement does. Life assurance can be very complicating to perspective clients, and they may have questions, which the sales rep can answer, or respond to situation sales rep may find themselves in to prevent themselves from being shut off completely. Advertising can be targeted within broad parameters, but even then ther will be many wasted contacts, and each of those wasted contacts will cost the company selling life assurance money. Therefore utilising sales reps will allow the company to weed out inappropriate contacts earlier on and concentrate its efforts on those who offer a real prospect of making a sale. Thus the personal selling effort can begin properly with persistence until satisfactory answers are received.

Various means of life assurance advertising cannot tell the impact it will be having on the perspective clients whether they understand it, or whether they think it is relevant to them. Therefore personal face-to-face interaction will help overcome these problems. The representative will make sure the client understands, and industry jargon or facts and figures, and go over it again and again from different angle. The representative can also see if something has caught the attention of the client, such as product developments linking life assurance with unit trusts or mortgages for example pension plans, investment bonds, health insurance, and endowment policies. The sales rep therefore will be able to tailor the message to emphasise that feature or benefit. Due to the sales rep selling life assurance and the perspective client being face to face, the sales rep can create a unique approach that matches the moods and needs of each perspective client.

Personal face to face selling also helps implement customer relationships management areas, an the creation of long term mutually beneficial buyer seller relationships is recognised an extremely important to the health and profitability of the life assurance industry. The life assurance market is huge and there are a combination of financial institutions offering a diversified product range, as well independent financial advisors, direct sales forces appointed reps, banks selling life assurance products, the therefore market is very competitive. Sales reps at this point are the public face of the organisation, and their ability to carry out the organisations message professionally and confidently can affect judgement of that organisation and what it stands for. The sales force has a crucial role to play in both creating, maintain and developing personal relationships with clients. This will aid the life assurance company information gathering as it will become easier, as the sales rep will be able to find out more about the client purchasing philosophy by having a friendly chat over a drink, than any formal inquiry or survey. Personal face-to-face selling is affected by various direct marketing techniques such as telemarketing and Internet marketing.

Telemarketing can be defined as a planned and controlled activity that creates and exploits a direct relationship between the customer and seller, using the telephone. Telemarketing can either be inbound or where the potential customer to call the organisation, which is used not only for direct response advertising but also for customer care lines, competitions and other sales promotions. Or outbound telemarketing, where the organisation contacts the potential customer. 1 a. 2 Telemarketing Personal face to face selling is expensive as it is extremely labour intensive, and costs include, travel, accommodation and other expenses, that is why in the life assurance industry organisations have to be sure what the sales force is for, and what it is actually doing cannot be achieved by any other means. As telemarketing is not simply about high pressure selling, but telemarketing is providing a whole range of marketing tasks such as: generating leads screen leads before follow up arrange appointments for sales reps direct sales encourage cross up selling dealer support account servicing market research Test marketing and brand development On an operational level telemarketing improves customer service, to build trust, empathizing with the customer and understanding and being able to communicate with confidence the product benefits relevant to the listener.

Telemarketing does provide the services that a sales rep does, selling face to face, as long as the call centre staff are well trained, and the basis for using this method is that selling by telephone will reduce the cost of providing life assurance products, and research from data monitor (European Business Tele culture 98) found that many people do accept these calls and in some cases actually enjoy them. MORI however conducted research and found that 75% of respondents preferred face-to-face contact with sales agents. Personal selling face to face however helps builds relationships between the buyer and seller, and because there is a high turnover of staff in telemarketing relationship building becomes more difficult, with clients in the life assurance industry. 1 a. 3 Internet Marketing The potential audience for Internet usage is very high and more and more homes and businesses are connected to the Internet. The Internet has revolutionise d the way in which transactions are done, and has reduced transaction costs for life assurance companies, when sales reps formed a major part of the selling process.

The internet is also available 24 hrs a day, 7 days a week, which gives life assurance companies flexibility in terms of getting the men across to potential clients. Therefore the Internet improves the service information and advice given to customers. There has been a reduction in the number of sales reps in the life assurance industry, due to internet marketing providing the following benefits: - relatively inexpensive to create compared to high costs associated with sales reps. equal access opportunities quick and easy to refresh and update, therefore saving time and money with training open all hours with no constant support staff required can provide cost efficiencies e. g.

collecting information via the web reduces staff for other activities. global reach the Internet can act as an aid to the selling process rather than a replacement. Using telemarketing and Internet marketing can provide a sales manager with sustainable competitive advantage. Question 1 b 1 b. 1 The life assurance industry is perceived to be ridden with con people, as a report by the securities and investments board (SIB) suggests that 1. 5 million people may have been wrongly advised to opt out of company pensions.

This reflects badly on sales management and sales people involved in the life assurance industry, as motivation of selling in the industry is perceived as being commission based advisers who offer unsound advice for the purpose of making a sale. Due to the public unease with regards to the financial services the Personal Investment Authority (PIA) was set up in 1994 to regulate all types of investment business conducted within the private sector. The services offered by PIA ensured that investors received appropriate investment advice from a firm regulated by the PIA. The PIA also ensured that members operate to the highest professional standards including life assurance and, provides a mechanism for redress (PIA Ombudsman) if members provide poor investment advice. Taking into consideration the negative of the sales person it is important that the selling techniques and sales approaches are improved in the assurance industry, to win back customer confidence. 1 b.

2 Selling services The selling approach of life assurance will depend upon the customer needs, and because life assurance in an intangible service, the task of selling life assurance is more difficult than selling services. Therefore the providers of the services must be highly trained in sales techniques and sales negotiation. Also attention should be paid to image building, so that the life assurance company is seen as stable reliable institutions with a friendly and no-intimidating attitude, therefore creating an atmosphere of trust between the buyer and seller, thus implementing a customer benefit approach. For the customer benefit sales approach to be successful it is important that the company selling life assurance has a customer based structure, which is designed to reflect the needs of the different types of customers.

The reason for implementing this strategy is due to the fact that financial institution selling life assurance are now full financial institutions, offering a range of services. This approach has an attractive logic on the sales representative can develop detailed industry knowledge and form long-term personal relationships with the customer. The customer based sales approach ensures a better match between the support and expertise needed by the customer and the skills of the sales rep selling life assurance. Research by Pards (1997) suggests that the customer based approach from the customers perspective found that, due to developing a relationship between the buyer and seller, meant the sellers attention being focussed on the customer, which gave real added value. This make the selling of life assurance a more augmented product, as more is on offer than the service itself.

1 b. 3 Relationship selling Selling techniques in the life assurance industry can be improved substantially by developing relationships with customers, so that a relationship is based on trust, where the life assurance company having full regard of customers need this will enable customer retention, as life is about acquisition and retention. The relationship with the customer is the most important asset a company has, therefore the sales manager must understand what happens when the sales rep meets the client. This will allow the sales rep to identify the relevant stages in consumer behaviour and adapt to the most appropriate selling approach. By implementing this tactic it will perceive the life assurance company as having similar values as the customer, allowing the relationship to develop further.

As mentioned earlier, that research from Pardo suggested a customer-based approach, as it gave the selling approach a value added dimension. To take research from Pards even further, so as to enhance the customer benefit approach and relationship selling, by companies offering life assurance to implement follow up and account management, as the relationship with the customer stills needs to be cultivated and managed. In order to maintain the relationship, the sales rep or even a customer care manager will ensure that the client is regularly sent new product information. Personal contacts maintains relationship with customers, and as clients will be passing over confidential information for assessment, this will be made easier an there will be a history of experience, trust and respect which has been built through personal contacts. Question 2 No matter how good the life assurance is or other promotional elements are, the sales rep has to show the customer the benefits of dealing with the life assurance company that is why the management of the sales force is very important. Sales management will provide an essential link between the organisations strategic marketing plans and the achievement of sales objectives by the sales reps.

Therefore it is essential that the sales manager ensures that the selling effort fits with the overall tasks specified in the marketing plans and strategy. 2. 1 Sales planning and strategy The sales plan will outline the objectives of the selling effort and details of how the plan should be implemented. The plan will arise from the marketing objectives set for the life assurance products and market share etc. The sales plan will interrelated by three factors (i) sales objectives (ii) sales organisation and (iii) sales coverage and deployment. 2.

1. 1 Sales objective A general sales objective is the sales target to be achieved by the sales force as a whole, and a more specific objective will be for individuals within the sales force. Sales objectives are essential to measure progression and motivation of the sales force selling life assurance. The general sales objectives will be a quantitative measure, i. e. to gain 30% of life assurance industry market share by 2002.

This is to avoid the dangers of chasing low profit or to lesson the temptation to reduce margins to generate more sales volume. The life assurance sales rep as an individual will be given sales quotes, i. e. x number of life assurance polices to be sold in a year.

However, due to the negative image of the industry, performance targets in terms of follow up sales calls, call frequency should be implemented, to develop relationship with the client. 2. 1. 2 The sales organisation The sales organisation of the company selling life assurance will already be created, therefore the sales manager will have to organise the sales force in terms of a customer benefit approach, as described in question 1 b. By developing relationships with customers so it becomes easier to sell other financial products and services to them. 2.

1. 3 Sales coverage and deployment The life assurance market is very large, therefore the sales force should be sufficient to cope with the market. A number of factors need to be considered her, such as calling frequency required for each customer, the sales representatives time division between administration, selling and repeat calls. Taking these factors into consideration, the size and deployment of the sales force will not be fixed, but varied according to opportunities. 2. 2 Telemarketing The growth of telemarketing along with increasingly cost per personal sales calls have made companies selling life assurance policies think more carefully about when, where and how to employ the sales team.

Therefore calls centres will be created and a system, which is used by Abbey National Direct which recognises the telephone number from which an inbound call originates, and can route the call to the staff member who dealt with that customer the last time they called. This will allow personal relationships to develop with the customer and the life assurance seller as well as providing consistency. As the one to one relationship develops it becomes easier for the staff member to sell other financial products to that customer i. e. PEPs and Equity Plans.

Outbound calls will also be made, as a care call, or to take any corrective action, which will aid the life assurance policy holder to be loyal. Depending upon the distribution channels used for selling the life assurance polices, call centres can be within the company or specialist call centre can be hired to handle outbound telemarketing. A company called ADS Telemarketing provides a range of services including data enhancement, mailing follow up, customer reactivation, lead generation, appointment selling, market research and brand development. 2. 3 Methods of distribution Due to the vast range and complexity of product channel combinations, there are six main types of channels used for selling life assurance products: 1) The independent financial advisor.

(IFAs) 2) Direct sales forces. 3) Appointment representatives 4) Bancassurance 5) Mail and advertising 6) Telephone For the purpose of selling life assurance three main distribution channels should be implemented. Bancassurance Mail and Advertising Telephone Reasons for not using distribution channels 1, is that there has been accusations that IFAs sold policies on the basis of most lucrative commission. Reasons for not using distribution channel 2, is that their loyalty changes depending which company they work for. There is also the danger of high-pressure sales. Reason for not using distribution channel 3, is because Bancassurance is preferable, as they sell only life assurance products, which will be the company I am the sales manager of.

Mail and Advertising reflect the importance of marketing, as the life assurance industry faces growing competition for peoples savings from other financial institutions. Marketing will also help in cleaning the tarnished image of the life assurance industry. 2. 4 Direct Marketing Direct marketing has grown to be the significant element of the communication mix, as it will add on extra dimension to elements of the promotional mix.

My purpose for using direct marketing will be used as a direct response mechanism, as we will engage in a number of TV and print advertisements. This strategy will be used as a means of attracting and retaining customers. Our direct marketing activities will consists of direct mail, telemarketing, Internet marketing and direct response mechanism. The biggest benefit of using direct marketing is to build an on-going relationship with an individual customer, so that the customers trust and confidence grows with my company. We will also capitalise on this by analysing the customer needs and purchasing habits in order to tailor future offerings to fit that customer profile.

Direct marketing will also enable to create loyal customers, as we have entered into a dialogue with them, and have their needs and wants met through tailoring offerings, which will make it hard for competitors to poach them. Direct mail will allow us to communicate at length and in depth with our customers personally. The Internet will make easier for us to locate our target segment, and also it will be cost effective for us to build direct responses mechanisms, as a higher proportion of the audience reached will be interested, then a relatively high response rate can be expected. 2. 4.

1 Sales costs Communication is becoming very expensive, therefore direct response advertising, followed by direct mail activity will prompt the customer into action, which will be cost effective for us. 2. 5 No matter how good the life assurance is, or other promotional elements, the representatives will have to show the customer the benefits of dealing with our life assurance company. That is why management of the sales force is very important, which is part of the sales plan involving recruiting, training, management, motivation and compensation of my sales force. 2. 5.

1 Recruitment It is important to begin recruitment by developing a profile of the type of person we are looking, which will lead to a list of ideal skills characteristics of the representative to be recruited. 2. 5. 1. 1 Job Analysis The job will involve selling, as well as concentrating highly on customer relationship management. The applicant should therefore be able to perform sales tasks in line with company policies.

2. 5. 1. 2. Manpower After the job analysis, manpower planning is important, in order to achieve the organisations objectives. The life assurance market is huge, therefore staff will be required, to perform personal selling activities, telemarketing and Internet marketing activities.

The most commonly used formula to asses the size of sales force is described below as an example. The Inputs C = number of customers F = average frequency of calls per customer year L = average number of calls per representative day N = average number of selling days per representative per year The Calculations Stage 1 T = C x F = total number of calls per year Stage 2 D = T / L = total number of selling days required per year Stage 3 S = D / N = number of sales representatives required Source: Russel, F. A (1997) Textbook of salesmanship It will not be necessary for new recruits to have experience as they will be trained in our own methods, as experienced sales reps may come with bad habits and other organisation weaknesses. 2. 5. 1.

3 Source of Sales recruits Recruits will be mainly from educational establishments. Reason being that a relationship is developed between the company and the new recruit, which will help enhance the relationship of the sales rep and the customer. 2. 5.

1. 4 Selection The selection process will be designed to draw out evidence of the ability that the candidate can perform the specified tasks. In view of making the right choice, in addition to normal interviews and reference procedures psychological tests to access the personality of the candidate as the job entails a lot of customer interaction. 2. 6 Training The recruitment process only provides the raw material, therefore training will be given for better sales performance. Training will not only be for new recruits, but for existing staff, even well established staff for skills refinement and upgrading.

For new recruits training will given in knowledge of life assurance products, so they understand what they are selling. Selling skills are also important, therefore depending on where the recruits are based i. e. call centre, on the road, appropriate training will given to improve standards in the selling of life assurance products, in a customer benefit approach. 2. 6.

1 Competency testing for sales people. All people involved in selling life assurance products must take an independent test to assess their level of knowledge of the life assurance industry and its products and services. Anyone who actively engages, advices or assists in completing a proposal for a member of the public has to pass the course. This includes sales staff of life assurance companies who give advice. The only exemptions apply to holders of certain equivalent or higher qualifications (eg. A.

C. I. I) or sellers of limited products ranges. 2.

6. 2 Registration Anyone who sells a life assurance product is included in a central Registry of Life Assurance Sales people. The objective of the register is to protect the customer by establishing and maintaining sales standards and to improve the standing of those who sell life assurance. The included on the register are: Sales staff employed by the life assurance company Anyone assisting or advising the public. The register includes information on the name, address, and date of birth of each salesman as well as his or her status, qualifications, details of current employment. Each salesperson is also assigned an individual registration number which is carried with him / her from one employer to another.

Every proposal form filled out by the salesperson will quote the number. 2. 7 Management Having a mixture of telemarketing, and having a team of sales reps visiting the customers will accomplish the management of the sales force. The telemarketing will be more focused on building relationships. Territory management will be configured and sales reps will be assigned to certain territories. Potential customers will receive direct mail, which will require a response from them to matters further.

Territory management will allow us to strengthen our customer relationships as 9/10 repeats sales occur due to good relationships. It will also help in evaluating the sales force and co-ordinating selling with other functions. The sales reps time will be structured to maximise productive time and minimise wasted time i. e. maximising customer contact time, which will allow the company to maximise sales and profit potential of each territory. 2.

8 Motivation Any sales effort requires motivated sales people, as the motivated seller will sell better. New recruits joining the sales force will be sufficiently rewarded for their achievements so that are not easily poached by the competition. Besides financially based motivation factors other methods will be used. Team activities will take place to create a sense of belonging to a team can be important. Bringing the representatives back to HQ for regular team meetings, seminars and briefing will help foster team spirit. This will allow an opportunity for the team to share the views and experiences.

Training programmes will also play a part in reaching employees that they are valued. Representatives whether on the road or in the call centres will be involved in managerial activities, such as developing their own sales plan, an it will give the sales rep a greater sense of control over their own working as well as there is an open an co-operative management. Mechanisms for regular feedback will also be devised through a direct data link, which will make them feel they are offering more than just selling expertise. I as the sales manager will create healthy rivalry between sales rep, through sales contests, items that are seen as valuable and achievable. Contest will not be focused on sales figures, but on a range of important activities, such increased penetration of existing accounts.

2. 9 Compensations The compensations method to be employed will be straight salary compensation plan, as it is more appropriate on our aim is to encourage the representation to spend time developing relationships with the customers. However bonuses will be awarded similar as a profit sharing scheme. This is to find an appropriate balance between income and incentives. Fringe benefits will include free medical insurance, a generous expense account, paid holidays and sickness leave, to keep the staff happy.

2. 9 Performance Evaluation Monitoring and controlling an individuals selling activity is vital therefore there will be a systematic means of gathering account information on a weekly basis from the sales rep. From a strategic point of view, this will help is assessing the general impact of marketing policies at account level. Performance will be measured in qualitative and quantitative terms, which will allow me to find explanations for a particularly good or bad performance, which will indicate the need on training or motivation. Section B Sales Force automation Because the cost of maintaining a direct sales force is high, sales force productivity is an important issue for sales managers. In many industrial organisations, sales force costs are the largest single marketing expense item.

A typical sales rep will have a car, mobile phone, expense account and bonus scheme, but there are limits to the number of customers that can be met in any particular day. Many organizations complain that: . Sales force effectiveness is difficult to measure; . Potential business leads slip through the net; . Vital customer information remains hidden on scraps of paper or in the sales representatives head; . If a sales representative leaves the company, important customer information also leaves; .

Sales representative are always busy but the sales results are often mediocre; . Bonus schemes fail to encourage sales teams to greater efforts. In response, companies have looked at various methods of automating the sales force (SFA) to improve productivity and increase sales. The technologies and tools that companies use to automate their sales forces vary significantly, it is like creating a virtual office in the car. The Yankee Group, a consultancy company, has identified three separate generations of SFA tools: . Generation 1: personal information and contact management.

The first generation of SFA tools, products such as ACT! , Goldmine and Maximizer, was designed to help sales representatives to manage contacts and time and increase their selling effectiveness. Such powerful time- and contact-management tools had not existed previously and were accepted quickly and enthusiastically... Generation 2: networked contact management. The second generation of tools was essentially networked versions of the first, connecting the contact-tracking database and personal productivity tools of the sales force with the corporate network, contact and prospect database. Sales representatives were equipped with laptop computers that they synchronised or replicated with the corporate network each day... Generation 3: technology-enabled selling.

The third generation of SFA has its primary focus on making the sales force effective where it matters most: in front of the customer. The new generation of tools allows sales representatives to configure products, prepare proposals, give illustrations and quotes, and track orders, using their laptops. The benefits of SFA can be significant. HP foods, for example, which sells a variety of food products through shops and supermarkets, replaced its traditional sales force of 100 representatives with 12 business development executives equipped with mobile phones and computers, thus making significant cost savings without compromising service quality. The business case for automating the sales force does not have to stop with the sales representatives. If it is extended further into the organisation, the benefits are far more wide reaching.

Campbells Soup, for example, invested $30 mn in SFA for some 1000 sales representatives, sales administration, marketing, operations and IT employees in the USA and Canada. The New Jersey-based company, with customers including supermarket chains, other grocery retailers and food service vendors such as KFC and McDonalds, targeted savings of more than $18 mn annually through shorter order-cycle times, more accurate invoicing and better control of funds used for product promotions. Campbells efforts cut across a wide range of functions; distribution, pricing, invoicing, settlement and accounting. SALES MANAGEMENT BS 535-3 FROM: FAY AZ PATEL TO: JOHN WARD.