6. Models for Sales Management Decisions

Excerpt

Personal selling is a critical marketing instrument for acquiring and retaining customers in many industries, e.g., industrial products, financial and business services, medical and health services products, etc. Zoltners et al. (2008) report that by current estimates there are over 20 million full-time salespeople in the US, including over 15 million engaged in direct to consumer selling for companies such as Avon and Amway. Salespeople constitute a channel for two-way communication and social interaction with customers as well as a conduit for collecting market intelligence. Personal selling is the most effective way, especially in business markets, to learn about and assess a customer’s needs, inform customers of standard and/or customized solutions, detail and demonstrate complex high-value products, handle objections, close sales and provide long-term continuing service. However, the high impact of sales forces on firms’ sales comes at a high cost. Dartnell’s 30th Sales Force Compensation Survey: 1998–1999 reports the average company spends 10% and some industries spend as much as 40% of their total sales revenues on sales force costs. In total, the US economy is estimated to spend $800 billion on sales forces, almost three times the amount spent on advertising in 2006 (Zoltners et al. 2008). …