This series takes concepts learned in an MBA program and adapts them for easy comprehension by scientists without a management background. This is currently the 12th part of the series and the fifth in an introduction to marketing.
In our introduction four chapters ago, we discussed "promotion strategy" as one of the four major facets of marketing. We defined promotion strategy as figuring out how to advertise and sell your product. When we discussed promotion strategy in more detail, we learned that it could be divided up into two large sections: mass marketing strategy and personal selling strategy.
We learned that the first choice you must make in defining your promotion strategy is whether to concentrate on "personal selling" (selling your product door-to-door) or on "mass marketing" (announcing your product to the world). Although people usually want to do both, we learned that which one you focus on will depend on the product you are trying to sell. We used the example of a multimillion-dollar electronic imaging product as the perfect product for a personal selling strategy.
As a scientist, you may be interested in the personal selling part of promotion strategy for two reasons. As the entrepreneur who has invented this multimillion-dollar electronic imaging product, you might be interested in figuring out exactly how you would sell it using a personal selling strategy. As the scientist who has worked in the field of electronic imaging and is sick of "the bench" because you want more personal interaction in your job, you might be interested in personal selling as a career choice: What kinds of things do you need to know in order to become an effective salesperson? We're going to tackle both in this series: This month, we'll discuss it from the entrepreneur's point of view; next month, from the salesperson's.
Designing an Effective Personal Selling Strategy
A personal selling strategy works best for a complex, technical, unique, customized product with a poorly informed client. That's why our multimillion-dollar electronic imaging product is perfect. It's so complex and technical you need a trained, informed person to explain it to its highly specialized customer. It's likely to have to be customized for each individual sale, and its client doesn't have the time to read up on all the different ones on the market and why yours is better (and is thus uninformed).
To address all of these unique needs, you have to design your personal selling strategy to have three key elements: a knowledgeable salesperson or sales team, an understanding of your client, and a sales structure designed to give the salesperson enough power to make an irregular sale but still get rewarded for it.
The salesperson is the key to your personal sales strategy. So when you're recruiting salespeople, you should be willing to recruit the best and expect to pay them a premium. There are two routes you can follow: You can hire someone with a good sales background and teach them about the science (or product); or you can hire someone with a good scientific background and teach them about sales. Usually, the choice you make will depend on how complicated your product is and who your customers are. An electronic imaging product is likely to be pretty technical, and your customer will likely be a doctor or a scientist, so you'll want a scientist to be your salesperson, both for credibility reasons and to give the customer what they're looking for. If the person buying your product is a hospital administrator, you might think about hiring someone with sales experience instead, because the administrator will be used to buying from nontechnical people and will likely be more bottom-line oriented.
The salesperson is your only link to the client. This means that they need to know the product inside and out, so that when the customer has a question or an issue with the product, it can be addressed immediately and not shuffled off to another staffperson. They also need to know the competitors' products, so they can give accurate representations of why your imaging technology is better. So to allow the salesperson to do their job well, you need to give them lots of information. You also need to give your sales force considerable power. Power to make a deal. Power to say "yes" to needed product customizations. And, of course, the power to say "no" to a deal that won't make the company money.
Remember, also, that the salesperson is more than just a sales agent: They're a research and development tool. Their interactions with customers give you more information about what modifications need to be done to your product than any other source. They're market intelligence (because they know what other products are being sold, and why) as well as a way of making your own product more customer-oriented.
Throughout the marketing section, we've used the phrase "Know your client." It's just as important here as anywhere else. By understanding what your client needs in a product, you can better give the salesperson the tools they can use to fulfill that need. By understanding what a customer wants in a salesperson, you can tune your sales team to be just that. Do they want a half-hour presentation or just a 12-second pitch? A customized product they help design (and maybe write a paper on) or a ready-to-use product, in their lab, tomorrow? Or maybe the purchaser isn't the user at all: A hospital administrator makes the purchase decision, and a doctor uses the machine. Understanding this will help keep you from wasting salesperson time on selling the machine to the doctor, who's not authorized to buy it anyway.
The Sales Structure
Remember: In a personal selling strategy, your salesperson is your best friend. But, depending on the system you've set up for them, that person can also be your worst enemy. Determining an appropriate incentive system for a sales force can be the most difficult job you'll have as a business person. The key is to keep your sales force motivated, without any loopholes that they can use to take advantage of the system. For example: By giving quarterly sales quota-based bonuses but also giving the salesperson the authority to make big discounts, chances are, you're going to get a lot of sales late in the quarter (as the salesperson desperately tries to make their quota). But you'll also see a cost to those sales: Chances are, they'll be discounted quite significantly, affecting your company's profits.
Determining a good incentive system for your sales force is very difficult and depends very much on what you're trying to do and the product you're trying to sell. You can reward the sales team based on short-term sales goals, long-term sales, repeat sales, customer support, number of new prospects, underbudgeted expense reports, or a whole lot of other things, but chances are, you'll have to fine-tune this structure as your business evolves, to emphasize what you want your sales force to do. Above all else, remember that your sales force isn't stupid and that they spend about as much time thinking about their paycheck as they do trying to sell your product, so the incentive structure you design will determine the behavior your customer sees.