Reference no: EM132216553

To fully appreciate the positive potential of personal selling in the promotional mix, it helps to first understand the downsides of this increasingly rare form of marketing. Think about just these few risks:

Cost – in some industries, the cost of a single sales call can be as high as $300. This includes compensation for the sales representative (salary, commission, benefits), plus sales support materials, entertainment spending, telecommunications and more. This can only make financial sense in a situation where “big ticket” products and significant sales revenues are involved.

Training – especially for technical products, extensive product training is required, as well as training in sales and customer service techniques. The costs of formal training programs can be steep, especially when development, delivery, and travel costs are considered.

Turnover – even among professional sales people, job turnover can be high as low-performers depart and high-performers seek more lucrative commission plans. High turnover contributes to difficulty in building and maintaining strong customer relationships.

Despite these negatives, personal selling is still a common form of marketing in many industries, including pharmaceuticals. Let’s think about why pharmaceutical sales reps are effective – starting with a review of the Career Profile for a Pharmaceutical Sales Rep.

Selling pharmaceuticals requires better-than-average intelligence and education.

Extensive training is required to understand and effectively communicate the data, benefits and risks associated with a specific pharmaceutical. It is critical that questions be answered quickly, confidently and completely, as can only be done face-to-face.

Both insurers and individual physicians may act as “gatekeepers” who stand between the pharmaceutical company and potential customers. This means it is even more important that a pharmaceutical sales rep be able to build positive, long-term, trusting relationships with decision-makers in his territory.

The relatively high compensation for pharmaceutical sales reps is offset somewhat by the rigors of a career as a traveling “road warrior.”

In a 2013 Wall Street Journal interview, Joseph Jimenez, CEO of Swiss drug maker Novartis AG, concludes that even in the lucrative pharmaceutical industry, there are pressures to reduce sales and marketing costs while increasing research & development spending. In an era of health care reform, centralized purchasing, government regulation and growing market share for generic drugs, it may be difficult to justify the costs of a personal selling approach.

As a marketer considering the use of personal selling, ask yourself a few critical questions: Can I afford personal selling as a promotional approach? Will the incremental revenues offset the significant costs? Does my product offer specific benefits that must be demonstrated or discussed to be fully understood? Are there long-term profits likely from building an on-going relationship with the customer? Only if you can respond “yes” to all of these questions should you consider use of this expensive yet powerful selling and promotional tactic.

Assignment:

Although personal selling has become a very expensive marketing tactic, it still can make sense in certain very specialized situations. Think about the last time you met face-to-face with a sales representative: Were you buying a new car? Considering a change to your life insurance? Maybe attending a jewelry party at a friend’s home? In each of these situations, the availability of a sales representative to ask and answer questions, or to demonstrate the features and benefits of the product/service, can add value to the interaction.

Think about a specific time (recently, please) when you were the customer in a personal selling situation. It will be more fun if you choose a particularly good or particularly bad sales experience!

In your first post, describe the process of the “sales call” – think about where, when, how and why it happened. It’s especially important to comment on how the sales call was initiated (did you reach out to the sales rep, or did the rep contact you?). Then, describe:

What functions did the sales representative perform during your time together? Think about whether s/he was trying to understand your needs, build rapport, describe features/benefits, “close the sale,” or other activities.

What were your reactions to the sales rep’s efforts? Do you believe s/he added value to the transaction, and if so, how?

If the roles were reversed, and you were the sales rep in this situation, what might you have done differently or better?