Personal selling is a process in which an individual salesperson works one-on-one with a customer to try to match a product to her needs. This sales discipline is practiced by many companies in the retail industry and in business-to-business sales. The role of personal selling is an important part of many business models.
Lower Marketing Investment
One of the reasons for the importance of personal selling for many companies is that it allows for lower costs. With a personal selling arrangement, the company does not have to put many resources into marketing. Instead, it can rely on salespeople to go out and sell products.
The sales representatives are responsible for marketing their products. When the sales reps bring in sales, they are paid a commission. When compared with the relatively high cost of marketing, this can be an attractive option for businesses.
Developing Customer Relationships
Another benefit of personal selling is that it helps develop relationships with customers. When a company relies on mass marketing and Internet sales, it may not be able to develop an ongoing relationship with customers. By comparison, when a personal selling process is used, the sales representative can get to know the customer on a personal level. This can help create customer loyalty with the prospect, which can lead to future sales and better profit margins.
Gaining Customer Referrals
When companies use personal selling as a way to sell products, they often have more referrals than other companies. When salespeople are responsible for bringing in their own prospects, they develop a knack for getting referrals. They do this by directly asking customers for referrals and by delivering superior service.
When a customer is happy with the service she receives, she may be willing to give a referral to a friend or family member. Referrals are desirable because they do not cost anything and they lend credibility to the salesperson.
Explaining the Products
Some businesses rely on personal selling because of the complex products that they have to sell. Some products must be explained before customers are likely to buy them. This means a personal sales rep must be employed to demonstrate the product to the customer.
Once the product is demonstrated, the customer begins to see how he could use this item. This strategy is often employed with high-end items that have high profit margins.
Personal Selling Examples
The best known personal selling examples are those involving car sales. While customers are increasingly coming on to car lots with an idea of exactly what make and model, even the color, they want thanks to sites like Car Max and Auto Trader, many customers still visit lots knowing only that they want a coupe or a sports car in a certain price range.
The car salesperson then takes the customer's stated price, style and other specifications and allows her a test drive of multiple vehicles to help her choose the right vehicle for her needs. Because vehicles are such a major purchase, it makes sense for auto dealers to offer personal selling techniques to help customers select the right vehicle for their budget and interests.