Effectiveness of Hard-Sell Techniques for Retail Product and Service Sales - Essay Example

?Effectiveness of Hard-Sell Techniques for Retail Product and Service Sales PURPOSE OF STUDY The purpose of this study is to determine the effectiveness of hard-sell techniques, as compared to other sales methods, in a retail setting. This is outside of product ranges that are traditionally associated with high pressure tactics, such as car dealerships or expensive electronics, and so customer responses to the technique may vary from responses in those areas. This study will attempt to show what effect changing their sales techniques could have on a business' sales revenue and customer perception of the business. A company could use an assessment of this method to decide if they should train their employees to use more aggressive sales methods and predict the revenue stream due to that change. OBJECTIVES OF STUDY Measuring the effectiveness of a sales or marketing technique requires comparing it against other methods under similar conditions. This study will have three major objectives to achieve the purpose of comparing hard-sell techniques to other sales techniques. The first objective is to define and describe what a consumer would consider hard-sell techniques, based on previously extant literature and studies. The second objective will then be to assess customer opinions of and responses to salespeople that use the previously-defined hard-sell methods. Finally, the third objective is to compare those responses with responses to sales pitches that do not use those techniques and analyse the results to determine if the aggressive tactics are as or more effective at closing the sale. LITERATURE SEARCH Academic sources define hard-sell techniques as those sale tactics that tell customers to take action and use forceful language (Englis, 1994, pp. 143). A hard-sell technique sets up a framework between the salesperson and the customer “where there is a 'winner' or 'loser'” (Meredith 2009, pp 36). Hard-sell salespeople may even resort to low-level deception in order to convince the customer to buy right away, telling the customer that there is another interested buyer who will purchase the item the next day or that the price the customer is being offered is lower than the price usually approved by the sales department leadership. They are selling the product they have, not necessarily the product the customer wants or needs (Pine and Davis, 1999). Generally, what a consumer refers to as a hard sell approach involves pushy and possibly rude salespeople, overly long sales pitches, and multiple demonstrations of a product they have already turned down (Consumer Affairs, 2002). Alternatively, the low-pressure or “soft sell” salesperson focuses on forming a relationship with the customer (Meredith 2009, pp 36). These techniques advocate listening to the customer, asking the right questions, and waiting for the customer to request a solution before offering a product (Rosen, 2007). According to an analysis by Pine and Davis, manufacturing of custom products to fill an individual customer's needs is the future in many industries (1999, pp 263). Customization would be the epitome of soft-sell techniques, as exactly what the customer requests is what the salesperson could provide. What is not covered in their study, however, is whether the availability of customization will replace the need for strong sales tactics; simply being able to solve a customer's problem does not guarantee a sale. When using a hard-sell method, the salesperson must be careful not to ignore what the customer needs in the interest of moving product; but a less aggressive salesperson may take too long in offering a specific solution and lose the sale in that way (Rosen 2007). Both of these failures to please the customer could hurt repeat business. Customer satisfaction, with not only the product but with their experience of the sale, is the key determinant of whether the customer will return for future business, recommend the product or service to a friend, or purchase upgrades and other services (Ahearne et al, 2005). Customer interactions that involve hard-sell techniques usually end in one of two ways. One, the salesperson intimidates the customer or the customer becomes aware of an omission or problem with what the salespeople told them, hurting repeat business. Or in the second case, the customer develops a positive relationship with the salesperson despite the sales tactics used (Rotemberg, 2010). In neither of those endings, however, does Rotemberg indicate that the aggressive technique was the right one to choose (2010). High-pressure sales need to show a significant benefit in sales revenue in order to be worth the risk and the effort involved. Research has shown that customers who might otherwise have had a positive feeling about a salesperson or business due to a personal connection lose the benefit of that connection after a negative experience (Jiang et al, 2009). If a salesperson pushes too hard, he or she may drive away an otherwise interested customer. Customers who feel they have become trapped in the sales environment, for example when a door-to-door sales enters their home and does not leave, often do not only refuse to buy the product but may inform others about their poor experience (Consumer Affairs, 2002). On the other side of the equation, McFarland found that salespeople who made use of hard-sell techniques, especially those he defined as “coercive”, experienced much higher levels of job-related stress (2003). There do exist cases where aggressive sales tactics are the better option. Companies competing against the holder of the dominant market share in their industry must be aggressive in order to make a foothold. In these cases, the salesperson must use every resource at their disposal to convince a customer to make the switch from a widely-known and trusted company to their smaller, lesser-known product (McHugh, 1996). Especially among older consumers, even a hint of unethical tactics can drive away a sale (Ramsey et al, 2006). Consumers often link morally grey hard-sell practices with general dishonest practices of a business. This concern is not unfounded, as, proven at least in the United States, a salesperson's individual opinion of ethical behaviour is often positively correlated with an organization's level of determination to maintain quality and standards (Weeks et al, 2006). Unethical and unfair business climates, such as overly competitive commission packages, often result in unsavoury practices by salespeople, due to a lack of loyalty from the employee to either the business or the customer (Trevino and Weaver, 2003, pp 226). METHODOLOGY Customer opinion and response is at the core of this study; therefore, the research methods used will focus on direct interaction with consumers. This interaction will be in the form of both observation and surveys. The sales types that fall under the definition of “hard-sell” tactics will be determined using a literature review. Due to the fact, again, that opinion is the cornerstone of this study, the literature research will also cover sources such as customer complaints about business practices, news articles, and product reviews. In attempt to mitigate some of the time and expenditure required for sufficient questionnaire response and observation, the research method will attempt to simultaneously ascertain a field study of actual consumer responses to a sales technique and an opinion survey asking for customers to give their conscious opinions of those tactics. The surveys will be handed out on at least two occasions, both at the same day of the week, time of day, and location, in order to minimize the effect of other variables on shoppers' moods. During the first handout, the researchers will ask each customer who approaches them if they are interested in filling out a customer opinion survey, offering only that the information would be helpful to the researcher as an incentive. The second time, the researchers will use a more aggressive approach, including going up to customers passing by, explaining how the results of a survey can benefit that person in particular, and offering a tangible incentive, such as food or discount coupons. The questionnaire will describe four scenarios and ask customers to say how likely they would be to buy the product based on that sales pitch or experience. One scenario would be an extreme hard-sell pitch. There would be an opposite scenario describing a very low-pressure situation, possibly just a salesperson who greets customers and shows them the location of a product without further elaboration. The other two scenarios will be more moderate examples, but both need to be clearly able to be classified into hard- and soft-sell. Appendix 1 shows an example of the beginning of one possible questionnaire. Using both the opinions and responses will allow figuring which technique will bring the most sales and also help determine what effect those techniques will have on customer perception of the retailer. A second researcher at the station should record data on the number of passing customers, the number of passer-by who agree to take the survey, and the number of returned surveys that are completed filled out. These numbers could be considered analogous to possible customers who pass by a retailer, customers who enter a store or engage the salesperson, and the number of actual sales made. Additionally, the researchers should mark the survey with either a plus or a minus to indicate if the person filling out the survey seemed glad to do so or irritated. This data is important because customers may avoid the location of a hard-sell retailer even after a sale is made if they feel overly pressured by the salespeople at that location, or they may tell others to avoid that location. This word-of-mouth could affect future sales and interaction with possible customers. Once data has been collected on an adequate sample size, preferably at least fifty complete surveys per sales type, the two data sets will be compared mathematically. The actual count data will be compared for each type of customer/possible customer to see if there is a statistical significant difference between the two sales types in customer response, and if so, which technique was more effective. Also, the walk-by count should be compared to the customer mood data to see if customer moods had any effect on the number of passer-by later in the day. This allows time for word-of-mouth to take effect among customers; if the sales tactics are causing customers to avoid the location of the researchers, negative moods early in the day should lead to lower numbers of people in the area later. Conversely, large numbers of positive experiences, especially those who felt rewarded by the incentives given, would lead to higher numbers later in the day. TIMELINE AND RESOURCES There are three segments to this project: literature review, primary research, and analysis. As the literature review involved in writing this proposal was extensive, the first segment is nearly complete. Additional research into the literature should not require more than ten days to complete. The most time consuming part of this project will be the primary research portion. Writing and editing the scenarios to be listed on the questionnaire is estimated to take about 10 days, plus or minus a few days to allow for multiple readers and revisions. Ideally, the questionnaire should be handed out for the same amount of time with the same environmental conditions each time. These sessions will be approximately six hours long each time; to allow for adequate data collection, this should be done four times, which would take four weeks. It is difficult to predict the amount of time required for analysis without first collecting the data. However, if it is assumed that the desired number of participants (fifty) is met, reading, verifying, and analysing the data would probably take about two weeks. If a larger sample is obtained, it would simply take longer to complete the calculations. If a smaller size is obtained, it may be necessary to return to the primary research portion of the experiment again, which would take another two weeks. The resources required involve manpower, location, and, obviously, copies of the questionnaire. The researchers will need to be set up in a central location with large amounts of foot traffic, but also have a slightly more private area for the participants to fill out the surveys. Each session will require at least two to three researchers. One of the researchers will be approaching potential participants or handing out surveys, one researcher will be responsible for helping participants actually fill out the paperwork, and the final researcher will be counting the number of people who walk past that do not agree to participate in the study. REFERENCES Ahearne, M., Mathieu, J. & Rapp, A. (2005) To Empower or Not to Empower Your Sales Force? . IN Journal of Applied Psychology, 90. McHugh, J. When It Will Be Smart to Be Dumb. In: Forbes, 1996. Consumer Affairs (2002) Consumer Complaints About Kirby UK. Available: http://www.consumeraffairs.com/in_home/kirby_uk.html (Accessed: January 13, 2011). Trevino, L. & Weaver, G. (2003) Managing Ethics in Business Organizations Stanford, Stanford University Press. Ramsey, R., Marshall, G., Johnston, M. & Deeter-Schmelz, D. (2002) Ethical Ideologies and Older Consumer Perceptions of Unethical Sales Tactics. IN Journal of Business, 70. McFarland, R. (2003) Crisis of Conscience: The Use of Coercive Sales Tactics and Resultant Felt Stress in the Salesperson. IN Journal of Personal Selling and Sales Management, 23. Jiang, L., Dahl, D. & Chattopadhyay, A. (2009) The Persuasive Role of Incidental Similarity on Attitudes and Purchase Intentions in a Sales Context. IN Advances in Consumer Research, 36. Rosen, K. (2007) What Sales Techniques Work Best? Available: allbusiness.com/ssales/selling-techniques/3878971-1.html (Accessed: January 13, 2011). Pine, J. & Davis, S. (1999) Mass Customization: The New Frontier in Business Competition United States, Harvard Business Press. Meredith, M. J. (2009) An Examination of Individual Differences in Communication-Related Social Cognitive Structures in Association with Selling Effectiveness. Ph.D. Dissertation. Graduate College of Bowling Green State University. Englis, B. G. (1994) Global and Multinational Advertising New Jersey, Lawrence Erlbaum Associates. APPENDIX 1 Questionnaire Scenario 1: You are walking through a hallway between a group of stores, on your way back to your car after a day of shopping. You are stopped by a salesperson who physically steps into your path, offering you a sample of hand cream. When you decline, the salesperson insists, until finally you allow them to give you the sample. Once the sample is applied, the salesperson takes hold of your hand to show you how the product is working. They rub the cream around your cuticles, explaining how it works. They continue their explanation for several minutes, not releasing your hand until you've seen the demonstration a number of times on your skin. On a scale from 1 to 10, 1 being least likely, how likely are you to purchase a product of this type before an interaction with a salesperson? 1 2 3 4 5 6 7 8 9 10 On a scale from 1 to 10, 1 being least likely, how likely are you to purchase this product as a result of this interaction? 1 2 3 4 5 6 7 8 9 10 Please give a brief description of your reaction to this scenario. How do you view the salesperson and the business they represent? Scenario 2: You have entered a large superstore. Upon entering the apparel department, you are approached by an employee of the store to ask if you need any help. When you decline, they give their name and tell you to come find them if you need anything. The employee then returns to other duties and doesn't speak to you again unless approached by you. On a scale of 1 to 10, 1 being least likely, how likely are you to purchase a product of this type before interaction with a salesperson? 1 2 3 4 5 6 7 8 9 10 On a scale of 1 to 10, 1 being least likely, how likely are you to purchase this product as a result of this interaction? 1 2 3 4 5 6 7 8 9 10 PERSONAL REFLECTION There are many difficulties I see in the study I am proposing. Key in the difficulties is obtaining the questionnaire responses. I must determine a location for this part of the study and then obtain the required permissions to set up at that location for the study. Additionally, I have to design a method for asking for participants that realistically compares to a sales method. Convincing someone to fill out a short survey is very different from convincing someone to spend their money on a product they may not be interested in purchasing. Added to these issues are those of creating a incentive method that will not cost me a significant amount of pocket money. The idea of performing an actual survey makes me apprehensive. I think I feel more comfortable with the idea of doing literature review-type research, instead of having to go out in the field and interact with potential subjects. Inherent in this type of research is the repeated rejections I expect, possibly people who will be quite rude and mean to me. I think I would prefer to avoid this sort of interaction altogether, but that is not a possibility when doing research on sales and customer reactions. Read More