Structural Steel Industry - Elements of Personal Selling Process - Case Study Example

Sales Management Introduction The sales process is essential in ensuring that a client is satisfied with the services and product offered by a seller. In this case, Structural Steel Industry (SSL) has supplied steel to Laredo construction which does not conform to Laredo’s specification. Instead of supplying purely domestic steel, SSL shipped partially Mexican steel. Since Laredo has already installed the steel SSI are required to take it out. This paper analyzes the SSI sales operation and management with an aim of finding out what caused the Laredo mistake. Analysis of the Problem Structural Steel industry is an organization that uses a Personal selling approach as opposed to advertising, publicity or Sales promotions preferred by other organizations. Personal selling is characterized by a number of pertinent factors. First, Angela, the sales executive is allowed to adjust the message to be given to Laredo Construction in order to suit the Informational needs of the client. From the case study it can be gathered that, SSL do not normally deal with domestic steel supply only. For Angela to convince Laredo to buy from them she must have adapted her sales message to fit Laredo’s informational needs. Secondly, Personal selling is more precise and focuses on the most promising lead in the market. According to Rust, Lemon and Zeithaml (2001), the precise nature of Personal selling comes from the recognition that all the customers do not bring about the same level of profitability to the organizations. According to Zeithaml, Rust and Lemon (2001), some groups of customers are just too costly to do business with and have no prospect of ever becoming profitable. In their views, it’s neither practical nor profitable for Sales organizations treat all customers equally. The personal selling philosophy recognizes that it is important to treat the top 20 per cent of your customers in a special way and aim to exceed their customer requirements (Zeithaml, Rust and Lemon, 2001). In this case study, Laredo Construction, is noted to be among Angela’s and SSL’s largest customers and therefore satisfying their customer requirements should be the largest focus for SSL and Angela. Thirdly, personal selling requires the sales executive to give more information to the client (Thomas, Mitchell S and Del Rossa 2007). In this case, Angela should have provided information about the possibility of a mix-up of domestic and Mexican steel, which would have meant Laredo construction would have undertaken more thorough Checks before installing the Steel in the San Diego site. Personal selling is also characterized by two way information flow, a characteristic noted of SSL’s business operations. In the case, it was found that most of the organizations staff are in constant contact with clients so they can know the specifications of the order and how to customize it immediately. However, in this case this two way communication seems to have failed as the production team was not aware of that Laredo’s steel order had been specified as domestic only. Angela as the Sales executive also failed to obtain, follow-up and meet Laredo’s requirement for Domestic Steel. The Third characteristic of Personal selling found in the case study is that it discovers the weakness and strengths of a new product and passes it to the marketing department (Thomas , Mitchell S and Del Rossa 2007). In this case, the weakness of SSL is obtaining a source(s) for domestic steel as they seem to be engaged with Mexican suppliers. Personal selling is also characterized by high-cost to the business than other forms of promotional mix. According to Thomas, Mitchell S and Del Rossa (2007), it costs more to hire and compensate highly skilled sales executive that can make a Personal selling strategy successful. The Goals of personal selling can be categorized into: looking for Prospects, convincing the prospects to make a purchase and keeping the clients satisfied. In this case focus is on keeping Laredo construction one of SSL’s steels major accounts satisfied. According to Thomas, Mitchell S and Del Rossa (2007), there are three types of people involved in Personal selling: order takers, order getters and support personnel. Order getters are defined as sales person who are involved in obtaining new customers or increasing sales to present customers. On the other hand, order takers are engaged in repeat sales, and their most important task is ensuring current customers remain satisfied. In this case, Angela the sales executive is an order taker as indicated by her comment that the manufacturing department should have known it was a federal job and thus required domestic steel. This shows that Angela had worked with Laredo Construction before and is aware of their dynamic specifications. In the case we are also told that Laredo was one of Angela largest accounts. In this case the support personnel include the engineers who were supposed to check whether the shipped steel was indeed domestic steel. Elements of Personal Selling process According to Ho (2012) the Personal selling Process is a seven step process, which includes: Prospecting and Evaluating Preapproach (Preparing) Approaching the Customers Making presentations Closing the Sale Following Up In this case the Personal selling process has failed on the Follow-up stage. According to Ho (2012), the goals of Personal selling are Making sure customers are satisfied in the short term Making sure customer makes referrals Motivating the customer to make a repurchase decision To prevent cognitive dissonance. Surprisingly, SSL has failed to follow-up and satisfy Laredo’s specification despite using a major account management approach to give special attention to their major customers. SSL’s major account management approach has seen the organization adapt its customer’s organizational structure to respond to the needs of its major customers such as Laredo Construction. Major account management involves the practice of engaging team to ensure important customers are satisfied (Guenzi, Pardo and Georges 2007). Its aim is to build mutually beneficial, long-term cooperative relationship with these customers. The Major accounts management approach is apparent in the handling of Laredo’s order. SSL has appointed a project manager, Mary Longren to handle Laredo’s project (Guenzi, Pardo and Georges 2007). Laredo’s account offers High possibility of future business and thus deserves a lot of attention from SSL. However, the team chosen to deal with Laredo’s project seems to be poorly coordinated. When the CEO asks Mary the project manager which engineer inspected the steel before shipment she is unable to identify the engineer. Furthermore, the Angela, the sales executive seems to have poorly communicated Laredo’s specification for Domestic steel for the San Diego project. Both the manufacturing and shipping are ignorant of Laredo’s specification for domestic steel. Therefore, it can be concluded that Angela the Salesperson in charge of the project is primarily responsible for the Laredo project mistake. Angela failed to communicate, Laredo’s specification for domestic steel. She also failed to make the necessary follow-up to ensure that her client was supplied with the steel he had specified. The rest of the team involved in managing the Laredo project is also responsible as they were supposed to be more knowledgeable about the project they were supplying steel for. To avoid future problems like the Loredo foreign steel mix-up, the sales team at SSL should adopt successful sales behavior proposed by Brent and Rogers (2007). Most clients admit to disliking salespeople, especially if they show a number of irritating behaviors. Cummings (2001) identifies one of these behaviors as failure to be knowledgeable about the customer’s requirements. According to Cummings most salespersons do not do their homework effectively. Secondly, some Salesperson’s are too pushy. Thirdly, some salespersons fail to make follow-up; one of the most negative traits a salesperson can posses. If Angela had made adequate follow-up with Laredo’s purchase, the mistake would not have occurred. In other cases, Salesperson’s deliberately mislead their customers into making a purchasing decision. According to Cummings (2001), most salespeople are knowledgeable and trustworthy but failure to make follow-up is their most profound weakness. Indeed, Angela knew that only domestic steel should be used in defense projects but she failed to relay this information to the rest of the team handling Laredo’s order. In so doing, Angela’s actions put the whole project in jeopardy. Sales managers have a profound role to play in ensuring effectiveness of their salespersons. There are a number of behaviors that salesperson’s should exhibit to ensure customers do not switch to competitors. According to Brent and Rogers (2007), research conducted among purchasing managers say that a good salesperson should exhibit the following behaviors: 1. He/she should be honest. 2. He/she should be aware of the product he/she is supplying. 3. He/she should be empathic to the customers’ needs. 4. He/she should communicate effectively. 5. Should advocate customer satisfaction. Angela as the salesperson for Laredo project failed to effectively communicate the product specification to the rest of the sales team. What could have been done differently? The adaptive selling behavior model has been suggested as a possible solution for salesperson to adopt in order to retain more customers (Park and Holloway 2003). Where salespeople are able to gather customer requirements and offer a tailored product, customer satisfaction is higher. In this case, Angela was able to identify Laredo’s requirement but was not able to adapt the final product supplied to Laredo to his specification. According to Park and Holloway (2003), Adaptive selling behavior greatly increases the satisfaction of customer with an organization’s services. Unfortunately, Angela’s conduct in this case falls short of true adaptive selling behavior. Reid (1997) felt that most sales people have a low understanding of their customers need. He argues that the Sales team needs to understand how the product adds value to their customer’s operations and processes. In this case, if SSL had identified the way the steel supplied to Laredo would add value to the company’s operations and processes then the mistake would have been avoided. In the views of Brent and Rogers (2007) salespersons and Sales team must strive to identify and fulfill user specifications. At some point, Mary the project manager asks if all the steel shipped to Laredo is all Mexican. Mary in posing this question seeks to justify that Laredo should go ahead with the project as the steel is partially domestic. By insinuating such a course of action, Mary displays the traits of an unethical sales manager. Roman and Ruiz (2007) show that buyers are heavily averse to unethical salespersons and their firms. Indeed, if any of the team involved in manufacturing the steel supplied to Laredo was aware it was partially Mexican and it was being supplied for defense project then SSL’s conduct is unethical. (Roman, Ruiz and Munuera 2005). Most likely, the Laredo mistake occurred because Angela did not effectively gather customer requirements. According to Roman et al (2005) poor listening skill on the part of the salesperson can negatively influence their performance. In cases where salespersons are remunerated on a commission basis they are likely to have very poor listening skills as they aim to make as many sales as possible. Another factor that has been associated with effective salesmanship is the customer orientation of a company. In the case study, SSL does not fit the description of a customer-oriented organization. Both the shipping and manufacturing manager talk rudely when they are confronted about the mistake they made in supplying Laredo with the Mexican steel instead of domestic steel. Manuel and Mark are keener on their weekend plans than in assisting Laredo rip off the steel they had supplied him. Indeed all the manufacturing staff is disgruntled when Mary informs them they have to work throughout the weekend to manufacture domestic steel for their client. Langarak (2001) has identified customer-orientation as a predictor of customer satisfaction among manufacturing firms. Furthermore, in Guenzie et al (2007) selling strategy was inconsistent with the account management behaviors of most sales people. However, in some cases salespersons are customer-oriented but other members of the team involved in fulfilling the customer’s requirements are not. Conclusion From the analysis of the case study it is clear the Laredo mistake could have been easily avoided. First, Angela as the responsible salesperson should have made it her duty to identify and effectively communicate Laredo specification for domestic steel. Angela also failed to make follow-up on the sale to make sure that Laredo was supplied with the type of steel he had ordered. Mary’s failing as the project manager also led to the mistake as Mary also seems to be unaware of the engineer who handled the shipment of the steel. SSL also contributes to the mistake by lacking customer orientation. References Brent, P., & Rogers, B 2007, What is Successful Sales Behavior?, Strategic Partner, 28. Cummings, B 2001, Do Customers Hate Salespeople?, Sales and Marketing Management, June 2001, Vol. 153, no 6, pp. 44-51. Guenzi, P., Pardo, C. and Georges L 2007, Relational selling strategy and key account managers’ relationship behaviors: An exploratory study, Industrial Marketing Management, Vol. 36, No. 121-133. Ho, H. D. (2012). Does friendship help in personal selling? 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