| Personal Selling and Sales Promotion 481

Chapter 16 | Personal Selling and Sales Promotion 481

Other companies, however, recognize that winning and keeping accounts requires more than making good products and directing the sales force to close lots of sales. If the company wishes only to close sales and capture short-term business, it can do this by sim- ply slashing its prices to meet or beat those of competitors. Instead, most companies want their salespeople to practice value selling—demonstrating and delivering superior cus- tomer value and capturing a return on that value that is fair for both the customer and the company.

Unfortunately, in the heat of closing sales—especially in a tough economy—sales- people too often take the easy way out by cutting prices rather than selling value. Sales man- agement’s challenge is to transform salespeople from customer advocates for price cuts into company advocates for value. Here’s how Rockwell Automation sells value and relation- ships rather than price: 26

Facing pressure from Walmart to lower its prices, a condiment producer hastily sum- moned several competing supplier representatives—including Rockwell Automation sales rep Jeff Policicchio—who were given full access to the plant for one day and asked to find ways to dramatically reduce the customer’s operating costs. Policicchio quickly learned that a major problem stemmed from lost production and down time due to poorly performing pumps on 32 huge condiment tanks. Policicchio gathered relevant cost and usage data and then used a Rockwell Automation laptop value-assessment tool to construct the best pump solution for the customer.

The next day, Policicchio and the competing reps presented their solutions to plant management. Policicchio’s value proposition: “With this Rockwell Automation pump solution, through less downtime, reduced administrative costs in procurement, and lower spending on repair parts, your company will save at least $16,268 per pump— on up to 32 pumps—relative to our best competitor’s solution.” It turns out the Polici- cchio was the only rep to demonstrate tangible cost savings for his proposed solution. Everyone else made fuzzy promises about possible benefits or offered to save the cus- tomer money by simply shaving their prices.

The plant managers were so impressed with Policicchio’s value proposition that— despite its higher initial price—they immediately purchased one Rockwell Automation pump solution for a trial. When the actual savings were even better than predicted, they placed orders for the remaining pumps. Thus, Policicchio’s value-selling ap- proach rather than price-cutting approach not only landed the initial sale but also pro- vided the basis for a profitable long-term relationship with the customer.

Value selling requires listening to customers, understanding their needs, and carefully coordinating the whole company’s efforts to create lasting relationships based on cus- tomer value.

Author Sales promotion is the Comment

Sales Promotion most short-term of the (pp 481–488) promotion mix tools. Whereas

Personal selling and advertising often work closely with another promotion tool, sales pro- advertising or personal selling says

motion. Sales promotion consists of short-term incentives to encourage the purchase or

“buy,” sales promotions say “buy

now.” sales of a product or service. Whereas advertising offers reasons to buy a product or service,

sales promotion offers reasons to buy now.

Examples of sales promotions are found everywhere. A freestanding insert in the Sun-

Sales promotion

day newspaper contains a coupon offering $1 off Pedigree GoodBites treats for your dog. Short-term incentives to encourage the

A Bed Bath & Beyond ad in your favorite magazine offers 20 percent off on any single purchase or sale of a product or a service.

item. The end-of-the-aisle display in the local supermarket tempts impulse buyers with a wall of Coca-Cola cases—four 12-packs for $12. An executive buys a new HP laptop and gets

a free memory upgrade. A hardware store chain receives a 10 percent discount on selected Stihl power lawn and garden tools if it agrees to advertise them in local newspapers. Sales promotion includes a wide variety of promotion tools designed to stimulate earlier or stronger market response.

482 Part Three | Designing a Customer-Driven Strategy and Mix