People as 5th Element in Marketing Mix (Direct Sales Force (Advantage …
People as 5th Element in Marketing Mix
Direct Sales Force
(Direct Sales Force)
A direct salesperson can meet the customer in his home or business premises, at his convenience
Used in two major areas of financial services
1) Selling to corporate customers
2) Selling services
1) Both sides are subjected to less pressures like time factors and office pressures.
2) A higher level of sales should be made
If the salesperson establishes a good relationship with the customer, the satisfied customer will come back to the bank for his future needs and may recommend other customers.
The salesman may be able to offer a ‘cradle to grave’ service if he establishes a good relationship with the customer. As he gets to know the customer’s changing needs over a period of time, he will be able to offer the right services to meet these needs.
3) Bank will need less office space as compared to an in-branch sales force
This will reduce overheads particularly when office space is expensive.
1) Salary only :explode:
Provide impartial service to the customer
His income does not depend on high pressure selling techniques, taking high risks or selling the product that generates the highest level of commission.
Intended to satisfy the salesperson’s need for income stability.
Salesperson more willing to perform non-selling activities and give them less incentive to engage in pressure tactics when dealing with customers.
Lack of incentive to make a greater effort to sell.
2) Salary plus commission :explode:
Provides the means to increase income with every successful sale and therefore, encourage a higher level of commitment than salary only.
There is still the safety net of the basic salary.
3) Commission only :explode:
Produce the highest level of sales since income is tied to sales.
Danger: Salesperson will push products that give the highest level of commission, regardless of the suitability for the customer and the risks involved for the bank or the customer.
May result in serious problems for the bank as in the case when the customer complains to the press or regulatory bodies
Even if there are no complaints, over-zealous selling is potentially unprofessional
Not in keeping with the marketing ethos and may affect long-term profitability as the relationship may be damaged.
1) Bank needs to invest more in the training of the direct sales force to maintain quality
As the salesperson has less contact with the office, he may need more frequent training sessions.
2) High turnover of good salespersons
Good salespersons are in demand and are often mobile.
Losing salespersons to competitors will add to costs as new salespersons must be recruited and trained.
One measure to minimise such turnover is to design a good remuneration package.