What is personal selling?
Du Plessis et al define personal selling as two-way person-to-person process during which the seller learns about the prospective buyer’s wants and needs, and seeks to satisfy these wants and needs by offering a range of products or services that the seller has available to offer to the buyer. The seller will commonly try to positively influence the buyer’s decision about the purchase of the goods the seller has available. Personal selling can also take place over the telephone.
You need to find a salesperson with the same language and cultural characteristics
Because of the need to communicate and interact with the buyer, successful personal selling in foreign markets is dependent on understanding the target country’s country’s social, cultural and language characteristics. For this reason, personal selling should be carried out by a salesperson that can speak the language and that share the culture of the target country. You may either make use of a travelling salesperson or use a person that is based in the target market. The latter option is probably the best option to follow for the serious exporter, but is very expensive and requires considerable management effort.
The foreign-based export salesperson
Very few small to medium exporters would have the resources to run a foreign-based salesperson, certainly in the early stages of foreign market development. Salaries are inevitably high and the associated costs (office rental, furniture, computers, electricity, telephone, Internet access, etc.) are also high. You also need to ask yourself whether the foreign-based salesperson will be fully occupied and whether they will be able to generate enough sales to cover their costs. You also need to ask yourself whether the foreign-based salesperson will have enough understanding of and commitment to your company and its to do a good sales job. Of course, it may be that you need to the salesperson to undertake additional tasks such as product training and product support, as well as to deal with administrative matters. These additional tasks may well justify the expense of a foreign-based salesperson. As your firm’s exports grow, so the idea the possibility of employing a foreign-based salesperson becomes more justifiable.
Relocating a salesperson from South Africa
An alternative to employing a foreign-based salesperson would be to locate a local salesperson from South African to live and work in the foreign marketplace. This person would also be an expatriate in the sense that he/she is a South African living and working in a foreign country. This is an even more expense way of employing a foreign-based sales person. You will need to take into consideration the employees’ conditions of service and the high cost of foreign living, including the relocation to this market. Conditions of service are of particular importance to an employee who is based in another country and such matters as salary, expenses and career development should be sorted out before (s)he is posted abroad. Actual salary levels and the allowance for the local cost of living need to be established separately for each country that you target. The only reason you would follow this route would be becuase the salesperson has been with the firm a long time, has a deep understanding of the firm and its products, and is a committed and diligent salesperson who you know is capable of working on his or her own. You would need put this person on language training courses and you need to be convinced that they have the personality to fit in with this new culture; not everyone hands new cultures and environments in positive way.
You are unlikely to employ someone new in South Africa and then relocated this person on a fulltime basis to the new foreign marketplace. It is doubtful whether this person (even if you chose someone that speaks the langauge) would have the company background or commitment necessary to succeed.
The travelling export salesperson
An alternative to to the foreign-based salesperson is the travelling salesperson. Because this person or team is based at home, your operational costs will generally be much lower even if travel is factored into the equation. What is more, this person could be taksed to also handle many of the administrative, financial and/or logistical tasks associated with your firm’s exports and in so doing, you can better justify his/her costs. The person could also undertake product training and provide product support when overseas, thereby setting off some his/her expenses against other cost items (i.e. training and support). Having the person work from your home base means that they are far more likely to have a deeper understanding and commitment to your company. This person should nevertheless, still be selected to have the same cultural and language characteristics as in the target market (using an expatriate – a foreign national living in South Africa – may be a possibility).
When is it OK not to speak the language and understand the culture
While we argue that it is essential to use a salesperson that has the same language and cultural characteristics as are to be found in the target market, the only time this need not be necessary is when the owner or export manager of the firm undertakes the personal selling task themselves. Their position and status as ‘head’ of the firm’s export operations, may help them overcome (to a limited extent) the language and cultural barriers they will face. These barriers will still require attention and you may need to employee a interpreter when you make these sales calls.
An effective export salesperson should have the following attributes:
- (S)he should be able to make decisions (often on the basis of very little information) and take risks and opportunities of considerable magnitude. Overseas buyers lose patience with sales staff who are constantly referring back to headquarters for instructions.
- (S)he should be capable of guiding agency operations and training agency staff.
- (S)he should know where to look for advice and information and how to interpret market research data.
- (S)he should be able to adapt to, and identify with, cultures very different from his/her own.
- (S)he should be able to persist in the sales task without supervision.
- (S)he should have a sound constitution, as (s)he will be subjected to extremes of climate, strange food and indifferent hotels, as well as company and customer entertainment!
- Ideally, (s)he should be fluent in the language(s) of his/her potential customers.
Sales through agents
An alternative to employing a salesperson, is to close an agency agreement either with firm or individual in the foreign marketplace. An agent is a company/person who represents your company in the marketplace within which they operate. They may represent several other (even competing) products. An agent is usually paid a commission and never really takes ownership of your products. The task of the agent is to bring your company into a contractual relationship with third parties (i.e. buyers), for which they get paod a commission. An agency agreement is a legal relationship that exists between your firm and the agent. Employing an agent is like have a part-time salesperson working for your company. The problem with agents is that they do work for you directly and you have little direct control over them. If they are poor, you will inevitably waste your time (and maybe some money). A good agent, on the other hand, can be extremely profitable for your firm. It is essential therfore that you employ a good agent. Bear in mind that legal title to your goods never passes to the agent – it passes, because of the agent’s efforts, directly from your company to the customer, with the agent receiving remuneration by way of commission.
Salesperson versus sales team
For most new exporters it will be difficult to even get one fulltime export salesperson into the field. They are expensive which ever route you follow, and you are not generating any sales as yet. Few exporters will be in a position to afford one salesperson, let alone a whole team. However, with some more established exporters it may be necessary to put a sales team into action. There may be an engineer that understands the product; a financial manager that can crunch the numbers and thrid member that does the actual negotiating. The Japanese, for example, almost always use teams when they sell. Using a sales team has it advantages in the sense that the work is divided between team members that are expert in their respective areas. If a team works well together, they can put put a more effective sales pitch into effect. A sales team is also a more professional and serious approach. Clearly, only larger firms are truly in a position to make use of the sales team. It is also highly unlikely that an exporter will establish a whole foreign-based sales team in the target market – it is simply too expensive. Having said that, a few multinational companies such as Bell Equipment company, SABMiller and others may well make use of sales teams as their size can justify it.