Theories of Personal Selling

Theories of personal selling are the conceptual frameworks that explain the principles, strategies, and techniques that salespeople use to sell products and services.

Understanding different theories of personal selling can help salespeople tailor their approach to different customers and situations, and ultimately increase their effectiveness in closing sales and building lasting relationships with customers.

AIDA’s Theory

A very popular theory in personal selling, AIDAS stands for Attention, Interest, Desire, Action, and Satisfaction. It is a customer-oriented theory that focuses on the customers’ needs and problems. The theory states that the prospect goes through five different stages before giving a satisfactory response to a product. Let us see what each of these stages means:

Attention

In this stage, the customer becomes aware of the product as well as the brand image. This stage is very important to the salesperson because this is where they attempt to catch the attention of the customer. Different ways in which to capture the attention of the prospect include catchy phrases in written communication, emails, etc.

Interest

In this stage, prospects maintain an interest in the product. This stage is of utmost importance to the salesperson where they communicate the benefits of the product to the prospect to maintain their interest.

Desire

In this stage, prospects develop a liking towards the product or brand. A desire can be created by using influencing and persuasion techniques such as adding an emotional element to the sales communication, making prospects aware of what they stand to lose if they do not act on their desires.

Action

In this stage, prospects become convinced of making a purchase or engages in a trial. Sales persons can use different promotional measures to ensure action.

Satisfaction

In this stage, the salesperson has to reassure the customer that they made the right decision in buying the product.

A continuous AIDAS approach is used by a salesperson to encourage prospects to buy the product of the company by instilling favourable feelings in their mind regarding the purchase.

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Buying Formula Theory of Selling

The buying formula theory is again buyer-oriented. It revolves around the needs and problems of the buyer and the role of the salesperson is to help the buyer find solutions. It is a schematic depiction of a set of responses. This theory attempts to explain the cognitive process that goes on in the mind of the prospect when he decides whether or not to buy.

The buying formula theory emphasises the internal factors that influence the prospect’s responses and downplay the external factors believing that the salesperson will not neglect the external factors. The buying formula provides a useful way to help the salesperson to remember the internal factors.

Simplistically, the buying process can be said to be comprised of three elements:

Need (or problem) → Solution → Purchase

A fourth element is added because the outcome of purchase influences the chance of a continuing relationship between the buyer and the seller so that the formula becomes:

Need (or problem) → Solution → Purchase → Satisfaction

The solution element in the above sequence consists of two parts: the product or service and the brand name. The buying formula thus becomes:

Need (or problem)→Product or Service or Brand name→Purchase→Satisfaction/dissatisfaction

For the buyer to make a purchase, they must consider the product or service and the brand name to be adequate and also derive a pleasant feeling expecting satisfaction from the purchase. When these are included, the buying formula becomes:

For example, Ram’s family is growing and it has become difficult for him to travel by a two-wheeler with his family. A salesperson provides him a solution by suggesting him to purchase a car. Here, the product is the car. If the salesperson advices him to buy a car of Tata Motors, then the brand name here is Tata Motors.

The salesperson needs to ensure that the solution he is giving is adequate to the problem and Ram feels pleasant while thinking about the car. After that, Ram purchases the car and derives satisfaction by using the car and by building a relationship with the seller.

In this buying formula, the central solid lines of the formula represent the primary elements in a well-established buying habit while the dotted lines represent the reasons and pleasant feelings i.e., the elements of defence in the buying habit. The goal of the salesperson is to encourage direct associations to ensure repeat purchases.

According to this theory:

• The salesperson should create and emphasise the need
  
  
• The salesperson should emphasise the relation between the need and offering
  
  
• The salesperson should create the brand image
  
  
• The salesperson should create an association between the need, the offering, and the brand name.
  
  
• The salesperson should emphasise brand loyalty and the satisfaction derived from the purchase.

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Behavioral Equation Theory

The behavioural equation theory proposed by J. A. Howard uses a stimulus-response model and combines with it the findings from behavioural research. The learning process is a part of the stimulus-response model and has four essential elements: drive, cues, response, and reinforcement.

Let us now understand each of these elements in turn.

• Drives are powerful stimuli that induce the buyer’s response. These can be placed into two categories: innate drives that arise from physiological needs and learned drives that are acquired.
  
  For example, if a customer has passion for gardening, he/she keeps on purchasing gardening tools frequently. This is an innate drive of the customer.
  
  On the other hand, if the customer sees the welldecorated house of his/her friend and decides to decorate the house in the same way, then his/her purchase for décor will be triggered by the learned drive.
  
  
  
• Drives are powerful stimuli that induce the buyer’s response. These can be placed into two categories: innate drives that arise from physiological needs and learned drives that are acquired.
  
  For example, if a customer has passion for gardening, he/she keeps on purchasing gardening tools frequently. This is an innate drive of the customer.
  
  On the other hand, if the customer sees the welldecorated house of his/her friend and decides to decorate the house in the same way, then his/her purchase for décor will be triggered by the learned drive.
  
  
  
• Cues are weak stimuli that determine when the buyer will respond. They can be of two main types: triggering cues activate the decision process for any given purchase while non-triggering cues influence the decision process but do not activate it.
  
  Examples of cues include packaging of the product (colorful, easy to carry, reusable containers), price (discounts and sales), place (store display, store layout) and promotion (advertisement).
  
  
  
• Response is the action the buyer takes as a reaction to drives and cues.
  
  
• Any action or event that boosts the buyer’s tendency to respond in a particular way is called reinforcement.

These four elements are combined to give the following equation:

B = P x D x K x V

Where:

B = Response i.e., the act of purchasing a particular brand or supporting a particular supplier

P = Predisposition or internal response tendency or force of habit

D = Present drive or motivation level

K = Incentive potential that is, the potential value of the product or brand to the buyer

V = Intensity of all the different types of cues

The variables in the above equation share a multiplicative relationship. Therefore, if any independent variable has a zero value, the value of B will also be zero, i.e., there is no response.

Every time the buyer responds and is satisfied with the purchase, i.e., K is sufficient to yield a reward, the value of P increases. Hence, there is a reinforcement of the tendency to respond to the same cue in the future that triggered the rewarded response. With reinforcement, the probability of B with the same cue in the future rises, i.e., the buyer has learned.

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Right Set of Circumstances Theory

Sometimes called the situation-response theory, the right set of circumstances theory states that the particular circumstances occurring in a given selling situation result in the prospect responding predictably.

The right set of circumstances theory is a seller-oriented theory and argues that if the salesperson can successfully grab the prospect’s attention and maintain their interest, and also present the right stimuli, it will result in the desired response i.e., the sale.

The circumstances can be both internal and external to the prospect. Supporters of this theory suggest that external circumstances should be given more emphasis than internal ones. This theory tends to overlook internal factors that are not readily manipulated and can therefore encounter problems as internal factors are important in most selling situations.

While this theory emphasises the importance of the salesperson controlling the situation, it fails to handle the internal factors that influence the interaction and is unable to assign a suitable weight to the buyer’s response.

Let us continue with the car example given above. After securing the attention and interest of Ram for car, the salesman invites him for a coffee in a nearby restaurant where he can be given the sales presentation. Here, the salesman and the invitation to the coffee shop are the external factors, which can be controlled by the salesman himself. However, the internal factor is the thinking process of Ram, which may not be controlled. The thought process of Ram in this situation can be to have coffee or not; to have the coffee now or later; to go out now or not; or to go out with the salesman or with his wife.