sales management ch. 2

why focus on the sale process
1. Want to scale our sales force so it can be successful (What size sales force do we want?)
2. To better measure and manage the sales process
3. Look at the sales process as manager so we can design it how the customer buys it
4. Team selling – requires clearly defined roles for each member
Drivers of change
1) building long term relationships
2) nimble and adaptable sales structures
3) gaining commitment from salespeople
4) shifting sales management styles
5) integrating performance evaluations
1. Building long-term relationships with customers
a. Assessing customer value
b. Focusing on high priority customers
2. Creating sales organizational structures there are more nimble and adaptable to the needs of different customer groups
a. Sales people don’t work as individuals anymore
b. Sales people follow a 7-step selling method to ensure consistency
c. Use a universal reporting system
d. Less meetings
3. Gaining grater job ownership and commitment from salespeople
a. Removing functional barriers within the organization
b. Leveraging the team experience
4. Shifting sales management style from commanding to coaching
a. Allows salespeople to use their talents and abilities to successfully secure, build, and maintain relationships with profitable customers
5. Leveraging available technology for sales success
a. The sales organizations that make the best use of technology will have a strong competitive advantage over the others
6. Better integrating salesperson performance evaluation
a. The move from transactional to relationship selling along with the use of selling teams and more coaching style management necessitates rethinking the performance evaluation and reward process for sales organizations
Customers expect us to be
o Responsive
o Knowledgeable (an advocate for them)
o Providing the total solution (ex. General contractor)
o Understanding of their business and to keep them competitive
expectations
matched = satisfied
exceeded = delighted
not met = disappointed
– always have to be changing what is satisfactory
cognitive flexibility
ability to think from different angles
sellers response to customer expectations
1. develop a customer driven culture
2. Market segmentation
3. Market adaptability
4. Information technology
5. More intentional in the selection and recruitment process
management theory
cant afford to hire the people we want so we hire the people we can afford
selling as a career
• Negative attitudes towards selling as a career as a result of stereotypes based on the old style of selling (hard selling techniques)
attractive aspects of selling
1) autonomy
2) sales activities
3) financial rewards
4) favorable working conditions
autonomy
freedom of action and opportunities for personal initiative
sales activities
multifaceted and challenging activities as part of the job
– high job variety
– something different everyday
financial rewards
salespeople hired right out of college tend to stat at higher salaries than most other professions and also tend to keep upwell during their careers with the compensation of their peers outside of sales
favorable working conditions
telecommuting with a virtual office and less minute-to-minute direct supervision than most other careers
– work-family conflict not encountered
rewards
intrinsic – satisfaction, opportunities for growth
extrinsic – given to the sale person by the company
*moving up in the organization
many salespeople move up in the organization from the sales ranks into executive positions
*reluctant to move on from sales
– Don’t want to give up their high paying jobs to move to managerial positions
– Most managerial talent is rewarded appropriately
*problems with promotions
Successful selling often requires different personal skills and abilities than does successful management
*managerial opportunities
Recent trends toward corporate downsizing, flatter organizational structures, and cross-function selling have changed the number and nature of these opportunities for successful salespeople
*moving up in the organization diagram
sales trainee>>salesperson>>sales manager OR brand manager>>sales director/vice president OR marketing director/vice president>>CEO
selling success factors
1) listening skills
2) follow-up skills
3) tenacity
4) well organized
5) overcome objectives
6) appreciates all types of people
listening
buyer-seller relationships are significantly strengthened when salespeople consistently employ effective listening skills, especially using active listening
listening EXAMPLE
Hear what they say, how they say it, and what they don’t say (NOW)
follow-up skills
Ongoing maintenance and management of the relationship (especially between actual face-to-face encounters with the customer)
follow-up EXAMPLE
Do what you say you’re going to do (LATER)
tenacity
sticking with a task
– Nurturing customer relationships is a long term proposition
tenacity EXAMPLE
Activity – doing little things to make sure the end result happens (ONGOING)
well organized
– Content and responsibility of the sales job have increased in complexity
– Buying organizations have become more complicated to navigate
appreciates all types of people
Involves communication and interaction with many people within the client firm besides the purchasing agent
overcome objectives
Objections are a natural and expected part of any sale process
objections can be minimized by
– Developing a trusting relationship over the long run
– By working to negotiate win-win solutions
rejection
listen to how it was said:
– they will never buy it
– they wont buy it right now
non-selling activities
– follow-up
– training and recruiting
– entertaining
– traveling
– services
– distribution
*how salespeople spend their time
mostly: administrative tasks and waiting/traveling
*administrative tasks
salespeople are doing more tasks because of new technology
*prospecting
has changed over time, easier to find now because of technology
communication
mostly done with technology now
B2C
retail selling
retail selling
selling goods and services to end-user consumers for their own personal use
B2C salespeople
direct sellers, residential real estate brokers, and retail stores salespeople
B2B
industry selling
– products are more expensive and complex
– customers are larger
– management decisions are broader
industry selling
the sale of goods and services to non-end user consumers
B2B customers
1) sales to resellers
2) sales to business users
3) sales to institutions
sales to resellers
– Salesperson for Hanes sells underwear to a retail store, which in turn resells the goods to its customers
– Business sells to walmart
sales to business users
A salesperson for general electric sells materials or parts to Boeing (to another business)
sales to institutions
– Dell sells a computer to a not-for-profit hospital or government agency
– Ex) college, hospital, church
– One product could go to 4 categories
B2B sales jobs
1) trade servicer
2) missionary seller
3) technical seller
4) new business seller
trade servicer
increase business from current and potential customers by providing them with merchandising and promotional assistance
trade servicer EXAMPLE
P&G salesperson selling soap and laundry products to chain-store personnel
missionary seller
increase business from current and potential customers by providing then with product information and other personal selling assistance
– persuade customers
– encourage the sales process
missionary seller EXAMPLE
– andheuser-busch salesperson calls on bar owners and encourages them to order a particular brand of beer from the local distributor
– detailers (pharmaceutical reps) call on doctors as representatives of pharmaceutical manufacturers
technical seller
increase business from current customers and potential customers by proving them with technical and engineering information and assistance
– cross-functional selling teams
– customizing a solution
cross functional selling teams
used because the complexity of many of the products and associated services involved in technical selling make it difficult for any one salesperson to master all aspects of this sale
new business seller
identify and obtain business from new customers
– lifeblood of every company, you have to find new customers
stages in the selling process
1) prospecting for customer
2) opening the relationship
3) qualifying the prospects
4) presenting the sales message
5) closing the sale
6) servicing the account
1) prospecting for customers
Core competency, fundamental to sales, takes hard work and disciple, happens by organization and design, has a delayed payoff, technology is helpful (access to call lists)
information sources for identifying relevant prospects
o Trade association and industry directories
o Telephone directories
o Other salespeople
o Other customers
o Suppliers
o Non sales employees of the firm
o Social and professional contacts
outbound telemarketing
calling potential customers at their home or office, either to make a sale or make an appointment for a field presentation
inbound telemarketing
prospective customers call a toll-free number for more information (used to identify and qualify prospects)
substantial time spent prospecting
Transactional strategy, product is in introductory stages of its life cycle, if it is an infrequently purchased durable good, or if the typical customer does not require much service after the sale
substantial time spent prospecting EXAMPLE
insurance and residential construction
substantial time spent servicing existing customers
Large market shares, sell frequently purchased nondurable products or products that require substantial service after the sale to guarantee customer satisfaction
substantial time spent servicing existing customers EXAMPLE
food manufacturers that sell products to retail supermarkets and firms that produce component parts and supplies for other manufacturers
2) opening the relationship
initial approach to a prospective customer
– research
– listen
goals of opening the relationship
– determine who has the greatest influence or authority to initiate the purchase process
– determine who will ultimately purchase the product
– generate interest to
– obtain information needed to qualify the prospect as worthwhile
key decision makers
identify their desires and relative influence
deal entirely with the purchasing department
inexpensive and routinely purchased products
seek appointments with influencers and decision makers
technically complex and expensive
involves many people within the customers organization
complex purchase decisions
– adopt policy of multilevel or team selling
3) qualifying the prospects
determine if he or she qualifies as a worthwhile potential customer
qualifies as a worthwhile potential customer
1) do they have a need, will they benefit
2) are they aware of the need so the sale can be made
3) will it be a profitable sale
learn about the prospects:
– operations
– type of products it makes
– its customers
– future demand for its product
– present suppliers
– relationship with present suppliers
– financial health
– credit rating
qualification policies include
– Minimum acceptable standards for prospects annual dollar value of purchases
– Minimum order size to avoid dealing with very small customers and to improve the efficiency of their ordering processing and shipping operations
4) presenting the sales message
• The salesperson transmits information about a product or service and attempts to persuade the prospect to become a customer (persuading is only short term)
presentation related complaints
1. Running down competitors
2. Being too aggressive or abrasive
3. Having inadequate knowledge of competitors’ products or services
4. Having inadequate knowledge of the clients business or organization
5. Delivering poor presentation
demonstration
Best way to convince prospects of a products advantage, particularly if the product is technically complex
demonstration EXAMPLE
Xerons salespeople learn about their clients office operations so they can demonstrate their products actually doing the tasks they would do after they are purchased
formal presentations
o Given to multiple members of a client organization
o Involve the buying team and selling team as well as members of management from both sides
5) closing the sale
– Starts with 1st contact
– Should be paced by the sales person
– Obtaining a final agreement to purchase
– The longer it takes to close, the more profit could go down and the risk of losing the sale goes up
– Continuous improvement; look back on performance
ways to close
– asking for an order (dont assume they want to do it)
– ask the client to chose between two alternative decisions
6) servicing the account
Many types of services and assistance must be provided to customers after a sale to ensure their satisfaction and repeat business
advantages of servicing the account
Customer service increases customer loyalty and fosters long term relationships with customers
follow-up
– Make sure no problems exist with delivery schedules, quality good or customer billing
– Supervise the installation of equipment
– Train customers employees in its use
– Ensure proper maintenance in order to reduce problems that may lead to customer dissatisfaction
Individuals in a client firm that may participate in the decision process:
Computer analysts, customer service representatives, procurement personnel, users and others
Participants in the buying process (buying center)
– Initiators, users, influencers, gatekeepers, buyers, deciders and controllers
– All the people who participate in buying or influencing the purchase of a particular product
initiators
start the buying process
– perceive a problem or opportunity that may require the purchase of a new product or service
initiators EXAMPLE
complaints from maintenance workers about outmoded and inefficient equipment might trigger the purchase of new machinery
users
people who use or work with the product
– could also be the initiator
users EXAMPLE
drill press operators might request that the purchasing agent buy drill bits from a particular supplier because they last longer
influencers
provide information for evaluating alternative products and suppliers
– determine specifications and criteria
– usually technical experts from various departments
influencers EXAMPLE
flight engineers or pilots often influence purchase decisions on the basis of their experience with the performance of various vendor options
gatekeepers
control the flow of information to other people involved in the purchasing process
– Purchasing agents, suppliers’ salespeople, others on the selling and buying teams
types of gatekeepers
– Screens – secretaries who can decide whose call to put through
– Filters – purchasing agent who gathers proposals from 3 different companies and decides what to tell others in the buying center about each company
buyers
contacts the selling organization and places the order
– authority to negotiate price
decider
person with final authority to make a purchase decision
– sometimes buyers, usually higher executives
controller
determines budget for the purchase (set independent of purchase)
controller EXAMPLE
May be an engineer or a line manager who is trying to keep the cost of the new maintenance procedure within a certain budget
perceived risk
A function of the complexity of the product and situation, the relative importance of the purchase, time pressure to make a decision and the degree of uncertainty about the products efficacy
selling center
bring together individuals from around the organization (marketing, customer service, sales, engineering and others) to help the salesperson do their job more effectively
organizational buying decision stages
1) anticipation
2) determination
3) search
4) acquisition
5) evaluation
6) selection
7) performance
1. Anticipation or recognition of a problem or need
depends on derived demand
-a small change in the market can result in a large change in the organizations sales
1. Anticipation or recognition of a problem or need EXAMPLE
demand for luggage depends on the demand for air travel
recognition
– automatic – computerized
– a better way is realized
– when focus changes
2. Determination and description of the characteristics and quantity of the needed items
– quantity is dictated by demand
– communicate what is needed, how much, and when
3. Search for and qualification of potential suppliers
depends on what type of item is being purchased
item has been purchased before
limited to one or a few suppliers that have performed satisfactorily in the past
single source suppliers
minimize the variation in quality of product inputs
a new item
complex and expensive (risky decision)
– search for several suppliers to ensure they can select the one with the best product and most favorable terms
4. Acquisition of proposal or bids
– non-extensive process – frequently purchased, standardized or technically simple product
– extensive lengthy process – complicated and expensive goods and services
5. Evaluation of offerings and selection of suppliers
Members of the buying center examine the acceptability of the various proposals and potential suppliers
– negotiation
– evaluate offerings
6. Selection of an order routine
purchasing department often tries to match the delivery of the goods with the company’s need for the product
– received, inspected, paid for, entered into inventory
– slotting allowances charged by retailers
7. Performance evaluation and feedback
Focuses on both the product and the suppliers service performance
– follow up is crucial
evaluated on:
o Promptness of delivery
o Quality of the product
o Service after the sale
new task purchases
relatively complex and expensive product or service for the first time
new task purchases EXAMPLE
a new piece of production equipment
modified rebuy
interested in modifying the product specifications, prices or other terms it has been receiving from existing suppliers and is willing to consider dealing with new suppliers to these things happen
– creates opportunity for a new vender to come in
straight rebuy
reordering an item it has purchased many times (sales rep has been taken out)
straight rebuy EXAMPLE
office supplies, bulk chemicals
out supplier
move the customer away from the automatic reordering procedures of a straight rebuy toward the more extensive evaluation processes of modified rebuy