sales management review 1

changes central to sales management today
o Changing customer needs drive changes in salespeople
o Changing sales management agendas
o Change creates opportunities
sales management in the 21st century
o Long-term relationships with customers
o Nimble and adaptable sales organizational structure
o Fewer functional barriers within the organization
o Coaching sales management style
o Leverage technology
o Incorporate all activities and outcomes in performance evaluations
innovation
thinking outside the box
– transactional or relationship selling
Technology
broad spectrum of tools available to sales persons
leadership
capability to make things happen
-takes subordinates work seriously, take lead from subordinates, build trust, allocate rewards and glory view self as steward
sales management process
formulation, implantation, evaluation
external environment components
econ, legal/political, natural, tech, social cultural
econ environment
• Buyer and seller interactions take place within the context of current econ conditions
• The economy impacts real potential demand
• Global econ conditions are important
• Competitive structure affects selling success
legal/ political environment
• Increased number of laws regulate conduct of business
• The broad categories of relevant laws: antitrust, consumer protection, equal employment opportunity
natural environment
• Natural influences: weather, natural disaster, availability of raw materials, energy
• Shortages may cause demarketing
• Social concern about possible negative environmental impact of product and production
tech environment
• Changes how salespeople/ sales managers do their jobs
• Influences sales strategies
• Provide opportunities for product development
• Transportation, communications, an data processing technologies change:
-Sales territories, rep deployment, performance evaluations
social and cultural environment
• Ethics: development of moral standards by which actions and situations can be judged
• Sales managers: relationship with salespeople/ interaction b/t salespeople and customers
• Managers must influence ethical performance by example
• Ethical standards reflect integrity of firm
internal environment components
goals/objective/culture, HR, financial resources, production/supply chain, service, R&D/ Tech
goals, objective, culture
• Mission and objectives drive customer management approaches
• Well defined mission+ successful corporate history+ top management values = strong corporate culture
human resource
• Sales organizations are highly complex and dynamic
• Often difficult to expand in response to growing markets
• Outside specialists can help meet need to expand
financial resources
• Lack of financial resources can:
-Constrain ability to develop new products
-Limit promotional budget
-Limit size of sales force
• Mergers are sometimes sought to obtain financial resources
production/ supply chain capability
• Production capacity
• Tech equipment
• Location of production facilities
• Transportation costs
• Ability to ensure seamless distribution and service after the sale
service capabilities
• Competitive adv. Opportunity
• Difficult for other firms to compete for same customers
• Customers reluctant to switch regardless of price
R&D and tech capabilities
• Excellent design and engineering provide promotional appeal
• Communicating tech sophistication as value-add helps prevent over-reliance on price for sales
drivers of change
o Building long-term customer relationships
o Creating sales organizational structures that are more nimble and adaptable to customer needs
o Gaining greater job ownership and commitment from salespeople
o Shifting management style from commanding to coaching
o Leveraging technology for sales success
o Integrating salesperson performance evaluations
key success factors in selling
o Listening skills
o Follow-up skills
o Ability to adapt sales style to situation
o Tenacity
o Well organized
o Verbal communication skills
o Able to interact with people at all levels of an organization
o Ability to overcome objections
o Closing skills
o Personal planning and time management skills
selling activities
o Most salespeople are involved in retail selling (B2C)
o Larger volume of sales accounted for by industrial selling (B2B)
• Sales to resellers
• Sales to business users
• Sales to institutions
stages in the selling process
o 1. Prospecting for customers
o 2. Opening the relationship
o 3. Qualifying the prospect
o 4. Presenting the sales message
o 5. Closing the sale
o 6. Servicing the account
participants in the buying process
o Initiators
o Users
o Influencers
o Gatekeepers
o Buyers
o Deciders
o Controllers
initiators
perceive problems/opportunities requiring new product or service
users
use or work with product or service
influencers
provide info for evaluating products or suppliers
gatekeepers
control flow of info
buyings
contact selling organization and place order
deciders
final authority to purchase
controllers
determine budget
organizational buying decision stages
o 1. Anticipation or recognition of a problem or need
o 2. Determination and description of the traits and quality of the needed items
o 3. Search for an qualification of potential suppliers
o 4. Acquisition and analysis of proposals or bids
o 5. Evaluation of proposals and selection of suppliers
o 6. Selection of an order routine
o 7. Performance evaluation and feedback
CRM or customer relationship management
o Comprehensive business model for increasing revenues and profits by focusing on customers
o Overarching business philosophy and process tool to facilitate a customer-driven enterprise
CRM’s 3 objectives
o Customer Retention
o Customer Acquisition
o Customer Profitability
advantages of CRM
o Reduces advertising costs
o Increases awareness of customer needs
o Tracks effectiveness of promotional campaigns
o Competition for customers based on service, not prices
o Prevents over-spending on low-value clients, under-spending on high-value ones
o Speeds time to develop and market a product
o Improves use of customer channel
mission
answers the most basic questions about an organization’s reason for being
goals
flow from the companies mission, represent more specific targets
objectives
specific, measurable, and realistically attainable
steps in developing and implementing strategies
o 1. Marketing opp. Analysis
o 2. Generate strategies
o 3. Select the strategy
o 4. Program marketing mix
o 5. Review and revise
o 6. Audit and adjust
market exchanges
• One-shot transactions occurring between a buyer and seller with limited thought of future consideration
• Roles of salespeople
-Create new value
-Adapt
-“Make the market”
-Exit
functional relationships
• Create a climate of cooperation, with open and honest communication
• Roles of salespeople
-Engender high level of personal trust in well managed business activities
-Provide expertise for competitive advantage
• Danger when one party in the relationship leaves
strategic partnership
• Long-term relationships where both parties make significant investments
• Roles of salespeople
-Direct communication with production, production designers, and others
-Relationship manager and general manager
-Work with clients large enough to make investments worthwhile
3 stages in personal selling
exploration, expansion, commitment
exploration
determine value, build trust, set proper expectations, monitor
expansion
generate repeat sales, full line selling, cross selling
commitment
build loyalty, become a preferred supplier, engage in TQM
purpose of sales organization
o Divide and arrange activities so the firm can benefit from specialization of labor
o Provide for stability and continuity in firm’s selling efforts
o Provide for coordination of activities assigned to sales force and to departments in the firm
line organization
• Vertical
• Chain of command runs from chief sales executive down through levels of subordinates
• Each subordinate responsible to one person
vertical structure
• Vertical (most common)
• Several sales management activities assigned to separate specialists
horizontal organizations
geographic, product, customer, selling function
geographic
• Advantages- lowest cost, travel time/expenses minimized, sales admin/overhead costs kept low
• Disadvantages- doesn’t provide benefits associated with specialization of labor
product
• Adv.- sales people master effective selling methods for a single or related products, closer alignment of sales/ production, sales management controls allocation of selling efforts across the line
• Dis- duplication of efforts or overlapping in territories
customer
• Adv.- bettering understanding of customer needs, increased familiarity with certain businesses, increased control over allocation of selling efforts
• Dis- possible higher selling and admin costs, duplication of efforts
selling function
• Adv.- skills matched to sales function, developmental salespeople often a successful alternative
• Dis- Customer objectives to switch to maintenance salesperson, feelings of rivalry b/t the sales force
building blocks to start a salesforce
o Start with a strategy
o Appoint an expansion team
o Leverage existing strengths
o Go to the press
o Avoid compensation snafus
o Provide support