Section #1

Research Findings

- 2/3 too many people with strong management skills but weak leadership skills - >95% too few people with both strong leadership and management skills - >80% did less than a very good job at attracting, developing, and motivating people with leadership potential - <60% 2/3 of sales VPs indicated that <60% of their sales managers were meeting expectations3

A Few Manufacturer's Reps Organizations

- Foodservice Sales & Marketing Association - Mfr. Rep's Educational Research Foundation - United Association of Manufacturer's Reps - Manufacturers' Agents National Association - Association of Independent Manufacturers' Reps All offer certification to upgrade professionalism Most specialize in industries

Alignment

- Getting all of functional areas of a firm to work together - This includes the company's various salespeople-its inside reps, geographic reps, customer service reps, etc. Alignment occurs at 3 levels: Strategic - Executives create Tactical - Managers support Operational - Salespeople engage

Drivers of Professional Selling

- Tectonic Shift in Selling Process - Everybody Needs Proficiency in Selling - Rising Demand for Sales & CRM Professionals - Sales is the Engine of Organizational Growth & Survival Sales consumes >20% of a firm's revenue Sales starting salaries are ~20% higher than other marketing positions Most successful sales reps are eventually pressured to make the transition to sales mgmt

The Sales Process

1. Prospecting: A prospect is a MAD buyer, or someone with the Money to spend, the Authority to buy what you are selling, and the Desire to buy it. 2. Pre-Approach: Learning about the prospective customer before approach 3. Approach: Request for meeting and/or meet with customer 4. Needs Identification - Confirm MAD - Use of SPIN or other techniques to determine the customer's needs. - Identify customer decision process (authority to purchase). - Gain pre-commitment: an agreement that all of the customer's needs have been identified, a budget, and the decision process is known. 5. Sales Presentation: Describe the product and how it meets buyer's needs. a. FEBAs: statements of Feature, Evidence, Benefit, and Agreement. 6. Handling Objections: Address buyer reasons to not buy your product. 7. Closing the Sale: Ask buyer for the sale or purchase commitment. 8. Implementation/Follow-Up: Ensure buyer has a good experience with final procurement, delivery, installation and use of the product.

Global Sales Management:The Caux Round Table (CRT)

1994 CRT principles: codified most comprehensive set of responsible business practices The value of a business to society is the wealth it creates for shareholders and employees, as well as the marketable products and services it provides to consumers at a price commensurate with quality Founded in 1986 Primary purpose: reduce trade tensions between countries

II. Leadership Theories: Historical Perspective (1900 - 1940s)

1. Trait Approach — "These are the traits you need to be a leader" Leaders are born, leadership is not a skill you can learn. "Great Man Theory" e.g., Abraham Lincoln, Napoleon, Mahatma Gandhi. Traits commonly associated with leadership were height, intelligence, dominance, and social skills. Intelligence: higher verbal, perceptual, and reasoning skills Self-confidence: ability to be certain about competencies and skills Determination: demonstrate the ability to get the job done Integrity: demonstrate honesty and trustworthiness Sociability: ability to interact in a comfortable, outgoing, pleasant manner Initially not supported by research, recent meta-analyses of past research now show some support of this approach. Findings note that leaders differ from followers in intelligence, alertness, insight, responsibility, initiative, persistence, self-confidence, sociability. Shortcomings of this approach include no universal listing of traits, findings that lacking some of these traits people can learn to lead, and whether a strength of one trait do seem to overcome the weakness or absence of another. Application — Many firms recruit and select based on these skills — so develop them. Training programs use these to develop programs.

V. Federal Laws

1. Uniform Commercial Code (UCC): legal guide to commercial practices A. Agent: person with ability to make a binding agreement for a company. B. Sale: transfer of title from seller to the buyer in exchange for money. C. Warranty is an assurance by the seller that the product or service will do what it was sold to do 2. Laws governing business defamation: State laws that govern what businesses (and salespeople) can say about competitors 3. The Gramm-Leach-Bliley Act: requires companies to notify their customers regarding their privacy policies 4. CAN-SPAM Act: requires companies to clean up their email lists and only contact those with whom they have an ongoing relationship 5. Do Not Call Registry: allows individuals to place their phone number off-limits to telemarketers. 6. Foreign Corrupt Practices Act (FCPA): preventing payment of briberies in foreign countries

Sales Strategy

1. What types of relationships do we form and with whom a. Customer acquisition strategies: plans to obtain new customers b. Customer retention strategies: plans designed to keep customers c. Growth strategies: plans that are designed to increase sales to the same customers 2. What level of investment will be required, and how will we locate and allocate the needed resources a. Human capital: the people that make up an organization. b. Social capital: the ties that the firm has with others 3. What are the detailed objectives and action plans a. SMART format i. Specific ii. Measurable iii. Achievable, yet challenging iv. Realistic v. Time-based

III. Leadership Theory: Behavioral Approach (1950s - 1960s)

2. Behavioral Approach — "This is how a leader behaves." Ohio State researchers found leaders have high consideration for: Maintaining good social relationships and building trust and Initiating structure or dealing with task-directed behaviors. University of Michigan researchers identified similar dimensions - Leaders were more employee-centered than production-centered. The Managerial Grid pulls from past researchers and uses two axes as their basis of leadership: Concern for people and, Concern for production. This approach has developed training programs that helps individuals move toward a higher level of both skills (i.e., Team Management). Application — It is important for the sales manager to balance leadership behaviors between the social needs of the group members and accomplishing the task. The more a leader demonstrates 'consideration' the more satisfied the group members.

IV. Leadership Theory: Situational Approaches (1960s - 70s)

3. Situational Approaches — "Assess the situation and fit behavior to it" Contingency Theory: Task-oriented versus relationship-oriented leadership is contingent to the situation of (i) leader-member relations; (ii) task structure; and (iii) position power of the leader. Hersey and Blanchard Continuum Model: Leader should utilize one of the four leadership styles (directing, coaching, supporting, or delegating) as per group competency and commitment to task on a continuum from developing to developed. Vroom and Yetton Model: Followers should be involved in the decision-making according to: The amount of structure in the situation, The amount of information available to solve the problem and The level of importance the decision's acceptance is to its implementation. Application -There is no one "best style". Leaders need to consider the characteristics of the situation and adapt their behaviors to each unique situation.

IV. Contemporary Perspectives of Leadership (1980s - 90s)

4. Contemporary Perspectives — "Motivate your followers" Leader-Member Exchange (LMX): Focuses on the relations between a leader and each group member. In-group relations develop with high levels of interaction, support, trust, and respect. Out-group relationship has less interaction and relies on formal roles, consequently followers are less satisfied and productive. Leaders should maximize the number of in-group relations they have and minimize out-group relationships. Transformational Leadership: Leaders should encourage, inspire, support and develop their followers. They need to establish trust and respect among followers. c. Application -The two approaches emphasize the roles of followers in the leadership process and encourages leaders to develop their followers.

V. Emerging Theories of Leadership (1990s - 2000s)

5. Emerging Theories of Leadership — "Develop your followers" Principle-Centered Leadership — Steven Covey's Seven Habits of Highly Effective People: Leaders should be proactive, goal driven, systematic, win-win thinker, understand and synergize with others. Servant Leadership Model — Robert Greenleaf proposed that leaders should serve their followers and be their role-models in their use of collaboration, empathy, and the ethical use of power. They should work to support and advance each individual. Jim Collins Level 5 Leadership Model — High performing leaders are modest, humble, and set up their successor for greater success. Identified 5 leadership levels : 1. Highly Capable Individual, 2. Contributing Team Member, 3. Competent Manager, 4. Effective Leader and 5. The Executive. No Leader? —Some believe in shared leadership, team leadership or leaderless work groups, members assume leadership responsibilities.

Mandela's 8 Lessons of Leadership

5.Many would consider Nelson Mandela to have many of the traits of a leader. 1. Courage is not the absence of fear - it's inspiring others to move beyond it 2. Lead from the front - but don't leave your base behind 3. Lead from the back - and let others believe they are in front 4. Know your enemy - and learn about his favorite sport 5. Keep our friends close - and your rivals even closer 6. Appearances matter - and remember to smile 7. Nothing is black or white 8. Quitting is leading too

Aligning the Organization

A. Achieving Alignment 1. Technology and Alignment 2. Aligning a Company's Processes and Goals B. Sales and Alignment 1. Metric: performance measurement 2. Customer Facing Personnel: people that have frequent and direct contact with customers 3. Suggestive Selling: a suggestion is made to consider an accessory to the main purchase 4. Service Plans: selling multi-year service plans instead of product ownership; or selling after-sales service plans along with product sales 5. Leasing Sales: Typically involves financing a rental use plan 6. Licensing: Sales of technology or know-how for a certain duration 7. Franchising: Sales of rights to use brand name and service process

III. Corporate Culture & Ethical Climate

A. Code of Ethics: A company's outline of its standards for ethical behavior to: 1. Provide salespeople with guidelines and standards for conduct. 2. Help salespeople inform others that they conduct business in an ethical way. 3. Support salespeople's ethical intent, offering a way "out" when under pressure. 4. Attract high quality salespeople. B. Federal Sentencing Guidelines (FSG): enacted in 1987 and updated in 2007 as a response to white collar crime, specifically crimes by businesses. Guidelines include: 1. Developing clear and complete code of ethics to reduce misconduct. 2. Securing top management support for high ethical standards with executive-level responsibility for establishing and managing a compliance program. 3. Establishing and managing a compliance program that includes mandatory training and regular communication. 4. Creating internal auditing systems to monitor behavior and detect misconduct. 5. Consistently enforcing standards and punishing violations. 6. Reviewing and modifying the compliance program on a regular basis to demonstrate a focus on continuous improvement.

The Strategy Hierarchy

A. Corporate Strategy 1. Establishing the Parameters of the Firm's Strategy a. Strategy: a plan designed to accomplish a mission. b. Mission: a set of objectives. c. Mission statement: a summary of the company's goals. B. Marketing and Sales Strategy 1. What Markets Do We Serve with What Products - Ways to grow market - Market penetration: trying to gain more market share with existing products. - Product development/ account penetration: creating new products to get more business out of the company's existing customers/ selling more products to the same accounts. - Market development: finding new markets - Diversification: combining new products and new markets.

II. Common Ethical Issues Facing Salespeople

A. Ethical Issues Associated with the Salesperson's Customers Misrepresentation: lying about a product, making claims for it that are not true. Bribery: offer of a gift that secures undue influence. Encouraging rogue purchasing: the practice of purchasing products from non-approved vendors Breach of confidentiality B. Ethical Issues Associated with the Salesperson's Company Stealing: The salesperson fails to work a full day, stealing time that she is paid for; the salesperson pads the expense accounts Claiming Credit: Steal other people's leads; misrepresents the location of the customer to receive credit for someone else's order Sexual Harassment: unwelcome sexual advances and jokes, inappropriate physical contact

Sales Positions

A. Inside Salesperson VS Field Representative 1. Inside salespeople cost less 2. An inside salesperson can see many people without the costs of travel 3. Field salesperson can build personal relationships B. Account Managers: build sales within specific accounts 1. Geographic Rep: builds sales within a specific area 2. Vertical Market Rep: handles accounts in the same industry C. Sales Positions 1. Retail Sales Representatives: sell to consumers who come into stores 2. Trade Representatives: sell to organizations in the supply chain, usually retailers 3. Missionary Salespeople/Detailers/Detail Reps: sell to people who recommend or prescribe a product to others but do not personally use it

Selling in a Multi-Channel Environment

A. Multi-channel environment: a number of methods, or channels, to accomplish the selling function Include all of Marketing's efforts, such as Trade Shows, web-marketing, and other activities 1. Internet A. Electronic Data Interchange (EDI): connecting customer's inventory management system with the seller's order entry system B. Customer Portal: website that only customers can enter because it provides them with customized information such as their order history, shipping status, and other personalized data C. Reverse auctions: customers post their needs on a web site and let companies bid; the company with the lowest bid wins. 2. Call Centers 3. Retail stores 4. Direct mail 5. Trade shows 6. Salespeople 7. Distributors

Sales Leaders

A. The Sales Executive - Responsibilities - Planning - Organizing - Implementing - Monitoring B. Sales Manager - Responsibilities - Implementing plans, policies, and procedures set forth by the sales executive. - Recruiting and selecting salespeople for their team - Training salespeople. - Planning, organizing, implementing and monitoring sales team - Evaluate sales team and team members performance - Monitor market changes, competitor activities, and evolving customer needs in their respective territories or customer groups

Alternative Personal Selling Approaches - Adaptive and Stimulus Response Selling

Adaptive selling: Ability of salespeople to change their sales messages based on various customer situations Stimulus response selling: Various stimuli can elicit predictable responses from customers Continued affirmation: Series of questions arranged to make the customer say yes to them, until he/she says yes to the entire sales pitch

Alternative Personal Selling Approaches - Mental States Selling (AIDA Model)

Assumes that the buyers can be led through a series of mental states in the buying process - Mental states are referred to as AIDA Attention Interest Desire Action

Alternative Selling Approaches - SPIN Selling & Need Satisfaction Selling

Assumes that the customer is buying to satisfy a particular need or set of needs - Involves the salesperson using a probing tactic to uncover important buyer needs - SPIN Selling refers to the technique of asking questions to the customer for the best results by framing their situation, problem, implication and need pay-off - Need satisfaction selling is the process of presenting solutions and offerings that satisfy buyer needs

Strategies to Reduce the Selling Cost

B. Strategies to reduce costs 1. Purifying the sales job: shift non-selling activities to lower-cost alternatives such as the Web. 2. Outsourcing: hiring another company to carry out a task or set of tasks 3. Break the sales process down into parts and outsource only parts of the process C. Outsourcing versus Not Outsourcing 1. Advantages of company salespeople A. Company can exert greater control over salespeople's efforts B. Greater control over who is hired to represent the company C. Salesperson will focus on only the company's products 2. Advantages of Outsourcing A. Sharing of the firm's selling costs with other manufacturers B. Greater coverage of the market for the manufacturer

The Sales Function

Consists of: 1. Locating potential buyers 2. Persuading them 3. Consummating the transaction Can be undertaken by: 1. Salespeople 2. Advertisements to attract customers to a company's website 3. Service department to take care of post-sales issues. Supply Chain: the complete process of events and people needed to bring a company's product to the customer 1. Task of Sales force in the supply chain A. Providing market information to the firm's strategic planners B. Creating the sales forecasts: what the salesperson expects to sell in a particular period of time. Used to schedule the firm's manufacturing, inventory, and shipping functions

Types of Outsourced Salespeople

D. Types of Outsourced Salespeople 1. Merchants: Buys and sells on their own accounts; sells on own terms 2. Manufacturer's Representative/ Manufacturer's Agent (Rep): do not take product ownership and do not maintain product inventory 3. Distributor: sells for many manufacturers; takes ownership of products; buys and sells them on consignment, or otherwise maintain inventory; adheres to manufacturer/brand guidelines 4. Broker: represents either buyer or seller and sometimes both. Can carry an inventory of products but does not take ownership of them. E. Types of Company-Employed Salespeople 1. Inside Salesperson: Salespeople who work at a. Company's facility b. Distributor's location c. Contact/Call Center - Inbound center and/or Outbound center 2. Field Representative: sells at the customer's location

Alternative Selling Approaches - Problem-Solving

Extension of need satisfaction selling Goes beyond identifying needs to developing alternative solutions for satisfying these needs

Sales Approaches

Four Approaches to Selling: 1. Transactional selling - designed to get the sale over with as quickly, and as easily as possible without little thought given to the lifetime value of the customer. 2. Affiliative selling - based on friendship between the salesperson and individual buyer. Usually, trust is more important than product specs. 3. Consultative selling - involves identifying and solving a client's problem or solving their need (also known as needs-satisfaction selling or problem-solving, or solution selling). Another form of consultative selling is challenger selling in which knowledgeable industry experts challenge a customer's way of operating to identify hidden opportunities 4. Enterprise selling - strategic partnering between buying and selling organizations. Extend beyond personal to company-to-company relationships. Usually, account management approaches are instituted.

Alternative Selling Approaches - Consultative Selling

Helping customers attain strategic goals by using products, services, and expertise of the sales organization Roles of salespeople - Strategic orchestrator - Business consultant - Long-term ally

What is Leadership?

It is a process (not a trait or set of characteristics). It involves influence. It occurs in a group. It involves movement toward a goal or goals. A. Leading versus Managing Leadership 1. Defined as a process that helps direct and mobilize people and ideas, or a person whose job is to be the group's leaders (i.e., manager) 2. Leadership is involved with establishing direction, aligning and communicating direction and motivating and inspiring. The focus is on change. 3. Leadership involves making decisions at the cusp of change. Ability to lead teams through changes and transformation is a key leadership skill. Management 4. Management is involved with planning and budgeting, organizing and staffing, and controlling and problem solving. The focus is on results that keep things working efficiently. 5. For efficiency, managers establish routinization of processes to reduce uncertainties and create predictability. 6. So, while managers deal with routinization and focus on achieving results, leaders are geared towards change management and transformation to achieve goals.

VI. Laws for Sales Managers

Market Laws 1. Foreign Corrupt Practices Act 2. Robinson-Patman Act: forbids price discrimination, the giving of special prices, discounts, or services to some customers and not to others. 3. Anti-trust Act: prohibit certain forms of non-competing agreements Labor Laws - Laws governing hiring, firing, worker compensation, injuries and disabilities, health and insurance, and minimum wages

Managing the Supply Chain: Active vs. Passive

Passive - Sales forecast influences what happens in supply chain, but salesperson is not taking active role in influencing chain's activity - Example: salesperson turns in sales forecast Active - Salesperson actively seeks to influence what supply chain does - Example: buyer that needs special payment terms will need the salesperson's help in securing those terms from the company - Example: salesperson might need to arrange ______ delivery in order to meet the ______ needs

Evolution of Professional Selling

Personality trait and product knowledge relationship building skills ability to research customers and their needs Increased focus on sales professionalism - Sales professionalism: Uses truthful, non-manipulative tactics to satisfy long-term needs of the customer and the selling firm Sales professionals require: - A substantive knowledge-base on various industries and their priorities - Ability to work independently, remotely and in virtual teams - Defined culture and organization of colleagues - Unique set of professional skills including research abilities Sales managers need to ensure that - The autonomy salespeople have in decision making and the amount of public trust granted to salespeople is well channelised - Adhere to ethical and responsible selling practices https://www.youtube.com/watch?v=1uXySEoiYYM

Global Sales Management:Going Global to Achieve Growth

QuadRep's expanding customers wanted local support in Singapore QuadRep opened office in Singapore Has since followed customers across the globe, opening offices in Malaysia, China, Taiwan, Thailand, the Philippines, and Mexico Empire Technical Group's customers moved mfg and purchasing to Asia ETG and several other companies formed a consortium and included Asian partners where Asia/Pacific resources were required Became opportunity to pursue contracts to build entire assemblies as well as just parts Morphed into international design and assembly house, controlling manufacturing of complete assemblies, turning "a $3 (part) sale to a $103 sale"

VI. Leadership Challenges for the Sales Executive

Recruiting and selecting good employees — Bad hires can be costly in terms of sales, goodwill and training costs. Keeping good employees — Once you hire them you have to keep them working for your firm. Executing virtual leadership — Sales managers will go long periods of time without being physically together with their sales force. Sales managers must be adept at communicating through multiple channels. Diversifying the sales force — A diverse sales force will better understand existing customers and attract new ones. Removing limitations facing females — Make sure women play an important role at all levels in the sales organization. Avoiding ethical mistakes — Training and good leadership will help the sales force act in the most ethical manner. Maintaining motivated sales teams — Sales managers must provide meaningful rewards to their sales force. Integrating technology in sales — Technology is often the difference between the most successful companies and those who follow them. ▪Respect ▪Service ▪Justice ▪Honesty ▪Community

Types of Sales Positions

Sales support - Missionary salespeople - Detailer - Technical support salespeople New business - Pioneers - Order-getters Existing business - Order-takers - Route salespeople Inside sales - Nonretail salespeople who remain in their employer's place of business while dealing with customers Direct-to-consumer sales - Ranges from a temporary salesperson to a highly educated person Combination sales jobs - Perform multiple functions while staying in the same position

Contributions of Professional Selling & Sales Management

Salespeople and sales managers help in: - Stimulating the economy - Diffusion of innovation: Distribution of new products, services, and ideas to the members of society - Generating revenue for the firm - Creating value for the customer and the selling firm - Conducting market research, and providing feedback to the selling firm - Maintaining long-term relationships with customers - Positioning themselves as good candidates for future managerial jobs - Providing expertise and coordinating activities with the selling firm - Managing the interaction with supply chain - Providing necessary forecast to manufacturing and finance - Forecasting and achieving sales that impacts shareholder value

Review & Summary Module 1

Selling process has evolved from product knowledge and salesperson personality orientation to more of a relational and consultative approach Personal selling relies on interpersonal interactions between buyers and sellers Trust-based relationship is different from traditional selling Steady increase of complexity in the business world has given rise to sales professionalism and need for analytical skills Salespeople choose alternative personal selling approaches to best interact with their customers Sales jobs are unique and can be classified based on many characteristics The role of sales managers and sales leaders is to plan, organize, implement, and monitor field sales efforts in line with strategy to accomplish sales and marketing goals

Conventionalist

The Conventionalist Approach: take any and all actions allowed by law or by convention. Fails to account for gray areas, in which acts are not specified as either "legal" or "illegal"

Golden Rule

The Golden Rule: do unto others as you would have them do unto you. Personalizes ethical decisions, making it easy to determine what to do Fails to account for situations in which "others" are in conflict

Libertine Ethic

The Libertine Ethic: ethics are based on the principle of individual freedom. Outcomes are important, and a responsibility for others is assumed Can lead to problems when others are harmed indirectly or harm is not obvious

Market Imperative Approach

The Market Imperative: the market will determine what is right. Provides clear responsibilities for individuals Can devolve into "might is right" scenario

Protestant Ethic

The Protestant Ethic: do what you can defend to a committee of peers. What's "ethical" is based on the intended, not actual, outcome Can lead to more concern about doing what can be defended than what is right

Utilitarian Ethic

The Utilitarian Ethic: do what has the best outcome. a. Situational Ethics b. Bentham/Mills proportional ethic Outcomes, and honorable intent, are important; requires taking responsibility for others It's unclear who gets to decide what outcomes are "best"

IV. Identifying & Responding to Ethical Breaches

Ways of identifying and responding to ethical breaches 1. Whistle-blowing: employee reporting of unethical or inappropriate behavior 2. Using technology to detect breaches (automated audits) Due Process Systems Responding to Ethical Breaches 1. Compliance investigation and punishment systems: upper management investigates potential violations, determine guilt, and assess punishment 2. Grievance and arbitration systems: Arbitrator resolves case if management and labor cannot agree on guilt or the punishment 3. Mediator/counseling systems: a manager investigates, leads discussions, and builds consensus about the potential guilt of an accused person, as well as the need for changes in the organization's practices or policies 4. Employee board systems: Mediator/counselor role is taken on by a board of the accused's peers. Individual Response to Ethical Breaches 1. Leave the organization 2. Take a stand 3. Negotiate for an alternative course of action 4. Appear to agree with the tactic but choose to remain ethical