Sales Mgt (Ch. 1-4)

sales management

Defined as all activities, processes, and decisions involved in managing the sales functions in an organization

Co-Marketing Alliances

Developing marketing and sales programs to sell integrated systems directly to the ultimate customer in order to meet the needs of a consumer. Suppliers and the selling organization work together to meet consumer's needs.

Division and Specialization of Labor

Division and Specialization of labor helps to: Increase productivity - specialists can become proficient at assigned tasks Divide required selling activities to gain maximum benefits within the sales force Line organization Vertical Chain of command runs from chief sales executive down through levels of subordinates Each subordinate reports to one person Line and staff organization Vertical (most common) Several sales management activities assigned to separate specialists

Qualifying the Prospect

Does prospect have a need for product? Possible to make prospect aware of need? Will the sale be profitable to the company?

Legal-Political Environment

Increased number of laws regulate the conduct of business Three broad categories of relevant laws: Antitrust laws (aimed to protect competition) Consumer Protection (aimed to protect consumer) Equal Employment Opportunity (EEO)

21st Century Reinventions to Address the new trends

a) Build L-T relationship with customers (create customer value, prioritize customers) b) Create nimble (flexible) organizational structures c) Gain greater job ownership and commitment from salespeople d) Shift managerial style from commanding to coaching.

Purposes of Sales Organization

a)Divide and arrange activities so the firm can benefit from specialization of labor b)Provide for stability and continuity in firm's selling efforts c)Provide for coordination of activities assigned to sales force and to departments in the firm

Prospecting for Customer

-Core competency -Sales fundamental -Critical to increasing sales -Hard work (make calls, make appointments, etc.) -Delayed payoff -Requires design and discipline -Enhanced by technology (software, internet. Etc.)

Financial Resources

-Lack of financial resources can: constrain the ability to develop new products limit promotional budget limit size of sales force -Mergers are sometimes sought to obtain financial resources

Keys Trends affecting sales organizations and sales managers today

-Proliferation (increase) of information -Constant mobility of the workforce -Availability of communication means -Globalization of the markets

Selected Antitrust Provisions

-Robinson-Patman Act: prohibits discrimination in prices or services offered to competing customers -Tying agreement: The law discourages forcing a buyer to purchase one product to gain the right to purchase another one -Reciprocal dealing: "I will buy from you if you buy from me" -The Federal Trade Commission Act: prohibits unfair methods of competition in general (deceptive product claims, interfering with the actions of a competitor' sales and reps are illegal).

Human Resources

-Sales organizations are highly complex and dynamic and require the recruitment of qualified sales force with skills -Outside specialists can help meet the need to expand

Customer-Centric Culture

Among many other components of customer-centric concept are: Adopting of a relationship or partnership business model with shared risks management and rewards Defining the selling role in terms of provision of customer business consultation and solutions Increasing the formalization of customer analysis processes and agreements Taking a proactive leadership role in educating customers about value chain and cost reduction opportunities Focusing on continuous improvement principles stressing customer satisfaction

CRM-Driven Data for Sales Manager Decision Making

Access to technology has allowed consumers to gather and have more info CRM is also one of the means helping firms understand consumers and become customer oriented CRM systems (use of technology) are well-suited to drive and be driven by volume of data being produced by customers, salespeople and other internal and external sources

Coordination and Integration

As an organization divides tasks among specialists, those specialists become more difficult to integrate in the firm, therefore: Sales force activities must be integrated with customer needs Selling activities must be coordinated with other departments Tasks must be integrated among specialized units

Objectives of CRM

(RAP) Customer Retention- ability to retain loyal and profitable customers for firm profitability Customer Acquisition- acquiring the right customers based on learned/defined characteristics Customer Profitability- increase individual customer or individual market segments while offering the right product at the right time

Market Orientation

(consumer is at the center of orientation; their needs are our priority) Successful salespeople think beyond "selling" Market-driven companies do better market sensing Market-driven companies develop stronger relationships with customers and channels Internal partnering a critical component

Selling Success Factors

***Listening skills -Follow-up skills -Ability to adapt sales style to situation -Tenacity (nurturing relationships) -Well organized -Verbal communication skills -Proficiency in interacting with people at all levels of an organization -Demonstrate Ability to overcome objections -Closing skills -Personal planning and time management skills

Opening the Relationship

-"The initial approach" of a prospective customer -Determination of who has have the greatest influence or authority to initiate the purchase process or will ultimately purchase the product? -Generate interest to obtain information needed to qualify a prospect -Identify key decision makers, their desires, and relative influence

Factors Making Sales Careers Attractive

-Autonomy and opportunities for personal initiatives -High Variety of challenging activities -Opportunities for rewards (intrinsic and extrinsic rewards) -Favorable working conditions -Moving up in the organization (Excellent opportunities for development and advancement)

Closing the Sale

-Begins with first contact Requires: -"Asking for the order" -Trial Close -Understanding the prospect and buying process Paced by the salesperson Requires continual improvement

6 Critical Drivers of Change in Selling and Reinventing Sales Management

-Building long-term customer relationships -Creating sales organizational structures that are more nimble and adaptable to customer needs -Gaining greater job ownership and commitment from salespeople -Shifting management style from commanding to coaching -Leveraging technology for sales success Integrating salesperson performance evaluations

Selected Consumer Protection Provisions

-The Fair Packaging and Labeling Act: makes unfair or deceptive packaging or labeling of certain consumer commodities illegal. -Truth-in-Lending Act: requires full disclosure of all financial charges on consumer credit agreements. -State-Cooling-off laws: allow consumers to cancel contracts signed with door-to-door sellers within a limited number of days after agreeing to such contracts -The FTC requires door-to-door salespeople who work for companies engaged in interstate commerce to clearly announce their purpose when making calls on potential consumers

Stages of the Selling Process

1. Prospecting for customers (NEED: hard work, email, etc.) 2. Opening the relationship 3. Qualifying the prospect 4. Presenting the sales message 5. Closing the sale 6. Servicing the account

Outsourcing the Sales Force

2 Types of agents to select from when outsourcing include: Manufacturer's representatives Sell part of the output of their principals Take neither ownership nor physical possession of goods Cover specific territory and specialize in limited range of complementary products Selling agents Do not take title or possession of the goods they sell Compensated by commissions Broad authority to modify prices and terms of sale Actively shape manufacturer's promotional and sales programs

Environmental Factors Impacting Selling Activities Success

2 kinds of environmental factors impact selling activities success: a)External, which is beyond the manager's or firm's control b) Internal (organizational environment), which is under the manager or organization's control

what are the 2 Sales Organization Structures?

2 major organization structures include: A) Horizontal - divides selling activities among sales force B) Vertical - assigns authority for specific sales management activities

What is Customer Relationship Management (CRM)?

A Comprehensive business model for increasing revenues and profits by focusing on customers

Virtual Office

Benefits Better work-life balance Real estate and overhead cost savings Environmental impact of fewer commuters Drawbacks Out of sight out of mind? Isolation

Selling and Buying Centers

Bring together individuals to help salespeople be more effective Establish team selling structure to meet customer needs Matrix organization - direct reports and are internal consultants who provide expertise Key account - team managed by senior salesperson dedicated to serving important customer

Technological Environment

Changes how salespeople/sales managers do jobs Influences sales strategies Provides opportunities for product development Transportation, communications, and data processing technologies change: sales territories sales rep deployment sales performance evaluation

The 6Cs of Finding the Right Rep

Compatible lines: find a rep with complementary portfolio of products Compatible territories: find a rep who knows his/her region and where/how to sell your product Compatible customers: find a rep who knows the industry, your company, and your customers Credibility of the rep: find the right ambassador who will talk positively about your company Capabilities: find a rep who gives attention and give priority to your product Credits: check references and do a background check of the rep

Personal Selling's Role in Functional Relationships

Create a climate of cooperation, with open and honest communication for long-term relationship Roles of salespeople Engender high level of personal trust in well managed business activities Provide expertise for competitive advantage

Customer Orientation

Customer drives the marketing strategy, which is driven by the marketing mix All firm's actions taken will focus on aligning all various organizational processes and functions with maximization of firm success Customer is at the center of all strategic decisions and firm activities Firm with high customer orientation are referred to as customer centric - meaning customer is at the center of their business model

Outsourcing Considerations

Economic criteria Control Transactions costs Strategic flexibility

Ethical, Social, and Cultural Environment

Ethics - development of moral standards by which actions and situations can be judged are very important especially in the 21st century Sales managers must also create a culture that promotes: Relationships with salespeople Interactions between salespeople and customers Managers must influence ethical performance by example Ethical standards reflect integrity of firm

Servicing the Account

Excellent service bolsters loyalty Follow up to check satisfaction: -Product -Installation -Training -Maintenance -Billing Satisfied customers = Repeat customers

How New Trends affect Businesses, salespeople, and Leaders? (this part: For businesses and Salespeople)

For Businesses: - new market opportunities - rethink and introduce new selling approaches For salespeople: - Job opportunities - become knowledgeable about business environment and update skills

How Do New Trends affect Businesses salespeople, and Leadership? (cont...) For managers

For Managers the focus should include: - Support for customer-centric culture (Beliefs and values) - Recruit/select the right salespeople - Provide training to develop right skills - Leverage technology to support sales force - Collaborate with other departments, etc.

Strategy Development

From the company mission come the goals and objectives These goals and objectives are overreaching for the company, and generate strategy to be fulfilled Goals and objectives are cut into smaller, attainable ones for employees to reach Strategic business units (units, subsidiaries, etc.) aid in this process

Sales Management as a Global Endeavor

Globalization is a MUST in the 21st century. It requires: - Good relationships with global vendors - Efficient, trusted, and adaptable communication systems - Recruit managers and employees who understand, are aware, and adapt to other cultures

Managerial Decision Levels

Greater managerial levels make important decisions The lower the pay of the sales force members, the lower the managerial level The higher the level of complexity within sales activities, the higher the managerial level involvement

Buying Process Participants

Initiators - perceive problems/opportunities requiring new product or service Users - use or work with product or service Influencers - provide information for evaluating products or suppliers Gatekeepers - control flow of information Buyers - contact selling organization and place order Deciders - final authority to purchase Controllers - determine budget

Integrated Marketing Communication (IMC)

Integrates personal selling, advertising and other communications options Advantages of selling in IMC Face-to-face contact More persuasive More demonstrative Customization opportunities Disadvantages of selling in IMC Limited ability to duplicate More costly

Telemarketing

Is a Form of organization by selling function Is used to qualify potential new accounts/potential new customers Is used to Service existing accounts quickly Seeks repeat purchases from existing accounts that cannot be covered efficiently in person Provides quick communication of newsworthy developments such as intro of new or improved products or special sales programs

Logistical Alliances and Computerized Ordering

Is another system enabling customers to place an order directly, and automatically via links to a supplier's computer Customers find this as convenient, flexible, and less time consuming

Team Selling

Is another way to deal with the demand of customers by assigning specialists in the organization to individual customers It integrates functional specialists with customer relationship specialists to meet customer needs Benefits of Team selling: Customer questions answered faster Customers can speak directly with desired specialist

Sales Management Process

Is the process of effective management of a company's sales force.

Sales Management Process (Part 2) 3 components

It involves 3 interrelated components for decision making: -Formulation of the sales program -Implementation of the sales program -Evaluation and control of the sales program

The CRM Process Cycle

Knowledge Discovery Market Planning Customer Interaction Analysis and refinement

Personal Selling's Role in Strategic Partnerships

Long-term relationships where both parties make significant investments to improve profitability for both parties/companies 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

Customer Feedback

Maintaining customer loyalty is crucial for improving profitability Loyal customers . . . Tend to concentrate on purchases Provide positive customer referrals May pay premium prices for value they receive Supplement satisfaction measures with examinations of customer behavior Annual retention rate Frequency of purchases Percentage of the customer's total purchases captured by the firm

CRM Failures Are Often Who's Fault?

Managements: Disruption of routines Perception of CRM as micro-management tool Differences in expectations Perceived lack of management support

Managerial Selling Responsibilities

Managers often active in sales to key accounts Organizations value their selling skills Managers value commissions, contact with marketplace Drawback - some managers neglect managerial responsibilities

Differences between managing and leading ?

Managing (control, direct, be a boss) Leading (communicate, cheer lead, coach, and empower salespeople to become decision makers)

Impact of New Technologies

May change vertical structure Productivity enhancement through CRM systems

Goals/Objectives/Culture

Mission and objectives drive customer management approaches: Well-defined mission + Successful corporate history + Top management values= Strong corporate culture

B2C vs. B2B

Most salespeople are involved in retail selling (B2C) Larger volume of sales accounted for by industrial selling (B2B) Sales to resellers Sales to business users Sales to institutions

Customer Type/Market Organization

Natural extension of marketing concept and strategy of market segmentation: Pros Better understanding of customer needs Increased familiarity with certain businesses Increased control over allocation of selling effort Cons Possible higher selling and administrative costs Duplication of effort

Natural Environment

Nature influences demand for products Weather Natural disasters Availability of raw materials Energy resources Product/raw materials shortages may cause demarketing (less marketing actions/activities)

Organizing to Service Key Accounts

New approaches used to service, attract and maintain large important accounts using efficient management of these accounts. Actions taken could include: Assigning Key account to sales executives and business managers (Customize products and services to satisfy key customers, Implement key account business plans) Have a separate corporate division or Sales Force to deal with Key Accounts Deliver high-level customer service to attract and maintain important customers

Organizational Buying Situations

New-task purchase - first-time purchase of complex and expensive product or service Modified rebuy - requires modification to existing purchase decision and may open the door for new suppliers Straight rebuy - reorder item purchased many times in the past

Personal Selling's Role in Market Exchanges

One-shot transactions occurring between a buyer and seller with limited thought of future consideration Roles of salespeople Create new value: provide distinctive offering to consumers through true innovation or unique service Adapt: engineer sales approach to succeed in selling "Make the market": find a way to profit from transaction itself based on place/product sold Exit: Disengage if not successful in the transaction/business

Importance of Sales Organization Decisions

Organizing activities, sales force management are major parts of strategic sales planning Managers becoming more proactive in restructuring Strong corporate vision, effective strategic market planning are closely linked with how an organization is structured, interacts with its customers

What is marketing mix?

Price Product Place Promotion

Larger Span of Control

Pros Greater control/ responsiveness due to fewer management layers Lower admin costs Pros Greater control/ responsiveness due to fewer management layers Lower admin costs

Strong Service Capabilities

Provide Competitive advantage opportunity Make it difficult for other firms to compete for same customers Customers are reluctant to switch regardless of price when the company provides strong service capabilities

Sales Message Presentation

Purpose: -Transmit information (present facts, samples, etc) -Persuade prospect to become a customer Common complaints about sales presentations: -Running down competitors -Too aggressive or abrasive -Inadequate knowledge of competitors' products and services -Inadequate knowledge of client business/organization -Poor delivery

Horizontal Structure

Questions to be asked in choosing Horizontal Structure Should the Company use its sales force or outside agents? What is the number of sales force needed and how will this sales force be arranged? Should sales force be assigned to Product, customer, or functional assignments? Who should have Responsibility for national accounts? How to sell in Foreign market sales and how should marketing activities be arranged?

Advantages of CRM

Reduces advertising costs Makes it easier to target specific customers by focusing on their needs Makes it easy to Track the effectiveness of given promotional (marketing communication) campaigns Allows to compete for customers based on service, not prices Prevents over-spending on low-value clients, or under-spending on high-value ones Speeds time to develop and market a product Improves use of customer channel

Selling Function Organization

Salespeople specialize in performing different selling functions - e.g. prospecting and developing new accounts versus maintaining and servicing existing customers Pros Skills matched to sales function Developmental salespeople often a successful alternative Cons Customer objections to switch to maintenance salesperson Feelings of rivalry between the sales force

Production and Supply Chain Capability

Seller-buyer relationship can be influenced by: -Production capacity -Technology equipment -Location of production facilities -Transportation costs (may affect competitiveness) -Ability to ensure joint distribution and service after the sale

Product Organization

Separate sales force for each product (or category) in the line: Pros Salespeople master effective selling methods for single or related products Closer alignment of sales and production Sales management controls allocation of selling effort across the line Cons Duplication of effort

Geographic Organization

Simplest and most common method Individual salespeople assigned to separate geographic territories Responsible for performing all activities necessary to sell all products Lowest costs Travel time and expenses minimized Sales administration and overhead costs kept low Does not provide benefits associated with specialization of labor

Stability and Continuity

Stability and continuity can be achieved by: Organizing activities without regard to talents of current employees Training people to fill positions Allowing same activities to be carried out even if designated individuals receive promotions to upper positions or leave the firm

Organizational Buying Design Stages

Stage 1: Anticipation or recognition of a problem or need Stage 2: Determination & description of the traits and quality of the needed item(s) Stage 3: Search for and qualification of potential suppliers Stage 4: Acquisition & analysis of proposals or bids Stage 5: Evaluation of proposals and section of suppliers Stage 6: Selection of an order routine Stage 7: Performance evaluation and feedback

Personal Selling in Relationship Era (EEC)

Stage 1: Exploration: investigate, learn about customer/partner Stage 2: Expansion: Generate repeat sales, full-time selling, cross-selling Stage 3: Commitment: Build loyalty, become a preferred supplier, engage in TOM (Total Quality Management)

Starting a Sales Force: Building Blocks

Start with a strategy - mission, skills needed, customer benefits/needs Appoint an expansion team - find human resource executives and executives who will manage the sales force Leverage existing strengths - find new hires with your ranks, of your personal networks, as well as your clients and suppliers Go to the press - tout/advertise your business model susceptible to attract customers and salespeople Avoid compensation snafus: Pay both new and existing sales force for sales made if they will be working together and be fair in pay Provide support- get in the field with sales force to show support and best practices

Steps in Developing and Implementing Strategies

Step one: Market opportunity analysis Step two: Generate strategies Step three: Select the strategy Step four: Program marketing mix Step five: Review and revise Step six: audit and adjust

What are some examples of touch points?

Such as call center, salesperson, distributor, store, branch office, web, or e-mail) with purpose of acquiring, cross-selling, or retaining customers.

VERTICAL ORGANIZATION

The Vertical organizational structure assigns authority. 2 key questions that need answering when designing an effective vertical structure are: -How many levels of sales managers should exist? -How many people each manager should supervise? Managers and levels of management dictate the span of control. The more levels exist, the lower the span of control, and vice versa.

Span of Control

The span of control should be reduced when: Sales task is complex Profit impact of each salesperson's performance is high Salespeople are well paid and professional Also, at higher levels in the organization

Other Team Selling Structures

They include: Selling center: Brings together individuals from around the organization to support salespeople Matrix organization: salespeople who support internal consultants with specialized expertise to care for the customer Multi level selling - personnel or sales teams from various managerial levels who call on their counterparts in buying organizations. This may involve setting up a permanent team to coordinate various activities with the customer.

Managerial Decision Levels

To decide on the level of managerial decision, the organization should ask itself: How much, where should the managerial authority lie? Who should have decision in Hiring, firing, and evaluating other managers and salesforce?

Classification of B2B Sales Jobs

Trade servicer - have responsibility to increase business form current and potential customers by providing them with merchandising and promotional assistance Missionary seller - increase business from current and potential consumers by providing them with product information and other personal selling assistance Technical seller - have responsibility to increase business from current and potential consumers by providing them with technical and engineering assistance New business seller - have responsibility to identify and obtain business from new customers

Ethics, Trust and Sales Management

Trust and ethics are necessary to maintain customer loyalty, and maintain L-T relationship Federal Guidelines punish unethical firms and behavior

Building Customer Relationships

Under promise, over deliver Don't forget the small things. Stay in contact Establish a feedback system

SBU Strategy (Strategic Business Unit)

Used to determine how the business will compete in its industry to achieve sustainable competitive advantage (SCA) SCA focuses on distinctive competencies Porter's Three Generic Strategies: Low Cost (pursue of cost reduction/minimization strategy) Differentiation (provide consumers with unique/distinct product) Niche (service a particular target market which less competitive)