marketing 430 Midterm

Business Strategy

Defining and articulating an overall business mission, developing specific business goals, and designing a strategy for achieving these goals

Personal Selling

Direct communication between paid representatives that lead to transactions, customer satisfaction, account development, and profitable relationships • Critical to the sale of many goods and services, especially major commercial and industrial products and consumer durables • Form of promotion (marketing mix price, product, promotion, place) • Provides the "push" from the push and pull strategy, to get orders signed; advertising gives the pull • Involves two way communication • Considerably the most effective form of promotion in identifying opportunities to create value for the customer and gaining customer commitment.

Sales Manager

The planning, organizing, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm • Person responsible for management of the field of sales operation • Focuses on the administration of the personal selling function in the marketing mix o Role includes: planning, management, and control of sales programs

Market Potential

an estimate of maximum demand in a time period based on the number of potential uses ad their purchase rate o Actual industry sales are usually less than market potential o The industry purchase rate is a function of price levels, overall product quality, promotional expenditures, and the number of stores stocking the item

New buy

most complex; the seller has the opportunity to add value for the buyer during three of the 4 stages of the purchasing process: recognition of needs, evaluation of options; purchase decision; and implementation and evaluation

Global Perspective Competency

o Cultural knowledge and sensitivity o Global Selling Program

Leading the Sales Force

o Expected to lead by example in encouraging ethical behavior within the sales force.

Generalist Advantages and Disadvantages

o Generalist Advantages: • Low cost • no geographic overlap • no customer overlap o Generalist Disadvantages • Limited product line knowledge • Limited customer knowledge • Lack of management control over product or customer emphasis

Recognition of Needs

o Help customers recognize need or opportunity o Some cases the need is immediate and focuses on resolving a problem o More typical of a transactional relationship o Needs to understand derived demand: refers to the dynamic in which demand of a product or service is derived from the demand for the customer's products and services o Supplier can gain competitive advantage by knowing and understanding the needs of the customers' customers.

Evaluation of Options

o Identify and provide solutions o Specifications: the development of a precise statement of the requirements and tolerances • Usually dictated by the anticipated demand for the organization's products and by the technological requirements of its operations • This process is critical o Proposals: written offer by a seller to provide a product or service to a purchasing organization. • May represent the culmination of sales activities spanning several months involving extensive client analysis May result from receiving and RFP (request for proposal) from a buyer. It's a notice a buyer sends out to qualified suppliers asking them to bid on a project with a certain set of specifications. • Must be integrated into the selling process • The proposal is the outcome of the 1st two phases of the purchasing process

Self Management

o Includes: • Integrity and ethical conduct • Managing personal drive • Self-awareness and development

Segmentation and Target Marketing

o Involves aggregating customers into groups that: • Have one of more common characteristics • Have similar needs • Will respond similarly to a marketing program o Target marketing: the selection and prioritizing of segments to which the company will market

Competition: Short Product Cycles

o Rate of technology transfer is increasing thus product cycles are becoming shorter and imitation and consequence are rapidly growing. o Sales and customer relationship skills are more important when a product is new and again when it is late in its life cycle. o Help customers understand that the benefits of the new product outweigh the risks and costs associated with the requisite business changes.

User Buyer

o Role of determining the impact of the purchase on the job that they or their people perform o Focus is much narrower than that of the economic buyer because they are concerned primarily with their own operating areas or departments o Typically • Are personnel whose daily work will be affected by your product or service • Are implementation oriented • Take a tactical view vs. a strategic one • Focus on the past and present rather than the future, expect to ask: "How will this affect me?" o Want to know how your solution will affect the o May represent a very powerful buying influence and on that is important for the seller to identify

Relating Skills

o Salespeople have long recognized call reluctance, or the fear of making contact with a customer, as a problem o The role of a salesperson is to help the customer buy wisely o The ability to put the other person at ease in a potentially tense situation o Propriety: show buyer respect; dress appropriately o Competence: know your product/service; third-party references o Commonality: have common interests, views, acquaintances o Intent: reveal purpose of call, process, and payoff to the buyer • Needs Discovery Skills o Should begin to understand what's on the prospect's mind rather than focusing discussion on the product and its benefits. o Customers don't buy products or services; they buy solutions that address their problems or enhance opportunities. o Needs finding and selling success go hand in hand o Identifying Needs • Task motives: can be defined as the logical, practical, or functional reasons for buying; the usually involve either money or productivity. • Personal Motives: respect, approval, power, recognition o Questioning • Not only do you want to know perceived needs, but you want to obtain the information in a way that does not alienate the other person.

Sales Force Composite

o Salespeople project volume for customers in their own territory, and the estimates are aggregated and reviewed at higher management levels o The territory estimate is often derived based on demand estimates for each of the largest customers in the territory, the remainder of the customers as a group, and then for new prospects.

Supply Chain Management (SCM)

o The integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers o Its about producing world-class products that are available at the right time, at the right place, and in the right form and condition • Selecting and managing supplier relationships • Managing inbound logistics • Managing internal logistics • Managing outbound logistics • Designing product assembly and batch manufacturing • Managing process technology • Managing order, pricing, and payment terms • Managing channel partners • Managing product installation and maintenance Switching to SCM methods involves complexity and implications • Knowledge of the entire upstream and downstream supply chain • Thinking strategically about partnering • Establishing good lines of communications and influence with senior corporate management

Purchase

the set of activities culminating in a purchase. The set of activities most likely to involve direct sales people • Negotiating, bidding, finalizing terms and conditions, and writing proposals

3 phases of CRM

• 1. Companies look to manage customer relationship as a driver of revenue. The focus is on utilizing cross-selling and upselling opportunities and on finding new solutions to customer situation that could be packaged as new offerings • 2. Companies look for possibilities to manage customer relationships as drivers of profits focused on using customer knowledge and emerging new channels to decrease cost to serve and frequently on using advanced price mechanisms

Strategic Implementation Decisions

• A set of processes that organizations will be develop to create customer value and achieve a competitive advantage o How will customers be accessed (go-to-market strategy) o How will new offerings be developed and existing products be improved? (product development management? o How will physical products be created and delivered to the customer (supply chain management) o How will customer relationships be enhanced and leveraged (customer relationship management)

Sales Process Activities

• All the activities needed to serve a customer properly • Four groups: interest creation, prepurchase, purchase, and postpurchase Interest creation: all the ways the customers learn about the benefits of the product and the company • Prospecting, generating leads, creating awareness and interest, and providing information about the company's products and services

Decision MOdel

• Allocating sales calls overcomes these two shortcomings by focusing on the response of each account to the number of sales calls made over a period of time • Two parts Develops the relationship between the number of sales calls over a period of time and sales to a particular account: sales response function Uses the individual response functions to allocate calls so as to maximize the sales • Most helpful in setting priorities when the sales force program is more transactional in nature because the response estimates are most reliable in such selling situations

Portfolio Model

• Considers multiple factors when determining attractiveness of individual accounts within a territory • Selling effort is allocated so that the most attractive accounts receive the most effort • Offer Help the sales team to identify the important customer and relationship issues Facilitate communication between salespeople and sales managers Help isolate information gaps and set priorities for customer data collection and analysis Force the sales team to think about the future and consider ways of achieving a more desirable portfolio configuration • Most likely to be used in sales force programs with more of a consultative-type account relationship strategy

Sales Management Competencies

• Defined as sets of knowledge, skills, behaviors, and attitudes that a persona needs to be effective in a wide range of industries and various organizations. • Strategic Action Competency o Understanding the overall strategy and goals of the company and ensuring that your actions and those of the people you manage are consistent with these goals involves strategic action competency: • Understanding the industry • Understanding the organization • Taking strategic actions o Involves understanding the organization-not just the sales unit

Postpurchase

• Delivery, installation, and servicing products; addressing customer questions that need answering; providing information about new features; and collecting payment

Relationship Binders

• Drive parties to progress to a fully committed relationship o Create Value o Meet Expectations o Build Trust

Generalist Vs. Specialist Structures

• Each salesperson sells all products to all customers within a particular geographic area, to highly specialized sales forces, where teams of salespeople focus on specific products, markets, or functions • Companies attempt to develop a sales force organization that is adaptable, efficient, and effective • Adaptive: if the company can react quickly to product and market changes without a major structural overhaul • Efficiency: reflects the rate at which key stakes activities, such as calls, demonstrations, and proposals, are performed

Single Factor Model

• Examines a single customer characteristic, often sales volume, to arrive at an initial allocation of sales calls

Generating New Accounts

• Firms who have developed effective customer acquisition capabilities are more profitable than those who have the capability of developing close customer relationships, but are not good at acquiring new customers • The key to building sales through prospecting is to spend time with prospects that are likely to become good customers.

Qualitative Sales Forecasting

• Sales forecasting is concerned with predicting future levels of demand

Sales Management Process

• Two primary responsibilities: o Achieve their firm's goals for their current planning period and o to develop the people reporting to them • Focusing on the Big Picture o A company's management process is fundamentally affected by the firm's overall business strategy for accessing its target markets.

Managing Existing Accounts

• Will prosper more if maintain stronger customer loyalty and they are considered to be more profitable because they are less price sensitive and will stick with you in the face of competitive offerings

Evolution of Relationships 5 stages

1. Awareness o Recognition that a supplier may be able to satisfy an important need • 2. Exploration o Tentative initial trial with limited commitments by both parties • 3. Expansion o Greater rewards for both parties in the relationship • 4. Commitment o Commitment by both the buyer and seller to an exclusive relationship • 5. Dissolution o Total disengagement from the relationship

Functional Specialization

o Focuses on the activities or functions performed by customer contact people o New customer specialists: these people are charged with gaining new customers • This type of person and the skills needed successful call on prospects are believed to be quite different from those needed to service existing accounts • Helps ensure than an appropriate amount of effort is dedicated to new customer acquisition o Retention Specialists: 80-90% of customers are current customers • Retaining customers is more important, realizing revenue growth are critical to profitability o End-User Specialists • Companies that sell through distributors face the challenge of creating demand among end-users o Sales engineers: • Responsible for developing applications for their products witihin an existing customer's business • Technical sale focusing on technical issues that are usually beyond the expertise of the general sales force o Service Consultants • May support three of four sales representatives and address customer issues that salesperson cannot handle adequately but that are important to creating customer value

Jury of Executive Opinion

o Involves soliciting the judgment of a group of experienced managers to give sales estimates for proposed and current products o Main advantages are that it is fast and it allows the inclusion of many subjective factors such as competition, economic climate, weather, and union activity.

Positioning Strategy

o Occurs in the mind of the consumer and refers to how the consumer perceives the product, brand, and company (vs.) competition o Questions include • Who are you (brand identity) • What are you (brand meaning) • What do I think or feel about you (brand responses) • What kind of association and how much of a connection would I like to have with you (brand relationships)

Sales Force Program Decisions

• A tool for planning how the sales force will perform its role in achieving the firm's objectives • Account Relationship Strategy o The type of relationship it intends to develop with its customers. Encompasses plans for acquiring, maintaining, and developing customers

Post Interaction Phase

• Attention shifts to the follow up activities • Followup refers to all the efforts involved in servicing the sale and building a lasting and growing relationship • Relationship Management o Cross-selling: involves selling additional products and services to an account o Up-selling: closely related to cross-selling and refers to selling bigger products or enhanced services to an account that typically results in higher margins an greater dollar commitments

Quantitative Sales Forecasting

• Based on analysis of historical data to predict future sales • Seasonal Adjustments o What appears to be a good forecast may turn out to be a poor one because of the failure to consider seasonal factors o Collect sales figures for the past several years o Next, sales for months of quarters are averaged across years to build a seasonal index o The quarterly averages are then divided by mean sales for all quarters to give seasonal index number o Once seasonal index numbers are developed for each time period, it is easy to adjust a set of sales data seasonally o Actual sales, are simply divided by the appropriate index numbers to give a set of deseasonalized data then prepared using the deseasonalized figures o Two truths to remember • Seasonal adjustments are widely used in business • Seasonal adjustments reduce forecasting errors

4 skills needed in CRM

• collaboration • relationship management • finance and business skills • consultative skills

Sales Vs. Profits

• tendency in sales to evaluate opportunities in terms of dollar sales • some companies are beginning to focus on the bottom line instead of the top line • profit = difference between net price the actual cost to serve a customer • Customer Lifetime Value o Appropriate metric for measuring marketing performance o Based on the notion that the value of a customer is the sum of the customer's discounted flow of profit contributions in the future.

Preinteraction Phase

Planning Skills • When you collect your thoughts and organize your interaction strategy prior to meeting a customer face to face • Setting Objectives: What do I want to Accomplish? o Specify an action that they want the client or proposal to take o Objective should be vague o "collect information" o "build a relationship" • ex. The client agrees to supply information on historical inventory levels • The client tells you who will be involved in the purchase decision • The client arranges for a meeting with the chief design engineer • The client agrees to a trial run on the system o First two examples involve collecting information • Knowledge Management: What do I know about the customer? o Good opportunity to review individual, company, and industry information about clients and their companies o Know how to spell and pronounce name, title, age, residence, education, buying authority, clubs, and memberships, hobbies, and idiosyncrasies o 47% of salespeople admit to not having a clue about their customer's biggest concerns. • Information Gathering: Where Can I find the Information> o You can usually identify a number of sources for obtaining the data o Include company records, salespeople, customer employees, published information, and observation o Can learn about pricing strategy, merchandising strategy, vendor preferences, and deal proneness. • Rehearsal: What Am I Going to Say? o All salespeople should have at leas some idea of how they will initially start an interaction, what questions they will ask, and what benefits they plan to present o Successful Salespeople • Research Prospect Background • Use referrals to prospecting • Open by asking questions • Use needs-satisfaction type presentation • Focus on customer needs • Let prospect make purchase decisions o Less Successful Salespeople • Do little background research • Use company-generated prospect lists • Open with a product statement • Use standard presentation • Focus on product benefits • Close by focusing on the most important customer objection o Questions for Customers? • Who is your company? • What Is your record for support and service • What are you selling and what kind of person are you • Who else is using your product and are they satisfied • How does your solution compare to other alternatives • Why do I need it? Why do I need it now? • How much does it cost? Is your price truly competitive?

Managing Account Relationships

The implementation of the account relationship strategy in discussing the activities involved in managing account relationships • The key four aspects of business to business relationships o Account purchasing process o The buying center o Building account relationships o Account Relationship binders

Qualitative Methods

are often used when you have little numerical data to incorporate into your forecasts. o New products are a classic example of limited information , and qualitative methods are frequently employed to predict sales revenues for these items o Also recommended for those situations where managers or the sales force are particularly adept at predicting sales revenue.

Competition: Globalization

companies competing in other counties o World trade accounts for more than 20% of the US gross national product (GNP) o 95% of world's population and 75% of purchasing power is outside of US. o Chief Sales Officers are now requires to do more traveling, hiring the right people, defining new role and duties, developing a global perspective and world-class skills at addressing an increasingly eclectic sales force.

Prepurchase

customers are actively considering and evaluating competitive product offerings • Explaining features and benefits, qualifying prospects, assessing customer needs, cooperating in problem solving, and demonstrating company and product capabilities • Go to Market Participants Who will participate? The Internet, telemarketing, advertising, promotion, direct mail, and face to face selling (including a direct sales force, independent agents, distributors, integrators, and alliances.

Problem-Solution Model

involves an analysis of each customer's circumstances. Based on more formal studies of customer's operations. o The early selling objective is to get the customer's permission to conduct a formal study o Will submit a written proposal based on the study o A formal presentation, perhaps by a team including a salesperson, management, and technical personnel, often accompanies the proposal. o Computer systems, advertising, campaigns, telecommunications systems, and information systems o Most appropriate for a consultative or enterprise type of relationship where there is a very high investment in the relationship by both the seller and client organizations

Build a Prospect Profile

o A profile of what the best prospect looks like o Start with a review of the target markets for your products, as specified in your marketing plan. o If a target market is not clearly identified, a new salesperson may need to rely on the past experiences of other salespeople in the company by asking them what types of business became their most valuable customers o The profile is defined in terms of demographics, the identifiable characteristics that define the individual buying environment • Size of the business • Age of the equipment to be replaced • Geographic distance from shipping points • Product line specialty

Team Building Competency

o Accomplishing tasks through small groups of people who are collectively responsible and whose work is interdependent requires a team-building competency; effective by: • Designing teams properly • Creating a supportive environment • Managing team dynamics appropriately

Technical Buying Influence

o Act as gatekeepers by screening out products and suppliers that do not meet the needs of the buying organization. o Function is to narrow down the choices of those alternatives that are most likely to fulfill particular organizational objectives. o Focus on quantifiable aspects of the product or service as they relate to the product's specifications • Be able to say "no" but needs to get approval before saying "yes" • Be able to recommend • Be a key influencer to the decision maker • Be concerned about product specs and financials • Be focused on the present • Ask "what" and not "why"

Competition: Proliferation

o Advances in technology, information, communications, and distribution have created an explosion of new sales and service channels, media, products, and brands. o Product and competitor knowledge of demands on sales people are greater. o Developing solutions for customer problems becomes more complex as does the need for better understanding of customer needs. o Must work and understand companies marketing strategies

Estimating Potentials

o Based on the number of possible users of the product and the maximum expected purchase rate o Use secondary sources o For existing products you may wish to use the ratio of current sales to the number of households or sales per person to derive a purchase rate o Function of the size of the market x anticipated market share with an +/- adjustment for retailer inventory changes

Leading Indicators

o Can be useful to guide in preparing sales forecasts o Changes in the factor series are used to predict sales directly o Predicts sales trends o Can be more sensitive to change

Coaching Competency

o Coaching is defined as a sequence of conversations and activities that provide ongoing feedback and encouragement to a salesperson or sales team member with the goal of improving that person's performance o Performance improvement is achieved by • Providing verbal feedback • Role modeling • Building trust o Coaching helps salespeople develop through one on one feedback and encouragement o Including providing ongoing training and coaching in selling skills, sales strategy, and product and market knowledge

Customer: Rising Expectations

o Customer satisfaction remains low and is difficult to manage because as customers receive good treatment, they become accustomed to it and demand even better treatment. o Customer expectations are raised by the higher standards et in other industries and how a business performs vs. competitors o Customers expect salespeople to be professionals who are adapt at identifying and satisfying their buying needs.

Qualifying Prospects

o Determine if the prospect is likely to be converted to a buying customer o Possibly do this over the phone first o Needs • Qualified leads are those that have a use for the seller's goods or services and are planning to buy in the near future • A prospect that is satisfied with the present supplier and has no desire to change is going to be very difficult to convert into a customer • You must discover the desire and need and focus on those needs o Buying Authority • Must have the buying authority and be present especially in a sales meeting o Ability to Pay • Finding prospects that want a product and also have the authority to buy will not be productive if they lack the financial resources to buy. • Objective is to eliminate prospects who represent too high a credit risk

• When is an account too small?

o Determine the minimum opportunity on which you should be spending your time o The individual salesperson is in an excellent position to determine the long-term value of a customer o Salespeople should know customers' short-term growth potential, as well as their competitive and demand situations o Perform a minimum account size analysis • Calculating a personal cost per sales call • Breakeven sales volume o Cost per call • Calculate the cost of making a sales call • Is a function of the number of calls you make per day, the number of days available to call on customers, and your direct selling expenses • Direct selling expenses include expenses that can be attributed to the salesperson Compensation Travel Lodging Entertainment Communications o Breakeven Sales Volume • The sales volume necessary to cover direct selling expenses • Necessary to calculate breakeven sales volume in order to determine the minimum size customer that should be pursued. • Requires knowing direct selling expenses as a percentage of total sales • Divide the cost per call by sales costs as a percent of sales

Customer Specialization

o Each salesperson or sales team sells the entire product line to select types of buyers o It allows salespeople to gain a better understanding of the customer's special needs and problems and become experts in a particular customer or industry o Customer based sales organizations are very adaptive as well to changes in customer needs and buying behavior o Execute a consultative or enterprise-level relationship strategy with its customers o Has additional benefit in that the sales force can be organized that each customer or market receives the appropriate level of selling resources. o Downsides: • Can lead to conflict with the marketing organization, which is usually organized around products A product manager with have to work with multiple sales organizations to implement a product's marketing strategy • Problem arises when in-depth product expertise is critical to solving a customer's problems • Salespeople may not have the necessary product expertise to answer a customer's product questions Organizations with diverse and complex product lines may have technical product specialists that the customer team can call on when needed.

Customer: Increasing Power

o Fewer than 10% of all retail stores account for more than half of US retail sales o Retail sellers and retailers have become bigger and more powerful than the manufacturers that supply them and they are now dictating the customers-supplier relationship o Requires an integrated approach between marketing and sales to make joint decisions about price, product, brand, and support

Customer Relationship Management (CRM)

o Focusing on the customer o A comprehensive set of processes and technologies for managing relationships with potential and current customers and business partners across marketing, sales, and service regardless of the communication channel. o Success depends on combination of people, processes, technology, and knowledge, and at the heart is information • Identifying high value prospects • Learning about product usage and application • Developing and executing advertising and promotion programs • Developing and executing sales programs • Developing and executing customer service programs • Acquiring and leveraging customer contact information systems • Managing customer contact teams • Enhancing trust and customer loyalty • Cross-selling and upselling of offers o Process includes marketing, sales, service o Marketing: targeting and acquiring prospects through data mining, campaign management, and distributing leads to sales and service o Service: addressing service and support issues with sophisticated call center applications and Internet-based customer service products o Sales: developing effective selling processes using proposal generators, knowledge management tools, contact managers, and forecasting aids • The level of involvement of sales is very important but varies from company to company

Gaining Access

o Hard to get facetime with client • Direct personal contact: hard without prior attempt to communicate with the prospect Can create problems Many clients wouldn't see a salesperson without an appointment • Phoning Ahead Use the telephone to approach prospects has a number of advantages • Appointments make better use of the salesperson's time and reduce the hours spent in waiting rooms • Using first name with receptionist helps gain access because of familiarity • Personal Letters Letters are more difficult than phone calls for administrative assistants to screen. Letters allow the person to include brochures that describe the product assortment and benefits, enabling prospects to learn more about a potential supplier than they can over the phone • Email Messages An increasingly common method of communications, whether with new or existing clients, is to leave an email message It is possible to send the message at very little cost in time or money to a large number of people to whom the same message is applicable Graphics and detailed promotional material may be included with the message as an attachment to the main message. • Referrals When it comes to getting on a senior executive's calendar, having a referral is by far the most appropriate method Must establish relationships with midlevel managers at most large accounts

Product Development Management (PDM)

o Identifying customer needs for better solutions o Discovering and designing new product solutions o Developing new solution prototypes o Managing internal departmental priorities and involvement o Designing activities to speed up development process o Launching new and redesigned offerings o Changes companies are likely to make in their sales force when introducing important new products: • Sales quota systems, most likely adjusted upward to include new product sales • Training program adjusted to develop new sales competencies • Supervision program is altered to allow management to spend more time accompanying salespeople on sales calls for purposes of training and coaching • Compensation plan changes including commission rates, sales incentive programs, and guarantee draws • Sales force organization structure is changed, often to organize around different types of customers

Selling Process: Sales Team

o In the case of relationship selling, no one person possesses the necessary knowledge and resources to address the bigger opportunities to create value that go beyond the selling product o With Sales Teams, allows for a broader transfer of capabilities and communications. o Sales Teams require changes in a firm's organization structure, selection process, training program, compensation plan, and evaluation processes.

Selling Process: Productivity Metrics

o Increase revenue over the previous year o Sales managers typically rewarded and compensated salespeople by evaluating sales volume over a certain period of time. o Profitability depends on: • The amount of time necessary to complete the sale • The gross margins associated with the sale • The level of price discounting • The amount of promotional support • The amount of post-sale support • The potential for future sales o Sales force has an important influence on all these issues through their account selection, account penetration, account retention, pricing, and servicing decisions o Salespeople are source allocators o First, they decide on which customers and prospects they will spend time selling and how much time they will allocate to each customer

Advocate

o Involves multiple buying influences o Suggested that salespeople need to develop a special relationship with a buying influence referred to as an advocate o Help guide you in the sale by providing critical information about the organization and the people involved in the purchase decision. o Provide key information about those who influence the sale o May win: • Personal: wants you to win because he or she knows you, likes you, and wants to see you be successful • Professional: wins by doing his or her job better, achieving goals and helping the companies meets objectives • Recognition: Wins by receiving recognition from his or her own recognition • Negative: really wants someone else to lose o Can help: • Recommending selling strategies: they may clarify key organizational issues, the priority areas of interest for each of the buying influencers, identify the key decision maker, etc. • Build a groundswell of interest: they can encourage discussion among the decisions influencers • Refer to your other advocates: They can identify other people who may be interested in your succeeding in the sale • Review your presentation: They can ensure you are using the right terms, picking up the subtitles, and prioritizing the right areas • Gain access to decision makers: they can get you access to the executive suite

Company Sales Potential

o Is a portion of total industry demand. It is the maximum amount a firm can sell in a time period under optimum conditions o Company sales will be lower than industry sales o The ratio of company sales to industry sales is a measure of the market share of the organization

Generalist Structure

o Least complicated sales organization o Salesperson sells the firm's entire product line to all accounts and prospects, usually with a geographic area o Have geographically small sales territories and minimal travel time & spend a high percentage of their time face-to-face with customers o Highly efficient sales structures o Works best when the product line consists of related products or services that appeal to rather a homogenous group of buyers o When salespeople sell many products, they tend to focus their attention on the lines with which they are comfortable, neglecting the lines that are newer, more difficult to sell, but possibly more profitable o Salespeople may find themselves at a competitive disadvantage if they are asked to sell to customers with problems and needs that are diverse and complex. o Possible risk of spending too much time with customers who are easy to sell, but potentially not profitable or high-growth opportunities • Potential of territory not being developed to its full potential.

Purchase Decision

o Make process convenient and hassle free o Involve writing orders, persuading, negotiating, finalizing terms, and closing the sale. o This is where the seller can create value for the customers in a straight rebuy situation and in a transactional type of relationship by making the purchasing process easy and convenient. o Price is usually a crucial factor in business to business marketing, especially for commodity

Product Specialization

o Most appropriate when a firm has a large, diverse, and complex line of products as a result of new products, mergers, and acquisitions o Each salesperson specializes by selling only a few of the products in the organization's total product folio and reports to a management structure that is also focused on the same limited number of product lines. o Each product-based sales force calls on its own customers, sets its own goals, and rewards its own salespeople o Coordination occurs only at the highest levels in the organization o Probably the most effective way to ensure that a product or product line receives the desired level of selling effort. o Use training, coaching, and compensation programs • But success is not guaranteed o Has a number of limitations • Has low geographic efficiency, meaning that each product specialist must usually cover a large geographic area • Increases travel expenses and reduces the amount of face to face time with customers and create confusion

Closing Skills

o Occurs when a salesperson asks for a commitment from the customer o Asking for a decision when you're fairly certain a person is going to say yes o When to close • Trial close How does this look to you How important is this to you Is this what you had in mind Will this equipment be consistent with what you have now? o Closing Techniques • Alternative Choice: poses a series of questions designed to narrow the choice and help the prospect make a final selection • Summary Close: summary of benefits accepted during the call, combined with an action plan requiring the customer's commitment

Advocating Skills

o Refer to the ability to clearly and fully present a solution that customers can see helps to address their needs. o The ultimate goal may be to address customer's needs, advocating is also an opportunity to demonstrate customer and product knowledge and one's ability to provide solutions that fit the customer's needs. o Solution Presentation • Confirm with customers that the goods and services being offered match their requirements and satisfy their needs. • Features: tangible or intangible characteristics of the product or service • Benefit: statement about how a product or service can help a customer satisfy an explicit or stated need. • The benefit is being sold, not the feature o Sales Proposals • Seeing it in writing • Less chance of misunderstanding o Addressing Customer Concerns • Listen to the client's feelings • Share the concerns without judgment • Clarify the real issue with questions • Problem solve by presenting options and solutions • Ask for action to determine commitment

Structuring the Sales Force

o Sales force structure decisions influence how customers see the firm because sales force structure will affect the selling skills and knowledge level required of salespeople o Sales management activities such as compensation, recruitment, training, and evaluation are affected

Building Sales Competencies

o Sales managers are responsible for hiring salespeople with appropriate skills and backgrounds to implement the sales strategy o Competencies are developed through training before they are sent into the field.

Need-Satisfaction Model

o Salesperson discusses these assumptions with the customer and determines if the customer is willing to invest the time to prove or disprove the value assumption and discuss the ramifications and potential solutions. o The salesperson's goals are • 1. To quickly and accurately identify the customer with the highest probability of purchasing the offering • 2. To provide the customer with the incentive to change • 3. To provide the customer with the confidence to invest • 4. To ensure that the value promises made are fulfilled. o The general line sales forces of most consumer goods and office products companies are trained to use this selling model. o Most appropriate for consultative-type

Implementation and Evaluation

o Support the purchase decision and build the relationship o The seller has an obligation to ensure that all promises are fulfilled and customer expectations are met and exceeded. o This will include making sure that the product has no defects, arrives on time as promised and at the right place, warranties are honored, repairs of exchanges are handled quickly and smoothly, needed info is provided, and adequate training is provided. o The seller then needs to focus on customer retention and growth. o Value Analysis • Focuses on the relative cost of providing a necessary function or service at the desired time and place with the necessary quality. • Focuses on the total cost, not just the invoice cost • Possession costs (costs related to holding inventory) and acquisition costs (costs related to originating requisitions, interviewing salespeople, expediting deliveries, receiving and editing invoices, following up on inaccurate and late deliveries) usually far exceed the price on the invoice that the customer pays for the product o Vendor Analysis • Focuses on the vendor by looking at such items as delivery, reliability, price, service, and technical competence • "wavelength": measures such values as attitudes, responsiveness, and follow-up on details • The greater importance of the implementation and evaluation stage of the purchasing process has key implication for the sales process. • A broader perspective is needed with multiple goals: short-term goals, such as winning the sale and ensuring that the value of the customer is expecting is actually delivered; and long-term goals, such as creating new value delivery opportunities and positioning yourself and your company's capabilities to enlarge the customer relationship o Supplier Tiers • They are segmenting their supplier base according to the importance of the supplier's product and the difficulty of finding alternative sources for the product • Recognizing the groups of suppliers should be treated differently, customers are starting to place their various supplier relationships into separate supplier tiers. • Selling in each type of customer relationship requires a high degree of customer intimacy-knowing the customer's problems and priorities, expectations, needs, and culture. • Complex sales situations Are those in which several people in the customer's organization must give their approval before the sale can take place. Refer to the structure of the purchase decision, not a particular product or its price

Selling Process: Sales Networks

o The more you contact the more leads you generate and the more sales you will make o Sales networks are needed to not only prospect for new customers, but networks are also often required for closing the complex deal and for providing customer solutions o Sales prospecting depends on the salesperson's acquiring precise and timely information about opportunities from contacts outside the sellers' organization

Customers: Fewer Suppliers

o The number of wholesalers in the US has dropped to 1/3 of the # operating in 1990. o Must be one of the "in-suppliers" because people are purchasing from fewer. o The revenue stream from individual customers had become so important that survival had become dependent on maintaining the supplier-customer relationship

Economic Buyer

o The person or committee with the power to give final approval to buy your product or service. o These people have the money to make a purchase and are able to release the cash to buy should they choose to do so. o Focus is on price, technology, and performance o This person: • Establishes the priority of projects • Is concerned about the economic health of the business • Focuses on the future • Asks "why" • Can say yes even if everyone else says "no" • Can also say "no" when everyone else says "yes" o Likely to by more up the organization ladder in" • The more expensive the product • The more depressed the organization's business condition • The less experience the customer has with you, your firm, and the product • The greater the potential impact a wrong purchase decision will have on the organization.

Naive Forecasts

o The simplest numerical forecasting technique and is often used as a standard for comparison with other procedures o Assumes nothing is going to change and that the best estimate for the future is the current level of sales o The formula for the percentage forecasting error is: Percentage of forecasting error= Forecast-actual Actual May also be used with deseasonalized sales figures

Roles of the Sales Force

o To be successful and produce profitable results, a firm's business strategy and market access strategy must be implemented by the sales force o Strategic plans are implemented through the activities and behaviors of the sales force o Calling on certain types of customers and prospects, managing customer relationships, and creating value for individual customers.

Building a Prospect List

o Traditional method is cold canvasing • Involves contacting prospective customers without appointments; that is salespeople call on firms or knock on doors until they find prospects • Successful when target markets for these products are fairly broad • Drawback: this approach could waste time soliciting low-quality prospects; can also be done over the phone o Direct Mail • The use of email inquiries has made it possible to dramatically increase the speed with which companies can respond to a direct mail inquiry, which helps to increase the rate which inquires are converted to sales o Trade Shows • Estimated that more than 145,000 firms participate in over 8,000 trade shows at a cost of $10 billion annually • Relatively low cost per customer contact o Directories • Provide names, addresses, and other information compiled by types of products and by state • The are scored according to their assets, which enables the salesperson to judge the size of each potential customer. • Industry trade associations often publish directories of their members by targeted segment of organization function o Internet • Has revolutionized the process of selling and qualifying prospects. • Prospects can make purchases over the internet, and a wealth of knowledge is available on company sites o Referrals • A satisfied customer is asked to provide the names of others who might be interested in a product • In some cases, the person may also supply and introduction of the salesperson of the products • The person can say things about the salesperson • Benefits: networking with other customers and Siebel executives, the opportunity to expand their brand through speaking engagements and media activities, and previews of new products

Selling Process: Solution Selling

o Traditional selling model emphasizes selling products in the short term o The value added by the sales force was in communicating the benefits of the product or service to the customer, helping customers make a purchase decision, and making the whole process convenient and easy for the buyer. o Many buyers are finding that this selling model does not work for all customers, particularly those that are most important. o Solutions selling: involves creating customer value by addressing important customer problems and opportunities through a supplier-customer relationship that is much more intimate than that of the traditional transactional selling o The top five factors that are important to success in sales: • Listening skills • Follow up skills • Ability to adapt sales style to the situation • Seeing a task through to its completion • Well organized

Technology Competency

o Understanding the productivity potential of new technology o Implementing sales force automation • The integration of communications technology o Implementing customer relationship management

Modified Rebuy

purchasing situation occurs when some changes are anticipated in a product that the buyer has previously been purchasing o The evaluation if options step of the process is much more extensive, and it is here that the seller can add the most value

Standardized Model of Selling

series of statements are constructed about an offering, so as to stimulate a positive response by the customer o Often referred to as benefizing an offering. o Benefizing: translating a product feature in a competitive advantage that is related to a customer benefit. o Advantages may include: • Ease with which employees can learn to use it • Fewer employee complaints • Greater productivity • Cost savings • "user friendly" • "satisfaction guaranteed" o canned presentation: highly structured presentation because the same basic presentation is given to each customer • not much time and effort is put into preparing for any single customer interaction once the basic presentation has been mastered. • Standardized model: most appropriate in situations where a product is standardized or when the benefits are generally the same for all the customers. o Most appropriate for transactional relationships where customers are concerned about lowest cost and convenience

Consultative Relationship

• Based on the customers' demand and willingness to pay for a sales effort that creates new value and provides additional benefits outside the product itself • Employ the solutions selling approach • Success rests on the ability of the salesperson or sales team to get very close to the customer and to intimately grasp the customer's business issues • Create value by Helping customers understand their problems and opportunities in a new or different way Helping customers develop better solutions to their problems than they would have discovered on their own Acting as the customers' advocate inside the supplier's organization, ensuring the timely allocation of resources to deliver customized or unique solutions to meet the customer's special needs • Much more time is spent learning the special needs of the individual customer and marshaling resources inside the supplier's company to meet those needs

Sales Process Model

• Focuses on where the opportunity is in the selling process • Opportunities are assigned to different stages of the selling process according to the probability that they will ultimately result in a sale • Categorized based on the level of uncertainty in in meeting the opportunity Unqualified opportunities: data suggest that a possible need exists, but this need has not been verified with key people in the account. Qualified Opportunities: must meet 4 criteria • The need has been verified with at least one of the buying influences (technical, user, or economic buyers) • There is a confirmed intention to buy a new product or service, replace an existing one, or switch suppliers • Funding for the purchase has been approved or already exists • There is an identified time frame within which the purchase will be made Best few opportunities: all the buyers have been contacted and their needs identified and in your judgment have been sufficiently developed to make the sale • Sales funnel: derived from figuratively placing the sales opportunities in a funnel, unqualified appear just outside the top of the funnel, qualified opportunities inside the funnel and the best few opportunities are at the bottom Suggest prioritization sequence of: • 1. Closing your best few sales opportunities first • 2. Prospecting unqualified opportunities • 3. Then working the qualified opportunities last to ensure a constant and predictable flow of sales over time.

Interaction Phase

• Generally refers to what takes place during a face to face encounter with a customer • Focus on 3 skills in all business and social interactions: o Relating o Discovering o Advocating • 2 skills critical to successful selling in certain situations: o gaining access o closing

Sales Opportunity Management

• Generating New Accounts • Managing Existing Accounts • Sales vs. Profits • Personal Time Management

Estimating Potentials and Forecasting Sales

• Keys to success in sales is knowing where customers are located and being able to predict how much they will buy

Purchasing Process

• Must create value for the customer • Straight rebuy: the product has been previously purchased and there is no change desired in the product or offering; it often involves replenishing inventories of products o The seller can add value for the customer by making the purchase easy, convenient, and as hassle-free as possible

Establishing Goals

• Next step after mission is decided is to organize goals o Specific objectives by which performance can be measured o Stated in profits, sales revenue, unit sales, market share, survival, and social responsibility

Strategies

• Next step is to make strategies o The means an organization uses to achieve its objectives

Time Management

• One of the most frequently mentioned training topics • Biggest time wasters o Telephone interruptions o Drop in visitors o Lack of self discipline o Crises o Meetings o Lack of objectives, priorities, and deadlines o Indecision and procrastination o Attempting too much at once o Leaving tasks unfinished o Unclear communication

Transactional Relationship

• One which the relationship is based on the need for a product of acceptable quality, competitively prices, and a process and relationship convenient for the buyer. • Involves a personal relationship between the buyer and seller • Needs history of building trust, creating value, and meeting or exceeding customers' expectation

Customer Interaction Process

• Preinteraction: actions that are initiated prior to interaction with key decision makers requiring skills in precall planning • Interaction: Actions initiated while interacting with decision makers, calling on skills in relating, discovery, advocating, handling objections, and closing • Postinteraction: Activities following a transaction involving supporting skills • The actual process may backtrack to earlier phases many times before concluding a sale.

Business Mission

• Provides a sense of direction to employees and helps guide them toward fulfillment of the firm's potential • The basic character of an organization's business defined by 3cs (customer, competitors, company) • Business statement should include: o The types of customers it wishes to serve o The specific needs to be fulfilled o The activities and technologies by which it will fulfill these needs.

Buying Center

• Refers to all of the people formally or informally involved in the purchasing decision o All the people who must say yes for a sale to occur or influence the people who will ultimately say yes or no to the purchase. o Changes over time and is not a formal department and is not a formal department in the organization o Purchasing Role: refers to the set of issues or concerns that a member of the buying center will consider when deciding whether to approve or recommend either a purchase or a specific supplier

Enterprise Relationship

• The primary function is to leverage any and all corporate assets of the supplier in order to contribute to the customer's strategic success • Both the product and sales force are secondary and the customer must be strategic important to the selling organization • Major, strategic, national, global, corporate, and key account programs • To achieve successful enterprise relationships, the supplier must deliver exceptional customer value while also extracting sufficient value from the relationship

Marketing Strategy

• The set of integrated decisions and actions a business undertakes to achieve its marketing objectives by addressing the value requirements of its customers • Concerned with decisions related to market segmentation and target marketing, as well as development and communication of a positioning strategy.