MGT 103

Fully loaded sales rep

$220,000 The cost to add a new sales rep, this includes base salary, bonuses, training, benefits, etc.; does not include other company expenses

Value of Benefits

$23,000 year

Social Media Benefits

(BBIIS) 1. Branding 2. Building relationships 3. Improving business processes 4. Improving search engine rankings 5. Selling in the social media marketplace

Promotional materials

(CMASPS) 1. Product color/design/logo 2. Product Message 3. Product Advertising 4. Product Sales Material 5. Product Packaging/inserts 6. Product Spend

How to present message of Product/Service

(CTUF) 1. Customize based on your learnings 2. Trust the flow of the sale piece (tested) 3. Use visuals (always) 4. Features/Advantages/Benefits (FAB) creating value in customer

Types of closes

(DSAASE) 1. Direct request (ask for "x") *2. Summary benefit close (I endorse this one)* 3. Assumptive close (based on...let's do this...) 4. Alternate choice close (do you want the blue one or the red one)? 5. Standing room only close (this baby won't be here tomorrow) 6. Emotional close (baby needs new shoes)

When sales go flat

(EMSRIM) Change: 1. Execution 2. Messaging 3. Selling skills 4. Resource Optimization 5. Incentives 6. Change people

Making the sales call ("The Sales Process")

(OFPAS) 1. Opening 2. Fact Finding 3. Presentation (FAB) 4. Assess Interest/Answer Q's (Questions) 5. Seek Commitment/Call to Action (Close)

Sales Forecasting

(PIEM) process for estimating future sales, based on: 1. Past sales data 2. Industry-wide comparisons 3. Economic trends 4. Market Research and Competitive Intelligence We know for for certain: it will be wrong

Targeting by decile

(must know MMTIM) Actionable Sales and marketing metric, must know: 1. Market Share 2. Market segmentation 3. Time 4. Increase or decrease from last year 5. Market Volume Once you know numbers, next step is to know who top decile customers are; not all customers spend the same

Time and Material pricing

- Due to variability in time and material, pricing is determined by amount (and complexity of each provided to specific customer)

Cost Plus pricing

- For products new or novel - You (and not the market) sets the price - Examples: Tesla, iPhone, Rolex - To maintain market leadership and healthy profit margins, you must: 1. Innovate (newer/better) 2. Uphold premium brand image

Target Cost pricing

- For products that are not easily differentiated ("me-too" products) - Market determines the price - You are NOT 1st to market - Must make product fit into structure to make profit

Annual Pay Increase Factors

1. Average increase % approved by board 2. Performance of individual

Sale Compensation

1. Base Salary/Benefits (hard compensation) 2. Bonus (Based on some plan)

Problems with gaining commitment

1. Closing too soon (customer doesn't show signals to buy) 2. Failing to close (failure of sales person to detect signals)

Fact Finding

1. Don't ask what you already know 2. Customize questions to demonstrate you've done your HW 3. Keep question to a minimum

ROI Metrics

1. How often the customer buys 2. Number (or %) of new customers 3. How much (on avg.) a customer spends per transaction 4. Track sales to marketing promotions

Base Salary Factors

1. Market price 2. Experience in market 3. Male or Female 4. Geographic Location

Sales bonus plans

1. Ranking Bonus Plan 2. Commission 3. Goal based quota

Invest, Plan, and Dominate Long Haul

1. Strong sustained product launch (1 chance) 2. Continue to invest in brand awareness (beyond launch) 3. Neutralize entrants/new competition (legally but prevent invasion of space/property) 4. Evergreen products (new features, styles, improvements) 5. Continuously search for "secret sauce"; win customers over ****6. Maintain and defend premium price strategy (Dominant player sets market price) 7. Incentivize team (reward marketing and sales) 8. Create and foster company culture of creating a brand that is the category (Kleenex, Scotch tape, etc.

Targeting by decile questions

1. Who uses it? Marketing and sales 2. % of what business? Market Basket 3. Time Period? A year 4. Market Volume: in $

Expected Revenue of Additional Fully Loaded Reps

10:1 ratio of revenue:cost to get reps

Jeff Bezos Top Maxim

6. Our culture is friendly and intense, but if push comes to shove, we'll settle for intense

Objection

A question voiced in a concern, due to customer not convinced of value not price also lack of understanding, disbelief, unwilling to trust, concern about company

Franchise Marketing

Another, bigger company has already made the risk and established a brand; allows business people outside company to run store and represent brand

Franchise Formula

Average Profit throughout years open * Range(5-8) = sales profit (range at which to sell) then, total profit throughout years + sale profit (can take any value *5-8) = profit temp then, profit temp - (build out + initial fee) = true total profit

B2B vs B2C

B2B - creates goods for other businesses B2C - creates goods for the general consumer Companies can be both

Commission Based Bonus Plan

Bonus based on how much a rep sells UNCAPPED Pro: Highly motivating to (most) reps. Easy to understand and drives (hard selling) behavior. Often supported by Sales Mgmt., Finance, and Senior Mgmt.. Con: Does not account for variability among territories (potential, current established business). Useful for "launch period", less effective for established product period

Goal/Quota Based Bonus Plan

Bonus is based on if a quota was met/improved from last year UNCAPPED Pro: most common bonus plan design, calculated percent increase for each territory Con: Present cloud among sales rep MARKET SHARE CHANGED VALUED MORE THAN MARKET SHARE

Building Brand Value (Pyramid)

Brand awareness -> Brand Performance (repeat purchase) -> Consumer Feelings -> Consumer Connection (amount of customers get smaller towards connection)

Manager Report Relationship

DON'T lie to your boss, will hurt career

Recruiting Sales Force

Determine the balance (%) of sale force (internal candidates, recent grads, competitors, etc.)

FAB Sales Message

Feature/Advantage/Benefit; Feature - What the product does? Advantage - How is it different? Benefit - Why should you purchase it? (creating value in the minds of customers)

The "ask"

Final slide, ask for: 1. People (Marketing people to do the work) 2. Money (Funds needed to launch)

Social Media Marketing

Follows the same same customer segmentation as traditional marketing; using social media to connect to customers

Franchise Profit Goal

Goal is net 10% profit from total revenue

Identifying talent

Likeable, trusted, competent

Marketing and Sales Foundational Anchors

Marketing: Positioning Statement Sales: FAB Sales Message

Is the sales force responsible for the sales message?

No, the marketing team is responsible for the sales message

Ranking Bonus Plan

Payed bonus based on ranking performance CAPPED Pro: Easy to understand, Easy to budget, Good for short term/"confusing" markets Con: Pits rep vs. rep (finite pool of bonus funds). May limit rep sharing/cooperation. No accounting for variance among territory sizes *Rarely used.* Finance Dept. and H.R. (sometimes) like it. Sales (Reps and Mgmt.) hate it

Value

Perceived benefit/price (demand driven factors increase or decrease price/cost equation)

Positioning Statement vs Tagline

Positioning statement is internal while tagline is external

Strategic Levers

Presentations, ambassadors, innovation, accessibility (builds brand value)

Price vs. Cost vs. Value

Price - what the product/service is listed at Cost - the price the product/service was paid for Value - the ratio of perceived benefits to price

Pricing Models

Products - Target Cost pricing and Cost Plus pricing Services - Time and Material pricing

Selling Franchise

Profit - (Buildout + initial fee) = money we have left when we sell

Base Salary

Take annual base salary and divide by 2000

Pricing/How to price

The price of a product or service must cover the costs of the product/service as well as earn a reasonable profit

Professional Sales

complex product or service to large and/or intelligent customers

Social Media Marketing and reach

reach 1 target market at a time

Cost of Customer Acquisition (CCA) and Customer Lifetime Value (CLV)

refers to expenses required to convert a prospect into a customer Marketing cost/# of new customers = CCA How much customer will bring in = CLV Goal: 3:1 CLV to CCA