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
