6-16-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Sales Knowledge: Customers, Products,

Technologies

Chapter6

Chapter

Chapter

6

6-3

6-4

The Tree of Business Life: Knowledge

Guided by The Golden The Golden RuleRule: Be an expert on everything

associated with your product(s)

Use wisdom when applying knowledge

Remember, customers rely on you to truthfully provide knowledge and wisdom

Realize that people do not care how much you know until they know how much you careI

T C

Ethi

cal Service

Builds

T r

u e

Relationships

TT T

T T T TT T T T

6-5

Sources of Sales Knowledge

Sales training Experience

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Knowledge Builds Relationships

Knowledge increases a salesperson’s confidence

Knowledge increases a buyer’s confidence in salesperson

More knowledge leads to more sales and more relationships

6-7

Know Your Customers

Find out all you can

6-8

Know Your Company

General Company InformationCompany growth and accomplishmentPolicies and proceduresProduction facilitiesService facilities

6-9

Know Your Product

Product knowledge may include:Performance dataPhysical size and characteristicsHow the product operatesSpecific features, advantages, and benefits

of the productHow well the product is selling in the

marketplace

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Know Your Resellers

Understand the channel of distribution Know as much about each channel

member as possibleLikes and dislikes of each channel

member’s customersProduct lines and the assortment each one

carriesWhen each member sees salespeopleDistribution, promotion, and pricing policiesWhat quantity of which product each

channel member has purchased in the past

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Advertising Aids Salespeople Main ingredients of a firm’s promotional

effort Types of Advertising Differ

National advertisingRetail advertisingCooperative, or co-op, advertisingTrade advertising Industrial advertisingDirect-mail advertising Internet advertising

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Why Spend Money on Advertising?

Companies advertise because they hope to: Increase overall sales and sales of a specific

productGive salespeople additional selling

information for sales presentationsDevelop leads for salespeople through mail-

ins and ad response Increase cooperation from channel

members through co-op advertising and promotional campaigns

Educate the customer about the company’s product

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Why Spend Money on Advertising?, cont…

Inform prospects that a product is on the market and where to buy it

Reduce cognitive dissonance over the purchase

Create sales or pre-sell customers between sales calls

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Sales Promotion Generates Sales

Consumer sales promotion Trade sales promotion Point-of-purchase (POP) displays Shelf positioning Shelf facings Premiums Sales promotion on the Internet

6-15

What’s It Worth? Pricing Your Product

Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the product

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Exhibit 6.4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations

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Know Your Competition, Industry, and Economy

Understand competitors’ products, policies, and practices

6-18

Personal Computers and Selling

The top 10 PC applications include: Customer/prospect profile Lead tracking Call reports Sales forecasts Sales data analysis Sales presentation Time/territory management Order entry Travel and expense reports Checking inventory/shipping status

6-19

Technology Etiquette

Netiquette – etiquette on the internetCell PhonesTexting Instant MessagingEmailSpeakerphones and Conference Calls

6-20

Price Sheets

PricesList Price—standard priceNet Price—w/discountsZone PriceFOB Shipping PriceFOB Destination

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Discounts

DiscountsNoncumulative: one-time reductionCumulative: discount over a period of

timeCash discounts: pay bills w/in stated

period i.e. 3/10 net 30 on $10,000

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Discounts Cont.

DiscountsTrade discounts: reduce prices to

channel members (% off the list retail price)

Consumer: one-time price reductions manufacturer passes on to retailer or consumer (cents off labels)

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Markups

Markup: dollar amount added to the product to determine the selling price

Gross Profit: money available to cover costs of marketing

Net Profit: money remaining after the costs of marketing and operations

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Markups Cont.

• Percentage Markup on Selling Price

Amount added to cost = $2.00 = 40%

Selling Price $5.00

• Percentage Markup on Cost =Amount added to cost = $2.00 = 66.6%Cost = $3.00

6-25

ROI--Return on Investment

$70,440 = total gross sales -55,260 = total investment$15,180 = total gross profit

27.5% ROI ($15,180/$55,260)

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Value Analysis

Determines the best product for the money

High-priced product may be better value than a lower-priced productHow does your product’s

features/benefits/advantages compare?Can your product do the same job as the

competitor’s?

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Value Analysis

Three types:Product Cost to True Value

Never discuss costs until you demonstrate the value of a product –Exhibit G

Units Costs Break down price Computer sells for 1K, processes 50K in

transactions Unit cost is 2 cents per transaction

ROI = Gross sales - Total Investment = Gross Profit

Gross Profit /Total Investment = ROI

6-28

Case 6A.1—Claire Cosmetics

Cost for a dozen of each productCost for a floor stand and counter displayProfit on a floor stand and counter displayWhat are discounts—dozen of each

product/floor stand/counter displayDetermine markups for individual unitDetermine ROI on a floor stand and counter

display

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Product Sales Pitch

Selling to buyer at TargetPitch the product 5 minute time-frame (approx)Be aware of verbal and nonverbal cues and

be prepared to use a different tactic/strategy to get my attention

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Product Sales Pitch Cont.Target is in need of new product for the

Health & Beauty Dept.You are the salesperson trying to get me to

purchase product to put on my shelvesKnow the product

features/benefits/advantageYou can provide me

literature/testimony/product demoKnow the product pricing—retail price (make

up cost if need be)Know the competition

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Product Sales Pitch Cont. Identify the problemBuild interest and excitementGive a testimonyValidate my objections/concernsCreate a decision/move the buyer to act/on

the deal