3 Professional Selling and Sales Management McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill...

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Professional Selling Professional Selling and Sales and Sales

ManagementManagement

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

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AgendaAgenda

How Professional Business Selling Differs How Professional Business Selling Differs from Selling to Consumersfrom Selling to Consumers

Profile of a Professional SalespersonProfile of a Professional Salesperson

The Cost of Professional SellingThe Cost of Professional Selling

Understanding Buyer Behavior: A Seller's Understanding Buyer Behavior: A Seller's PerspectivePerspective

The Professional Selling ProcessThe Professional Selling Process

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How Professional Business Selling How Professional Business Selling Differs from Selling to ConsumersDiffers from Selling to Consumers

Personal selling Personal selling persuasive, deliberate persuasive, deliberate contact between a buyer and a seller for the contact between a buyer and a seller for the specific purpose of creating an exchange specific purpose of creating an exchange between them.between them.

Selling to consumers Selling to consumers personal selling is personal selling is used to complement other elements in the used to complement other elements in the promotional mix.promotional mix.

Selling to business customers Selling to business customers professional selling is usually the professional selling is usually the primaryprimary means of selling business goods and services.means of selling business goods and services.

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Classifying sales jobsClassifying sales jobs Development-orientedDevelopment-oriented

a.k.a. order-gettinga.k.a. order-getting Refers to the creation of customersRefers to the creation of customers

Missionary-orientedMissionary-oriented Provide necessary professional selling Provide necessary professional selling

assistanceassistance Do not intend to sell anythingDo not intend to sell anything

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Classifying sales jobsClassifying sales jobs• Maintenance-orientedMaintenance-oriented

Involves the continuation of present sales Involves the continuation of present sales volume from existing customersvolume from existing customers

• Support-orientedSupport-oriented Provide continuing service to the buyerProvide continuing service to the buyer May engage in some direct selling by May engage in some direct selling by

suggesting a replacement item rather than suggesting a replacement item rather than a repaira repair

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One day’s workOne day’s work• Averages 9 ½ + hoursAverages 9 ½ + hours• Less than 30 percent spent in face-to-face Less than 30 percent spent in face-to-face

sellingselling• About 30 percent in travel and waitingAbout 30 percent in travel and waiting

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The salesperson may perform many types of The salesperson may perform many types of activities:activities:• Selling Selling – e.g., prospecting, making presentations, – e.g., prospecting, making presentations,

consultingconsulting

• Servicing customers Servicing customers – e.g., following-up with – e.g., following-up with customers, contacting and working with other company customers, contacting and working with other company employees to ensure delivery of productemployees to ensure delivery of product

• Time management Time management – e.g., must plan the scheduling and – e.g., must plan the scheduling and routing of sales calls, frequency of contact with accountsrouting of sales calls, frequency of contact with accounts

• Communication Communication – e.g., with current and potential – e.g., with current and potential customers, with members of distribution channelcustomers, with members of distribution channel

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Do You Have These Do You Have These Salesperson Characteristics?Salesperson Characteristics?

Is detail orientedIs detail oriented Likes to meet new Likes to meet new

peoplepeople Manages multiple Manages multiple

thingsthings Appearance orientedAppearance oriented Good listenerGood listener Gets involvedGets involved Encourages harmony, Encourages harmony,

agreementagreement

Has good Has good communication skillscommunication skills

Has good intuitionHas good intuition Enjoys discussing Enjoys discussing

events and newsevents and news Keeps in touchKeeps in touch Has sense of Has sense of

responsibilityresponsibility Has organizational Has organizational

skillsskills

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The Cost of Professional SellingThe Cost of Professional Selling

Varies significantly - depends on:Varies significantly - depends on:• Type of productType of product• Type of industryType of industry• Size of the firmSize of the firm• Degree of personal contact necessary with Degree of personal contact necessary with

customercustomer About $350 per sales callAbout $350 per sales call An average of 4.3 calls are needed to closeAn average of 4.3 calls are needed to close Cost per sale often in excess of $1500Cost per sale often in excess of $1500

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Understanding Buyer Behavior: A Understanding Buyer Behavior: A Seller’s PerspectiveSeller’s Perspective

Understanding Buyer NeedsUnderstanding Buyer NeedsBarriers to overcome:Barriers to overcome:I don’t know who you are.I don’t know who you are.I don’t know your company. I don’t know your company. I don’t know your company’s product.I don’t know your company’s product.I don’t know what your company stands for.I don’t know what your company stands for.I don’t know your company’s customers.I don’t know your company’s customers.I don’t know your company’s record.I don’t know your company’s record.I don’t know your company’s reputation.I don’t know your company’s reputation.

NOW, What was it you wanted to sell me?NOW, What was it you wanted to sell me?

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Methods Used to Uncover Important Buyer Methods Used to Uncover Important Buyer NeedsNeeds• Ask questions:Ask questions: Questions often can bring out Questions often can bring out

needs that the prospect would not reveal or does not needs that the prospect would not reveal or does not know exist.know exist.

• Observe:Observe: Successful salespeople are particularly Successful salespeople are particularly sensitive to customer expressions and body sensitive to customer expressions and body language.language.

• Listen:Listen: Telling is Telling is notnot selling. Ask a question and selling. Ask a question and wait quietly for an answer – then the prospect’s entire wait quietly for an answer – then the prospect’s entire attention is focused on the salesperson. attention is focused on the salesperson. Never say Never say something if you can ask it.something if you can ask it.

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Methods Used to Uncover Important Buyer Methods Used to Uncover Important Buyer Needs (continued)Needs (continued)• Talk to others:Talk to others: Ask people close to the customer Ask people close to the customer

(e.g., a secretary) about the customer’s level of (e.g., a secretary) about the customer’s level of satisfaction with current products and/or situations.satisfaction with current products and/or situations.

• Combination:Combination: Talk, listen, ask questions and Talk, listen, ask questions and observe a prospect to get the full pictureobserve a prospect to get the full picture

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Behavioral Styles of BuyersBehavioral Styles of Buyers• Hard bargainer:Hard bargainer: Obtains several price quotations Obtains several price quotations

and/or sources of supplyand/or sources of supply

• Sales job facilitator:Sales job facilitator: Positive toward the Positive toward the salesperson, may help things go smoothlysalesperson, may help things go smoothly

• Straight shooter:Straight shooter: Is honest and polite Is honest and polite

• Socializer:Socializer: Likes personal interaction Likes personal interaction

• Persuader:Persuader: Seems to want the salesperson to like Seems to want the salesperson to like the buyer’s companythe buyer’s company

• Considerate buyer:Considerate buyer: Is compassionate and Is compassionate and concerned for sellerconcerned for seller

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The Personal Selling Process: A The Personal Selling Process: A Business Salesperson’s PerspectiveBusiness Salesperson’s Perspective

Phase I: Preliminary (or Presale) ActivitiesPhase I: Preliminary (or Presale) Activities• Setting ObjectivesSetting Objectives• Preparing the OpenerPreparing the Opener• Choosing and Preparing the Sales PresentationChoosing and Preparing the Sales Presentation

The formularized model-The formularized model- attention, interest, desire, attention, interest, desire, action (action (AIDAAIDA))

The buying-decisions modelThe buying-decisions model – a form of “outlined – a form of “outlined presentation”presentation”

The problem-solving modelThe problem-solving model – like need-satisfaction – like need-satisfaction selling, may involve use of SPIN techniqueselling, may involve use of SPIN technique

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Preliminary (or Presale) Activities Preliminary (or Presale) Activities (continued)(continued)

Using different sales presentations for each buyer and, if needed, within one sales presentation.

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Preliminary (or Presale) Activities Preliminary (or Presale) Activities (continued)(continued)• List Possible ObjectionsList Possible Objections• Plan the ClosingPlan the Closing

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Phase II: Face-to-Face ActivitiesPhase II: Face-to-Face Activities• Introduction Introduction – tries to capture buyer’s attention, to – tries to capture buyer’s attention, to

create a positive selling atmosphere and build rapport create a positive selling atmosphere and build rapport with buyerwith buyer

• Presentation Presentation – the business of selling, engage in – the business of selling, engage in “signal detection” of buyer’s signals, handle objections“signal detection” of buyer’s signals, handle objections

• Closing – Closing – getting the buyer to make a commitment getting the buyer to make a commitment to your productto your product

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The Personal Selling Process: A The Personal Selling Process: A Business Salesperson’s Perspective Business Salesperson’s Perspective

Handling Sincere ObjectionsHandling Sincere Objections

Find out what the objection means—ask Find out what the objection means—ask questions and listen. What does “it costs too questions and listen. What does “it costs too much” really mean?much” really mean?

Restate the objection as you understand it.Restate the objection as you understand it.

Get in step—agree that it is a wise concern. Get in step—agree that it is a wise concern. Never say, “You’re wrong.”Never say, “You’re wrong.”

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The Personal Selling Process: A The Personal Selling Process: A Business Salesperson’s Perspective Business Salesperson’s Perspective

Handling Sincere ObjectionsHandling Sincere Objections

Answer objection byAnswer objection by

Offsetting with other benefitsOffsetting with other benefits

““Boomerang method”—converting objections Boomerang method”—converting objections into a benefitinto a benefit

Converting objection into question so it Converting objection into question so it becomes a request for further informationbecomes a request for further information

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Salespeople Expect - and Even Like - ObjectionsSalespeople Expect - and Even Like - Objections

Handling objections correctly will lead to your close.Handling objections correctly will lead to your close.

A well-handled objection is a positive buying signal.A well-handled objection is a positive buying signal.

• Ask for the orderAsk for the order

• Ask for the trialAsk for the trial

• Ask for actionAsk for action

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Closing the SaleClosing the Sale Closing Closing is simply asking for the order. A is simply asking for the order. A

professional salesperson knows several professional salesperson knows several closing techniques from which to choose, closing techniques from which to choose, based on prospect and setting.based on prospect and setting.

When to close:When to close:

• After a positive buying signalAfter a positive buying signal

• After a successful answer to an objectionAfter a successful answer to an objection

• At the end of the presentationAt the end of the presentation

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Closing the Sale (continued)Closing the Sale (continued)

Types of closingsTypes of closings::

• Alternate proposal close:Alternate proposal close: “Do you prefer truck or rail “Do you prefer truck or rail shipment?”shipment?”

• Assumptive close:Assumptive close: “Sign here please, so I can “Sign here please, so I can process the shipment.”process the shipment.”

• Direct:Direct: Can we write up the order?Can we write up the order?

• Minor decision:Minor decision: Takes customer through decision-Takes customer through decision-making process— either/or, step by step, open-making process— either/or, step by step, open-ended questions, summary, balance sheetended questions, summary, balance sheet

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Phase III: Follow-Up ActivitiesPhase III: Follow-Up Activities• Be sure that an order is completedBe sure that an order is completed• Be sure that all support arrangements are Be sure that all support arrangements are

completedcompleted• Evaluate customer satisfaction with product Evaluate customer satisfaction with product

and with salesperson.and with salesperson.• If a sale wasn’t made – try to determine whyIf a sale wasn’t made – try to determine why

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Sales Management:Sales Management:A Leadership ChallengeA Leadership Challenge

Sales managers must allocate, maintain, Sales managers must allocate, maintain, direct and control the sales force direct and control the sales force

Planning, organizing, leading, and Planning, organizing, leading, and controlling activities of salespeople is controlling activities of salespeople is important because salespersons are important because salespersons are “boundary spanners” and oversight and “boundary spanners” and oversight and supervision are difficult. supervision are difficult.

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Planning the Sales OrganizationPlanning the Sales Organization

Basic Types of Sales OrganizationsBasic Types of Sales Organizations• LineLine• Line and Staff OrganizationLine and Staff Organization• Functional OrganizationFunctional Organization• Centralized vs. Decentralized OrganizationCentralized vs. Decentralized Organization• Organizing by specializationOrganizing by specialization

Geographic specializationGeographic specialization Sales activitiesSales activities Product-line specializationProduct-line specialization Customer specializationCustomer specialization Combination specializationCombination specialization

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Staffing a Business Sales ForceStaffing a Business Sales Force

Determining Sales Force SizeDetermining Sales Force Size• Turnover ExpectedTurnover Expected method method• Workload methodWorkload method: :

• Number of sales calls to be madeNumber of sales calls to be made

• Number of accounts in the territoryNumber of accounts in the territory

• Frequency of sales calls to given customersFrequency of sales calls to given customers

• Time intervals between sales callsTime intervals between sales calls

• Travel time around the territoryTravel time around the territory

• Nonselling timeNonselling time

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Determining Sales Force SizeDetermining Sales Force Size• Sales potential method:Sales potential method:

• Yearly sales volume divided by expected Yearly sales volume divided by expected volume of each salespersonvolume of each salesperson

• Incremental method:Incremental method: • Profit contributions from an additional Profit contributions from an additional

salesperson’s sales versus costs of hiring that salesperson’s sales versus costs of hiring that personperson

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Recruitment Recruitment (finding and attracting (finding and attracting qualified applicants)qualified applicants)• Conduct a Job AnalysisConduct a Job Analysis

A careful and objective study and written summary A careful and objective study and written summary of the job in questionof the job in question

• Prepare a Written Job DescriptionPrepare a Written Job Description Details the components of the job and the Details the components of the job and the

functions or activities that must be performedfunctions or activities that must be performed

• Develop Sales Job QualificationsDevelop Sales Job Qualifications List duties and responsibilities outlined in the job List duties and responsibilities outlined in the job

descriptiondescription

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Training a Business Sales ForceTraining a Business Sales Force

What a Training Program Should CoverWhat a Training Program Should Cover• Company KnowledgeCompany Knowledge• Product KnowledgeProduct Knowledge• Selling TechniquesSelling Techniques• Customer KnowledgeCustomer Knowledge• Competitive KnowledgeCompetitive Knowledge• Time and Territory ManagementTime and Territory Management

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Who Should Do the Training?Who Should Do the Training?• Home Office Sales TrainingHome Office Sales Training• Field or Local Sales TrainingField or Local Sales Training• Private Consulting Organizations and Private Consulting Organizations and

Professional TrainersProfessional Trainers

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How Sales Training Should Be EvaluatedHow Sales Training Should Be Evaluated• Set objectives (overall and specific) for Set objectives (overall and specific) for

company sales training program.company sales training program.• Determine whether objectives as set are Determine whether objectives as set are

being met or already have been met.being met or already have been met.• Try to measure the effect of training on Try to measure the effect of training on

profitability.profitability.

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Directing and Motivating a Sales ForceDirecting and Motivating a Sales Force

Providing leadershipProviding leadership Sales quotas:Sales quotas:

• To provide incentiveTo provide incentive• To provide a basis for compensationTo provide a basis for compensation• To evaluate a person’s performanceTo evaluate a person’s performance

Compensation PlansCompensation Plans

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Managerial Leadership*Managerial Leadership*Twelve Golden Rules:Twelve Golden Rules:

• Set a good exampleSet a good example

• Give your people a set of objectives and a sense of directionGive your people a set of objectives and a sense of direction

• Keep your people informedKeep your people informed

• Ask your people for adviceAsk your people for advice

• Let your people know you support themLet your people know you support them

• Don’t give ordersDon’t give orders

• Emphasize skills, not rulesEmphasize skills, not rules

• Give credit where credit is dueGive credit where credit is due

• Praise in publicPraise in public

• Criticize in privateCriticize in private

• Criticize constructivelyCriticize constructively

• Make it known that you value new ideasMake it known that you value new ideas

* * Exhibit 3-17Exhibit 3-17

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Managerial Leadership*Managerial Leadership*

Seven Deadly Sins:Seven Deadly Sins:• Trying to be liked rather than respectedTrying to be liked rather than respected

• Failing to ask subordinates for their advice or helpFailing to ask subordinates for their advice or help

• Failing to develop a sense of responsibility in subordinatesFailing to develop a sense of responsibility in subordinates

• Emphasizing rules rather than skillsEmphasizing rules rather than skills

• Failing to keep criticism constructiveFailing to keep criticism constructive

• Not paying attention to employee gripes and complaintsNot paying attention to employee gripes and complaints

• Failing to keep people informedFailing to keep people informed

* * Exhibit 3-17Exhibit 3-17

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Analyzing and Evaluating Analyzing and Evaluating a Sales Forcea Sales Force

To determine areas where each salesperson needs To determine areas where each salesperson needs improvementimprovement

To assess the validity of the standards usedTo assess the validity of the standards used

To spot people who are ready for promotion, salary To spot people who are ready for promotion, salary raises, or assignment to new territories and raises, or assignment to new territories and responsibilitiesresponsibilities

To supply evidence about salespeople who should be To supply evidence about salespeople who should be disciplined or terminateddisciplined or terminated

To check the effectiveness of the sales compensation To check the effectiveness of the sales compensation plan, training, supervision, recruitment, territory plan, training, supervision, recruitment, territory assignments, and operating proceduresassignments, and operating procedures

3 Professional Selling and Sales Management McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill...

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