Chapter Thirteen Sales and Sales Management Personal Selling.
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Transcript of Chapter Thirteen Sales and Sales Management Personal Selling.
Chapter Thirteen
Sales and Sales ManagementPersonal Selling
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Learning Objectives
1. Sales’ role in the organization - Identify sales’ strategic communication role
2. Sales strategies and customer relationships - Select the types of selling used for different types of relationships; Outline the sales strategy associated with each type of selling
3. Organizing the sales force - Compare and contrast organizational structures used to manage sales
4. Directing the sales force - Illustrate when to use different control and compensation program
5. Evaluating performance - Discuss how sales force performance is evaluated
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Sales’ Role In the Organization
Sales are person-to-person; only personal selling are able to tailor the sales message to the unique needs/preferences of each individual customer
1. Salespeople create value by adapting their products to fit customer needs- training customers to use the product correctly;- handling customer complaints
2. Manage customer relationships – must be adept at interacting with personnel representing credit and billing, shipping, manufacturing and customer service
3. Gather information – a prime source of customer/market information- From Customers- From Competitors- About Market Forces
4. Play an important part in the product design process
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Sales Strategies and Customer Relationships
1. Script-based selling
2. Needs satisfaction selling
3. Consultative selling
4. Partnering
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Sales Strategies and Customer Relationships
Script-based selling involves using scripts or memorized sales pitches from which the salesperson does not deviate
Used when all customers’ needs are similar
Popular in telemarketing and in selling MRO items and other supplies
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Sales Strategies and Customer Relationships
Needs satisfaction selling is a process of selling that involves identifying the buyer’s needs and tailoring the sales pitch (presentation) to fit those needs
A more sophisticated approach which works best when buyer needs vary and choices must be made from among various products and/or brands
Identifying buyers’ needs and selling to them
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Sales Strategies and Customer Relationships
Consultative selling is a process of selling that the seller brings specialized expertise into a complex problem in order to create a somewhat customized solution
May appear similar to needs satisfaction selling, but in this case, the buyer has less information about what is needed and relies on the consultant’s knowledge to custom-tailor a solution
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Sales Strategies and Customer Relationships
Partnering Seller-Customer joint effort for developing product
solutions Goes beyond consultative selling because the long-term
nature of partnerships Both parties share expertise/resources to create customized
solutions and a commitment to joint planning for mutual benefit
There are many sales strategies that can be used when partnering including cross selling and full-line selling
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Selling across the stages of the partnership
• Generate reorders• Upgrade• Full-line sell
• Secure complete commitment from both companies• Manage change
• Limited relationships• Failure to monitor competitors or industry• Complacency
Exploration
Awareness
Commitment
Expansion
• Set correct expectations• Ensure proper initial use• Follow up• Make personal visits• Handle complaints• Achieve customer satisfaction
Dissolution
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Selling across the stages of the partnership
Exploration – The major goal is building trust. In order to begin a relationship properly, the salesperson must
Set proper expectation Monitor order processing and delivery Ensure proper use of the product Assist in servicing the customer
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Selling across the stages of the partnership
Expansion – From generating repeat sales to …
Upgrade (upselling) – convincing the buyer to use a high-quality or newer product; high-tech firms are vitally dependent upon upgrading
Full-line selling – the entire line of associated products; Many companies try to get their foot in the door with any sale, hoping to then blossom into full-line selling once the initial product has proven its value
Cross selling – sell additional products to customers currently buying unrelated products; works best when the salesperson can leverage the relationship with the buyer and trust in the salesperson and the selling organization already exists
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Selling across the stages of the partnership
Commitment
Preferred supplier status – a supplier is assured a large percentage of the buyer’s business and first chance at any new business
A stated or implied pledge to continue the relationship
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Type of customers and choice of sales strategies
Simple, lower-margin items sold to customers whose needs are uniform can be served by lower caliber salesperson following a script
As margins, product complexity, and customer diversity/importance increases, the firm moves to need satisfaction, consultative, and strategic partner selling
The strategy upgrades require a higher investment in salesforce quality and training
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Partnership Communication:From single level to multi-level
ProductionMarketing
AccountingFinance
PurchasingDepartment
Shipping& Receiving
Buying Company
EngineeringMarketing
Credit andBilling
FinanceSales
Shipping& Receiving
Selling Company
ProductionMarketing
AccountingFinance
PurchasingDepartment
Shipping& Receiving
ProductionMarketing
AccountingFinance
Purchasing
Shipping& Receiving
Buying Company
EngineeringMarketing
Credit & BillingFinance
Sales Purchasing
Shipping& Receiving
Selling Company
Before Partnering
After Partnering
PurchasingAgent
Salesperson
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Organizing the Sales Force
The sales function can be organized in many ways, depending on the sales strategy
Sales ExecutiveAt the top of the structure is the sales executive, who has responsibility for deciding the size and type of sales force.
- the choice of strategy- the number and location of salespeople (the workload approach, based on the expected number of sales calls that a salesperson can make)
- the setting of sales quotas and compensation plans- sales forecasting
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Organizing the Sales Force
Organization of the sales force Assign each salesperson a geographic territory (geographically) Assign salespeople to accounts, including key accounts, national
accounts, or global accounts Organize by product Create sales teams (matrix team) to meet the needs of customers– Account managers works with product specialists;– Account manager coordinates activities and determines sales
strategies;– Product specialists carry out more specific objectives– Customer-focused teams are one type of team structure that includes
representatives from manufacturing, billing, shipping, and other areas that serve the customer
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Buying and Selling Teams Streamline Multilevel Selling
Vice PresidentOf PurchasingVice PresidentOf Purchasing
Vice PresidentOf Sales
Vice PresidentOf Sales
Director ofPurchasingDirector ofPurchasing
AccountManagerAccountManager
EngineerEngineerProduct
SpecialistProduct
Specialist
Buying Company Selling Company
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CFT Structure
AccountConsultant
F&A Rep.Customer
Sales Specialists
AccountManager
TeamLeader
Manufacturing
Finance andAccounting
Other Business Units
OtherRep.(s)
PurchasingAgent
Shipping
CSSRep.
CustomerSupportService
Purchasing
ShippingManager
SalesSpecialists
Prod. / Ind.Mktg. Groups
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Outsourcing The Sales Force
Organization of the sales force Assign each salesperson a geographic territory (geographically) Assign salespeople to accounts, including key accounts, national
accounts, or global accounts Organize by product Create sales teams (matrix team) to meet the needs of customers– Account managers works with product specialists;– Account manager coordinates activities and determines sales
strategies;– Product specialists carry out more specific objectives– Customer-focused teams are one type of team structure that includes
representatives from manufacturing, billing, shipping, and other areas that serve the customer
13-20
Organizing the Sales Force
Organization of the sales force Assign each salesperson a geographic territory (geographically) Assign salespeople to accounts, including key accounts, national
accounts, or global accounts Organize by product Create sales teams (matrix team) to meet the needs of customers– Account managers works with product specialists;– Account manager coordinates activities and determines sales
strategies;– Product specialists carry out more specific objectives– Customer-focused teams are one type of team structure that includes
representatives from manufacturing, billing, shipping, and other areas that serve the customer
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Organizing the Sales Force
Outsource the selling effort – Some companies choose to use manufacturers’ reps, distributors, and telemarketing service firms rather than hiring their own salespeople
Outsourcing selling temporarily – Hiring temporary salespeople for special sales campaigns
The advantages of outsourcing include- Lower costs- Selling expenses are borne by the distributor or rep- Less upfront investment needed- Greater local knowledge and contacts
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Do you outsource the sales force?
YES NO
• Establish relationships• Salary and selling expenses can be limited• Little/no up-front investment
• Loss of control over sales presentation• Products may not be a selling priority with representative
TO MAKE IT WORK:INVEST IN TRAINING AND
MERCHANDISING MATERIALS
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Allocation Grid for Sales Resources
Relatively fewerresources shouldbe allocated here
Low
Maintain sufficientresources to continueto reap the salespotential and strongposition
High
Direct more salesresources here
Assign toalternative methodof communicating,such astelemarketing
Weak
Strong
Sales Potential
MarketPosition
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Directing the Sales Force• ESTABLISH QUOTAS – Minimum levels of acceptable performance; Fair and
Understandable• Activity Quotas (number and type of activities: new business calls, turning
in call reports; collecting customer feedback; collect competitor intelligence)• Performance Quotas (level of performance: revenue, margin, or unit sales
in a period of time)
• ESTABLISH COMPENSATION PLAN – Equitable, Stable, Understandable• Straight Salary• Straight Commission• Bonus System • Combination PlansBase rewards on results and efforts; provide equal rewards for equal
performance; provide competitive rewards; are easy to understand and implement
• MOTIVATION ACTIVITIES – Keep Sales Force Producing
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Evaluating Performance
Sales performance is measured in two ways: in outcomes and by activities
By combining outcomes and activities, conversion ratios can be calculated to measure salesperson efficiency
These three figures (outcomes, activities, and conversions) enable sales executives to compare salesperson performance
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Five Steps in Evaluating Performance
1. Review specific sales objectives
2. Obtain appropriate performance data (outcomes and effort, observing both performance and activity)
3. Evaluate what was beyond salesperson’s control (the economy, the weather, etc)
4. Identify problems and opportunities
5. Create a strategy that resolves problems and seizes opportunities