Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling,...

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Sales Knowledge: Customers, Products, Technologies Chapte r 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Page 1: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales Knowledge: Customers,

Products, Technologies

Chapter 5

McGraw-Hill/IrwinABC’s of Selling, 10/e

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Page 2: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Main Topics

The Tree of Business Life: Knowledge Sources of Sales Knowledge Knowledge Builds Relationships Know Your Customers Know Your Company Know Your Product Know Your Resellers Advertising Aids Salespeople Sales Promotion Generates Sales What’s It Worth? Pricing Your Product Know Your Competition, Industry, and Economy

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Page 3: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Main Topics, cont...

Personal Computers and Selling Knowledge of Technology Enhances Sales and Customer Service Sales: Internet and the World Wide Web Global Technology Provides Service Technology Etiquette

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Page 4: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

The Tree of Business Life: Knowledge

Guided by The Golden Rule: 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 care

IT C

Ethi

cal Service

Builds

T r

u e

Relationships

TT T

T T T TT T T T

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Page 5: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sources of Sales Knowledge

Sales training Experience

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Page 6: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Sources of Sales Knowledge

Sales Training – effort put forth by employer to provide the opportunity for the salesperson to receive job-related attitudes, concepts, rules, and skills that result in improved performance

Education, Reading, and Word-of-mouth

Page 7: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Sources of Sales Knowledge

Experience – the critical source Selling is a skill developed through experience

Page 8: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Knowledge Builds Relationships

Knowledge increases a salesperson’s confidence,

and,

Knowledge increases a buyer’s confidence in the salesperson.

Thorough knowledge about your product is needed to gain the buyer’s confidence.

More knowledge, more confidence mean more relationships,

and…

More relationships mean more sales

Page 9: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your …

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Page 10: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Customers

Find out all you can

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Page 11: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Know Your Company

General company information: Company growth and accomplishment Policies and procedures

Page 12: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Company’s Policies & Procedures

The salesperson should let the buyer know:How his order will be processed

How long it will take for her to receive her order

The policy on returned goods

How to open a new accountWhat to do if he receives the wrong shipment

Page 13: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Know Your Company

General company information, cont.: Production facilities Service facilities – promise of prompt repair services

can help make a sale

Page 14: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Product

Product knowledge may include: Performance data Physical size and characteristics How the product operates Specific features, advantages, and benefits of the

product How well the product is selling in the marketplace

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Page 15: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Resellers

Understand the channel of distribution

Page 16: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

The Channel of Distribution

Page 17: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Resellers

Understand the channel of distribution Know as much about each channel member as

possible Likes and dislikes of each channel member’s customers Product lines and the assortment each one carries When each member sees salespeople Distribution, promotion, and pricing policies What quantity of which product each channel member

has purchased in the past

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Page 18: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Advertising Aids Salespeople

Advertising Aids Salespeople

Page 19: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Why Spend Money on Advertising?

Main ingredient of a firm’s promotional effort Companies advertise because they hope to:

Increase overall sales and sales of a specific product Give salespeople additional selling information for sales

presentations Develop 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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Page 20: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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 presell customers between sales

calls

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Page 21: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Types of Advertising

Types of Advertising Differ: National advertising Retail advertising Cooperative, or co-op, advertising Trade advertising Industrial advertising Direct-mail advertising Internet advertising

Page 22: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Types of Advertising

National Advertising Reaches all users of the product across the

country Ford, GM, GE, IBM, Coca-Cola

Retail Advertising Used by retailers to reach customers within a

geographic area Cost for national-brand advertising paid by retailer or

shared

Page 23: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Types of Advertising, cont.

Cooperative Advertising Conducted by retailer, paid by

manufacturer or shared

Trade Advertising Undertaken by manufacturer directed toward

the wholesaler or retailer Trade publications

Page 24: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Types of Advertising, cont.

Industrial Advertising Aimed at individuals and organizations who

purchase products for use in manufacturing other products

Direct-mail Advertising Ads, samples, and coupons mailed directly

to the consumer or industrial user to expose him to or remind him of the product May solicit response

Page 25: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Types of Advertising, cont.

Internet (Web) Advertising

Page 26: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales Promotion

Promotional tool that simulates consumer purchasing and dealer interest by means of short-term activities

Supplements personal selling, advertising, and public relations

Examples: free samples, prizes, contests, and cents-off coupons

Page 27: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Sales Promotion Generates Sales

Consumer sales promotion Business sales promotion

Page 28: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales Promotion Techniques

B2B Trade Shows Portfolios Deals Catalogs Conventions

B2C Coupons Cents-off Promotions Sampling Premiums Sweepstakes Contests Bonuses Catalogs Demonstrations Special Events Lotteries In-store Displays

Page 29: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Sales Promotion Generates Sales, cont.

Point-of-purchase (POP) displays Shelf positioning Shelf facings Premiums

Page 30: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Premiums

Premium Article of merchandise offered as an

incentive to the user to take some actionPurposes of Premiums

Promote customer sampling of new product

Introduce new productEncourage point of purchase displayBoost sales of slow products

Page 31: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales Promotion Generates Sales

Premiums Sweepstakes and contests Consumer premiums Dealer premiums

Page 32: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales Promotion Generates Sales

Sales promotion on the Internet

Page 33: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer

Page 34: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer

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Page 35: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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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Page 36: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit 5-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations

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Page 37: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Know Your Competition, Industry, and Economy

Understand competitors’ products, policies, and practices

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Page 38: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

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

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Page 39: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Knowledge of Technology Enhances Sales and Customer Service,

Three Areas of Sales Force Automation

1. Personal Productivity

2. Communications with Customers and Employer

3. Customer Order Processing and Service Support

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Page 40: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Knowledge of Technology Enhances Sales and Customer Service

Personal Productivity Contact management Calendar management Automated sales plans, tactics, and ticklers Geographic information systems Computer-based presentations

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Page 41: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Knowledge of Technology Enhances Sales and Customer Service, cont…

Communications with Customers and Employer Word processing E-mail Fax capabilities and support

Customer Order Processing and Service Support Salespeople's mobile offices GPS and PDA

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Page 42: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit 5-8: Salespeople Rely on Mobile Technology to Serve Their Customers

GPS DeviceCell Phone

PDA

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Page 43: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Sales: Internet and the World Wide Web

The Internet The World Wide Web

Web page Links Surfing the Internet

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Page 44: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit 5-9: Web Sites Can Provide Valuable Information to Salespeople

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Page 45: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Global Technology Provides Service

Increased worldwide interaction

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Page 46: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Technology Etiquette

Netiquette – etiquette on the internet Cell Phones Voice Mail Faxes Speakerphones and Conference Calls

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Page 47: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Summary of Major Selling Issues

Company knowledge includes information on a firm’s:

History Development practices Procedures Products Distribution Promotion Pricing

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Page 48: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Summary of Major Selling Issues, cont…

To reduce conflicts and aid channel members in selling products, manufacturers offer assistance in:

Advertising Sales promotion aids Pricing allowances

National, retail, trade, industrial, and direct-mail advertising create demand for products and are powerful selling tools in sales presentations

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Page 49: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Salespeople should be able to confidently discuss price, discounts, and credit policies with customers

Success in sales requires knowledge of the many technologies used to sell and service customers

Summary of Major Selling Issues, cont…

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Page 50: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Chapter 5 Appendix

Sales Arithmetic

and Pricing

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Page 51: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Types of Prices

List price – standard price charged to customers Net price – after allowance for all discounts Zone price – based on geographical

location FOB shipping point – buyer pays transportation

charges – title transfers FOB destination – seller pays all shipping costs

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Page 52: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Discounts Lower the Price

Quantity discounts Noncumulative – one-time Cumulative

Cash – ex. 2/10 Net 30 Trade – Wholesaler / Retailer Consumer

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Page 53: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit B: Types and Examples of Discounts

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Page 54: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Resellers: Markup and Profit

Markup Gross profit Net profit Channel-of-distribution markup Markup arithmetic Return on investment

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Page 55: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

What Is the Percent Markup?

$1.00 = cost to retailer

$1.00 = dollar markup

$2.00 = selling price

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Page 56: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

What Is the Percent Markup?, cont…

It depends on whether you use Selling Price, or Cost

Dollar markup is divided by either selling price or cost to retailer

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Page 57: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

What Is the Percent Markup?, cont…

$1.00 = cost to retailer

$1.00 = dollar markup

$2.00 = selling price

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• Selling price = 50%• Cost = 100%

• We use selling price in calculating the percent of markup

Page 58: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

What Is Markup?

Markup is the dollar amount added to the product cost to determine its selling price

Markup is often expressed as a percentage

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Page 59: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit C: Example of Markup on Selling Price in Channel of Distribution

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Page 60: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Exhibit E: Profit Forecaster for Granola Bars Shown to Buyer

3-Day Special 2-Week Special Normal

Total storesDeal datesRegular cost per dozenLess allowance ($.53)Deal cost per dozenFeature priceCases purchasedTotal investmentTotal gross salesTotal gross profitReturn on investment (ROI)

100June 1 – June 30

$21.60- 6.36$15.24 1.39

500a

$7,620b

$8,340c

$720d

9.0%e

100

$21.60- 6.36$15.24 1.391,000

$15,240$22,680 $7,440

49%

100

$21.60

$21.60 2.19f

1,500$32,400$39,420 $7,020

22%g

a 5 cases per store d $8,340 - $7,620 = $720b 500 x 15.24 = $7,620 e $720 ÷ $7,620 = 9.0%c 500 x 12 = 6,000; 6000x $1.39 = $8,340 f $21.60 ÷ 12 @ case = $1.80 (regular cost)

g $7,020 ÷ $32,400 = 22%

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Page 61: Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc.

Organizations: Value and ROI

Value analysis Product cost compared to true value

Unit costs ROI is listened to

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