What is relationship selling and why use it rather than transactional selling?
- Selling process that builds strong relationships and narrows the vendor pool.
- Use this rather than transactional selling because satisfied customers keep buying, recommend others and increases efficiency
How is the sales force different that other departments in the organization?
- –Revenue generators (more than one right way)
- –Boundary spanners(identity crisis)
- –It’s a tough job
What are the characteristics of leading vs. managing?
- 1. Leading-
- to coach be the cheerleader,Communicate, Empower
2. Managing- making yourself useful, resourceful and trusted, control, supervisor, boss
What are the six aspects of the sales environment we discussed?
•Legal and political
–Development of moral standards
- •Ethical considerations for sales managers:
- –Relationships with salespeople
- –Interactions between salespeople and customers
- •Trust for customer loyalty
- •Long term relationships
- •Personal ethics reflect integrity of firm
- •Managers must influence ethical performance by example
- •Technology is changing sales profession.
- –Buying online
- •Sales without the salesperson
- –Customer have more access to information
- •Product information
- •Customer reviews of sellers
- •Pricing information
- •Management software:
- communications, and data processing technologies change:
- –Customers can easily communicate world-wide
- –Significant growth opportunities lie outside domestic markets
- –Customers are global
•Diversity of sales force creates challenges
What are some legal issues impacting sales management?
•Increased number of laws regulate conduct of business
- •Three broad categories of relevant laws:
- –Consumer Protection
- –Equal Employment Opportunity
B2B vs. B2C?
- •B2B markets compared to B2C
- –Fewer total customers
- –Large orders from customers
- –Usually a few customers generate most profits
- –Often much stronger relationships between buyer and seller
- –Derived demand (business demand derives from consumer demand)
- –Different government regulation
What is the buying center? What are the roles? Why is it important?
- Buying center- the buying center is not an actual place but a group that represents all people who participate in buying or influencing the purchase of a particular product
- The center is important because eliminates the chances of the purchase being a mistake
- selling to businesses. Large amounts accounted for by industrial selling
- Trade servicer
- missionary seller
- Technical seller
- new business seller
Roles in the buying center
- 1. Initiator- precieves problems requiring new product
- 2. Users- uses product/service
- 3. Influencer- provides info for evaluating product
- 4. Gatekeeper- controls flow of info
- 5. Buyers- contacts selling organization and places order
- 6. Decider- final authority to purchase
- 7. Controller- determines budjet
What are the three buying situations?
- 1. New task purchase- 1st time buying. Completely new vendor and product
- 2. Rebuy- modified, buying with modification. May choose a different vendor
- 3. Straight rebuy- buying thr same thing again
Why is buying situation relevant?
- Consideration depends on newness of purchase, risk and types of purchase
- Customer has less to decide if they have already made the purchase
What are some different B2B selling jobs?
- Trade servicer- provides customers w/merchandising & promotional
- missionary seller- perauades customers to buy products from distributers
- Technical seller- offers current customer technical/engineering assistance
- new business seller- identifies & obtains business from bew customers
What is CRM? p71
- Comprehensive busn model for increasing revenues and profits by focusing on customers
- Purpose of aquiring, retaining or cross-selling (profitability) customers with touchpoints (email, call centers, sales person, distributor, store, branch office, web)
Learning customer needs then making a product to meet those needs
- good at market sensing, learning their needs, anticipating the future, sharin info across the firm.
- Focus on alinging the org processes and functions to max the firm's success
Helping customers make purchase decisions that will satisfy their long-term needs.
- employees implement mkt mix. Doesnt increase salesperson performance.
- Takes long to get benefits, extra costs
- Lon term benefits
How are they different from a product and sales orientation?
they put the customer first
- Making a product and figuring out who wants to buy it.
- The company believes that they have a superior product, based on quality and features, and because of this they feel their customers will like it also.
The focus here is to make the product, and then try to sell it to the target market. However, the problem could be that consumers do not like what is being sold to them.
What activities do salespeople do?p47
- 1. Selling function
- 2. Working with others
- 3. Servicing the product
- 4. Managing information
- 5. Servicing the account
- 6. Attending conferences and meetings
- 7. Training and recruiting
- 8. Entertaining
- 9. Traveling
- 10. Distribution
What are the steps in the selling process?
- 1. Prospecting for customers-
- 2. Opening the relationship-
- 3. Qualifying the prospect
- 4. Presenting the sales message
- 5. Closing the sale
- 6. Servicing the account
What are the two strategies we talked about?
- 1. Porters typology
- Low cost
- 2.Miles and Snow's typology
- .prospector- newer business
- .defender- beat down the competition
- .analyzer- older busn trying to keep up w/new niche
How do they impact the sales force?
- low cost- might not have a sales force, sell in volume
- Differentiator- build relationship,
How do they impact the sales force?
- Prospector-someone outgoing, hitting the streets
- Defender- relationship focused, take them out
- analyzer- service, prospecting, new application, new product campaign
Is it okay to outsource?
Yes, only if you dont need a lot of control over them
Product Sales structure
- Separate sales force for each product (or category) in the line
- •Salespeople master effective selling methods for single or related products
- •Closer alignment of sales and production
- •Sales management controls allocation of selling effort across the line
-Duplication of relationship activities
Geographic sales structure
- -simple most common structure
- -Responsible for performing all activities necessary to sell all products
- -low cost, travel time expenses minimized
-salesperson has to be expert in all the products and customers
team selling structure
Salespeople specialize in performing different selling functions – e.g. prospecting and developing new accounts versus maintaining and servicing existing customers
Market/Customer type sales force
- Natural extension of marketing concept and strategy of market segmentation
- •Better understanding of customer needs
- -Possible higher selling and administrative costs
- -Duplication of effort
What are the four sales structures we talked about? What are advantages and disadvantages of each? pg113
- Market/Customer type
- Team selling
key account management
- •Separate corporate division/sales force
- –Deliver high-level customer service to attract and maintain large and important customers
When should sales support structure be centralized/automated?
–Low complexity, high workload: Make it central and/or automated
When should sales support be outside the sales chain of command?
- When qualifying the customer
- Dont have finance qualifying people in the same place as the sales people
When should a specialist be hired for sales support?
–High complexity, high workload: Hire a specialist
What is span of control (for managers)?
Number of people a manager supervises
How can managers increase cross-functional integration?
- –Decentralizationand cross-functional teams
- –Coordinatorsbetween sales and marketing
- –Complex information systems
- –Right about of communications
- •Cross-functional training
- •Joint goals
- •Company culture vs. departmental culture
Why is the relationship between marketing and sales often strained?
- •Strong marketing-sales integration can:
- –Shorten sales cycles
- –Decrease cost per sales
What is the difference between objective and subjective forecasting?
- •Market test – places product in select areas
- •Statistical demand analysis
- –Use regression to guess demand
- –Regression: Prediction equation
- Y(sales) = b1X1 + b2X2 + constant
- •Moving average – averages sales results over previous time periods to forecast
- •Exponential smoothing – type of moving average where most recent years given more weight
- •Decomposition – applied to monthly or quarterly data where seasonal pattern is evident
What is the difference between objective and subjective forecasting?
- •User expectations –relies on buyers’ expressed intention
- •Sales force composite– sales force opinions
- •Jury of executive opinion - key experts’ opinions
- •Delphi technique –participants prepare estimates which are compared anonymously and iteratively to reach consensus
Which is better of objective and subjective forecasting?
- •Best method depends on industry
- –Subjective methods involving expert non-biased judgment are best for periods of change
- –Otherwise, use multiple forecasting methods
How does regression work?
Y(sales) = b1X1 + b2X2 + constant
How does rolling averages work?
- previous 2yrs/2
- previous 4yrs/4
How does sales force size relate to product life-cycle?
- •Match sales force size to business life cycle
- intro: hire aggrseeively
- –Improved accuracy of size/demand
- –Focus on improving quality of sales effort
- decline –Reduce size
- •Use salespeople to perform critical tasks and /or serve key accounts
- •Quick build—hire for market forecast
- –If you forecast you need 380 salespeople in three years, hire 380 salespeople in year 1.
- •Play it safe—build up to market forecast
- –If you forecast that you 380 in 3 years, hire 350 salespeople in year 1 and 30 more in year 2.
- •Earn your way—hire as needed
- –As sales grows, hire more salespeople.
How do you know your current size is not correct?
- •Customer test
- –Too small: customer needs aren’t met (“who?”)
- –Too large: avoiding salespeople (“so annoying!”)
- •Sales force test
- –Too small: Overworked (“I can’t keep up!”)
- –Too large: No opportunity (“the floor is flooded”)
- •Sales activities test
- –Too small: Too much time order-taking too little prospecting
- –Too large: Salespeople have little to do
- •Competitive test
- –How big are competitors’ sales forces?
- •Financial tests
- –Incremental benefit
What is the optimal sales force size?
- •Diminishing returns to sales force efforts
- •There is an optimal size
size where incremental profit exceeds incremental profit
What is the break-down method and what is the workload method?
- #salespeople required= #hrs required to serve market / #hrs to wach sales person
- #sales people needed= forcasted sales volume / estimated productivity of each sales person
What issues should managers try to balance when designing sales territories?
- –Matching territory workload to salesperson capacity
- –Distributing sales potential fairly to salespeople
- –Developing compact, travel-efficient territories
How should managers change sales territory sizes?
- –Use change-friendly commission plans.
- •Ex. Commission based on territory potential
- –Changes impact high-relationship customers more than low relationship customers.
- –Assess territory design every few years.
- Personal selling is important in almost every company because it is the
- firm's most direct link with their customers AND because it is usually
- the most expensive component of a firm's marketing mix.