McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.

Chapter 13

Sales and Sales

Management

THE KEY ROLES OF SALESPEOPLE

1. THE SELLING FUNCTION

2. MANAGE CUSTOMER RELATIONSHIPS

3. GATHER INFORMATION

• From Customers

• From Competitors

• About Market Forces13-3

SALES ROLE IN THE ORGANIZATION

• MANAGE RELATIONSHIPS

• CREATE CUSTOMERS FOR LIFE

• PROVIDE CUSTOMER SERVICE

• COORDINATE CORPORATE RESOURCES

• GATHERING INFORMATION

• CUSTOMER DIALOGUE IS USEFUL

• OBTAIN COMPETITIVE INFORMATION

13-4

DETERMINING THE SALES STRATEGY OPTION TO FIT YOUR CUSTOMER

1. SCRIPT-BASED SELLING—Used when all customers’ needs are similar

2. NEEDS SATISFACTION SELLING—Identifying buyers’ needs and selling to them

3. CONSULTATIVE SELLING—Bring specialized expertise for a customized solution

4. STRATEGIC PARTNER SELLING—Seller-Customer joint effort for developing product solutionsExhibit 13-1

13-5

• Limited relationships• Failure to monitor competitors or industry• Complacency

• Generate reorders• Upgrade• Full-line sell

• Secure complete commitment from both companies• Manage change

Exploration

Awareness

Commitment

Expansion

• Set correct expectations• Ensure proper initial use• Follow up• Make personal visits• Handle complaints• Achieve customer satisfaction

Dissolution

Exhibit 13-2

STAGES IN RELATIONSHIP BUILDLING

13-6

PARTNERSHIP COMMUNICATION:FROM SINGLE LEVEL TO MULTI-LEVEL

Buying Company Selling CompanyEngineeringMarketing

SalesFinance

Credit and Billing

Shipping& Receiving

ProductionMarketing

AccountingFinance

PurchasingDepartment

Shipping& Receiving

ProductionMarketing

AccountingFinance

Purchasing

Shipping& Receiving

Buying CompanyEngineeringMarketing

Credit & BillingFinance

Sales Purchasing

Shipping& Receiving

Selling Company

BEFORE PARTNERING

AFTER PARTNERING

PurchasingAgent

Salesperson

Exhibit 13-413-7

SALES ORGANIZATION OPTIONS

1. ORGANIZE GEOGRAPHICALLY USING CITIES, STATES, COUNTRIES, ZIP CODES, BY ACCOUNT

2. ORGANIZE BY PRODUCT AND DEVELOP SPECIALISTS FOR EACH PRODUCT CATEGORY

3. USE SALES TEAMS TO DEVELOP AND KEEP NEW BUSINESS.

13-8

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

Exhibit 13-513-9

CUSTOMER FOCUSED TEAM 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

Exhibit 13-713-10

Exhibit 13-8

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

MARKET LIFETIME VALUE

RELATIVEPOSITION

13-11

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 aselling priority withrepresentative

TO MAKE IT WORK:

INVEST IN TRAINING ANDMERCHANDISING MATERIALS

13-12

SALES FORCE CONTROL MECHANISMS

• ESTABLISH QUOTAS – Fair and Understandable• Activity Quotas

• Performance Quotas

• ESTABLISH COMPENSATION PLAN – Equitable, Stable, Understandable

• Straight Salary

• Straight Commission

• Combination Plans

• Bonus System

• MOTIVATION ACTIVITIES– • Keep Sales Force Producing

13-13

MANAGER’S DILEMMA: EVALUATINGPERFORMANCE & MAINTAINING MOTIVATION

1. REVIEW SPECIFIC SALES OBJECTIVES

2. OBTAIN APPROPRIATE PERFORMANCE DATA

(outcomes and effort)

3. EVALUATE WHAT WAS BEYOND SALESPERSON’S

CONTROL

4. IDENTIFY PROBLEMS AND OPPORTUNITIES

5. CREATE A STRATEGY THAT RESOLVES

PROBLEMS AND SEIZES OPPORTUNITIES

5 STEPS TO EVALUATE SALES FORCE PERFORMANCE

Exhibit 13-1113-14

RECOGNIZING AND IDENTIFYING A PROBLEM

ExpectationsEnormity of problem rests on length of this difference

Results

PROBLEM RECOGNITIONPROBLEM RECOGNITION

1. Our sales are down: WHY?2. We can’t see customers: WHY?3. We can’t make appointments on time : WHY?4. We spend too much time covering territory : WHY?5. Our territories are too big : WHY?6. We don’t have enough salespeople : WHY?

THE 6xWHY FILTER Ask the WHY question at least six times(or as many times as necessary)

PROBLEM IDENTIFICATIONPROBLEM IDENTIFICATION

“The Problem”

CONCLUSION / PROBLEMWe haven’t matched demand to our sales force.

13-15