MAR3400 Exam 1

Researchers created a scale to measure how unique or substitutable a product/service is. With 10 being the most unique, and 1 being the most substitutable.

3 years ago, the number on the scale was 6.4

Today, the number on the scale was 4.5

This chart shows that products today are becoming easier and easier to copy; unique products are getting duped quicker and quicker, and are more easily substitutional

Competitors can copy features and could copy technology faster today than they could ten years ago. The reason for this is:

• the Internet

• people tend to change jobs more than they did ten years ago (helping the competing brand)

what does the unique/substitutable scale mean for salespeople?

You have to have better salespeople than the competitors. Because if our products are the same, then I better have somebody who's a better seller and communicator.Our salespeople become a source of advantage, they help set our company apart

The Old Business Model:

a contract would be signed by the customer during the “develop the solution” step, which would lead to the solution being delivered

Which of the following best explains why companies develop an Ideal Customer Profile (ICP) as part of their prospecting efforts?

To focus time and resources on customers most likely to buy and create value

Why do companies continue to invest in professional salespeople even when customers can research products online?

Salespeople help customers navigate complex decisions

The New Business Model:

you need an actual fully finished product developed at the meeting to even get someone to consider signing a contract. (customers demand more before saying yes)

what does the difference in the old and new business model say about salespeople?

As costs have gone up, the professionalism and the quality of salespeople have to go up also to make sure the customer says yes. You need to have good salespeople who are going to make sure the buyer goes through with signing.

Transactional Deal definition:

cost focused, convenience decision, don’t want to meet (with seller)

Consultative Deal definition:

advice focused, expertise decision, wants meetings (with seller)

Deal Types Five to Ten years ago:

• only 10% of deals were purely transactional and another 10% were purely consultative

• most deals were mixed/in the middle of the two giving the graph its bellcurve distribution

• Most customers would have paid a little extra for some advice

Deal Types Today:

• almost all purely transaction or purely consultative; not a lot of inbetween/the middle is going away

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today, transactional deals are:

seen as "efficient", with the channel being the interest or telemarketing

• hire young inexperienced salespeople who can answer just a few questions about the products. They're pretty efficient at what they do and don't cost a lot.

today, consultative deals are:

for deals that require more “insight”, and sales teams co-create solutions with the client

• hirer fewer salespeople. However, they are really expensive people because they have all this expertise but are useful since buying criteria has become more demanding

Sales People as Finance Managers

Salespeople have huge impacts on the financial aspects of the business because often they are given the ability to negotiate prices with customers, which can mess up the projections/predictions made by finance/accounting.

Sales People as Supply Chain Managers

• Salespeople are often the ones out promising customers how much they can ship to customers and when they will get it.

• Salespeople influence where inventory is stored because their information about customer demand helps supply chain managers decide where to put products.

Sales People as Manufacturing Managers

Salespeople can control what types of products the company makes, and control when the company makes the products.

• EX: Salespeople tell customers we can customize a product, but manufacturers hate customization because they want to run the same products all day to make it easy and cheaper.

Sales People as Marketing Managers

Salespeople can damage the brand image that marketing is trying to create when they communicate a different message to customers.

go-to-market definition:

how are we going to get our products/services out to customers?

sales vs advertising team:

typically salespeople convert more customers, more prospects into actual customers. And when they do get the customer to buy something, they tend to buy a whole lot more of it.

buyers’ information needs:

traditional advertising: low info needed to buy

personal selling: high info needed to buy

adv vs sales distribution:

traditional advertising: lots of channels. the more stops it has along the way = go with advertising costs

personal selling: more B2B selling, meaning it is going to be more direct.

Why a Career in Sales?

• high rewards

• promotion

• freedom

• most fair profession

• entrepreneurial

• knowledge is power

B2B individual salesperson:

• goes from manufacturer straight to business customer

• high control on price, and expert knowledge needed on product since you are the main line of communication

  • EX: Steris’ sales team goes to hospitals to try and sell their cleaning machines

B2B channel/trade salesperson:

• manufacturer to distributor

• more of a coach than a seller to other salespeoples; They teach the distributor salesperson how to sell their products

• low pressure

B2B distribution salesperson:

• distribution to end user

• benefit: you can buy from lots of manufacturers. So when meeting with a customer, you can tailor the solution

B2B Missionary/pull salespeople:

• jump from the manufacturer down to the business customer.

• They can’t actually sell anything, only promote the product.

• These are really technical and super-smart people. They're the ones that know everything about how to solve problems.

Trade and distribution salespeople would be considered “push” salespeople, whereas missionary salespeople would be considered a:

“pull” salesperson because they are trying to create interest in the customer so that they start pulling the product down through the channel without talking to any other people first

Direct consumer sales channels:

like helping end users and customers, and give suggestions and find things that will directly help the consumer.

• EX: Tom James

Trade consumer salesperson:

manufacturer to retailer

• EX: a trade consumer salesperson would go to Publix and would pitch them to have a new product or new variation from an established a product

retail salesperson:

inside the retail facility to sell end-users a product

• EX: when you go to Best Buy to buy a new tv, and the salesperson there pulls that product down through the channel

field sales description:

you take a job at a company, you’d train for 3-4 months on the products, how to sell them, and how to operate within the company. From there, the company would give you a territory/geographical location to cover, and you would be let on your own to call directly on mid to large customers.

inside sales simplifed description:

you are starting by working behind the scenes with smaller customers so that you have the opportunity to learn the business. And ultimately, you are usually supporting somebody who is out there working in field sales

• you are almost like an assistant to a sales representative

Ways to start in an inside sales model:

• “Filling the funnel”

• Outbound Selling

• Inbound selling

• Triad/Pod selling

“Filling the funnel”:

Your job is to create interest in customers who would be open to meeting with a salesperson. And once they say yes to a meeting, you hand them off to the actual sales rep

Outbound Selling:

you are actually selling products through the phone/internet to get meetings with customers. These are smaller customers who may just want some guidance before placing orders

Inbound Selling:

imagine marketing develops an ad campaign (via the web or television or print), and then customers reach out with questions/interest in the product. Your job is to answer the phone and work with the interested customer

Triad/Pod Selling:

You and an outside sales person work together with customers to sell to them or handle their service issues after they’ve already made purchases

Capital Equipment:

items are major purchases such as mainframe computers and machine tools that don’t get bought very often.

From a sale’s perspective, capital equipment:

• good b/c: it’s expensive and we will get more commission from it.

• bad b/c": these sales take a long time because there are a lot of decisions involved.

Maintenance, repair, and operating (MRO) Supplies:

much smaller in strategic importance and price; they’re things we typically use to run day to day business.

From a sale’s perspective, MRO Supplies:

while these may be low in price, we say in bulk and sell often (usually on a schedule every few weeks).

resellers are concerned with two things:

1. profit margin: “How much money can I make on it when I resell it to someone else?”

2. turnover: “How often do you think people are going to buy this product?”

Bid example for government agencies:

the state of Florida will say ‘we’re going to put the toilet paper contract out there for this year, and we invite anyone who sells toilet paper to bid’. They then get the proposals in with a dollar amount on them, and they pick the lowest priced one.

direct demand:

doesn’t matter how well our company is doing, the building needs MRO supplies.

derived demand:

the company is buying things because their customers are using/ordering from them

Steps in the Buying Process

1. Recognition of need

2. Definition of the product type needed

3. development of detailed specifications

4. Search for qualified suppliers

5. Acquisition and analysis of proposals

6. Evaluation of proposals and selection of a supplier

7. Placing and receiving the order

8. Evaluation of product performance

9. Payment

creeping commitment definition:

• if I can get involved earlier in the buying process, then I increase the odds that the customer is going to commit to me.

• you get to shape the specifications so that their needs fit my product, and narrows down the range of alternatives

Some things that might dictate how fast or how slow the customer goes through all of those steps:

• new tasks

• straight rebuys

• modified rebuys

(End) Users:

someone on the buying committee will represent the end users, and will be the person who decides what kind of laptops would/wouldn’t work for their company

Initiator:

the person who first comes up with the idea to change the outdated product.

• Salespeople need to find the initiators because they are the ones that first pointed out the issue, and have shown that they can make some noise and get the process started

Influencers:

they have heavy influence on the product we need, but don’t care where we buy it from

• Salespeople want to get to the influencer relatively early because sellers want to be able to shape the influencers opinions.

Controller/Economic Buyer/Decision Maker:

the person who controls the budget. mportant in the decision-making process

Gatekeepers:

people who are controlling access to other people on the team, as well as the information that’s getting sent around to different people on the team.

Deciders:

who is going to make the actual decision. think CEO, or someone important in the company.

Purchasers:

the people who handle the day-to-day operations and administration associated with making a decision.

• These are people who make sure all the paperwork gets done, all the evaluations get done according to company policy, etc. then eventually they're the ones who take over once a decision is made.

value in use

what are the customers going to get if they use our product

value in process

how do I help them as they’re going through the process of making a good decision about who to use

“How many calls do you need to make per day to hit quota?”

• First: divide quote by earnings per sale

• Second: divide first answer by close rate

• Third: amount of days multiplied by week to find days total

• Fourth: divide the second answer by the third answer

close rate:

out of every ten customers, how many of them buy (usually a percentage)

lead scoring:

a method used by companies to rank potential customers with a numerical value to see how likely they are to buy. Done by sales and marketing

Characteristics of a Good Prospect:

Does a want or need exist?

Does the lead have the ability to pay?

Does the lead have the authority to buy?

Can the lead be approached favorably? (i.e. can i even get to this person?)

Is the lead eligible to buy?

Ideal Customer Profile (ICP)

a detailed description of the company or organization that is the absolute best fit for a product or service, yielding high conversion rates, maximum retention, and long-term revenue

social selling definition:

• the process of finding and connecting with your potential customers through social media.

• Social selling is about developing 1-to-1 relationships with a single individual (or a very small group of prospects), with sales being the long term goal.

Social Selling Index:

It is a tool (or calculator) on LinkedIn that takes 4 factors into consideration and it gives you a score based on the effectiveness of your social selling activities

Social Selling Index four factors:

Establish your professional brand

Find the right people

Engage with insights

Build relationships

What’s the difference between social selling and social listening?

social listening is the passive or analytical practice of monitoring broad online conversations and sentiment to gain market insights

Social selling is proactive, involving direct outreach, personal branding, and sharing content. Social listening is observational, tracking keywords, industry trends, and brand mentions without necessarily interacting right away.

social media marketing:

focuses on 1-to-many communication, with the express goal of increasing the reach of your message to find an even greater audience

Top 6 Common Mistakes That Make Reps Miss the Game

Trying to sell the product/service in the first phone call

Lack of clear purpose for the meeting

Very long winded and vague when describing their company

Pushy; salespeople don’t take no for an answer

Rely on gimmicky statements or tactics

Over-reliance on E-mail

2 Key Questions for “Getting to the Game”:

“Who are you?” → “Why should I take a meeting with you?”

“Who are you?”

Not just who are you personally, but who and what company are you with?

“Why should I take a meeting with you?”

What's in it for them? What do they get to learn something? Are they gonna get something out of the meeting or is it just a meeting to help you out?

As a salesperson, you should be asking ___ and not “I’ve got solutions.”

“I understand your problem,”

referral answer:

when you say to the customer we've helped other people with similar problems, or directly reference someone you helped that the customer knows

statistic answer:

using percentages to show that the problem is not isolated i.e. the customer isn’t alone

Question Answer:

asking the customer, “What if you never had to experience this specific problem again?”

Compliment Answer:

complimenting the customer, and then asking “is there anything i can offer you/do to help you get even better at this job?”

What are the differences between optimistic, realistic and minimum objectives for a sales meeting?

• the best thing that could happen would be, for example, the customer says yes.

• The next could be the next realistic thing the customer might say if they'll agree to maybe let me come in and demonstrate how the product works.

• And then the minimum objective would be they let me send over a case study to them and they agree to let me follow up on the phone.

A Flow Diagram of the Strategic Planning Process

1. Figure out where you are

2. Identify what is important

3. define what you want to achieve

4. figure out who is accountable

5. review review review!

SPINS Technique:

• Situation Questions: General data-gathering questions

• Problem Questions: Questions about specific difficulties, problems, or dissatisfactions

• Implication Questions: Help the prospect recognize the true ramifications of the problem

• Need payoff Questions: Questions about the usefulness of solving a problem

• Solution/Summary Questions: Ensures that the customer is in agreement on the issues to be addressed and that they are willing to hear you out on your solution

High performing salespeople will ask a good mix/variety of SPINS questions, but will have the bulk of the conversation be

Problem and Implication questions

positive envisioning:

imagining a better future for yourself once you fix an issue you currently have