MKT 363: Exam #2 - Sales Mgmt

Salesforce Management: Numbers

Sales positions consume 20% of a firm’s revenue

Starting salaries are 20-40% higher than in other marketing positions

The Strategy Hierarchy

The flow of strategy from organizational level to unit level

Corporate Strategy: plans and goals for the entire organization

Marketing Strategy: markets, relationships, investment, and objectives

Sales Strategy: locating potential buyers, persuading them, and consummating the transaction.

Product-Market Grid

Market Penetration: Gain more market share with its existing products

Product Development: Creating new products to increase business with company’s existing customers

Market Development: Finding new markets

Diversification: Combining new products and new markets

Finding the Capital

Human Capital: determining number of salespeople needed, what skills/experience they must have, training required, and CRM support

Social Capital: ties the firm has with others, can be developed and then drawn upon as a resource.

SMART

Format used by sales managers and sales reps for establishing sales objectives

Specific - who the account is and its potential

Measurable - quota attainment and monthly revenues

Achievable, yet challenging - can objective be met?

Realistic - is the customer willing and able?

Time-based - length of sale

Eight Steps in the Selling Process

Lead Generation: identifying potential customers

Pre-Call Planning: learn everything they can about account

Approach: opening statement must get buyer’s attention

Needs Identification: confirms the account is a prospect (uses MAD & SPIN)

Presentation: describes product/service and how it meets buyer’s need

Handling Objections: find cause of concern and resolve it quickly

Closing the Sale: ask buyer for sale and secure the order

Implementation/Follow-Up: ensure customer has good experience with product/service & additional sales

Challenger Selling

The process that can increase value by helping the customer identify previously hidden or misunderstood opportunities or threats

FEBA Statements

Approach to presentation - feature, evidence, benefit, and agreement

5 Steps of Recruiting & Selection Process

Determine number of salespeople needed, identify unique skills needed, attract a sufficient number of applicant, conduct assessment interviews, and offer positions

Turnover Rate

Annual % of salespeople who leave the firm for controllable and uncontrollable reasons

Annual Turnover Rate = number of salespeople who left during the year / average sales force size during the year

Job Analysis & Ideal Candidate Profile

• What a salesperson currently does

• How the salesperson should ideally spend their time

• Territory size, account importance, job-related skills, motivation to succeed, promotability, maturity, engagement, and team participation

Writing a Job Description

Products/services a salesperson will sell, customer types/frequency, tasks and responsibilities, relationships with others, intellectual/physical demands, environmental factors, and compensation method

Recruiting Internal Applicant

Pros: managers already know about applicants (work habits, personality, responsibility, and team player)

Cons: seldom possess sales experience, must be trained, and managers will need to fill positions

Recruiting External Applicants

Referrals, advertising, blind advertisement (limited info), third-party, educational institutions, job/career fairs, and online postings

Application Form

Form that requires job candidates to provide a standard list of information. Allows managers to set threshold criteria or expectation levels.

Tests

Aptitude Test: measures whether an applicant has an interest in or an ability to perform certain tasks

Intelligence Test: measures an applicant’s memory, reasoning, or cognitive/verbal abilities

Personality Test: measures traits that motivate an applicant

Psychological Test: a method of sampling small, representative sets of behavioral responses

Semi-Structured Interview

Most common, open-ended questions with the option of probing deeper

Four Forces Model

Backward-Looking Approach: assessing current sales reps who reflect the ideal candidate profile used in the past

Forward-Looking Approach: considers new characteristics, the organization’s future, and go-to-market strategies.

Operational Focus: candidate profile must link to the current org; prompts sales managers to focus more on their existing organization than moving toward the ideal

Strategic Focus: sales managers consider where the organization should grow in terms of candidate characteristics

Training Process: 4-Stage Training Cycle

Identify Firm’s Training Needs: determine objectives of training and areas where sales reps need training, and who needs it

Develop Training Program: determine content, staffing needs, and delivery method

Deliver Training: schedule training and facilitate learning transfer

Assess Efforts: determine training value to individual salesperson and org

Training Needs

Organizational Analysis: How does the training program align with firm’s goals?

Task Analysis: How does the training program help salespeople develop the knowledge, skills, and abilities they need?

Individual Analysis: How does the training program match salespeople’s need for training?

Training Program Objectives

Increase sales productivity, lower turnover, improve morale, improve communication, improve customer relations, and improve self-management

On-the-Job Training

Exposes new reps to practices, products, and customers immediately, and refresher courses for more experienced reps; train reps on how to work with complicated/larger customers and products

Who Should Train Salespeople?

Line Executive: greater credibility, clearer expectations, more thorough evaluations, BUT lack of time and teaching abilities

Staff Trainer: greater time, more resources, better skills, BUT additional expense, lack of authority, and less credibility

Outside Specialist: greater specialization and expertise, BUT additional expense and program content not specific to company needs

Decentralized vs. Centralized Training

Decentralized Training: less expensive, takes more time, involves sales manager, BUT sales manager often lacks time/skill

Centralized Training: involves dedicated personnel, allows home officer interaction, reps focus on training, BUT more expensive and limited amount of time

Between-Person vs. Within-Person Analysis

Between-Person Analysis: helps determine which employees benefit from training

Within-Person Analysis: presenting a person’s knowledge and skills prior to/after training

Bloom’s Taxonomy

The cognitive, affective, and psychomotor behaviors that are reflected in the seven levels of learning, which range from remembering to creating

Gamification

Computer-based training programs that guide a person’s learning through an engaged, goal-directed process, frequently resulting in points and badges

KSAs

Knowledge, Skills, and Abilities; specific attributes needed for a firm’s sales jobs

Why Set Sales Goals (Quotas)?

Synchronize the direction and efforts of salesforce with plans/quotas developed by managers; benchmark performance within a period of time; sales rep compensation plans can motivate achieving goals

Sales Quotas

Usually established in terms of sales volume, used as standards to indicate the desired level of performance for a salesperson, territory, district, or region. Useful in providing goals, controlling activities, selling expenses, and evaluating salespeople

Sales Volume Quotas

Based on sales of particular products and sales of new products and to new customers, established usually for a 12-month period.

Dollar Quotas vs. Unit Quotas

Dollar Quotas: used to measure product activity; useful for selling different products and evaluating financial ratios

Unit Quotas: useful when fewer products are sold and when products are expensive

Sales Activity Quotas

Used for younger, inexperienced reps to get them on track to regularly call on customers. Helps plan daily activities and use routing techniques to manage their territories in a more efficient way.

Input-Based Goals vs. Outcome-Based Goals

Input-Based Goals: ACTIVITIES; related to the observable selling efforts a salesperson must make.

Outcome-Based Goals: OUTCOMES; selling-related results a rep is expected to make

Metrics

Net Promoter Score (NPS): a questionnaire that indicates customer satisfaction levels

Customer Satisfaction (C-Sat): a survey using questions to assess customer satisfaction levels

When is a Sale a Sale?

Counted when the product is either shipped or paid for, difficult for long sales cycles (6 months - 2 years)

Offer partial credit (30%) when the order is placed, and the remaining (70%) when order ships and installed

Meeting a Goal

Threshold Goal: reaching the 90% mark

Actual Goal: reaching the 100% mark

Stretch Goal: reaching the 110% mark

Bricolage

Tapping one’s ability to use resources effectively in times of change by assessing one’s resource situation and actively reconfiguring resources to meet the challenging environment.