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EBS Sales Force Mgt Course Book Release SF-A1-engb 1/2006 (1023) April 2007 This presentation is best viewed in fullscreen- press F5 now... 1
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Sales Perspective Development and Role of Selling in Marketing Sales Strategies Consumer and Organisational Buyer Behaviours 2
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Selling Make a sale In most companies sales personnel are the single most important link w/ the cust. Front-line role Increasing emphasis on professionalism Required to adapt and change Type of selling/ Selling function: Order-takers (already committed cust.): Inside OTs (transactional), Delivery Sp., Outside OTs Order creators: Missionary Sp. (do not close the sale, medical/architect rep.) Order-getters (persuade Cust. to make a direct purchase) : Front-line Sp.: New B. Sp. (win new prospect), Organizational Sp. (maintain close long-term relationships), Consumer Sp. (more one-off) Sales support Sp.: Technical support Sp. (to front-line Sp.), Merchandizers (retail & wholesale) Salespeople key quality Empathy & an interest in people: identifying needs & understanding customer feelings Ability to communicate Determination Self-discipline and resilience B2B – B2C 3
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Sales Management Exercise Planning: sales forecasting, budgeting Organizing Controlling Adapt and change Play strategic role: Make key input into formulation cny plans Less on sales volume, more on profits Must be aware of developments in HR management Ensure that sales function makes the most effective contribution to the achievement of cny objectives and goals. Determination of SF objectives and goals, Forecasting, Budgeting SF organization, size, territory design and planning, SF selection, recruitment, training, motivation, evaluation, control Evolution of modern B. practice: production, sales, marketing orientation 4
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Implementing the MK concept Segmentation and Targeting Clearer identification of mkt opportunities Designing products more finely tuned to the needs Focusing MK and SALES efforts on those segments w/ the greatest potential Segmentation bases: Consumer products and mkts: age, sex, income, social class, geographical location type of residence using ACORN (A Classification of Residential Neighborhoods), personality, benefits sought. usage rate, e.g. heavy users versus light users Industrial products and markets: end-use market, type of industry, product application, benefits sought, company size, geographical location, usage rate. 5
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Marketing Programme/ Mix Product: Features, packaging, quality, range PLC IGSMD Diffusion of Innovation Theory Innovators 2.5% Early adopters 13-14% Early majority 34% Late M. 34% Laggards 16% Diffusion mediated by... Risk, Relative advantage, Ease of Trial/ Divisibility, Communicability, Compatibility, Relative simplicity Price: price levels, credit terms, price changes, discounts. How it affect selling and sales management Company objectives (Return on capital, early cash recovery, payback period MK objectives: mkt penetration, skimming Demand consideration, what the market will bear. SF can play a key role in the provision of pricing information Cost (BEP, Cost-plus or Mark-up), Competition, Customer oriented methods Place/ Distribution: inventory, channels of distribution, number of intermediaries. Direct, Intermediaries – Intensive, Selective, Exclusive Level of Cust. Sce: delivery & transporation methods – increase inventory hence costs – trade-offs Promotion: Advertising, Personal selling, Sales promotion, PR 6
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Sales and MK relationship Marketing strategy affect personal selling through: Creation of Differential advantage Strategic objectives: Build, Hold, Harvest, Divest Selling obj. and strategies are derived from MK strategy decisions and should be consistent w/ other elements of the MK mix Selling objectives Sales volume, Market share, Profitability, Service levels, SF costs SF strategy (define how obj. will be achieved) Call rates, calls % existing vs. new accounts, discount policy, improving cust./mkt feedback and cust. Relationships, % of resources targeted at - new vs. existing product - selling vs. after-sales service - field selling vs. telemarketing - different types of cust. (high/low potential) 7
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Marketing Plan Contents Sales Planning process: Setting objectives, Determining operations necessary to meet objectives, Organizing for action, Implementing, Measuring results against standards, Revaluating and controlling MOST: Mission, Objectives (where), Strategy (how), Tactics (details) Situational Analysis mkt analysis or Mk audit Market Situation S (analysis of cust. needs and trends) Competitive Situation S Macro-environmental Situation - PEST, STEEPLE S Past Product Performance Mkt and sales potential, Sales Forecast Sand Key Assumptions Key Issues: SWOT Objectives SMART S (setting sales objectives) Financial (profit, ROI) Marketing (sales volume, market share, targeting, pricing, cust. retention) Marketing Strategies (one per objectives, competitors’ counter-strategies) S (Sales Mgr consulted and input) Marketing Action Plan Implementation OR Integrated mkt program/mix S (Sales Mgr consulted and input) Target, Who, What, When, How Much… Communicated to everyone involved Projected Profit & Loss Budget – Allocating resources S Control - Contingency Plans S Measurement, corrections, modifications If threats/opportunities materialize, if situation/assumptions change 8
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Mk plan influences sales Inside-out planning, financially driven Outside-in planning, customer-oriented Promotional mix: Advertising, Personal selling, Promotion, PR , Direct mk, Interactive/Internet mk Where to place emphasis influenced by Type of make Stage in the buying process (hierarchy of effects model) Unawareness, Awareness, Comprehension Ad.& PR Conviction, Purchase Pers. Selling Push vs. Pull strategies, depending of channel of distribution Stage in the PLC Advertising-Selling relationship Reputation, awareness, new products, leads Consumer goods, branding/ brand image crucial, Advertising most effective promotional tool Brand or supplier loyalty: conscious decision – superiority perception Learning theory: tendency to repeat experiences that give us pleasure and to avoid those that do not Sales strategies to Tactics The SMgr must decide the specific actions required to achieve sales goals, ie. Tactics 9
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Consumers Who buys? Buying centre: Choice criteria? Initiator Economic: perf., reliability, price Influencer Social Decider Personal Buyer User How to buy? Need id./ Pb. Awareness Info gathering Evaluation of alternative Evaluative criteria Beliefs (imply knowledge) Attitudes (imply liking or disliking) Intentions Selection Post-purchase evaluation (cognitive dissonance) 10
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Factors Affecting Consumers Buying situation Extensive pb.-solving New purchase High involvement Limited pb.-solving Modified rebuy Limited involvement Automatic response Straight rebuy Low involvement Personal influences Personality: Dominant, Submissive, Warm, Hostile D-H, SH, S-W, D-W Modify selling accordingly Motivation Needs to satisfy Perception Selective exposure/ perception/ retention Learning Changes as result of experiences Lifestyle/ psychographics: beliefs, activities, values, demographics Young sophisticates Home-centered Coronation Street Traditional Working class housewives Middle-aged sophisticates Self-confident Homely Social influences Penny-pinchers Social class ACORN Reference groups Culture Family 11
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Organisational Buyer Structure: WHO – DMU Avoid Initiators Working in comfort zone Users Spending too much time with naysayers Deciders Influencers Organisational buyer Buyers Fewer customers Gatekeepers Concentrated markets Relationships Decision-making process More rational Problem/ Need recognition Product specifications 1. Reciprocal buying 2. Determination characteristics, spec, qty More risky 3. Search for, qualification potential suppliers More complex Proposals Negotiation important 4. Selection 5. 6. Order Routine Production type Feedback and evaluation 7. Job/ unit/ project Batch Content WHAT or CHOICE Flow/ mass/ line CRITERIA Process/ continuous Functional (Economic) Psychological (Emotional) 12
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Factors Affecting Org. Buyers Factors Affecting Org. Buyers Buy class Straight rebuy Modified rebuy New purchase Product type Importance of purchase Development in Purchasing Practice JIT Centralized Purchasing Reverse MK Leasing financial vs. operating lease Relationship Management Interaction Strategic Partners 13
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Sales Technique Responsibility of a salesperson Primary to conclude a sales successfully Secondary: Prospecting Records, feedback Self-management Handling complaints Providing service Implementing Sales & MK strategies: eg. Diversion Preparation Sales negotiations vs. Pure selling Sales negotiations Relate product features to consumer benefits Balance of power Competitors products/benefits knowledge # options available to ea. party Sales presentation planning Knowledge is power Sales objectives: w. the Sp. Wants the Cust. to do Need recognition & satisfaction Understanding buyer behavior Pressures Negotiation objectives: BATNA, ‘WOULD LIKE’, ‘MUST HAVE’ Concession analysis (valued by the cust.) Proposal analysis (objection anticipation) 14
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Personal Selling Skills Personal selling process 1. Opening Cardinal sin: ‘Can I help you?’ ‘No thank you. I’m just looking’ 2. Need & Pb. Recognition question-and-listen - open/closed question 3. Presentation & Demonstration 4. Objections 5. Negotiation 6. Closing 7. Follow-up call Presentation & Demonstration Chinese proverb ‘Tell me and I’ll forget, show me and I may remember, involve me and I’ll understand’ Relating Features & Benefits Which means that Which results in Which enables you to Reducing risk Reference selling Demonstration 1. brief features description/ ‘u’ benefits description 2. actual demo. Guarantees (warranty, service…) Trial orders 15
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Personal Selling Skills Objections Preparation Techniques: 1. Listen and do not interrupt 2. Agree and counter 3. Straight denial 4. Question the objection 5. Forestall the objection 6. Trial close 7. Hidden objections – Is there anything …so far which you are unsure about? …on your mind? – – What would it take to convince you? – Negotiation Start high but Be realistic Concession for concession: ‘if…then’ Buyer’s negotiation techniques Shotgun approach: unless you agree to cut…, we’ll look elsewhere Sell cheap, the future looks bright Noah’s ark: do better, competition is much lower Closing At highest interest, buying signals, trial close 1. Simply ask for the order 2. Summarize and ask 3. Concession close 4. Alternative close: red or blue, Tue. or Fri. 5. Objection close: if I can convince you…, will you buy it? 6. Action agreement: never display emotions – leave as quickly as possible 16
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KAM Advantages WHO Close relationships Best person Improved communication and coordination Support from top management Better f/up sales/service Relationship-building skills In-depth DMU penetration Higher sales KA relational development model Advancement opportunities for career Sp. Per-KAM prospecting Lower costs thru joint agreement prod/delivery/forecast Early-KAM build trust/performance/communication Cooperation on R&D Mid-KAM Risks Partnership-KAM share sensitive information Dependence, vulnerability of few customers Synergistic-KAM transparent costing systems Pressure on Profit Uncoupling KAM anytime, transactions/interactions cease Ever-increasing demand Neglect smaller accounts GAM At odds w/ career aspiration When Relationship building Small # of cust. = high proportion of sales Personal trust Differentiation potential Technical support Complex buying behavior Resource support Multifunction contacts Service levels Cost savings Risk reduction Danger of different Sp. Tailoring products and services KA information system Centralized cust. Competition doing KAM 17
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KAM KA planning system Account audit SWOT: Suppliers, Competitors, External changes Account plan Objectives in terms of cust. responses Strategies Control progress/achievement/corrective actions 18
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Relationship Selling From market-driven TQM to Customer care From Transactional to Relational selling 2 business basics: MK (cust. Orientation/knowledge) and innovation Relationship MK Differentiate via actual and augmented product (holistic view: sales support, guarantees, after-sales care) First priority, customer satisfaction (perceived quality) From JIT to Relationship MK Part-time marketer of non-marketing staff BPB Reverse MK SCI: Looking at the Supply chain as a whole to find new opportunities to improve overall effectiveness From RMK to Relationship selling JIT based on open accounting Serve cust. present and future needs (holistic needs) Simultaneous engineering: Japanese subcontractors’ ability to participate in product design 19
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Relationship Selling Tactics of relationship selling Customers' needs focus Trustworthy relationships Internal MK concept Determination, self-motivation, tenacity - overtaken by – acceptability, attention to detail, get along w/ people Sales visits longer Less calls Permanently at the cust. Information gathering MkIS: Market Intelligence + Market Research + Cny internal accounting syst. => Strategic MK plans Reducing selling costs More sales per cust. Superior business forecasting 20
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