1 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Read articles: › Know Thy Customer › Basics of B2B Sales Success  Learning Objectives › Understand the role of sales in B2B marketing › Identify the situations in which sales should be the primary marketing tool and other tools that might be used › Identify sales management policies and issues that affect the success of the sales force Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 2

 Creatively joining your company’s capabilities with your customer’s needs  Characteristics › Boundary between customer and company › Repeated, ongoing relationships › Solution-oriented, total system effort › Long time-period before sale pays off › Continuous adjustment of needs › Buyer demands creativity of seller in problem solving 3 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Successful relationships between customer and seller involve:  Mutual Respect  Trust  Authenticity 4 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Levels of Relationship and Intricacy:  Discrete Exchange  Differentiating an undifferentiated product  Multiple Transactions  Collaboration/Partnering 5 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Maximizing production/sales is often the goal  Production Era  Product Era 6 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Maximizing market choice or life quality and focus on satisfying a need  Marketing era  Societal/partnering/value network era 7 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Forms of Seller Roles Order Taker Persuader/ Sustainer Motivator/ Problem Solver Relationship/ Value Creator Takes orders, ensures correct and timely delivery of offering. Major effort in the “place” marketing mix variable. Proactive role in relationship. Informs customers about offerings and ongoing updates. Attempts to convince customer of value of offering, though the focus is still on needs of selling organization. Focuses on the needs of the customer organization, potentially creating unique customer solutions by matching supplier capabilities with customer needs. Considered a resource by the customer. Build and maintain partnership with all elements of the customer buying center. Supplier/customer relationship is mutually inspiring and stimulating. Both parties recognize an equity in the other’s success. Exhibit Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Forms of Seller Roles Order Taker  Take orders  Ensure timely delivery of products – major effort in “place” in marketing mix 9 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Forms of Seller Roles Persuader/Sustainer  Proactive role in relationship  Updates customers about offerings  Convinces customers of offerings’ value 10 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Forms of Seller Roles Motivator/Problem Solver  Focused on the needs of the customer’s organization  Finds unique customer solutions by matching capabilities and needs  A customer resource 11 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Forms of Seller Roles Relationship/Value Creator  Builds and maintains partnership with all elements of the buying center  Relationship is mutually inspiring and stimulating  Both seller and buyer recognize equity in the other’s success 12 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

One must understand the customer’s:  Technologies  Products  Markets and Customers  Competitors  Channels  Buying Center and Buying Patterns  Culture 13 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

External Environment Organizational Environment Target Markets & Marketing Mix Account Management Policies Sales Force Organization Sales Planning, Forecasting, Budgeting Deployment, Territory Design The EnvironmentMarketing Strategy Sales Management Activities Churchill, Ford & Walker (1997), Sales Force Management, 5 th ed., Irwin, p. 6.

 What kind of selling should we use? › Script-based selling › Needs satisfaction selling › Consultative selling › Strategic partner selling  What kinds of accounts should sales reps handle?  What kinds of accounts should be handled through less expensive means (e.g., telemarketing, direct marketing, e- commerce)

 Sales Force Organization & Size › Geographic, Product, Customer › Sales Teams › Sales force size  Directing the Sales Force › Territory design › Quotas – activity and performance › Compensation – Straight salary, straight commission, bonuses, combination plans  Evaluating Performance – Balance Score Card › Productivity – Activities vs. Outcomes › Customer Satisfaction › Profitability › Contribution to the company

Exhibit 13-8 ALLOCATION GRID FOR SALES RESOURCES Relatively fewer resources should be allocated here Low Maintain sufficient resources to continue to reap the sales potential and strong position High Direct more sales resources here Assign to alternative method of communicating, such as telemarketing Weak Strong MARKET LIFETIME VALUE RELATIVE POSITION 13-17

 Missionary Sellers — Task oriented  Field-Marketers — Market developers, focus in translation  Post-Sale Customer Service — Reinforce purchase decision 18 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Relationship Between Field Sales & Field Marketing Vice President of Marketing & Sales Sales Manager Marketing Manager Purchasing Influences at customers who are contract providers to end users. Field Marketer Regional Sales Manager Field Sellers Programs Manager Field Manager Headquarters Segment Specialists Field Marketer Regional Sales Manager Specifying Influences at End User customers who rely on contract providers Specifying Influences at End User customers who have integrated manufacturing facilities Purchasing Influences at integrated customer facilities Field Sales Team Field Marketing Team Specifying Influences at End User customers who rely on contract providers Field Marketing Flow Outsource/Contract Provider Flow Direct Sales Flow Exhibit 12-7 Field Sellers 19 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Correlation of Value & Complexity of Relationships A Generalized Case Increasing Value Orientation Transactional Sales Relationship Sales Complexity of Seller Skills Order Taker Motivator/Problem Solver Persuader/Sustainer Relationship/Value Creator Degree of shading indicates relative degree of importance. Increasing complexity of Relationship Exhibit Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Needs of job function  Needs of organization  Individual needs of buyer/seller 21 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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 a selling priority with representative TO MAKE IT WORK: INVEST IN TRAINING AND MERCHANDISING MATERIALS 13-22

Direct Sales Force Manufacturer’s Representatives Distributors Any Combination of The Three 23 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

24 Boaz, Murnane & Nuffer, “The Basics of B2B Sales Success”, McKinsey Quarterly, May 2010

 Straight Commission  Straight Salary  Combination Plans 25 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Repeat efforts necessary to sustain customer purchases  Rewards are short-term  Sellers focus on those who have frequent purchases  Inappropriate during new product introductions  Compensation variability/volatility may be a problem for the seller 26 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Management has greater control over sales force  Appropriate when sellers provide design and engineering assistance  Motivator/Problem Solver, Relationship/Value Creator  Creates stability  Does not tie financial rewards to sales results 27 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Frequently used form of compensation  Salary portion contributes to needs of management control  Commission encourages higher sales  Commission is paid as it is earned 28 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 Specialists in a particular market segment or collection of segments that have common users or call patterns  In business for themselves or as part of an agency of representatives 29 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 No ownership for what they sell  Carry no inventory  Have low fixed costs  Have little or no transaction between principle and customer  Commission given only after sale is booked 30 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 The product is technically complex  The situation requires a specialized background  Control is important – the organization selects, trains, and controls personnel  Long lead times expected for results  Prospecting for new customers is required  The customer base is concentrated  Explicit customer feedback is desired  High fixed costs Exhibit Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

 The product is standardized or generic  For technical products, a technical background is important  Control of personnel is less important  Short sales cycles are common  Reps have other complementary lines  Reps have established relationships with target customer segments  Match of reps’ existing call patterns  The market is dispersed and/or when the market consists of many small customers  Customer feedback is less critical  Low fixed costs are required Exhibit Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall