Sales Management 5 The Process of Buying and Selling And Sales Job Tasks

Players in the Purchase Center I _________: Initiators are people who perceive a problem or opportunity that might require the purchase of a new product or service and thereby set the buying process in motion. The initiator can be almost anyone at any level in the firm. _________: The people in the organization who must use or work with the product or service often influence the purchase decision.

Players in the Purchase Center II _________: Influencers provide information for evaluating alternative products and suppliers, and they often play a major role in determining the specifications and criteria to use in making the purchase decision. _________: Gatekeepers control the flow of information to other people involved in the purchasing process. They include the organization’s purchasing agent and suppliers’ salespeople.

Players in the Purchase Center III _________: The buyer is usually referred to as a purchasing agent or purchasing manager. In most organizations, buyers have the authority to contact suppliers and negotiate purchases. _________: The decider is the person with the final authority to make a purchase decision. Sometimes buyers have this authority, but often it is retained by higher executives in the organization.

Players in the Purchase Center IV _________: The person who determines the budget for the purchase is the controller. Sometimes the budget is set independently of the purchase. Then, if the copier needs to be replaced, the cost would have to fit in that budget. At other times, the controller may be a product designer who is trying to keep the cost of the new product within a certain budget.

Stages in the Organizational Buying Process (1) Anticipation or recognition of a problem or need (2) Determination and description of the characteristics and quantity of the item needed (Specifications) (3) Search for and qualification of potential suppliers (RFP) (4) Acquisition and analysis of proposals or bids (5) Evaluation of proposals and selection of supplier: Not just $ (6) Selection of an order routine (7) Performance evaluation and feedback

Types of Purchases I Straight _________ : Ongoing, repetitive purchase: e.g. windshields, microchips, paper, light bulbs.

Types of Purchases II Modified _________ : Price periodically to be sure that you are getting best deal: e.g. long distance carrier, janitorial service.

Types of Purchases III New Purchase: First time, or first time in a while; writing specs: e.g. new warehouse, office, production equipment, sales cars.

Internal Sales Force vs. Independent Agents First Decision: Which is right for you?

External: Two Types of Agents Manufacturers Representative Pure Commission; No Ownership Advantages:  Established _________  Familiarity with _________  _________ spread over several manufacturers  Strictly _________ cost to manufacturer (No cost unless they sell.) Selling Agent Acts as sole sales agent of the manufacturer, rather than just in one geographic area or product. Broader authority.

Transactional Cost Analysis Substantial Transaction-Specific Investments: Lock-in (e.g. Showroom) Agency Theory: Agent looks out for self first and foremost Alignment of interests Altruism Hiring own sales people limits flexibility

How Salespeople Spend Their Time With customers 15% Service Calls 5% Administrative Tasks 34% Prospecting 14% Waiting/traveling 32% SOURCE: Fenemore Group, as reported in Sales & Marketing Management (March 1998), p. 96. NB: Actual Selling 1/6 Time

Job Factors and Tasks Selling function Working with others Servicing the product Managing information Servicing the account Attending conferences and meetings Training and recruiting Entertaining Traveling Distribution

Selling Function Plan selling activities Search out leads Call potential accounts Identify decision makers Prepare sales presentations Overcome objections Call new accounts

Prospecting: _________ 100 Leads  50 Qualified Leads (only half)  10 Hot Prospects (only 20%, 1 in 5)  4 Customers (only 40%, 2 in 5) This is why cold-calling is so important.

Working with Others Write up orders Expedite orders Handle back orders Handle shipping problems Find lost orders

Servicing the Product Learn about the product Test equipment Supervise installation Train customers Supervise repairs Perform maintenance

Managing Information Provide technical information to customers Receive feedback from customers Provide feedback to company Communicate with superiors

Servicing the Account Stock shelves (Maintain inventory) Set up displays Take inventory for client Handle local advertising (not national)

Attend Conferences & Meetings Sales conferences Regional sales meetings Client conferences Exhibits/Trade shows Training

Training & Recruiting Recruit new sales reps Train new salespeople Travel with trainees (or have them tag along)

Entertaining Golf Meals: Lunch, Dinner, Breakfast Drinks (watch tax deductions, and behavior) Parties for clients Donuts to office

Travel Out of town Day trips Overnight stays Extended trips In town Traffic Optimize route

Distribution Establish good relationships with distributors Sell to distributors Handle credit Collect past due accounts (sometimes )

Stages of the Selling Process Prospecting Opening relationship Qualifying prospect Presenting sales message Closing sale Servicing account after sale. (More to come later.)

Selling Tips Be professional Don’t glad-hand Know your product Know your prospect Know your competitors Don’t make promises you can’t keep Always tell the truth LISTEN