1. 1 Sales and Sales Management Lecture Dr. Geurts Winter 1997

2. 2 TYPES OF SELLING: Trade = existing customer more of the same Missionary = existing customer new products or larger amounts of the same Technical = unique complex products to existing and new customers New accounts = new customers

3. 3 A.Types: 1.Inside order taker of tangible product --- ---popcorn at a movie 2.Outside order taker of tangible product- -----milk route salesman 3.Inside creative salesperson of tangible product------telemarketing of aluminum siding 4.Outside creative salesperson of tangible product-----door to door of insulation

4. 4 A.Types: (con’t) 5.Inside order taker of a nontangible product------ 6.Outside order taker of a nontangible product------door to door pest control or insurance. 7.Inside creative salesperson of nontangible product---telemarketing of investments 8.Outside creative salesperson of a nontangible product-----

5. 5 B.Roles of Salespeople - function as boundary spanners customers company 1.Consultant to customer 2.Advocate of customer to company 3.Information flow to both customer and company 4.Motivator of client 5.Do you sell or create desire to buy?

6. 6 C.Advantage of salespeople over advertising - Salespeople: 1.Customize the message 2.Close or force a decision 3.React to objections 4.Can be a friend/who know/social setting 5.Provide more information 6.Select who gets the message 7.Conduct product demonstrations

7. 7 II.COMPENSATION:

8. 8 A.Commission only 1. Ignore development over time 2. Sell lots of merchandise then quit before customers have time to return it 3. Disadvantages –a. sales are a function of territory as well as skill –b. feast or famine creates anxiety –c. no motivation to train other salespeople –d. no motivation to do reports –e. may not want management job - cuts into profits –f. play games to make quota (sales on paper only) 4. Advantages –a. selling costs are a fairly constant percent of sales –b. tends to motivate and get better performance

9. 9 B.Salary only: 1.Disadvantage –a. lack of motivation 2.Advantage –a. willingness to train, do reports, etc. C.Combination of salary and commission: 1. Lose some motivation but get all the other benefits 2. Less commission as a person goes up in promotions 3. Draw = advance of money paid back by future commissions

10. 10 III.SALES territory A.Geographic B.Type of Customer (industry) C.Combination of geographic and territory * It is hard to get them designed for equal potential.

11. 11 IV.MANAGING SALESPEOPLE

12. 12 A.Special Problems 1.Problem of them making more money than the boss 2.Rejection complex 3.Pressure to perform - success or failure is evident 4.Don't build reputation with company - only as good as last year's performance

13. 13 A.Special Problems (con’t) 5.Represent company - may misrepresent to clients 6.Travel weary 7.Frequent moves - marital and family difficulties 8.Haggle over territory with other salesmen 9.Loyal to customer or profession

14. 14 B.Motivation: 1.Money 2.Title prestige 3.Prestige - picture in paper 4.Prizes and awards - pin 5.Part of company - integrate into the decision-making process 6.Songs 7.Speeches, seminars 8.Wife shared trip or prize - sometimes not a motivation 9.Heavily in debt 10.Lifestyle 11.Prestige

15. 15 C. Attributes of a good salesperson Personal attributes –Oral communication –Work ethic - sometimes do to debt –Adaptability –Persuasion using logic –Charismatic - personality that pleases –Product knowledge –Self starter –Knowledge of role*** –Creativity

16. 16 C. Attributes of a good salesperson (con’t) Role perceptions –Knows both clients and employers perception of his duties –reduces conflict –reduces ambiguity –accurate assessment of needs for all involved

17. 17 C. Attributes of a good salesperson (con’t) Skill level –Close –Bring out motives –Overcome objectives Aptitude –Likes people –Deal with rejection –Satisfaction from selling –Self confidence Motives

18. 18 C. Attributes of a good salesperson (con’t) Organization –Role –No ambiguity –Motivation with pay and recognition –Good territory design –Good training –Compensation

19. Managing Sales Relationships

20. 20 Managerial Implications: 1. Selling is communication, look for communicators who can motivate self 2. 20% of salesmen generate 80% of sales 3. Care in territory design, equal potential 4. Pay to have information flow 5. Many individuals go into selling because they can’t find other jobs. Avoid these, look for people with a passion for selling.