1. Introduction to Sales Management
Chapter 1
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2. Managing Sales Force Is Important
Sales positions are the hardest jobs to fill.
Sales is also one of the most expensive activities a company undertakes.
Sales consumes are more than 20% of a firm’s revenue.
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3. $$$ As a career opportunity, starting in sales is an excellent choice.
Sales starting salaries are about 20% higher than other marketing positions.
Many CEOs get their start in sales.
Sales managers earn more than managers in other areas.
Sales jobs predicted to grow at a faster rate than other professions.
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4. Establishing the Parameters of the Firm’s Strategy: The Mission Statement
A strategy is a plan designed to accomplish a mission.
A mission is a set of objectives.
Most companies tend to think of missions in longer terms rather than as a single campaign.
Often companies summarize their goals in what’s called a mission statement.
Mission statement is a brief document that defines why the organization exists, what it seeks to accomplish, and the principles that the company will adhere to as it tries to reach its goals.
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5. Vision to Mission Statement
Objectives
Goals
Philosophies
Product
or Service
Primary
Market
Survival, Growth,
Profitability
To transform vision into reality, managers must define specific organizational goals, objectives, and philosophies. A starting point is to write a company mission statement, a brief document that defines why the organization exists, what it seeks to accomplish, and the principles that the company will adhere to as it tries to reach its goals.
Typical components of a mission statement include the company’s product or service; primary market; fundamental concern for survival, growth, and profitability; managerial philosophy; and commitment to quality and social responsibility.
Managerial
Philosophy
Level of
Quality
Social
Responsibility
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6. Establishing the Parameters of the Firm’s Strategy: The Mission Statement
Mission statements should serve to;
Inspire the members of an organization
Give purpose to their actions
Guide their decision-making
A good mission statement also serves as a standard against which the decisions and actions employees take can be compared to ensure that they are the ones for the organization.
Once the mission’s objectives are set, strategy can be created.
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7. Sample Mission Statements
Everything we do is inspired by our enduring mission:
To Refresh the World in body, mind, and spirit
To Inspire Moments of Optimism through our brands and our actions
To Create Value and Make a Difference everywhere we engage
The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit
Coca-Cola
Southwest Airlines
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8. The Strategy Hierarchy
A firm’s corporate strategy encompasses plans and goals for the entire organization.
The corporate strategy will also address questions such as what markets and sourcing options company should engage.
Ex: hire sales force vs. use distributors
Ex: outsource mf and focus internally on marketing
Once a company’s strategy is formulated, it is then communicated to the firm’s various business units –marketing, sales, manufacturing, and so forth– create their plans to support corporate strategy
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9. The Strategy Hierarchy
The flow of the strategy from the organization level to the unit level is called the strategy hierarchy.
The firm’s marketing plan is likely to precede its sales plan.
Marketing and sales work together to create an overall marketing strategy.
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10. The Strategy Hierarchy
Corporate Strategy
Marketing Strategy
Sales Strategy
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11. Creating a Marketing Strategy
Markets
What markets do we serve with what products?
Relationships
What types of relationships do we form and with whom?
Investment
What level of investment will be required, and how will we locate and allocate the needed resources?
Objectives
What are the detailed objectives and action plans?
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12. What Markets Do We Serve with What Products?
In certain situations, the product defines the company.
For ex; Xerox was built around xerographic technology.
At other times, a natural market such as a geographic area might define a company.
An example might be steel mills in Pennsylvania, located near iron ore and coal deposits needed to manufacture steel.
Yet, when market conditions changed, both Xerox and the mills had to carefully consider what markets they wanted to serve and with what products.
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13. What Markets Do We Serve with What Products?
Find a sustainable competitive advantage, something that gives a company an edge in the market over time.
To achieve a competitive advantage, you need expertise, technology or a patent that is difficult for others to copy.
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14. Product-Market Grid
Market penetration; the firm can try to gain more market share with its existing products. It is often about trying to find more customers like the ones who are already buying your products.
Product development; involves creating new products in order to get more business out of the company’s existing customers. Another term for this strategy is account penetration because it involves selling more products to same accounts.
In the market development approach, a company can try to find new markets. Examples of potential new markets can include new countries or new industries in which to sell the company’s existing products.
Combining new products and new markets is called diversification. The risks associated with diversification are far greater than with other market expansion approaches because it requires developing both new products and new markets.
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15. What Types of Relationships Do We Form and with Whom?
Strategic plan considers network of relationships
Investors, potential investors, bankers
Suppliers
Personnel sources
Regulatory agencies
Relationship with customers is most important aspect of its relationship strategy.
Customers’ lifetime value is worth more than the average single purchase
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16. Customer Relationship
Today, more firms are in the business of providing services.
Called the service dominant logic, the idea is that being in business is essentially about serving the needs of others.
Whether or not the company actually makes a tangible product, the real advantage lies in how the organization serves its’ customers needs.
Therefore, all companies, no matter what line of business they are in, should try to gain a service advantage.
A service advantage is often a function of the quality of relationships a firm has with its customers.

17. Customer Relationship Management (CRM): Key Terms
CRM: the process of identifying and grouping customers in order to develop an appropriate relationship strategy so that the organization can acquire, retain, and grow the business.
Sales and marketing teams are responsible for CRM
Customer acquisition strategy: plan to obtain new customers
Customer retention strategy: plan designed to keep customers
Growth strategy: plan designed to increase sales to the same customers
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18. What Level of Investment Will Be Required, and How Will We Allocate the Needed Resources?
Another important aspect of strategic planning involves finding the capital, or resources necessary to accomplish the firm’s plan.
This includes money, human or social capital
Human capital refers to the people that make up an organization.
For ex, a firm that has more highly skilled employees will have greater degree of human capital.
Social capital refers to the ties that the firm has with others.
Social capital is who owes you a favor or who can be asked a favor.

19. What Level of Investment Will Be Required, and How Will We Allocate the Needed Resources?
Human capital decisions include:
Determining number of salespeople
What skills and experience they must have
What training they require
Other decisions include:
Whether to hire telephone prospectors or to outsource
Who handles customer service (a sales rep or a customer service rep)
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20. What Are the Detailed Objectives and Action Plans?
SMART format for establishing objectives S
pecific M
easurable A
chievable, yet challenging R
ealistic
For example, an objective to simply “increase market share” is not specific enough. As a manager, you need to ask yourself, by how much do we need to increase market share? If the objective is to increase customer loyalty, you need a way to measure customer loyalty, perhaps by recording the number of repeat purchases customers make. If the objective is to double market share, you need to ask yourself whether such an ambitious goal is achievable or even realistic. Finally, the objective needs to be time-based. When will it be met? In the next month, year, or decade? T
ime-based
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21. What Are the Detailed Objectives and Action Plans?
SMART objectives can motivate managers and salespeople alike.
These objectives can also be used to hold managers accountable.
Milestones, or important short-term objectives, can help mark the company’s progress toward achieving its objectives.
For example, an objective to simply “increase market share” is not specific enough. As a manager, you need to ask yourself, by how much do we need to increase market share? If the objective is to increase customer loyalty, you need a way to measure customer loyalty, perhaps by recording the number of repeat purchases customers make. If the objective is to double market market share, you need to ask yourself whether such an ambitious goal is achievable or even realistic. Finally, the objective needs to be time-based. When will it be met? In the next month, year, or decade?
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22. Selling Approaches A company should have a standard sales method.
However, because customers make buying decisions differently, there will obviously be variations in the selling techniques successful salespeople use.
Research shows that there are four basic models of selling:
Transactional
Problem solving (consultative)
Affiliative
Enterprise selling
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23. Selling Approaches Finish sale as quickly and as easily as possible
Transactional
Finish sale as quickly and as easily as possible
Key to success is making as many calls as possible to as many people as possible
Affiliative
Based on the friendship between the salesperson and the individual buyer
Problem Solving or Consultative
Identify and solve a client’s problems
Also called needs-satisfaction selling or problem/solution selling
Enterprise
Business-to-business (B2B) concept
Based on not only person-to-person relationships but on company-to-company relationships
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24. The Selling Approach: 8 Steps
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25. Prospecting
Prospecting involves identifying potential customers for a particular product or service.
A prospect is a MAD buyer, someone with
the Money to spend,
the Authority to buy,
the Desire to buy it.
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26. Pre-Approach
During Pre-Approach, the salesperson tries to learn everything he can about the account.
Can take a significant amount of time.
Preperation signals that the salesperson is knowledgeable, competent, and cares about the customer.
During Pre-Approach, the salesperson tries to learn everything he can about the account. Perhaps using contact management software, the account’s history with the firm can be explored and the salesperson can tell what the customer needs. Or, using the internet, the salesperson can examine the account’s financial strength, future strategies, and the like. The salesperson might also try to find out what can be learned about the industry in which the account operates.
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27. Approach Approach: salesperson asks buyer to commit to a meeting
Opening statement must get buyer’s attention.
A good opening statement causes the buyer to focus on the salesperson.
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28. Needs Identification
Needs identification: salesperson confirms prospect is MAD (Money, Authority, Desire)
Comprised of 3 elements;
Questioning 1
Identification 2
The needs-identification step is comprised of three important elements;
The first one is the use of questioning techniques in order to figure out the customer’s needs. The questioning process can take quite a while in a complex, custom sales situation.
The second element is the identification of the decisions process elements facing the customer (authority to purchase).
The third is the gaining pre-commitment. A pre-commitment is an agreement that all of the customer’s needs have been identified, a budget has been identified, and the decision process is known. In other words, the pre-commitment sets the “rules” for the sale and confirms that the buyer is MAD (has money, authority and desire to purchase).
Pre-commitment 3
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29. Presentation
Presentation: salesperson describes product and how it meets buyer’s needs
Feature
Evidence
Benefit
Agreement
One approach to presentations is to string together a series of FEBAs, or statements of Feature, Evidence, Benefit, and Agreement.
Using this approach, the salesperson begins with a characteristics of the product or feature. Then evidence is provided. The evidence is written or visual. Whenever possible, the salesperson should offer tangible evidence that is credible. The salesperson then ties that feature back to the need mentioned by the customer. Describing how a feature satisfies a need is a benefit. Finally the salesperson asks the customer if the product meets the need, gaining agreement.
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30. Handling Objections
Objections: reasons a buyer offers to not buy your product
Can occur at any time
Salesperson should find out root of concern and resolve it
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31. Closing the Sale Close: when salesperson asks buyer for the sale
Good close
Reinforce decision to buy
Confirm implementation schedule
Thank the buyer
Ask for referral
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32. Implementation/Follow-Up
Follow-Up: After delivery, ensure that the customer has good experience with product
Training, service, policies and procedures
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33. Selling Process vs. Selling Approach
Transactional
Prospecting
Affiliative
Consultative
Closing
Presenting
Enterprise
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34. Selling Process vs. Selling Approach
The selling process is a constant cycle of prospecting, presenting, and closing.
Whether the model is transactional, consultative, affiliative, or enterprise, the basic process is similar.
In a transactional situation, little time is spent on needs identification. The emphasis in the selling process is on the presentation and a key to being successful is to make as many presentations as possible.
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35. Selling Process vs. Selling Approach
Affiliative selling, may not require a long needs identification process. Yet, there is a relation-building process that is ongoing, within which the selling process takes place. More emphasis is given to follow-up because it is during this step that the relationship with the customer is built.
Consultative selling emphasizes the needs-identification stage. The complexity of the buyer’s situation will make it necessary for the salesperson to spend a great deal of time, relatively speaking, on understanding the situation and needs.
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36. Selling Process vs. Selling Approach
With enterprise selling, the seller will engage in consultative, affiliative, and transactional selling at different times and with different products. The result is that the emphasis shifts, depending on the situation within the account.
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37. Ethics in Sales Management: Maintaining NCR’s Ethical Sales Culture
We … recognize that selling only works when everything is right for the customer—when we deliver value
—Rick Makos President, NCR-Canada
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38. Questions and Problems
Estimate your lifetime value to Starbucks (or a fast-food restaurant). Then estimate your lifetime value as a car owner. Is the concept of lifetime value of equal importance to your car dealer as it is to Starbucks? What is the growth strategy of both?
Examine the mission statements in the chapter. Then go to the Web site of your university and find your university’s mission statement. Assess your university’s mission statement.
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39. Questions and Problems
“Nothing happens until a salesperson sells something.” This statement has been around for decades. What does it mean? How does it relate to the strategy hierarchy.
“I want to be the best student this university has ever had.” Is that a SMART goal?If not, rewrite that statement into the SMART format.
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