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Session 3

Customizing the Sales


Approach
An Expert’s Viewpoint:
Lisa Gregg, Director of Sales Development for American
Express had this to say about customizing the sales
approach: “Depending on the application, the card may have
hundreds of different benefits. A supermarket manager has
different needs than a client in the furniture business. We
wanted to create a message to fit the specific needs of our
customers.” Sales representatives now input specific
customer information, then the database produces sales
materials ranging from industry data sheets to Power Point
slides that can be used in the sales presentation.

Actio
n
Customizing the Sales
Approach
An Expert’s Viewpoint:

Result

Customers now receive sales presentations based on


their unique needs, and American Express has greatly
improved the efficiency of its sales organization.
The Sales Process: An
Salesperson
Attributes Overview

Selling Initiating Developing Enhancing


Strategy Customer Customer Customer
Relationship Relationship Relationship
s s s
The Sales Process:
Selling Strategy
In order to be successful in today’s global business
environment, salespeople must also think and act
strategically. The must develop strategies for:

Their Sales
Territory
Each Customer

Each Sales Call


The Sales Process
Salesperson
Attributes

Initiating Developing Enhancing


Customer Customer Customer
Relationships Relationship Relationship
s s

• Prospecting
• Preapproach
• Presentation Planning
• Approaching the
Customer
The Sales Process
Salesperson
Attributes

Initiating Developing Enhancing


Customer Customer Customer
Relationships Relationship Relationship
s s

• Sales Presentation
Delivery
• Earning Customer
Commitment
The Sales Process
Salesperson
Attributes

Initiating Developing Enhancing


Customer Customer Customer
Relationships Relationship Relationship
s s

Adding Value through


Follow-up, Self-leadership,
and Teamwork
Personal Selling-Driven vs. Advertising-
Driven
Marketing Communications Strategies
Personal Selling

When Message Flexibility is Important


When Message Timing is Important
When Reaction Speed is Important
When Message Credibility is Important
When Trying to Close the Sale

When Low Cost per Contact is Important


When Repetitive Contact is Important
When Control of Message is Important
When Audience is Large

Advertising
Merging Two Sales Forces
An Expert’s Viewpoint:
Zeneca and Astra were two independent pharmaceutical companies
that merged, forming AstraZeneca. Integrating the two sales forces
was a major challenge, for example, Astra was more decentralized
and Zeneca was more centralized. The decision was made to
develop a new sales model that blended the advantages of
centralization and decentralization, and they decided to move to a
market-oriented sales organization structure.

Actio
n
Merging Two Sales Forces
An Expert’s Viewpoint:

Result

The new sales organization has been successful in generating


significant sales and market share growth. Tony Zook, vice
president of sales at AstraZeneca, thinks that “by bringing
together two winners, you can create a champion.”
Sales Organization Concepts
Specialization
The degree to which individuals perform some
of the required tasks to the exclusion of others.
Individuals can become experts on certain
tasks, leading to better performance for the
entire organization.

Centralization
The degree two which important decisions and
tasks performed at higher levels in the
management hierarchy. Centralized structures
place authority and responsibility at higher
Sales Force Specialization
Continuum

Generalists Specialists
Some
All selling activities Certain selling
specialization
and all products to activities for
of selling
all customers certain products
activities,
for certain
products, and/or
customers
customers
Span of Control vs. Management
Levels
Flat Sales Organization

Management Levels
National
Sales
Manager

District District District District District


Sales Sales Sales Sales Sales
Manage Manage Manage Manage Manage
r r r r r
Span of Control
Span of Control vs. Management
Levels
Tall Sales Organization

National
Sales
Manager

Management Levels
Regional Regional
Sales Sales
Manager Manager

District District District District District District


Sales Sales Sales Sales Sales Sales
Manager Manager Manager Manager Manager Manag
er
Span of Control
Geographic Sales
Organization
National Sales Manager

Eastern Region Sales Western Region Sales


Manager Manager

Zone Sales Managers (4) Zone Sales Managers (4)

District Sales Managers (20) District Sales Managers (20)

Salespeople (100) Salespeople (100)


Product Sales Organization
National Sales Manager

Office Equipment Sales Office Supplies Sales


Manager Manager

District Sales Managers (10) District Sales Managers (10)

Salespeople (100) Salespeople (100)


Market Sales Organization
National Sales Manager

Commercial Accounts Government Accounts


Sales Manager Sales Manager

Zone Sales Managers (4) District Sales Managers


(5)

District Sales Managers Salespeople (50)


(25)

Salespeople (150)
Functional Sales
Organization
National Sales Manager

Field Sales Manager Telemarketing Sales


Manager

Regional Sales Managers District Sales Managers


(4) (2)
District Sales Managers Salespeople (40)
(16)

Salespeople (160)
Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages

• Low Cost
• Limited
• No geographic duplication
specialization
Geographic • No customer duplication
• Lack of
• Fewer management levels
management
control over product
or
• Salespeople become
• customer
High cost emphasis
experts
Produc • Geographic
in product attr. &
t duplication
applications
• Customer duplication
• Management control over
selling effort
Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages

• Salespeople develop
better understanding of
unique customer needs • High cost
Market
• Management control over • Geographic
selling allocated to different duplication
markets

• Geographic
• Efficiency in performing
Function duplication
selling activities
al • Customer duplication
• Need for coordination
SALES QU OTA S:
QUOT AS ARE SE T A S S TA NDARDS
TO SP ECIF Y A D ESIR ED LEV EL OF
PERF OR MA NCE F OR A SP EC IFIED
MA RK ETIN G UNIT . A LL QU OT AS
ARE GUID ED BY A C ER TAIN T IME
ELEME NT W ITH IN WH IC H
MA NA GE ME NT FEELS T HE QUOT A
SHO UL D B E A TTA IN ED .
A.TH E PU RPO SE OF QU OT AS:
-P RO VID ING GOA LS AN D
IN CEN TIV ES
-E VA LUA TING PER FOR MA NC E
-C ON TR OLLIN G THE SA LES
- UNC OV ER ING ST REN GT H A ND
WEAK NE SS IN TH E
SEL LING STR UCTU RE
- IM PR OVIN G T HE
EFFECTIV ENE SS OF THE
COMPE NS ATIO N P LAN
- CONT ROL LIN G TH E S EL LING
EXPE NS ES
- ENH ANC IN G SALES C ON TE ST S
B. TYPE S OF QUO TA S:
- SALES V OL UME QUOT AS
BASED ON RUPU EE4 S,
UN ITS OR POIN TS . S UC H
QU OT AS ARE BASED ON
PAST SA LES
EXPE RIEN CE, TE RRITO RIA L
SALES P OTE NTIA LS, T OT AL
MA RKE T ES TI MA TE S OR ON
SALES P ER SON’ S E ST IMA TES .
- FINA NC IA L Q UOT AS :
GR OSS MA RGIN OR NE T
PROF IT QUO TA S
C. ADMIN IST RATION OF SALES
QU OT AS:

i. SET TI NG R EA LIST IC QUO TAS


ii. CREATIN G UN DCER STA NDABLE
QUOT AS
iii. IN CLUD IN G TH E SA LES PERSO N
IN QUOT A SE TT ING
iv. KEE PIN G TH E SA LES F OR CE
UPD ATED
v . MA INTAIN ING C ON TRO L
SA LES COMP EN SA TION :
MO NE TA RY C OM PE NS ATIO N
REMA INS AS ONE OF TH E MO ST
DIR ECT, L EA ST AMB IG UOU S WAYS
OF COMMUN I- CAT ING TO S ALES
PER SON S A BOU T TH EIR
PER FORMA NC E. SALES
COMPE NS ATIO N P LANS CAN BE
THE “S TE ER ING WH EEL ” TH AT
ENA BLES T HE MA NA GE ME NT TO
GU ID E THE ACTIV IT IES OF SALES
PEO PL E. SALES F ORC E
COMPE NS ATIO N IS U SUA LLY THE
LARGES T C OM PO NE NT OF THE
DIR ECT S EL LIN G C OS T.
THR EE B ASIC ME THOD S OF
FIN ANC IA L C OMP ENS ATIO N:
A. STRA IGHT SALARY
B. STRA IGHT COMMIS SI ON
C. COMB INA TION OF SA LARY,
COMMIS SIO N A ND /O R BONUS
Sa lesp eople a re
i. CREATU RES OF HA BIT
ii. GOA L-OR IE NT ED IND IV ID UALS
iii. SATIS FIE RS
iv. MO NE Y-ORIEN TE D IND IV ID UAL S
DEVE LOP ING A COM PENS ATI ON
PL AN:
- PRE PARE J OB DE SCRIPT ION
- ES TABL ISH SPEC IFIC
OBJE CTIVES
- DET ERM INE GENERA L L EVEL S
OF COMP ENSAT ION
- DEVE LOP T HE CO MPE NSATION
MIX
- PRE TE ST THE PLAN
- ADMINI STER T HE PL AN
- EVAL UATE T HE PL AN
SPE CIF IC OB JECTI VE S FROM TH E
VIE WP OIN T OF T HE COMPA NY
COUL D B E:
- CONTR OL OV ER TIME ALLOC ATION
- ECONO MY . A D ES IR ABLE BALANC E
BETW EEN S ALES C OS TS AND
SALES R ES UL TS
- MO TIV ATION . A PL AN THA T CAN
MO TIV ATE PEO PL E TO OPT IMA L
PER FORMA NC E.
- SIMPL IC ITY . SIMP LE TO
ADMIN IST ER , EA SY TO E XPL AIN
TOS ALES PE OP LE AND FLEX IB LE
FR OM THE VIEW POI NT OF THE SAL ES
PERSON TH E PLA N SHOULD OFFER:
- INCOM E REGULA RIT Y
- REWA RD FOR SUPERIOR
PERF ORMA NCE
- FA IRNESS
DETER MIN E THE GENERA L LEVEL OF
COM PEN SA TI ON: SEVER AL FAC TOR
INFL UENCE THE BA SI C LEV EL, VIZ,
THE SK ILL S, EX PER IENC E AND
EDUCA TI ON REQUI RED TO DO THE
WO RK
-THE LEV EL OF INCOM E FOR
COM PARA BL E JOBS IN THE COMPA NY
-THE LEV EL OF INCOM E FOR THE
ADVANTA GES & D ISA DV ANTA GES
OF DIFFER ENT C OMP EN SA TION
ME THO DS :
A.ST RAIGH T SA LARY-MO ST
APPR OPR IAT E WHE N:
i TEAM SEL LING IS INV OL VED .
ii . LONG NEG OT IA TIN G PE RIOD
v. MIX ED PROMO TIO NA L SITU ATIO N
vi. LEARNING PE RIO DS
ST RAIGH T SALARY
-ADV ANTA TGE S
i. PROV ID ES SE CUR ITY T O
SALES PERS ON
ii. HE LPS DEVEL OP A SE NS E OF
LOYALTY T O TH E C OM PA NY
vi. IN CREA SES F LEXIB IL IT Y IN
TER RIT OR IA L ASSI GNME NT S
iv. GI VE S A HIG HE R DEGR EE O F
CONT ROL OV ER SALES
PEO PL E’S ACTIV ITIE S.
V. IS SIMP LE T O A DMINIS TE R
DISA DVA NTA GES :
i. PROV ID ES NO FINA NC IA L
IN CE NTIV E TO PU T F ORT H
EXTR A EF FOR T
ii. MA Y INC REA SE SE LLIN G C OS T
iii. OFTE N L EADS T O INC OME
IN EQ UIT IES
iv. LEADS TO A DEQ UA TE B UT NOT
SUP ER IO R PERFOR MA NCE.
B. STR AIG HT COMMIS SI ON:
i. DECID E T HE BASE OR UN IT ON
WHIC H T HE COMMIS SIO N
WIL L B E PAID
ii. THE RATE T O BE PA ID P ER UNI T
iii. THE POIN T A T WHIC H THE
COMMIS SIO N START
iv. THE TIME WHE N C OMM ISSION IS
PAID
ADVANT AGE S:
i. IN COME IS D IR EC TLY LINK ED TO
PROD UCTIV IT Y
ii. EASY T O C AL CUL ATE
iii. THE RE IS NO CE IL ING ON
POT EN TIA L EARNING S
iv. MO NE Y IS NO T TIE D UP IN
SALARIES
v. COST S A RE PROP OR TION AL
TO SALES
vi. SALES P EOP LE HAVE MA XIMU M
WOR K FREEDOM
vii. POO RLY PERF OR MIN G SA LES
PER SON S E LIMINA TE
THE MS EL VES BY QU ITT ING
viii. IN COME IS B ASE D NOT ON
SUB JECTI VE EV AL UA TIONS .
DISA DVA NTA GES :
i. EXCES SIVE EM PH ASIS MA Y B E
PLACED ON SALES VOLUME
RATHE R THA N ON PR OFITA BLE
VOLUME
ii. SALES P EOP LE HAVE L IT TL E
LOYALTY T O TH E C OM PA NY
iii. DUE TO EXTR EME
FLUC TUA TIONS IN EARNIN GS ,
IT CAN CREATE
UN CER TA INT Y
iv. MA Y L EAD TO HIG H SA LES
FORCE TUR NOV ER WHE N
THE SALES A RE LOW
v. NON S EL LING A CTIVITIE S
MA Y GE T NEG LEC TED
vi. SALES P ER SONS MA Y DUMP
IN VEN TO RY ON C US TO ME RS
THUS STR AIN ING
RELATIONS HIP S.
vii. FLEX IB IL IT Y TO SPL IT
TER RIT OR IE S OR TRANS FER
SALES PE RSONS IS
DIMIN ISH ED B EC AU SE OF L ACK OF
CONT ROL .
viii. SALES MA NA GER S MA Y BECOM E
PER FUNC TOR Y IN
RECRUIT ING, SEL EC TING AND
MA RGINA L SA LES PE OPL E
ACCEPT ABLE UND ER THIS PL AN

C. COMB INA TION P LAN:

i. SALARY PLUS C OM MISS ION


ii. SALARY PLUS B ON US
iii. SALARY PLUS C OM MISS ION PLUS
BONUS
iv. COMMIS SIO N PLUS B ON US
TE RRIT OR Y
MA NAGEMEN T
TER RIT OR Y MA NA GEM EN T:
EST ABLIS HIN G SALES T ER RIT OR IE S:
A SA LES TERRITO RY IS A
GEO GR APHIC A REA T HA T
CONT AINS CUST OME R A CCOU NTS -
PRES ENT & PO TE NT IA L, ASSI GNE D
TO A PA RTIC UL AR SA LES PE RSO N.
SALES T ER RIT OR IE S A RE
DESIG NE D IN SUCH A W AY THA T IT
CAN BE CUL TIV ATE D IN THE MOS T
EFFECTI VE A ND EC ONO MIC AL
WAY. A SSIG NING SALES
TERR ITOR IES HEL P TH E S AL ES
MA NA GE R TO MA TCH SA LES
EFFORTS WIT H SA LES
REASO NS FOR ES TA BLISHI NG
SALES TE RRITO RIE S:
A. TO EN HA NCE MA RKET
COVER AGE
B. TOM INIMIZ E S EL LIN G C OS T
C. TO ST RENGT HEN C US TOME R
RELATION S
D. TO B UIL D A MOR E EFFEC TIV E
SALES F ORC E
E. TO EV AL UA TE T HE S ALES
FORCE BETT ER
F. TO C OO RDINA TE SE LLING W ITH
OTH ER MA RKE TING FUNC TION S
SE TTIN G UP SALES TE RRIT OR IE S:
A. SEL EC TING A GE OGR APH ICA L
UNIT AS A C ON TR OL UNIT .
THIS SHO UL D B E A SMA LL
UN IT.
B. MA KING AN ACCOU NT
ANAL YSIS - ENU ME RA TION OF
ACCOU NT S, EST IMA TED
SALES PO TE NT IA L OF
EACH A CCOUN T A ND
COMPA NY’S S HA RE IN THE
ACCOUNT PO TE NT IA L.
C. DEVEL OPI NG A SALES PER SON ’S
WOR K LOAD ANA LYSIS-NO .
OF ACCOUNT S,
FREQU EN CY OF CAL LS,
DURA TION OF EA CH CALL, TH E
TRAVEL TIME REQUI RED
AND T HE NON S EL LING TI ME.
D. CO MB INING GEO GRA PH IC
CO NTR OL UNI TS INTO SALES
TER RITO RI ES- TER RI TORY
MA PPI NG S OFTWA RE
PA CK AGES CA N ALI GN TER RI TO RIES
QUI CKLY AND EV EN LY.
TEN TA TI VE ALI GN MEN TS W ILL
HAV E TO BE MO DI FIE D TO
BR ING A BOUT C LO SER
E. ASSIG NIN G SA LES PER SON NE L
TO TER RIT OR IE S
F. REVISIN G SA LES TERRITO RIES .
ROU TIN G :
A PR OPE RLY D ES IGN ED R OU TIN G
PLAN OF FER S THE F OL LOW ING
ADVANTA GES :
- REDUC ED TRAVEL TIME AND
SEL LING C OS TS
- IMP ROV ED TERRITO RY COVER AGE
- IMP ROV ED COMMU NIC ATION
DIS ADVANT AGE S
- REDUC ED SALES PE RSON
IN ITIA TIV E
- IN FLEXIB LE WH ENEV ER TH E
PROD UCT IS SU CH T HA T IT
REQUI RE S FREQU EN T CONTA CT
AND F REQU EN T S ER VIC ING A
STR IC T ROUT ING PLAN IS A MUS T
DRIV ER-SALESMA N FOR SO FT
DRINK S, B REA DS, G RO CER IES ETC.
ROUTI NE S EL LING J OBS A RE MO RE
AME NA BLE TO ROUT ING. R OUT ING
IS MO RE C OM MON FOR
EST ABLIS HE D COMPA NIE S.
SE TTIN G UP A R OU TIN G PL AN:
IN FOR MA TION NEE DED A RE:
NO . OF CALLS T O B E MA DE PER
DAY, THE CA LL F REQ UE NC Y F OR
EACH C LASS OF C US TO ME R, T HE
DIS TA NCE TO EA CH A CCOUNT , A ND
THE MOD E OF TRANS POR TAT ION
TO B E US ED. US ING GI S B ASE D
SOF TWARE , A PC CAN DRAW OUT A
ROUTI NG P LAN GIV EN TH E
AVAIL ABIL ITY OF T HE ABOVE
IN FOR MA TION . S UC H A PL AN WIL L
MIN IMIZ E B ACKT RACKING AN D
CRIS SC ROSS ING THU S OP TI MIZIN G
TRAVEL TIME & C US TOM ER
ROU TIN G PA TTE RNS :
THE SE ARE EIT HE R STRAIGHT L INE
OR CIR CULAR. W ITH A ST RAIGH T
LIN E R OU TE , THE SALESP ER SON
STA RTS A T THE BASE AND THE N
MA KES CALLS IN ON E D IR ECTIO N
UN TIL THE END OF THE TERRITO RY
IS REACHE D. CIR CULAR PATE RNS
IN VO LVE STA RT ING AT TH E B ASE
AND MO VING IN A C IR CLE OF
STO PS UNT IL TH E SA LES PE RSO N
END S UP B ACK A T T HE BASE.
ANOTH ER MO RE C OMP LEX
ROUTI NG PA TTER N IS A
CLOVER LEAF. IT IS S IMIL AR TO
CIR CULAR PATT ERN, BUT INS TE AD
COVER ING TH E EN TIR E
TER RIT OR Y, THE R OU TE CIR CULES
A PA RT OF A TERR ITO RY. TH E
NE XT TRIP IS AN ADJACE NT
CIR CLE AND THE PA TTER N
CONTI NUE S TIL L A LL TH E L EAVES
ARE COVER ED. WITH HOP SC OTC H
PATT ERN, THE SALES P ER SON
STA RTS AT THE F ARTH ES T POINT
FROM THE HO ME B ASE A ND
MA KES CA LLS ON TH E WA Y B ACK
TO TH E B ASE . THE SA LES PER SON
WIL L TY PIC ALLY F LY T O THE
OU TER L IMIT S OF THE TERRI TOR Y
SKIP -STO P R OU TING INV OLVES
DIF FERENT CALL FRE QUEN CIE S
FOR DIF FER ENT ACCO UN TS . IN
THIS PATTE RN, SALESMA N WIL L
MA KE ON E TR IP IN WH IC H A LL TH E
ACCOU NT S ARE CALLED ON , B UT
ON ALTE RNA TE T RIPS ONL Y T HE
MO RE PR OFIT ABLE A CCOUNT S A RE
CALLED.
SA LES CALL GRID AN ALYSIS:
IN THIS APPRO ACH, A S ALES C ALL
STR ATEG Y IS D EV ELOP ED BASED
ON ACCO UN T OP POR TUNIT Y AN D
STR ENG TH OF POSIT ION OF THE
SUP PL IER . THE GR ID SHO WS
FOUR PO SS IB LE CELL
POS ITIO NS , A S F OLLOWS :
A. HIGH A /C OP PO RTU NIT Y &
STRO NG SUP PLIER
POS ITIO N- HIGHL Y
ATTR ACTIV E
ACCOU NT S, SH OU LD RECEIVE
HIGH L EVEL S OF SALES
CALLS.
B. HIGH A /C OP PO RTU NIT Y &
WEA K SUP PL IER P OSI TIO N -
A/C s A RE POT EN TIA LLY
ATTR ACTIV E. THE SE A /C s
SHO UL D R EC EIV E HIGH
LEVEL OF SALES CALLS TO
STREN GTH EN THE SU PP LIE R
POS IT ION.
D. LOS A/C OP POR TUNIT Y &
STRO NG SUP PL IER P OS ITIO N
A/Cs A RE SOM EW HA T
ATTR ACT IV E BUT FUTUR E
OPP OR TUN ITY IS LIMIT ED.
THE SE A /C s SHO UL D R EC EIV E
MOD ERATE LEVELS OF SALES
CALLS T O MA INT AIN TH E
CURREN T POS IT ION.
E. LOSS A /C OP PO RTU NIT Y &
WEAK SUP PL IER P OS ITIO N- A/C s
ARE VER Y UNA TTR ACTIV E.
THE SE SH OUL D RECEIV E
MIN IMA L L EV EL OF S ALES
CALLS. EFFORTS SHOUL D B E
MA DE TO R EPL AC E F IE LD CALLS
BY TE LEPH ON E C ALLS, D IR EC T
MA IL E TC .