Introduction to Sales Management：中国经济管理大学 MBA课堂笔记《销售管理学》
Introduction to Sales Management：
中国经济管理大学/中國經濟管理大學
Introduction to Sales Management
Learning Objectives:
After completing this chapter, students will be able to:
· Define the strategy hierarchy and understand how a firm’s sales and marketing strategies affect its overall strategy
· Identify the different types of selling strategies and how the selling process varies across those types
· Describe the sales management process and the responsibilities and activities of sales managers.
Introducing the Chapter:
This chapter serves as an introduction to sales management and discusses four main topics: the strategy hierarchy, the different types of selling approaches, the selling process, and the responsibilities of sales leaders.
Sales leaders participate in the creation of the firm’s strategy, which starts with the development of objectives. This usually begins with a mission statement to describe the firms overall reason for existence. The strategy hierarchy begins with the corporate strategy, from which the marketing and sales strategies are developed. A good idea for class discussion is to review the university’s mission and ask students how they see that mission communicated in marketing materials used to recruit new students.
Companies should have a standard sales approach, even though the techniques that sales people will end up using will vary depending on customers buying decisions. The general selling process consists of eight steps. These may occur sequentially, one after the other. At times, salespeople may find that the steps occur in different orders, are repeated, or may be skipped, depending on what item being sold and/or to what customer. One idea for class discussion is to compare the selling process for pharmaceuticals, office equipment, and insurance. While students may not have experience with any of these processes, questions such as “What would you need to do in order to buy a piece of office equipment?” can help students see how the selling process is a function of the information the buyer needs to make an effective decision.
Chapter Outline:
I. The Strategy Hierarchy
A. Corporate Strategy
1. Establishing the Parameters of the Firm’s Strategy
a. Strategy: a plan designed to accomplish a mission.
b. Mission: a set of objectives.
c. Mission statement: a summary of the company’s goals.
B. Marketing and Sales strategy
1. What Markets Do We Serve with What Products
a. Ways a market can grow
i. Market penetration: trying to gain more market share with existing products.
ii. Product development/ account penetration: creating new products to get more business out of the company’s existing customers/ selling more products to the same accounts.
iii. Market development: finding new markets
iv. Diversification: combining new products and new markets.
2. What types of relationships do we form and with whom
a. Customer acquisition strategies: plans to obtain new customers
b. Customer retention strategies: plans designed to keep customers
c. Growth strategies: plans that are designed to increase sales to the same customers
3. What level of investment will be required, and how will we locate and allocate the needed resources
a. Human capital: the people that make up an organization.
b. Social capital: the ties that the firm has with others
4. What are the detailed objectives and action plans
a. SMART format
i. Specific
ii. Measurable
iii. Achievable, yet challenging
iv. Realistic
v. Time-based
II. Selling Approaches
A. Four approaches to selling
1. Transactional selling
2. Affiliative selling
3. Consultative selling
4. Enterprise selling
III. The Selling Process
A. Eight steps in the selling process
1. Prospecting: A prospect is a MAD buyer, or someone with the Money to spend, the Authority to buy what you are selling, and the Desire to buy it.
2. Pre-Approach
3. Approach
4. Needs Identification
a. Use of SPIN®, New Base®, or some other questioning technique to determine the customer’s needs.
b. Identification of the decision process elements facing the customer (authority to purchase).
c. Gaining pre-commitment: an agreement to the effect that all of the customer’s needs have been identified, a budget has been identified, and the decision process is known.
5. Presentation: the salesperson describes the product and how it meets the buyer’s needs.
a. FEBAs: statements of Feature, Evidence, Benefit, and Agreement.
6. Handling Objections: Objections are reasons a buyer offers to not buy your product.
7. Closing the Sale
8. Implementation/Follow-Up
IV. Sales Leaders
A. The Sales Executive
1. Responsibilities
a. Planning
b. Organizing
c. Implementing
d. Monitoring
B. The Field Sales Manager
1. Responsibilities
a. Implementing plans, policies, and procedures set forth by the sales executive.
b. Training salespeople.
c. Planning, organizing, implementing and monitoring, for his/her particular sales team
V. Chapter Summary
Questions and Problems:
In this chapter, we calculated the average lifetime value of a college student to a clothing store. Why is the lifetime only 4.5 years? Don’t you expect to live longer than that?
4.5 years is the average time that a student will be enrolled in college. After the student graduates, their clothing styles will most probably change as their lifestyle changes. For instance, after graduation if the student moves to the corporate world their dressing style will change and they probably won’t visit the same store they did when they were in college.
Think about your past buying experiences---especially your purchases of expensive clothing such as suits, prom dresses, and the like. How were you treated? Could you tell if your sales clerks worked on commission? Would you expect someone working on commission to treat you differently than the store owner or someone who received only a base salary?
Answers will vary greatly, depending on how aware the students are and what setting they choose to think about. What follows is one student’s answer: “I was treated with importance and could tell that the sales clerks worked on commission. I would expect someone working on commission to treat me differently than someone who receives a base salary, because the sales clerks on commission has an incentive to make a big number of sales. However, I would expect the store owner to treat me with importance because they would want to make sales to maximize their profit.”
Estimate your lifetime value to Starbucks (if you never visit Starbucks, then pick a fast food restaurant that you do visit). 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?
At Starbucks, the lifetime value will entail many purchases made over a long period of time, which when combined will constitute a significant amount of money. As a car owner, the lifetime value will entail fewer purchases-maybe even one purchase of a significant amount of money. However, the concept of lifetime value will be of equal importance to the car dealer and Starbucks. Their growth strategy would entail activities that focus on getting more business from the existing customers; for instance Starbucks could have special offers on their meals- a free burger for every customer that purchases four burgers. The car dealer could offer maintenance service and spare parts at a discount to the existing customers
How might the process vary for selling the following products?
Large specialty computers, such as active data warehouses, that cost millions of dollars
The selling process will probably be longer than a year and flow sequentially through the whole selling process, from prospecting to follow up. You might expect several people involved from the selling side and several on the buying side.
Copiers that cost $5000
The selling process would most probably be less lengthy than selling the specialty computers, but would generally flow through the whole selling process from prospecting to implementation.
Campbell’s Soup sales to a grocery chain
The selling process will be brief and would most probably skip many steps in the selling process. For instance, the salesperson would be selling to a current customer and the sale is more likely to involve choices in merchandising or promoting Campbell’s Soups in the stores rather than choosing whether to carry the product or not. Therefore the sale can be closed in a relatively short time.
PVC pipe fittings sold to a plumbing distributor
The selling process may not follow all the steps. However, the salesperson might have to explain to the plumbing distributor why the benefits of the particular fittings that he or she is selling. The selling process would probably revolve around needs identification, and handling objections from the distributor.
Examine the mission statements in the exhibit in the chapter. Pick the best and the worst ones. Then go to the Web site of your school and find your school’s mission statement. Assess your school’s mission statement and compare it to the best and worst statements in the exhibit.
Clearly, responses will vary significantly across students.
What does a “service dominant logic” mean to salespeople? Why would that concept be important to a salesperson or a sales organization?
It means that being in business is about meeting the needs of others. This concept would be important to salespeople because they center on making money for the company by selling goods and services; and by ensuring that they meet the customer’s need, they will increase sales.
“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?
Businesses are set up to sell products and services and in so doing, make a profit. Unless a salesperson sells something, then there is no reason for a business to be in existence. The strategy of the business will therefore revolve around ways to ensure that the business makes maximum sales. This strategy will flow from the corporate to the marketing levels and then to the sales levels where the actual plans will be implemented.
“I want to be the best salesperson this company has ever had.” Is that a SMART goal? If not, re-write that statement into the SMART format.
No it is not a SMART goal. “Best” is not defined – does it mean sell the most or have the most customers or make the most commission? How will it be measured? “Ever” is defined but a time frame would be better, such as stating when it will happen. As for realistic or achievable, that depends on the person.
“I want to sell 100 dinette sets for my furniture company this month” is an example of a SMART goal.
Answers for Chapter Caselets:
Caselet 1-1
Killebrew Manufacturing
Francine Killebrew takes over her late husband’s company and wants to grow it so her children can all work there. But her idea of an introductory discount leads salespeople to sell price and not quality.
Case Question:
Francine wondered if salespeople were too quick to sell price and not sell quality. If so, she knew that customers wouldn’t see the quality; it had to be demonstrated and sold. So what sales process or approach should she consider?
Critical to Francine’s success is meeting her customers’ needs. Salespeople are cutting price too quickly because they either do not believe in the value of the product themselves or customers do not see the value; what’s worse is that they are probably using a transactional approach. From a store’s perspective, they need something that will sell quickly at a good profit. Francine should try a consultative approach, first identifying customers’ needs before selling value or offering price.
Caselet 1-2
Morton’s Ice House
Sherry is franchising the Morton’s Ice House grill and bar. This caselet presents the classic question of whether a good salesperson makes a good sales manager, when she promotes Trey, her first salesperson, to sales manager and he fails to create structures and processes for managing salespeople.
Case Question:
At this point, it was pretty clear that there were problems. Why? What should Sherry do?
The problems arose from Trey being promoted from salesperson to sales manager. Even though he was a very successful salesperson, he was not a good sales manager. Sherry should let Trey be a salesperson, because that is what he is good at, and hire someone else with managerial skills to manage the salespeople.
Role Play:
Graduation Time
You are about to graduate and are interviewing for jobs. You come across an opportunity to sell for T&G Supply, a company that serves manufacturers by providing maintenance, repair, and operations items. These items include janitorial products, hardware products to fix machines (like nuts, bolts, and the like) and other products commonly found in a maintenance shed. Another opportunity to sell is with Columbia Leasing, a car rental and leasing company. Your job would be to visit companies and convince them to sign a corporate contract as their exclusive car rental or vehicle leasing company.
Assignment: Break into pairs, with each student picking one company. You are the sales manager for that company. Take a moment and think about issues reflective of a service dominant logic in each situation. From that reflection and other concepts discussed, identify three characteristics that, as a sales manager, you would want each new salesperson to have. Then take turns interviewing the other for a sales position.
Example characteristics might include:
1. Excellent communication skills-the sales person should be able to listen to the customers, understand what their needs are and respond to them satisfactorily on how the products will meet their needs.
2. Enthusiastic-the sales person should have a passion for the job and what they are selling.
3. Persistent- the sales person should have the will to go on, as not every customer they approach will want to buy the product.
As you observe students role-playing, ask them how they can prove that they have those characteristics if they are the job candidate? How can they observe and measure whether the candidate has those characteristics?
Self-Assessment:
In your copy of Sales Management, you will find an Access Code Card. By using this code at www.pearsonhighered.com/tanner, you will gain access to the SAL program. Students will find an Access Code Card in their copy of the book as well. The first SAL instrument is addressed in the text, the second is provided as an additional exercise.
IC5 – What are My Course Performance Goals
As you complete the instrument, you can see that there are different potential motivators for students. The overall score will give the student an indication of overall motivation to achieve in this course, as well as motivation along three dimensions: need for growth, need for relatedness, and need for existence. If you cover this in class, ask how they answered individual questions, as well as discuss the three dimensions.
IC6 - How Confident Am I in my Ability to Succeed?
This set of questions is pretty self-explanatory, but is a generalized scale not specific to sales. Since the scale is uni-dimensional, you may also find it interesting to go over individual items.
Using Videos:
To access these videos, go to www.pearsonhighered.com/tanner. Listed below are potential ways to introduce each video and questions that can be asked to spur discussion after you show the videos.
Video 1: Sales Excellence in Action – Sharon Daniels.
This video is a bit longer – over 7 minutes – but she and Gerhard cover so much that it is very worthwhile. Daniels starts out by noting the importance of sales managers and why managers are important. She also brings up the topic of coaching and meeting customer needs. Her 3 bullet points for coaching are
· Performance coaching, such as pipeline management
· Sales skills development
· Feedback in real-time
Coaching isn’t cheerleading, but is about skill development. She illustrates how coaching might work by talking through how coaching might work for a salesperson with a particular skills challenge. Gerhard brings up the issue of personal problems, too. His question, while a bit off-topic, highlights the importance of bringing in other resources as needed. From there, it goes into the topic of process coaching and how to get reps involved.
Questions to you may want to consider are:
1. What is coaching and how might it differ from managing or leading?
2. How would you have answered the question about which is more important, process or skills? Do you agree with Daniels?
3. Compare students to salespeople and faculty to managers. How can managers get salespeople to buy into the coaching process – to accept coaching?
Video 2: Hilarious Sales Mistakes - Dan Seidman
Dan Seidman has written a book on the subject and some of the stories he shares are truly hilarious. In this video, he shares one particular story that highlights how “old school” selling may not be as useful any more. In the story, he shares how one sales rep tried to make small talk by talking about a photo of the buyer with John Madden – except it wasn’t John Madden, it was the buyer’s wife! Seidman also talks a lot about failure in sales and the importance of learning from failure. Some questions to consider:
1. How often do salespeople fail? The video can be useful in highlighting the amount of rejection salespeople face.
2. Seidman says to keep in your mind, “Yes/No – Next.” What does this mean? (He is talking about recognizing the numbers aspect – that sales is about finding people who want to say yes and to keep looking for those people rather than waste time trying to get someone who wants to say no to say yes.)
3. What do buyers want from salespeople – according to Seidman? They always want professionalism, even though they may also want to talk sports or some other topic.
Full Case Recommendations:
Afgar is a case regarding managing multi-channel sales. The appeal for Chapter 1 is in the sales strategy issue. The context involves an acquisition in the B2B printing industry. The case does focus on ethical problems that resulted in a rep getting fired and how the manager has to clean up afterward. There are also, though, good questions regarding sales strategy and how sales has changed as a profession.
The TIP Financial Services case is a good case for Chapter 1. In this case, a sales manager is facing a number of challenges, some caused by his own management activities. Sales force turnover has been high and performance has failed to meet expectations. This case can work well for Chapter 1 because the case poses questions such as what type of salesperson would work in this environment and what is the sales process. In addition, you can explore the sales manager’s role, particularly the manager highlighted in this case.
Other In-class Exercises:
Debate: What’s Best?
Divide the class into groups. Dividing them randomly makes for more fun, but you can also divide them on the basis of how they answer the question “Does money motivate?” However, you’ll need to divide them into groups of equal size. Each group should be about 4 people. If you divide based on the question, put two who say yes and two who say no into each group. (Note, the purpose of the question is to just divide them into groups. Later in the semester, you can debate that question when you are covering compensation.)
The task is to prepare to debate the question “Which method of selling is the best method for the customer?” Assign to each group one approach – transactional, affiliative, consultative, and enterprise. If the numbers work out, you can also assign all four methods to one group, meaning that they get to argue that all are equally good for customers.
Alternatively, you can ask students to debate the question, “which is more important, sales or marketing?” If the numbers work out (if you have 6 groups), you can do both.
Once you have chosen the question, decide based on how much time you have and how many groups whether you want to do a full class debate or a by-group debate. Each group gets 10 minutes to prepare, 5 for the actual debate (in which they can present their case) and 1 minute for rebuttal. Who goes first is determined by a coin toss. At the end of the debate, you can take a class vote to determine the winner.
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