Presentation on theme: "Ed Jennings www.edjennings.com. Chapter 13, Sales and Sales Management."— Presentation transcript:
Chapter 13, Sales and Sales Management
Sales and Sales Management of a startup corporation in the USA Senao is a Taiwanese based corporation that desired to sell in the United States. The goal was to grow revenue by expanding into the USA and then go public in Taiwan. I was hired as the General Manager and first American employee. The USA subsidiary grew from $0 to $5M in the first 18 months of selling. This is the story and how it relates to chapter 13
Domestic vs. International The interview process The challenge The first question I always ask: Who is your customer?
Why marketing and sales need each other? 90 days Marketing identifies the product requirements, including sales / stakeholder requirements; identifies the best customer prospects through segmentation; establishes pricing; provides sales collateral; and establishes the product positioning. Sales contacts the customer; is responsible for the customer relationship management (CRM); represents the face of the company to the customer; represents the voice of the customer ; and are a primary source of revenue to the company.
Sources of cost-effective research Understand what you want to know Use your social network to gather secondary research that is already completed or contact people who work in that industry. Contact professional organizations such as the National Restaurant Association, Mobile Marketing Association, Forrester Research, etc… Use peer-reviewed journals of existing research. No, Wikipedia in not a peer reviewed journal. Fill in what you do not know with primary research. This process will save your company a lot of money
Porters 5 competitive forces The second question I ask is: Who is our competition? After we understand who is the customer and who is our competition, the next question is: What is our positioning and our value proposition?
Branding, Positioning, trademarks and Public Relations EnGenius is the longest range cordless phone & two-way radio phone in North America EnGenius is number one in the category of Industrial Cordless Phones ® Winner of the Consumer Electronics Show Innovation Award Targeted to small businesses who require long range cordless phones and dont require the expense of cellular or two- way radios CNN, Forbes.com, Fortune Magazine, Time Magazine, New York Times, Time Digital, Wall Street Journal, Tech TV. Gave a live interview with Into Tomorrow Radio Broadcast across 77 cities.
Transition to selling Additional questions are: How large is the market? What level of experience do we need in our salespeople? How do we structure the sales organization, the compensation and manage the sales team? Where do our customers expect to find our products? What are the options?
SALES ORGANIZATION OPTIONS 1.ORGANIZE GEOGRAPHICALLY USING CITIES, STATES, COUNTRIES, ZIP CODES, BY ACCOUNT 2.ORGANIZE BY PRODUCT AND DEVELOP SPECIALISTS FOR EACH PRODUCT CATEGORY 3.USE SALES TEAMS TO DEVELOP AND KEEP NEW BUSINESS
DO YOU OUTSOURCE THE SALES FORCE? YES NO Establish relationships Salary and selling expenses can be limited Little/no up-front investment Loss of control over sales presentation Products may not be a selling priority with representative TO MAKE IT WORK: INVEST IN TRAINING AND MERCHANDISING MATERIALS 13-11
Exhibit 13-8 ALLOCATION GRID FOR SALES RESOURCES Relatively fewer resources should be allocated here Low Maintain sufficient resources to continue to reap the sales potential and strong position High Direct more sales resources here Assign to alternative method of communicating, such as telemarketing Weak Strong MARKET LIFETIME VALUE RELATIVE POSITION
Sales Organization GM Outside/Field Sales Account / Strategic Sales GeographicInside Sales Customer service sales GM – selling to Distributors Outside salesperson 1 – Retail Outside salesperson 2 – Retail (Two) Inside Salespeople sold to dealers and divided the USA into East and West. (Two) Customer service people answered questions and could also sell accessories. Marketing Manager sold to catalog companies
House Account vs Key Account vs Strategic Account A house account may have one person or a team assigned to the account. The account does not pay commission. A key account is a large account that is assigned to one salesperson. Typically, there are multiple locations for the account. A strategic account is a key account but also important as an account that defines your product in that market segment.
Team vs Matrix vs Multilevel Selling For a strategic account, you are likely to see all three of these techniques used simultaneously. Team – group sell Matrix – Leverage other resources Multilevel – Selling at many levels
Dialing for Dollars Consultative selling – Understand the situation and provide expertise resulting in a custom, semi-custom or application specific solution Needs satisfaction selling – Satisfying buyer needs (features and benefits) Script-based selling – Similar customer needs Strategic partner selling – Developing products with your customer
Strange but true Have you ever heard of a sales force with unlisted phone numbers? Have you ever heard of a sales force that is unionized? Declaring a large account a house account after it has been sold? The president of a company who is on a phone call with a potential customer. The customer says they will buy and the president says no. We lost the sale.
Sales Compensation Salary Bonus Commission Rate Commission Base (unit sales, dollar sales or gross margin) Combination Plan MBOs (management by objectives) Balanced Scorecard
In general, non- advantageous sales compensation plans Straight commission selling Draw – a loan against straight commission selling Cap – a maximum payout on sales commission
Sales Process Do your homework! Preparation for the call (pre-qualification) Introduction (interest generating statement) Get Your Customer Talking! (Fact Finding - Needs Analysis). This could be a survey. Demonstrating the Value Proposition. Follow with Features and Benefits Recommendations Overcoming Objections Close the sale Stay Connected with your customers
What products or services can I sell? Full-line selling: - Size of the product line and support -Market application Upgrade selling or up-selling: -What is the value proposition -Used extensively in high-tech -What is the cost to switch? Cross Selling: -Selling unrelated products or services. May be sold by the same salesperson or may be sold by a different salesperson. Expertise (auditing vs taxes)
Preferred supplier status Partnership Incoming inspection and quality Payment terms On-time delivery (inventory stored at the customer or delivered every 2 hours) Special packaging Bar coding
How much can a salesperson do? Workload: -Meetings -Training -Customer Service -Cold calls -Repeat calls Activity Quota: -Contact every customer by a certain date -Make a minimum of xx calls per day Conversion Ratio: -Calls to reach the decision maker -Number of conversations to proposals -Number of proposals to new sales -Repeat business from new sale -Lifetime value of a new sale
Quota Performance Quota: -Sales performance over a specified period of time (units, dollars, margin) -Can be based on specific product categories - compensation algorithm -How to handle returns or cancellations -Intel – Japan was given an overall profit target for the head of sales -What is fair and what motivates the sales force to meet the corporate objectives? -Make it fun
The End Successful completion of IPO by starting up on time and executing the North American plan within budget Succeeded in placing product with 17 key distributors, 5 top 100 retailers, 1,300 value- added resellers and the top 5 targeted catalogs Personally carried and exceeded a $250,000 monthly sales quota while performing the responsibilities of the General Manager Segmented unique niche within the small and medium sized business market segment and defined requirements for a new class of cordless phones known as Industrial Cordless, which is the Longest Range Cordless Phone and 2-Way Radio System in North America Won Innovations and Workstyle awards at the Consumer Electronics Show 1999, 2000, 2001 Generated 1 billion EnGenius impressions - Press includes: CNN Television, Good Day LA Television, Forbes.com, Fortune, Wall Street Journal, Time Magazine, Farm Industry News, Into Tomorrow radio interview carried in 77 cities Defined the user interface resulting in a 95% customer satisfaction survey For a copy of the slides, go to: Click on the tab marked JWU