1. Part II SALES FORCE ACTIVITIES
Chapter 3:
Sales Opportunity Management

2. Sales Opportunity Management
Generating
New
Accounts
Managing
Existing
Accounts
Sales
Versus
Profits
Personal
Time
Management

3. What Creates Satisfied Customers?
Mergers and
Acquisitions
10%
Acquiring
New Customers
42%
Introducing
New Products
15%
42%
Increasing
Business with
Existing Customers
Figure 3-1: What’s the Best Way to Grow?

4. Prospect Profile Disposable Medical Supply Distributor
Multiple-practice physician office
Internal medicine, family practice
Suburban location
New practice -- less than 5 years
Good credit history
Currently purchases from a full-service distributor

5. Siebel Systems, Inc.: Opportunity Assessment
Is There an Opportunity? 1
Customer’s Application or Project 2
Customer’s Business Profile 3
Customer’s Financial Condition 4
Access to Funds 5
Compelling Event

6. Developing a Prospect List
1. Direct Inquiry
Advertising
Direct Mail
Trade publications
Trade shows
2. Directories – Thomas Register
3. Referrals
4. Cold Canvassing

7. Qualifying Prospects 1. Needs for your products/services
2. Authority to make purchase
3. Credit rating & ability to pay
4. Rating scale applied to characteristics by each salesperson

8. Siebel Systems, Inc.: Assessing the Opportunity
Is There an Opportunity? 1
Customer’s Application or Project 2
Customer’s Business Profile 3
Customer’s Financial Condition 4
Access to Funds 5
Compelling Event
Can We Compete? 6
Formal Decision Criteria 7
Solution Fit 8
Sales Resource Requirements 9
Current Relationship 10
Unique Business Value
Can We Win? 11
Inside Support 12
Executive Credibility 13
Cultural Compatibility 14
Informal Decision Criteria 15
Political Alignment
Is it Worth Winning? 16
Short-Term Revenue 17
Future Revenue 18
Profitability 19
Degree of Risk 20
Strategic Value

9. Table 3-1 Computing the Cost per Call for an Industrial Products Salesperson
Compensation
Salary, commissions, and bonus
$69,035
Fringe benefits (hospital, life insurance, social security)
$10,985
$80,020
Direct Selling Expenses
Automobile
8,000
Lodging and meals
6,250
Entertainment
3,250
Communications
4,500
Samples, promotional material
1,750
Miscellaneous
1,700
25,450
Total Direct Expenses
$105,470
Calls Per Year
Total available days
260 days
Less:
Vacation
10 days
Holidays
Sickness
5 days
Meetings
18 days
Training
12 days
55 days
Net Selling Days
205 days
Average calls per day
3 calls
Total Calls per Year (205 X 3)
615 Calls
Average Cost per Call ($105,470/615)
$171.50

10. Sales Opportunity Management Key to Productivity
Breakeven Sales Volume
(Cost per Call) x (Number of Calls to Close)
Sales Calls as a % of Sales

11. How Dell Achieves Selling Efficiencies
Traditional Model
Internet Model
100,000
Catalog Drops
100,000
Website Visits
5,000
Calls
10,000
Calls
2,000
Orders
500
E-Orders
1,750
Orders

12. Sales Opportunity Management Selected Break-Even Results
Industry
Breakeven
Business Services
1,096.37
Chemicals
15,474.67
Construction
9,730.00
Electronics
433.25
Food Products
6,580.00
Instruments
11,629.13
Machinery
1,580.77
Office Equipment
616.67
Printing/Publishing
3,811.61
Rubber/Plastics
41,662.14

13. Customer Break-Even Analysis
Average Sales Volume Per Month
$9,784
$8,153 C
$6,522
$4,891
$3,261 A
$1,630 B
Number of Sales
Calls Per Month

14. Table 3-3: ABC Account Classification
No. of Total Sales Total Total calls Sales ($)
Account Accts. Accts. (000) Sales Per Classif. Per Call
Classification (1) (2) (3) (4) (5) (6)
A % $ % $8,667
B ,000 C
Totals % $1, % $2,000 (Avg)

15. Number of Calls Needed to Close a Sale
Table Selected Statistics on Cost per Call and Number of Calls Needed to Close a Sale
Industry
Cost
per Call
Number of Calls Needed to Close a Sale
Sales Costs as a
Percentage of
Total Sales
Business Services $
4.6
10.3%
Chemicals
165.80
2.8
3.4
Construction
111.20
7.2
Electronics
133.30
3.9
12.6
Food Products
131.60
4.8
2.7
Instruments
226.00
5.3
14.8
Machinery
68.50
3.0
11.3
Office Equipment
25.00
3.7
2.4
Printing/Publishing
70.10
4.5
22.2
Rubber/Plastic
248.20
4.7
3.6

16. Figure 3-2: PortfolioModel
Competitive Position
Strong
Weak
Core
Accounts
Accounts are very
attractive.
Invest heavily in selling
resources.
Growth
Accounts
Accounts are potentially
attractive.
May want to invest
in heavily
High
Account Opportunity
Drag
Accounts
Accounts are moderately
attractive.
Invest enough to maintain
current position.
Problem
Accounts
Accounts are very
unattractive.
Minimal investment
of selling resources.
Low

17. Figure 3-3: Number of Sales Calls Response Function
$20,000
Dollar Sales per Quarter
$10,000
Number of Sales Calls Per Quarter
Figure 3-3: Number of Sales Calls Response Function

18. Figure 3-4: The Sales Funnel19 24 17 20
Unqualified 16 14 23 13 15 21 22 18 12 11
50% closure probability 9 10
Qualified 7 5
75% closure probability 8 6 3 4
90% closure probability
Best few 2 1
Figure 3-4: The Sales Funnel

19. Figure 3-5: How Salespeople Spend Their Time
Service
Calls
Selling
Face-to-Face
Administrative
Tasks
Selling over
the phone
Waiting and
Travel

20. Importance Emergencies Time Wasters Personal Growth Recreation
High Low
Emergencies
Time
Wasters
High
Urgency
Personal
Growth
Recreation
Low
Figure 3-6: Time Management

21. When Systematic Biases Are Likely to Exist
Source of Bias
Salespeople Who…
Are More Likely To
Customer
Have low-sales potential, demanding customers
Spend too much time with them.
Have customers with high service needs or needs that the salesperson can’t meet on his or her own
Focus on customers whose needs they can easily meet on their own.
Company
Have territories with too many high-sales potential accounts
Have low penetration or share as a result of poor coverage.
Have little information about the potential of different accounts
Spend their effort where the current sales are highest.
Have very little cash compensation at risk in the incentive plan
Expend too little energy customizing sales actions for individual customers.

22. When Systematic Biases Are Likely to Exist (cont.)
Source of Bias
Salespeople Who…
Are More Likely To
Sales Manager
Are managed by the number of calls they make
Spend too much time with friendly customers irrespective of potential.
Are left alone to decide what to do
Have high variability in the quality of precision selling
Salesperson
Have difficulty handling rejection and customer objections
Shy away from difficult accounts.
Are making good progress toward making quota
Seek the high-probability, low volume account.
Have made quota relatively early in the period
Seek the low-probability, high volume account.

23. Time Allocation
As a salesperson for Strength Footwear, Inc., you have been very successful.
Your commissions are well over $70,000 a year. Demand for your product line is very strong, but so is the demand on your time.
You work your territory 220 days a year and can make 4 calls a day. The maximum number of times you need to see any account is every other week, but you need to call on each account at least once a quarter.
To help you allocate your time according to sales results, you have gathered the following information on customer sales:

24. Time Allocation: Customer Sales
Strength Footwear, Inc.
Develop and justify a call schedule for allocating time across the 110 customers in your territory.
What additional information should you consider in allocating your time?
Accounts
Sales Last Year
Top 10
$150,000
Next 10 best
56,250
55,500
Next 20 best
37,500
18,750
Last 20
15,000
$370,000

25. Time Allocation Analysis
Number of Accounts
Total Sales Volume
Percent of Sales
Percent of Account
Sales per Account 10
$150,000
40.5% 9%
$15,000
56,250
15.2 9
5,625
55,500
15.0
5,550 20
37,500
10.1 18
1,875
37,000
10.0
1,850
18,750
5.1
938
15,000
4.1
750
110
$370,000
100.0%
99%
$ 3,364
Accounts
Call Pattern
Total Number
of Calls
Percent
Of Calls
Sales
Per Call
Top 10
Every other week
260
29.6%
$576.92
Next 10
Once a month
120
13.6
468.75
23.6
462.50
Next 20
About every 2 mos.
12.5
340.91
336.36
Once a quarter 80
9.1
234.38
Last 20
187.50
880
$420.45