1. Selling and Marketing Process
NEN Advanced Courses
Getting to Market: Commercializing your Idea

2. Selling and Marketing Process
The Selling Process Chart
Prospect
Qualify
Present
Close
Service

3. Rethinking the Sales Force: The New Selling 1
Selling is being transformed, much like manufacturing has been in the past
Sales organizations are changing: not size or geography centric any more
What does selling actually mean?
The ecosystem has become more important as ‘no company is an island’
The impact of widespread information is one reason

4. Rethinking the Sales Force : The New Selling 2
What is the reason for a sales force?
To communicate the value of the product or service to the customer
To ensure that customer needs are taken care of
To take customer feedback for future products and services
To inform customers of the latest and greatest technologies and innovations they bring
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

5. Rethinking the Sales Force : The New Selling 3
In the new world of selling, the sales force has to concentrate on:
Creating value for customers
Not just communicating inherent value
New ‘marketing myopia’ to be overcome, which has the wrong belief that:
Marketing and engineering creates value
Sales force simply makes customers aware of the value
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

6. Rethinking the Sales Force : The New Selling 4
Why are some companies struggling?
Take some well-known examples of companies that are shrinking in revenue
What causes them to be in trouble?
Environmental reasons including legal/regulatory
Marketplace changes, disruptive technologies
Demographic and macroeconomic changes
Vicious competition
What can the sales force do?
How do long-successful companies survive?
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

7. Rethinking the Sales Force : The New Selling 5
What is customer value?
Value = Benefit – Cost
Increase value by increasing benefits or by decreasing costs
Examples?
Company that wants more value
Company that wants less cost
Value proposition may be key to segmenting customers, not size
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

8. Rethinking the Sales Force : The New Selling 6
Matching investments by customer
Where are they investing or willing to invest in you by paying you a premium?
Avoid wasting energy on something that a particular customer does not need or want
Avoid under-investing in areas that are important to them since you risk losing them
Sales force needs to figure this out customer by customer, no recipes for one-size-fits-all
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

9. Rethinking the Sales Force : The New Selling 6
Types of customers
Intrinsic value
Extrinsic value
Strategic value
Appropriate sales stance
Transactional selling
Consultative selling
Enterprise selling
8/22/09
IIM Bangalore, PGSEM, Jun-Aug 09, Managing Tech Innovation

10. The New Buying Reality 1 Adding value in the three selling modes
Transactional Sales
Sophisticated customers or commodity buys
Make sales process painless, low-cost, hassle-free
Consultative Sales
Customers haven’t fully identified needs
Early in process, help them define needs/solutions
Enterprise Sales
Total assets and capabilities of both parties used
All across the value chain, insights into customer problems, function to function interfaces, ecosystem of third parties, value and culture fit

11. The New Buying Reality 2 But what about relationship selling?
Zone of Indifference
Assuming other things are equal, the best-liked salesperson gets the sale
Relationship helps get in the door, but value creation is the key
Building trust more likely if
Frequent interaction and consistent behavior
Trust in product: transaction sale
Trust in the people who sell/support: consultative
Trust in institution: enterprise sale

12. The New Buying Reality 3 There is no one *best* selling mode
Match selling mode to customer type
How to lose your shirt
Consultative sale to intrinsic value customer
Enterprise sale to intrinsic or extrinsic value customer
Transactional sale to strategic value customer
Prosper
Transactional sale to intrinsic value customer
Consultative sale to extrinsic value customer
Enterprise sale to strategic value customer

13. Sales Management
One best-practice model does not work for all sales situations
Value addition in the buying process
Recognition of needs: what?
Evaluation of options: how
Resolution of concerns: issues
Purchase: making in painless
Implementation: training, support, advice
Sales management
Formulation
Implementation
Evaluation

14. Sales Learning Curve
The temptation to ramp up sales force to increase the number of customers
Hiring a full sales force too early leads to burning cash and failure in meeting revenue expectations
Smart companies give themselves time and money to climb the sales learning curve
Sales learning curve is analogous to a manufacturing learning curve
Launching a new product is not just hiring a sales force and asking them to sell once the product is launched

15. Sales Learning Curve : New Product, New Market
REVENUE GAP
Sales Yield
Standard Quota
Progress along the sales learning curve is
measured by tracking sales yield over time.
As you might expect, the curve for launching
a totally new product into a new market is
much longer and flatter initially than one for
introducing a variation of an existing product
into an established market. Clearly, the longer
the learning curve, the greater the revenue
gap – that is, the longer it takes for sales yield
to reach targeted quota levels. Setting expectations
appropriately,
therefore, can make the
difference between pioneering a new market
and aborting too soon.
Time
Source: Sales Learning Curve, By Mark Leslie and Charles.A.Holloway, HBR Jul-Aug 2006

16. Sales Learning Curve: Follow-on Product, Existing Market
REVENUE GAP
Standard Quota
Sales Yield
Time
Source: Sales Learning Curve, By Mark Leslie and Charles.A.Holloway, HBR Jul-Aug 2006

17. Go To Market Strategy for New Product
Initiation Phase
Transition Phase
Execution Phase
Traction point
Sales Yield
Break-even point
The initiation phase. This phase begins when the product is ready to hit the market, that is, when it has been
beta tested, and lasts until the break-even point – that is,when sales yield reaches a point where revenue per sales
rep equals the fully loaded cost per sales rep. Typically, during this time, few customers will be willing to consider
buying the product, and those that do will require significant incentives. It’s both unrealistic and potentially dysfunctional to
assign large sales quotas in the initiation phase. The members of the sales team should be encouraged to focus instead
on learning as much as they can about how customers will use the product so they can support engineering,
Product marketing, and marketing communications in perfecting both the offering itself and the go-to-market
strategy and programs. A heavily commission-based pay plan is not only unlikely to achieve sales objectives but can inhibit learning.
It’s also inefficient to hire too many sales reps in this phase. A small sales force not only keeps costs down but
is more effective in supporting other parts of the company.
Typically, three to four salespeople are enough to start the learning process and to make sure that the problems
Encountered aren’t just the result of a bad hire. The types of skills needed during this phase differ from those needed to sell more
mature products. They include a facility for communicating with many parts of the organization, a tolerance of ambiguity, a deep interest
in the product technology, and a talent for bringing customers. Together with various functional teams within the company.
Salespeople must be resourceful, able to develop their own sales models and collateral materials as needed. We think of this kind of person as the “renaissance rep.”
The transition phase. Toward the end of the initiation phase, companies generally have acquired a critical mass
of customers, and sales are beginning to accelerate. Once the sales yield equals the fully loaded expense per sales
rep, it’s safe to assume you’ve moved into the transition phase. This second phase lasts until the sales yield reaches
a point where company management can see that the product has achieved real traction in the market.
What constitutes “traction” varies from company to company and product to product. Still, we’ve found that
a useful rule of thumb is to consider a sales yield of twice the fully loaded cost per sales rep as the end of the transition
phase.
By this point, the company should have a pretty good idea of what to expect in terms of steady state sales yield for the product.
In the transition phase, sales management should focus on developing a repeatable sales model, refining market
positioning, and adding sales capacity at a rate commensurate with the rise in the slope of the curve.
The original renaissance reps should continue to stay focused on learning.The people hired at this stage–
we call them “enlightened reps”–should be comfortable contributing to a still evolving sales model but do not need
to have the analytical and communication skills of the renaissance reps.
The execution phase. Once sales management is confident that the product
has achieved traction and is entering the execution phase, sales reps can be hired as rapidly
as the company’s management and financial constraints will allow. In this phase, when the formula
for success has been developed and all of the support requirements for sales reps are in place, the
company needs more traditional salespeople–what’s known in the industry as “coin operated
reps”– who require nothing more than a territory,a sales plan, a price book, and marketing materials
to bring in orders.
Time
Source: Sales Learning Curve, By Mark Leslie and Charles.A.Holloway, HBR Jul-Aug 2006

18. Customer Management Investing in value creation
Rich understanding of customer’s needs and their customers’ needs in consultative sale
Customer Relationship Management

19. Case Discussion Case: Hunter Business Group: Team TBA
Chapter 38, Marketing Management , Text and Cases: Rajiv Lal , John Quelch and Kasturi Rangan, Tata McGraw Hill Publication

20. References
The Sales Learning Curve – By Mark Leslie and Charles.A.Holloway, Harvard Business Review , Jul-Aug 2006
Book: Rethinking the Sales Force: Redefining Selling to Create and Capture Customer Value, Neil Rackham and John DeVincentis, Published by McGraw-Hill, 1999