Part II SALES FORCE ACTIVITIES Chapter 3: Sales Opportunity Management

Generating New Accounts Managing Existing Accounts Personal Time Management Sales Versus Profits

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

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

Table 3-1 Computing the Cost per Call for an Industrial Products SalespersonCompensation Salary, commissions, and bonus$69,035 Fringe benefits (hospital, life insurance, social security)$10,985$80,020 Direct Selling Expenses Automobile8,000 Lodging and meals6,250 Entertainment3,250 Communications4,500 Samples, promotional material1,750 Miscellaneous1,70025,450 Total Direct Expenses$105,470 Calls Per Year Total available days260 days Less: Vacation10 days Holidays10 days Sickness5 days Meetings18 days Training12 days55 days Net Selling Days205 days Average calls per day3 calls Total Calls per Year (205 X 3)615 Calls Average Cost per Call ($105,470/615) $171.50

Table 3-2 Sales Force Costs Across Selected Industries IndustrySales Force Costs as A Percentage of Sales Banking 0.9% Business services10.5 Chemicals3.4 Communications9.9 Construction7.1 Electronic components4.9 Electronics12.6 Fabricated metals7.2 Food products2.7 Instruments14.8 Machinery11.3 Manufacturing6.6 Office equipment2.4 Paper/allied products8.2 Pharmaceuticals5.6 Printing/publishing22.2 Rubber/plastics3.6 Wholesale (consumer)11.2

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

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

Table 3-3: ABC Account Classification No. ofTotalSalesTotalTotal callsSales ($) AccountAccts.Accts.(000)SalesPer Classif.Per Call Classification (1) (2) (3) (4) (5) (6) A 21 15% $910 65% 105 $8,667 B ,000 C Totals %$1,400100% 700 $2,000

Core Accounts Accounts are very attractive. Invest heavily in selling resources. Core Accounts Accounts are very attractive. Invest heavily in selling resources. Drag Accounts Accounts are moderately attractive. Invest enough to maintain current position. Drag Accounts Accounts are moderately attractive. Invest enough to maintain current position. Problem Accounts Accounts are very unattractive. Minimal investment of selling resources. Problem Accounts Accounts are very unattractive. Minimal investment of selling resources. Growth Accounts Accounts are potentially attractive. May want to invest in heavily Growth Accounts Accounts are potentially attractive. May want to invest in heavily Competitive Position Strong Weak Account Opportunity High Low Figure 3-1: Portfolio Model

Dollar Sales per Quarter Number of Sales Calls Per Quarter $20,000 $10, Figure 3-2: Number of Sales Calls Response Function

Unqualified Qualified Best few 50% closure probability 75% closure probability 90% closure probability Figure 3-3: The Sales Funnel

Selling Face-to-Face Service Calls Administrative Tasks Waiting and Travel Figure 3-4: How Salespeople Spend Their Time Selling over the phone

Emergencies Personal Growth Personal Growth Time Wasters Time Wasters Recreation Importance High Low High Low Urgency Figure 3-5: Time Management