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Chapter 13: Professional Selling


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Chapter 13: Professional Selling

  1. 1. by Jeff Tanner and Mary Anne Raymondby Jeff Tanner and Mary Anne Raymond Principles of Marketing
  2. 2. Chapter 13Chapter 13 Professional SellingProfessional Selling ©2010 Flat World Knowledge, Inc.
  3. 3. ©2010 Flat World Knowledge, Inc. 3 Learning Objectives 1.Recognize the role professional selling plays in society and in firms’ marketing strategies. 2.Identify the different types of sales positions. The Role Professional Salespeople PlayThe Role Professional Salespeople Play
  4. 4. ©2010 Flat World Knowledge, Inc. 4 What Salespeople DoWhat Salespeople Do
  5. 5. ©2010 Flat World Knowledge, Inc. 5 Fiduciary—selling the company’s products Ethical—fair to the buyer Can lead to conflicting roles for the salesperson! Salesperson’s ResponsibilitiesSalesperson’s Responsibilities
  6. 6. ©2010 Flat World Knowledge, Inc. 6 Limited sales time leads to focusing on customers with the most potential. Getting the order is critical for success. Being liked is necessary but not sufficient for continued success in selling. Salesperson’s ResponsibilitiesSalesperson’s Responsibilities
  7. 7. ©2010 Flat World Knowledge, Inc. 7 Salespeople are boundary spanners and are the first to learn about what competitors are doing. Through interaction with customers, they can learn of customer’s needs. Entering this information into databases allows marketing personnel access. The sales force can be the eyes and ears for market planners. Salesperson’s ResponsibilitiesSalesperson’s Responsibilities
  8. 8. Types of Selling PositionsTypes of Selling Positions ©2010 Flat World Knowledge, Inc. 8
  9. 9. Account ManagersAccount Managers ©2010 Flat World Knowledge, Inc. 9
  10. 10. Key TakeawaysKey Takeaways There are four types of salespeople 1. Prospectors 2. Trade sales 3. Missionary 4. Account manager Salespeople 1. Create value 2. Manage relationships 3. Gather information ©2010 Flat World Knowledge, Inc. 10
  11. 11. Customer Relationships and SellingCustomer Relationships and Selling StrategiesStrategies Learning Objectives 1. Understand the types of selling relationships firms seek. 2. Be able to select the selling strategy needed to achieve the desired customer relationship. ©2010 Flat World Knowledge, Inc. 11
  12. 12. ©2010 Flat World Knowledge, Inc. 12 Customer RelationshipsCustomer Relationships
  13. 13. • Transactional Relationships—each sale is a separate exchange, and the two parties have little or no interest in maintaining an ongoing relationship. • Functional Relationships—develop when a buyer continues to purchase a product from a seller out of habit. • Strategic Partnership—buyer and seller commit time and money to expand “the pie” for both parties. • Affiliative Selling Relationships—more likely to occur when the buyer needs a significant amount of expertise from the seller and trust is an issue. ©2010 Flat World Knowledge, Inc. 13 Types of Sales RelationshipsTypes of Sales Relationships
  14. 14. • Script-Based or Canned Selling—Salespeople memorize and deliver sales pitches verbatim. • Needs-Satisfaction Selling—asking questions to identify a buyer’s problems and needs, and then tailoring a sales pitch to satisfy those needs. • Consultative Selling—the seller uses special expertise to solve a complex problem in order to create a somewhat customized solution. • Strategic Partner Selling—both parties invest resources and share their expertise with each other to create solutions that jointly grow one another’s businesses. ©2010 Flat World Knowledge, Inc. 14 Selling StrategiesSelling Strategies
  15. 15. • The sales-strategy types and relationship types discussed don’t always perfectly match up. • Different strategies might be more appropriate at different times. • When is each method more appropriate? Depends on how the buyer wants to buy, and what information the buyer needs to make a good decision. ©2010 Flat World Knowledge, Inc. 15 Choosing the Right Sales StrategyChoosing the Right Sales Strategy
  16. 16. ©2010 Flat World Knowledge, Inc. 16 The Typical Sales ProcessThe Typical Sales Process
  17. 17. • Objections are concerns or reasons not to buy raised by the prospect, and can occur at any time. • Salespeople should probe to find out if the objection represents a misunderstanding or a hidden need. • Typical objections: 1. costs too much 2. don’t need it 3. competitor has a better product 4. don’t have the authority to buy • Resolve objections by addressing each concern. ©2010 Flat World Knowledge, Inc. 17 Overcoming ObjectionsOvercoming Objections
  18. 18. • Closing is asking for the order. • Trial closes are attempts to lead the buyer to make a decision. • Complex selling situations may require many sales calls. ©2010 Flat World Knowledge, Inc. 18 ClosingClosing
  19. 19. • The four types of relationships between buyers and sellers are transactional, functional, affiliative, and strategic. • The four basic sales strategies salespeople use are script- based selling, needs-satisfaction selling, consultative selling, and strategic-partnering. • The sales process used to sell products is generally the same regardless of the selling strategy used. • Different selling strategies can be used within different types of relationships. • The strategy chosen will depend on the stage on which the seller is focusing. ©2010 Flat World Knowledge, Inc. 19 Key TakeawaysKey Takeaways
  20. 20. Learning Objectives 1. Describe the sales cycle. 2. Understand the selling metrics that salespeople use. 3. Understand the selling metrics that sales managers and executives use. ©2010 Flat World Knowledge, Inc. 20 Sales Metrics (Measures)Sales Metrics (Measures)
  21. 21. ©2010 Flat World Knowledge, Inc. 21 The Sales CycleThe Sales Cycle
  22. 22. • The key metric that salespeople are evaluated upon is the revenues they generate. • Conversion ratios measure how good a salesperson is at moving customers from one stage in the selling cycle to the next. • Activity Goals–number of sales calls of each type that has to be made in a certain period of time. • Win-Loss Analysis—a review of how well a salesperson performed given the opportunities faced. • Compensation—bonuses and commissions are important metrics used by many salespeople. ©2010 Flat World Knowledge, Inc. 22 Metrics Used by SalespeopleMetrics Used by Salespeople
  23. 23. • Sales managers are interested in the same metrics as the salesperson, plus 1. market share 2. sales by product line 3. sales trends vs. forecast 4. salesperson results 5. selling costs 6. inventory levels 7. customer satisfaction ©2010 Flat World Knowledge, Inc. 23 Metrics Used by Sales ManagersMetrics Used by Sales Managers
  24. 24. Key TakeawaysKey Takeaways • The sales cycle is a basic unit of measurement indicating how long it takes to close a sale. • Salespersons who shorten the cycle are able to generate more revenue. • Sales executives track the same metrics as individual salespeople but at the aggregate level. • A firm’s sales trends affect many of the other decisions the company’s executives have to make, including manufacturing and output decisions. • Sales managers also have to manage their company’s selling costs. ©2010 Flat World Knowledge, Inc. 24
  25. 25. Learning Objectives 1. Compare and contrast common ethical challenges facing salespeople and sales managers. 2. Describe steps companies take to ensure ethical sales activities. ©2010 Flat World Knowledge, Inc. 25 Ethics in Sales and Sales ManagementEthics in Sales and Sales Management
  26. 26. Many of the most common situations faced by salespeople involve issues such as: 1. A customer asks for information about one of their competitors, who happens to be firm’s customer. 2. How much should you spend on holiday season gifts for your customers. 3. A buyer asks for something special, something not supposed to be provided but could easily be done. 4. No one knows if a salesperson is at work or not, and it is a nice day to play golf but without a prospective customer! ©2010 Flat World Knowledge, Inc. 26 Common Ethical Issues for SalespeopleCommon Ethical Issues for Salespeople
  27. 27. • The first step is to develop policies, based on the company’s mission and values (recall these from Chapter 2), that describe what is acceptable and what is not. • Train all salespeople and sales managers on the policy. • Training is to secure greater support and application of the policy. Another reason is that should a salesperson engage in an unethical or illegal activity, the company is protected. • Enforce the policy and have procedures in place that make enforcement possible. • Codes of ethics, policies, and procedures affect all employees. They are not created just because of salespeople. ©2010 Flat World Knowledge, Inc. 27 Company SafeguardsCompany Safeguards
  28. 28. • Sales managers face the same challenges in managing salespeople that all managers face. • When should an order be recorded for revenue purposes? • Laws that affect sales operations include pricing discrimination, hiring practices, and workplace safety as well as others. • Sales managers should also develop close working relationships with the human resources and legal departments. These professionals are charged with staying abreast of legal changes that influence management practice. ©2010 Flat World Knowledge, Inc. 28 Challenges Facing Sales ManagersChallenges Facing Sales Managers
  29. 29. • Salespeople face unique ethical challenges because of their job. • American salespeople have the added constraint of the Foreign Corrupt Practices Act. • Sales managers have all of the usual management concerns, such as fair hiring practices. They also have to develop policies and practices that codify ethical behaviors, train salespeople on the ethics policies. • Sales managers have to be aware of laws such as the Universal Commercial Code and others that govern sales transactions. ©2010 Flat World Knowledge, Inc. 29 Key TakeawaysKey Takeaways
  30. 30. Integrating Sales and MarketingIntegrating Sales and Marketing Learning Objectives 1. Identify the ways in which the marketing function supports the sales function. 2. Describe how the sales group of a company can support its marketing efforts. ©2010 Flat World Knowledge, Inc. 30
  31. 31. • Marketing Shortens the Sales Cycle • Marketing provides: Lead Management—the process of identifying and qualifying leads in order to grow new business. Closed-Loop Lead Management—systems that are able to track leads all the way from the point at which the marketer identifies them to when they are closed. Theses systems can result in better investment decisions for marketing managers because they can learn what works—what marketing actions shorten sales cycles and create more sales. ©2010 Flat World Knowledge, Inc. 31 What Marketing Does for SalesWhat Marketing Does for Sales
  32. 32. Lead Scoring—is a process by which marketing personnel rate the leads to indicate whether a lead is hot (ready to buy now), warm (going to buy soon), or cold (interested but no immediate plans to buy). Marketing personnel can also improve salespeople’s conversions by providing materials that help buyers make good decisions. ©2010 Flat World Knowledge, Inc. 32 Marketing Improves Conversion RatiosMarketing Improves Conversion Ratios by Scoring Leadsby Scoring Leads
  33. 33. • Salespeople talk to customers every day. They are the “eyes and ears” of their companies. More than anyone else in an organization, they know what customers want. • Salespeople are responsible for voicing their customers’ ideas and concerns to other members of the organization. • Salespeople monitor the competition. ©2010 Flat World Knowledge, Inc. 33 What Sales Does for MarketingWhat Sales Does for Marketing
  34. 34. • Marketing personnel support a firm’s sales force by shortening the sales cycle and improving conversions. • Lead management and lead scoring help salespeople. • Salespeople support marketing personnel by communicating their customers’ needs and ideas back to the them. • Salespeople are also the first to spot the actions of competing firms. ©2010 Flat World Knowledge, Inc. 34 Key TakeawaysKey Takeaways
  35. 35. Learning Objectives 1. Identify the primary types of outsourcing salespeople. 2. Characterize the strengths and weaknesses of outsourcing sales groups. ©2010 Flat World Knowledge, Inc. 35 Outsourcing the Sales FunctionOutsourcing the Sales Function
  36. 36. • Companies can outsource all or part of the sales cycle. • Independent agents are salespeople who are not employees of the company. They are paid on a straight commission basis They set their own hours, determine their own activities Independent agents often sell competing products • Manufacturer’s representatives are agents that sell a manufacturer’s product. They don’t sell competing products. Are already selling to the desired market. • Call centers are examples of outsourcing a portion of the sales cycle. ©2010 Flat World Knowledge, Inc. 36 Types of Outsourced SalespeopleTypes of Outsourced Salespeople
  37. 37. • Advantages Gaining access to more buyers. Outsourced salespeople have existing relationships. Entering new product or global markets. Outsourcing can be less expensive. Only pays commissions when they sell products. • Disadvantages The primary disadvantage of outsourcing the selling process is loss of control. ©2010 Flat World Knowledge, Inc. 37 Advantages and DisadvantagesAdvantages and Disadvantages of Outsourcingof Outsourcing
  38. 38. • Outsourcing the sales function can be done through distributors, independent agents, and manufacturers’ representatives. • The entire sales cycle can be outsourced or only parts of it. • Independent agents, distributors, and manufacturers’ representatives often have established relationships that make it easier for a company to enter and penetrate new markets. • Outsourcing the sales function means that a company will lose some control over its sales activities. ©2010 Flat World Knowledge, Inc. 38 Key TakeawaysKey Takeaways