Sales Management 5

The Process of Buying and Selling

And Sales Job Tasks

Players in the Purchase Center I

_________: Initiators are people who perceive a problem or opportunity that might require the purchase of a new product or service and thereby set the buying process in motion. The initiator can be almost anyone at any level in the firm.

_________: The people in the organization who must use or work with the product or service often influence the purchase decision.

Players in the Purchase Center II

_________: Influencers provide information for evaluating alternative products and suppliers, and they often play a major role in determining the specifications and criteria to use in making the purchase decision.

_________: Gatekeepers control the flow of information to other people involved in the purchasing process. They include the organization’s purchasing agent and suppliers’ salespeople.

Players in the Purchase Center III

_________: The buyer is usually referred to as a purchasing agent or purchasing manager. In most organizations, buyers have the authority to contact suppliers and negotiate purchases.

_________: The decider is the person with the final authority to make a purchase decision. Sometimes buyers have this authority, but often it is retained by higher executives in the organization.

Players in the Purchase Center IV

_________: The person who determines the budget for the purchase is the controller. Sometimes the budget is set independently of the purchase. Then, if the copier needs to be replaced, the cost would have to fit in that budget. At other times, the controller may be a product designer who is trying to keep the cost of the new product within a certain budget.

Stages in the Organizational Buying Process

(1) Anticipation or recognition of a problem or need

(2) Determination and description of the characteristics and quantity of the item needed (Specifications)

(3) Search for and qualification of potential suppliers (RFP)

(4) Acquisition and analysis of proposals or bids

(5) Evaluation of proposals and selection of supplier: Not just $

(6) Selection of an order routine

(7) Performance evaluation and feedback

Types of Purchases I

Straight _________: Ongoing, repetitive purchase: e.g. windshields, microchips, paper, light bulbs.

Types of Purchases II

Modified _________: Price periodically to be sure that you are getting best deal: e.g. long distance carrier, janitorial service.

Types of Purchases III

New Purchase: First time, or first time in a while; writing specs: e.g. new warehouse, office, production equipment, sales cars.

                                                                     

Internal Sales Forcevs. Independent Agents

First Decision:Which is right for you?

External: Two Types of Agents

Manufacturers Representative Pure Commission; No Ownership Advantages:

Established _________ Familiarity with _________ _________spread over several manufacturers Strictly _________ cost to manufacturer (No cost

unless they sell.)

Selling Agent Acts as sole sales agent of the

manufacturer, rather than just in one geographic area or product.

Broader authority.

Transactional Cost Analysis

Substantial Transaction-Specific Investments: Lock-in (e.g. Showroom)Agency Theory: Agent looks out for self first and foremost Alignment of interests Altruism

Hiring own sales people limits flexibility

How Salespeople Spend Their Time

With customers

15%Service Calls

5%

Administrative Tasks

34%Prospecting

14%

Waiting/traveling

32%

SOURCE: Fenemore Group, as reported in Sales & Marketing Management (March 1998), p. 96.

NB: Actual Selling 1/6 Time

Job Factors and Tasks

Selling functionWorking with othersServicing the productManaging informationServicing the accountAttending conferences and meetingsTraining and recruitingEntertainingTravelingDistribution

Selling Function

Plan selling activitiesSearch out leadsCall potential accountsIdentify decision makersPrepare sales presentationsOvercome objectionsCall new accounts

Prospecting: _________

100 Leads

50 Qualified Leads (only half)

10 Hot Prospects (only 20%, 1 in 5)

4 Customers (only 40%, 2 in 5)

This is why cold-calling is so important.

Working with Others

Write up ordersExpedite ordersHandle back ordersHandle shipping problemsFind lost orders

Servicing the Product

Learn about the productTest equipmentSupervise installationTrain customersSupervise repairsPerform maintenance

Managing Information

Provide technical information to customersReceive feedback from customersProvide feedback to companyCommunicate with superiors

Servicing the Account

Stock shelves (Maintain inventory)Set up displaysTake inventory for clientHandle local advertising (not national)

Attend Conferences & Meetings

Sales conferencesRegional sales meetingsClient conferencesExhibits/Trade showsTraining

Training & Recruiting

Recruit new sales repsTrain new salespeopleTravel with trainees (or have them tag along)

Entertaining

GolfMeals: Lunch, Dinner, BreakfastDrinks (watch tax deductions, and behavior)Parties for clients Donuts to office

Travel

Out of town Day trips Overnight stays Extended trips

In town Traffic Optimize route

Distribution

Establish good relationships with distributorsSell to distributorsHandle creditCollect past due accounts (sometimes )

Stages of the Selling Process

Prospecting

Opening relationship

Qualifying prospect

Presenting sales message

Closing sale

Servicing account after sale.(More to come later.)

Selling Tips

Be professionalDon’t glad-handKnow your productKnow your prospectKnow your competitorsDon’t make promises you can’t keepAlways tell the truthLISTEN