After studying this chapter, you should be able to: Describe effective steps for generating new accounts, explain how to determine the minimum opportunity a salesperson should pursue, describe four methods for setting opportunity priorities, explain why emphasis is shifting from sales volume to profit flow, tell how salespeople can manage their time more efficiently.
Part II SALES FORCE ACTIVITIES Chapter 3: Sales Opportunity Management Sales Opportunity Management Generating New Accounts Managing Existing Accounts Sales Versus Profits Personal Time Management 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 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 31 Computing the Cost per Call for an Industrial Products Salesperson Compensation Salary, commissions, and bonus Fringe benefits (hospital, life insurance, social security) $69,035 $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 Total Direct Expenses 25,450 $105,470 Calls Per Year Total available days 260 days Less: Vacation 10 days Holidays 10 days Sickness 5 days Meetings 18 days Training 12 days Net Selling Days Average calls per day Total Calls per Year (205 X 3) Average Cost per Call ($105,470/615) 55 days 205 days 3 calls 615 Calls $171.50 Table 32 Sales Force Costs Across Selected Industries Industry Sales Force Costs as A Percentage of Sales Banking 0.9% Business services 10.5 Chemicals 3.4 Communications 9.9 Construction 7.1 Electronic components 4.9 Electronics 12.6 Fabricated metals 7.2 Food products 2.7 Instruments 14.8 Machinery 11.3 Manufacturing 6.6 Office equipment 2.4 Paper/allied products 8.2 Pharmaceuticals 5.6 Printing/publishing 22.2 Rubber/plastics 3.6 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 100,000 100,000 Catalog Drops Catalog Drops Internet Model 100,000 100,000 Website Visits Website Visits 5,000 5,000 Calls Calls 10,000 10,000 Calls Calls 2,000 2,000 Orders Orders 500 500 EOrders EOrders 1,750 1,750 Orders Orders Table 33: ABC Account Classification Account Classification No. of Accts (1) Total Accts (2) Sales (000) (3) Total Sales (4) Total calls Per Classif (5) A B C Totals 21 28 91 140 15% 20 65 100% $910 280 210 $1,400 65% 20 15 100% 105 140 455 700 Sales ($) Per Call (6) $8,667 2,000 462 $2,000 Figure 31: Portfolio Model Account Opportunity Competitive Position Weak Strong High Low Core Core Accounts Accounts Growth Growth Accounts Accounts Drag Drag Accounts Accounts Problem Problem Accounts Accounts Accounts are very Accounts are potentially Accounts are very Accounts are potentially attractive attractive attractive attractive Invest heavily in selling May want to invest Invest heavily in selling May want to invest resources in heavily resources in heavily Accounts are moderately Accounts are moderately Accounts are very Accounts are very attractive unattractive attractive unattractive Invest enough to maintain Minimal investment Invest enough to maintain Minimal investment current position of selling resources current position of selling resources Dollar Sales per Quarter $20,000 $10,000 1 2 3 4 5 6 Number of Sales Calls Per Quarter Figure 32: Number of Sales Calls Response Function Unqualified 13 24 19 20 21 15 17 23 16 22 12 14 18 11 10 50% closure probability Qualified Best few Figure 33: The Sales Funnel 75% closure probability 90% closure probability Figure 34: How Salespeople Spend Their Time Service Calls Administrative Tasks 13% 16% 17% Waiting and Travel Selling FacetoFace 29% 25% Selling over the phone Urgency Importance High Low High Emergencies Emergencies Time Time Wasters Wasters Low Personal Personal Growth Growth Recreation Recreation Figure 35: Time Management ... 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.. .Sales? ?Opportunity? ?Management Generating New Accounts Managing Existing Accounts Sales? ? Versus Profits Personal Time Management Developing a Prospect List... few Figure 3? ?3:? ? The? ?Sales? ?Funnel 75% closure probability 90% closure probability Figure 34: How Salespeople Spend Their Time Service Calls Administrative Tasks 13% 16% 17% Waiting? ?and Travel