Lecture Dalrymple''s sales management: Concepts and cases – Chapter 3: Sales opportunity management

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