Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25%.. Sales district objective.[r]
(1)Part I
THE BIG PICTURE
Chapter 2:
(2)The natural progression
(3)Business Strategy Business
Strategy MarketingMarketingStrategyStrategy
Go-to-Market Strategy Supply Chain Management (SCM) Customer Relationship Management (CRM) LEVEL 2
Strategy
Implementation
Decisions Product DevelopmentManagement
(PDM) LEVEL 1
Top
Management Decisions
Figure 2-1 The Sales Force Decision Sequence
(4)(5)Figure 2-2: Factors Influencing Strategic Management Distinct competencies Marketing Financial Technology Information Distinct competencies Marketing Financial Technology Information Environmental constraints Legal & regulatory
Demographics Economic Conditions Technology Competitive conditions Sociocultural factors Environmental constraints Legal & regulatory
(6)(7)Figure 2-3: Hierarchy of Sales Objectives
Corporate goals
Maximize shareholder wealth Corporate goals
Maximize shareholder wealth Business unit objectives
12% revenue growth Grow pre-tax profits by 18%
Business unit objectives 12% revenue growth Grow pre-tax profits by 18%
Marketing objectives
Increase product A’s market share by points Grow contributions after sales & marketing by 20%
Marketing objectives
Increase product A’s market share by points Grow contributions after sales & marketing by 20%
Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25%
Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25%
Sales district objective
Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling
Sales district objective
Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling
Salesperson objective
Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars
Salesperson objective
Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars
Major account objective
Achieve sales revenues of $95,000 in product A Obtain an average gross margin of 80%
Major account objective
(8)A Look into What
(9)0 10 70 60 50 40 30 20 29.8% 31.9% 66.1%
7.7% 14.0% 7.8%
Building Brand of Company/ product Enhancing credibility of company product Increasing sales/ revenue Investor
relations Savingcosts Other
(10)0 100 60 80 40 20 Building Brand of Company/ product Enhancing credibility of company product Increasing sales/ revenue Investor
relations Savingcosts Other
How Successful Were You at Reaching Your Goals?
(11)Types of Strategies (Generic) and Their Effect on Sales
(12)(13)Build Strategy Expand market share in a high-growth market Harvest Divest Secure Added Distribution Add new customers Provide high presale services Provide product & market feedback Focus on volume growth Build current relationships
Call on targeted current customers Increase service to current customers Call on targeted new customers Focus on account penetration
Call on most profitable accounts only Reduce overall service levels Reduce inventory levels Maintain distribution Invest as little time as
necessary Marketing Strategies Sales Strategies Hold Strategy Maintain market share at the lowest costs possible
Harvest Strategy Reduce costs and focus on profit, not market share
Divest Strategy Reduce
inventory at lowest cost possible Eliminate services Offer exceptional pricing Focus on one time sales Minimize time commitment
(14)Sales Force Ranking and Sales Growth: Pharmaceuticals (1988-1990)
Low High
(15)Sales Force Ranking and Sales Growth: Computers (1988-1990)
Low High
(16)A More Detailed Look at Marketing Strategy
The Three Major Functions of
Marketing:
– Segmentation
– Targeting
(17)(18)1 What is the best way to segment the market?
2 What are the essential activities required by each segment?
3 What group of go-to-market participants should perform the essential activities?
4 Which face-to-face selling participants should be used?
(19)Figure 2-6 Essential Activities
Interest Creation
Purchase
(20)Large
Small
Low Information, Low Solution Needs
High Information, High Solution Needs
Buying Process Customer Size
and Opportunity
(21)Direct Sales Force Direct Sales Force Agents Distributors Retailers Agents Distributors Retailers Integrators
Integrators AlliancesAlliances AdvertisingPromotion Direct Mail Advertising Promotion Direct Mail Tele-marketing
Tele-marketing InternetInternet
Direct Indirect
Non-Sales Force Options Sales Force Options
Company Company
Customers and Prospects Customers and Prospects
(22)Figure 2-8 Comparing Various Go-to-Market Alternatives
Advertising
Direct Mail
Internet
Telemarketing
Sales Force
Effectiveness Efficiency
High Sales per Exposure Low Cost
(23)Customer Base
Customer Base
Account
Teams GeographicSales Force Direct Sales Force
Industry
Teams Inbound Outbound
Telemarketing Partners Internet
(24)Customer Base
Customer Base
Account Teams
Direct Sales Force
Inbound
Telemarketing
(25)Customer Base
Customer Base
Account Teams
Geographic Sales Force
Direct Sales Force
Inbound
Telemarketing Partners
(26)Customer Base
Customer Base
Account
Teams GeographicSales Force Direct Sales Force
Outbound Inbound
Telemarketing Internet
(27)Figure 2-9 Product Development Management Subprocesses
Identify customer needs for better solutions
Discovering and designing new product solutions
Developing new solution prototypes
Managing internal departmental priorities and involvement
Designing activities to speed-up development process
(28)Figure 2-10 Supply Chain Management Subprocesses
Selecting and managing supplier relationships
Managing inbound logistics
Managing internal logistics
Managing outbound logistics
Designing product assembly and batch manufacturing
Managing process technology
Order, pricing, and terms management
Managing channel partners
(29)Figure 2-11 Customer Relationship Management Subprocesses
Identifying high value prospects
Learning about product usage and application
Developing and executing advertising and promotion programs
Developing and executing sales programs
Developing and executing customer service programs
Acquiring and leveraging customer contact information systems
Managing customer contact teams
Enhancing trust and customer loyalty
(30)• From P&L to balance sheet: Customers viewed as assets • CRM;s Task: To increase shareholder value by
leveraging the customer base.
• Focus on understanding cash flow effects and risk
management
Shareholder Value
Driver of Cash Flow & EVA
• CRM integrated in the business process and yearly
planning process
• Improving the profitability of customers seen as a driver
of business profit
• Focus on customer selection
Business
Driver of Profits
• CRM viewed as a tool to achieve a bigger customer share
through cross-selling and up-selling
• Typical in multi-product, multi-divisional environments • Focus on account planning and organizational alignment
Sales
Driver of Revenue
(31)Figure 2-12 Sales Force Program
Marketing Objectives, Strategy, and Strategy Implementation Program
Marketing Objectives, Strategy, and Strategy Implementation Program
Account Relationship Strategy
Account Relationship Strategy
Desired Selling Actions and Behaviors
Desired Selling Actions and Behaviors
Organizational Structure
Organizational Structure
Competency Development Program
Competency Development Program
Leadership System
Leadership System
Estimates of sales potential and
sales forecast
Estimates of sales potential and
sales forecast
Estimates of sales force size and budget
Estimates of sales force size and budget
(32)Account Relationship Strategy
• How long is the selling cycle?
• How much time is spent on customer need discovery? • Will the offering be customized for each customer? • Will other functional areas be involved in the sale? • How much will we need to invest in the individual
customer relationship?
• How easily can the customer switch to a competitor once the relationship is established?
Sales Force Selling Activities
• What are their non-selling responsibilities?
• How much customer face-time will salespeople have? • How will sales leads be generated?
• How much time will be spent with new prospects? • How will business with existing customers be grown? • With whom in the customer’s organization will the
sales force interact?
• What support will be needed to consummate a sale? • How will customers be serviced?
(33)Sales Force Program Elements – Cont.
Organizational Structure
• Will the sales force be specialized by product, customer, or function?
• How many salespeople will be needed?
• What is the span of control for management? • How many levels of management will be needed? • How will territories by designed?
• What is the location of salespeople and managers? • Will telemarketing support be needed?
• Experience level of new salespeople?
• Length and purpose of initial training program? • Nature of continuing development program?
(34)Leadership Program
• Mix of salary, bonus, and commission compensation? • Total compensation level?
• What additional incentive programs will be needed? • What benefits will be needed?
• Use of quotas?
• How much will be spent on sales meetings? • Behavioral-based evaluation metrics?
• Performance-based evaluation metrics? • Required sales force information system?
(35)Investment by
Supplier
Investment by Customer
Tran sactio
nal
Relat ionsh
ip
Cons ultati
ve
Relat ionsh
ip
Enter prise
Relat ionshi
p
(36)Different Sales Orientations Sales Argument Profile of Sales Customer Contacts Offering Success Factors Best products “Product Expert” Narrow Space (e.g., purchasing)
Best products with a competitive price
Product excellence and/ or cost leadership
Product Sales
Solutions to your needs
“Solution provider”
Function/ department
Product and service solutions to customer needs
Understanding the customer’s needs
Solution Sales
Impact on your business results
“business consultant”
All levels
Valuable solutions to support competitive advantage
Driving customer profits and EVA
(37)(38)