The Sales Function and Multi-Sales Channels: Sales Management: Shaping Future Sales Leaders

Sales Management: Shaping Future Sales Leaders
The Sales Function and

Multi-Sales Channels
Chapter 2
2-1
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Learning Objectives
 Explain what the sales function consists of and
how salespeople affect a firm’s supply chain
 Identify the various channels in which the sales
function can be carried out
 Explain how effective sales management efforts
can align a firm’s sales strategy in a multichannel
environment
2-2
The Sales Function
 Locating potential buyers
 Persuading them
 Consummating the transaction
2-3
The Supply Chain
 Complete process of
events and people needed
to bring product to the
customer
 Key term Sales forecast:
what the salesperson
expects to sell in a
particular period of time
2-4
Managing the Supply Chain:
Active vs. Passive
Passive Active
 Example: salesperson turns in  Salesperson actively seeks to

sales forecast influence what supply chain does
 Sales forecast influences what  Example: buyer that needs
happens in supply chain, but special payment terms will need
salesperson is not taking active the salesperson’s help in securing
role in influencing chain’s activity those terms from the company
 Example: salesperson might need
to arrange expedited delivery in
order to meet a buyer’s needs
2-5
Multichannel Environment
 Using a number of methods, or channels, to accomplish
the selling function
2-6
Global Sales Management:
Outsourcing to India
 EDS manages some 500 call centers worldwide
E lle s m e re I s la n d S e v e rn a y a Z e m ly a
A rc tic O c e a n A rc tic O c e a n F ra n z Jo se f L a n d
A r cN etwi cS i b Oe r i a cn Ies l aa n nd s
G r e e n la n d ( D e n .) S v a lb a r d ( N o r.)
B a n k s Islan d J a n M a y e n ( N o r.) N o v a y a Z e m ly a W r a n g e l Is la n d
V ic to ria Is la n d B a ff in I s la n d
F a r o e Is . (D e n .) N o rw a y
U .S .A .
Ic e la n d F in la n d
R u s s ia
 Indian call center employees selling to US must
U n ite d K in g d o m S w eden E s to n ia 60°
C anada D en.
L a tv ia
L ith u a n ia A le u tia n I s la n d s ( U S A )
I re la n d N e th . B e la r u s
G e r m a n y P o la n d
B e l.
Islan d o f N e w fo u n d lan d C zech. U k ra in e K u ril I s la n d s
A u s . H uS nl og v. a k . M o ld o v a K a z a k h sta n
F ra n c e S w itz . S lo v . M o n g o lia
C r o . Y u g Ro .o m a n i a
 Learn to speak with American accent

B o s. U z b e k is ta n
N o rth A tla n tic O c e a n Ita ly M a c . B u lg a r ia
G e o rg ia
K y rg y z s ta n
U n ite d S ta te s o f A m e ric a P o rtu g a l
S p a in A lb a n ia
G re e c e T u rk ey
A r m e n ia A z e r b a ija n
T u rk m e n ista n T a jik is ta n
N . K o re a
S . K o rea Japan
N o r th P a c if ic O c e a n C y p . L e b . S y ria N o rth P a c ific O c e a n
M o ro c c o
T u n is ia
Isra e l Ira q Ira n
A fg h a n is ta n
C h in a
C a n a ry Is la n d s ( S p .) Jo rda n
 Learn American slang

K u w a it P a k is ta n N epal
A lg e ria L ib y a B hu.
T he B aham as E gypt
W e s te r n S a h a r a ( M o r.) Q a ta r
M e x ic o Cuba B ang. T a iw a n
H a w a iia n Is la n d s D o m in ic a n R e p u b lic Saudi A rUa . bA i .a E . In d ia M y an m ar (B u rm a)
O m an Laos
U . S.A . M a u rita n ia M a li
B e liz e
Jam .
H a iti P u e rto R ic o (U S )
N ig e r E ritre a
H o n d u ra s
D o m in ic a Senegal S udan Yem en T h a ila n d P h ilip p in e s
G u a te m a la
T h e G a m b ia B u rk in a F a s o
C had V ie tn a m
E l S a lv a d o r N ic a ra g u a B a rb a d o s
G u in e a -B is s a u G u in e a B e n in D jib o u ti A n d a m a n I s l a n d s ( I n d iCa a) m b o d i a
 EDS must
T rin id a d a n d T o b a g o M a rs h a ll I s la n d s
C o s ta R ic a C ô te D ’Iv o ire N ig e ria S ri L an k a F e d e ra te d S ta te s o f M ic r o n e s ia
V e n e z u e la G uyana S ie rr a L e o n e E th io p ia
Panam a S u r in a m e C .A . R. B ru n e i G u a m (U S A )
M a ld iv e s
F r e n c h G u ia n a ( F r.) L ib e r ia C a m e ro o n
G hana Togo S o m a lia M a la y s ia
C o lo m b ia E q . G u in e a U ganda
S in g a p o re
G abon R w anda K enya K irib a ti
G a la p a g o s I s la n d s (E c u a d o r) E cuador S a o T o m e & P r in c ip e In d o n e s ia
Z a ire B u ru n d i P a p u a N e w G u in e a
 Set appropriate metrics

S o lo m o n Is la n d s
C ongo T a n z a n ia S e y c h e lle s
M a la w i
P e ru
B ra z il A n g o la
Z a m b ia M o z a m b iq u e
B o liv ia M adagascar
N a m ib ia Z im b a b w e F iji
 Write scripts for salespeople

F re n c h P o ly n e s ia (F r.) N e w C a le d o n ia
B o tsw a n a
P arag u ay M a u r itiu s In d ia n O c e a n
S w a z ila n d
A u s tra lia
S o u t h A f r i Lc ae s o t h o
 Match its customer tracking system to the client’s

U ru g u a y
S o u th P a c ific O c e a n C h ile A rg e n tin a S o u th A tla n tic O c e a n N e w Z e a la n d
T a s m a n ia
F a lk la n d I s la n d s ( Is la s M a lv in a s ) ( a d m . b y U K , c la im e d b y A rg e n tin a )
Île s C ro z e t ( F ra n c e )
S o u th G e o rg ia (a d m . b y U K , c la im e d b y A rg e n tin a )
A n ta rc tic a
2-7
Global Sales Management:
Why Outsource?
 Lower cost
 Willing and highly educated workforce availability
2-8
Strategies to Reduce Sales Force
Costs Without Sacrificing Performance
 Purifying
 Shifting non-selling activities to lower-cost alternatives
 Outsourcing
 Hiring another company to carry out a task or set of
tasks
2-9
Advantages of Company-Employed
vs. Outsourced Sales Force
Company-Employed Outsourced
 Company can exert greater  Firm’s selling costs can be

control over their efforts shared with other
manufacturers, reducing cost
 Greater control over who is per sales call
hired
 Established relationships with
 Focus on only the company’s customers from which the
products, whereas an manufacturer can benefit
outsourced representative
might be free to sell many  These can yield greater
companies’ products coverage of the market for the
manufacturer
2-10
Types of Outsourced Salespeople
Mfg Rep  Independent contractor who does not take

Mfg Agent ownership of product and does not maintain an
Rep inventory
 Sells for many manufacturers and take ownership

Distributor of products, sell them on consignment, or
otherwise maintain an inventory
 Represents either buyer or seller and sometimes

Broker both, carries an inventory of products but does
not take ownership of them
2-11
A Few Manufacturer’s Reps
Organizations
 Foodservice Sales & Marketing Association
 Mfr. Rep’s Educational Research Foundation
 United Association of Manufacturer’s Reps
 Manufacturers’ Agents National Association
 Association of Independent Manufacturers’ Reps
 All offer certification to upgrade professionalism

 Most specialize in industries
2-12
Types of Company-Employed
Salespeople
Inside  Sells at a company’s facilities, either by

Salesperson telephone or in person
Field  Sells at the customer’s location

Representative
 Has responsibility for building sales within

Account specific accounts or accounts within a specific
Manager area (geographic rep)
2-13
Types of Company-Employed
Salespeople (continued)
Vertical Market  Accounts all operate in the same industry

Rep
Retail Sales  Sells to consumers who come into stores

Rep
 Sells to organizations in the supply chain,

Trade Rep usually retailers
Missionary
 Sells to people who recommend or prescribe a
Salesperson product to others but do not personally use it
(detail rep)
2-14
More on Outsourcing
 Can outsource Call Centers
 Can outsource parts of the sales cycle
 To different sales organizations
 Often used to
 Enter new markets
 Keep costs variable (no overhead)
 Leverage market coverage costs (share with others)
2-15
Seamless Integration
 Seamless integration: a firm’s
customers can easily shift
transactions across various
channels
 Goal: all areas have all the
customer information they
need so the customer is
treated properly
2-16
Alignment
 Getting all of functional areas of a firm to work together
 This includes the company’s various salespeople–its inside
reps, geographic reps, customer service reps, etc.
2-17
Alignment
 Alignment occurs at 3 levels
2-18
Areas to Align
Processes Sales
Technology
and Goals Metrics
 CRM system  Lead  Marketing &
used by management sales have
salespeople same sales
also supports targets for a
marketing new product
2-19
Self-Assessment Library
 Go to http://www.prenhall.com/sal/
 Access code came with your book
 Click the following
 Assessments
 Life in Organizations
 Careers
 How Motivated Am I to Manage?
2-20
Ethics in Sales Management:
Stuck in AOHell
 Customer tried to cancel his AOL service 21 times
 Recorded the call and posted the conversation on the Web
 Customer claimed moving to France, still had to talk
to manager in order to cancel
 AOL: “…every Member that calls in to cancel their
account is a hot lead”
 State of New York fined AOL $1.25 million for
hassling customers who wanted to cancel and then
billing them anyway
Source: Keith Dawson, “Your Call is Not Particularly Important to Us,” Call Center Magazine (Oct.
2006), p. 4; Anonymous, “Customers Complain of Cancellation Problems,” FinancialWire (July 2,
2006), p. 1.
2-21
Role Play: Mechanix Illustrated
 Family-owned magazine serving diesel mechanic
shops
 5000 subscribers, 10% increase over past 2 yrs
 Advertising sales stagnant
 Bill North, editor
 Does advertising sales
 Sandy Lake, Lake Sales
 Wants to sell advertising
 Wants to take over subscriber management
2-22
Role Play (continued): Action Steps
 Bill
 List objectives
 List concerns regarding outsourcing advertising sales
 Sandy
 Develop particular sales format (phone, field, etc.)
 List advantages for that format
 Role play the sales call
2-23
Caselet 2.1:
Hereford Promotions
 Promotional products company with 3 sales
people
 In past year, sales up 8%, but customer
complaints have doubled
 In past quarter, 12 new customers, 15 lost
 Company’s net income averaging
~$1000 / month
2-24
Caselet 2.1 (continued):
Running the numbers
 Salespeople paid 10%  Company averages 40
commission on each sale large customers per
 Earn an average of salesperson
$10,000 /month  Large customer bills
$20,000 / year
 Each rep earning $10,000
/month adds $5000 profit  Small customers account
margin to the company for $20,000 /month for
each rep
 New salespeople won’t  Each rep might have 100 small
work for straight customers
commission, they expect a
salary ($3000) until sales
are high enough to cover
expenses
2-25
Making decisions
 What alternatives for growth might Sandy
consider?
 What multichannel options might she
pursue?
2-26
Caselet 2.2:
Marchetti Machines, Problem 1
 Salesperson Frank McCaslin is close to landing a
large account, one of the biggest sales of the year
 Account’s CFO plays golf with Marchetti service
manager Louis Ruggieri
 Ruggieri says the service team hates to work on
the system Frank proposed
 Account’s CFO emails, “…if that is the case, we’re
going to have to open our search up to some other
companies to try to find something more reliable”
2-27
Marchetti Machines, Problem 2
 Sales division is reorganizing
 Bottom 10% of accounts moving to inside sales
 Inside sales moving to new division with Web sales and
distributor sales
 Distributors are only allowed to sell to
 Accounts under $100,000 in annual revenue
 Accounts that require engineering that Marchetti doesn’t do
 Accounts they find first
 Cannot sell to government or accounts already on Marchetti’s
customer list
 Current issue: distributors sell to Marchetti accounts
 Company names are not obvious or divisions operate under different
names
 Difficult to know who owns the account
2-28
Marchetti Machines, Questions
1. How should Frank’s boss, Emily, handle the
problem with Louis Ruggieri?
 What should she do about the account?
 What should she tell Frank if the account is lost
completely?
2. What problems are likely to occur because of
the reorganization?
 Did these issues exist before the reorganization?
 Will these issues be better or worse as a result of the
change in structure?
2-29
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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Sales Management: Shaping Future Sales Leaders

The Sales Function and

 Example: salesperson turns in  Salesperson actively seeks to

 Learn to speak with American accent

 Learn American slang

 Set appropriate metrics

 Write scripts for salespeople

 Match its customer tracking system to the client’s

 Company can exert greater  Firm’s selling costs can be

Mfg Rep  Independent contractor who does not take

 Sells for many manufacturers and take ownership

 Represents either buyer or seller and sometimes

 All offer certification to upgrade professionalism

Inside  Sells at a company’s facilities, either by

Field  Sells at the customer’s location

 Has responsibility for building sales within

Vertical Market  Accounts all operate in the same industry

Retail Sales  Sells to consumers who come into stores

 Sells to organizations in the supply chain,

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