Part One:

Strategic Planning

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 Sales Management: Shaping Future Sales Leaders

Introduction to
Sales Management
Chapter 1

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Learning Objectives
 Define strategy hierarchy and understand how
sales and marketing strategies affect overall
strategy
 Identify different types of selling strategies and
how the selling process varies
 Describe the sales management process and
responsibilities and activities of sales managers

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Managing Sales Force Is Important
 Sales positions are hardest to fill
 Sales consumes >20% of a firm’s revenue

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$$$
 Sales starting salaries are ~20% higher than
other marketing positions
 Many CEOs get their start in sales
 Sales managers earn more than managers in
other areas
 Sales jobs predicted to grow at a faster rate than
other professions

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From Sales Rep to Sales Manager
 “Manager of people”
 Sales success is poor predictor
of success as sales manager
 Most successful sales reps are
eventually pressured to make
the transition to sales mgmt
“This is a decision that must be
carefully analyzed because it’s not
an easy transition to go from being
a player to a coach.”

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What Being a Sales Manager Means

Coaching  Coaching salespeople so they can improve

 Developing strategies and delegating the

Developing responsibility for implementation to others

 Figuring out how to motivate people, some who

Motivating are older than you

 Convincing others that what is right for the sales

Convincing force is right for their departments, too

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Establishing the Parameters of the
Firm’s Strategy: The Mission Statement
 Inspire the members of an organization
 Give purpose to their actions
 Guide their decision-making
 Serve as a standard against which decisions
can be weighed
 Once the mission’s objectives are set, strategy
can be created

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Sample Mission Statements
 Everything we do is inspired by our
enduring mission:
 Coca-Cola  To Refresh the World . . . in body, mind, and spirit
 To Inspire Moments of Optimism . . . through our
brands and our actions
 To Create Value and Make a Difference . . .
everywhere we engage

 The mission of Southwest Airlines is

dedication to the highest quality of
 Southwest Customer Service delivered with a sense of
Airlines warmth, friendliness, individual pride, and
Company Spirit

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The Strategy Hierarchy
 Corporate strategy encompasses plans and
goals for the entire organization
 Address questions such as what markets and
sourcing options company should engage
 Ex: hire sales force vs. use distributors
 Ex: outsource mfg and focus internally on marketing
 Business units create their plans to support
corporate strategy

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The Strategy Hierarchy

Corporate
Strategy

Marketing Strategy

Sales Strategy

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Creating a Marketing Strategy

Markets  What markets do we serve with what products?

 What types of relationships do we form and with

Relationships whom?

 What level of investment will be required, and

Investment how will we locate and allocate the needed
resources?

 What are the detailed objectives and action

Objectives plans?

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What Markets Do We Serve with
What Products?
 Find a sustainable
competitive advantage
 Need expertise,
technology or a patent

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Product-Market Grid

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What Types of Relationships Do We
Form and with Whom?
 Strategic plan considers network of
relationships
 Investors, potential investors, bankers
 Suppliers
 Personnel sources
 Regulatory agencies
 Relationship with customers is most
important
 A service advantage is often a
function of the quality of relationships
 Customers’ lifetime value is worth
more than the average single
purchase

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Customer Relationship Management
(CRM): Key Terms
 CRM: identifying and grouping customers to best
acquire, retain, and grow customers
 Sales and marketing teams are responsible for CRM
 Customer acquisition strategy: plan to obtain
new customers
 Customer retention strategy: plan designed to
keep customers
 Growth strategy: plan designed to increase
sales to the same customers

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 Global Sales Management:
Going Global to Achieve Growth
 QuadRep’s expanding customers wanted local E lle s m e r e I s la n d S e v e r n a y a Z e m ly a
A r c 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 Nc etwi cS i b Oe r i a cn Ies l aa n nd s
G re 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 I s la n d B a ff in I s la n d

support in Singapore
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
U n ite d K in g d o m S w eden E s to n ia R u s s 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 )
Ir e 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. U k ra in e
Is la n d o f N e w fo u n d la n d C zech. K u ril Isla 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 s ta n M o n g o lia

 QuadRep opened office in Singapore

F ra n c e S w itz . S lo v .
C r o . Y u g Ro .o m a n i a
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 ac.
B u lg a ria 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 urk ey
A r m e n ia A z e rb a ija n
T u rk m e n is ta n T a jik is ta n
N . K orea

S . K o re a Japan
N o rth P a c ific 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 r y I s la n d s ( S p .) Jo rda n
K u w a it P a k is ta n N epal
A lg e r ia 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

 Has since followed customers across the globe,

M e x ic o C uba 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 a n m a r (B u rm a )

O m an L aos
U . S.A . Jam .
M a u rita n ia M a li
B e liz e H a iti P u e rto R ic o (U S )
N ig e r E ritr e 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 so
C had V ie tn a m
B a rb a d o s

opening offices in Malaysia, China, Taiwan,

E l S a lv a d o r N ic a ra g u a
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
T rin id a d a n d T o b ag o M a rs h a ll Is 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 ro n e s ia
V e n e z u e la G uyana S ie rra L e o n e E th io p ia
Panam a S u r in a m e C .A . R . B ru nei 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

Thailand, the Philippines, and Mexico

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
S o lo m o n Is la n d s
Congo 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
F r e n c h P o ly n e s ia ( F r.) N e w C a led o n ia
B o ts w a n a
P a ra g u a y 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
U ru g u a y
S o u th P a c if ic 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
Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
 Global Sales Management:
Going Global to Achieve Growth
 Empire Technical Group’s customers moved mfg E lle s m e r e I s la n d S e v e r n a y a Z e m ly a
A r c 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 Nc etwi cS i b Oe r i a cn Ies l aa n nd s
G re 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 I s la n d B a ff in I s la n d

and purchasing to Asia U .S .A .

C anada
Ic e la n d
F a r o e Is . (D e n .)

Ir e la n d
N o rw a y

U n ite d K in g d o m
D en.
S w eden
F in la n d
E s to n ia
L a tv ia
L ith u a n ia
R u s s ia 60°
A le u tia n I s la n d s (U S A )
N e th . B e la r u s
G e r m a n y P o la n d
B e l. U k ra in e
Is la n d o f N e w fo u n d la n d C zech. K u ril Isla n d s

 ETG and several other companies formed a

A u s . H uS nl og v. a k . M o ld o v a K a z a k h s ta 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
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 ac.
B u lg a ria 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 urk ey
A r m e n ia A z e rb a ija n
T u rk m e n is ta n T a jik is ta n
N . K orea

Japan

consortium and included Asian partners where

S . K o re a
N o rth P a c ific 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 r y I s la n d s ( S p .) Jo rda n
K u w a it P a k is ta n N epal
A lg e r ia 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

Asia/Pacific resources were required

M e x ic o C uba 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 a n m a r (B u rm a )

O m an L aos
U . S.A . Jam .
M a u rita n ia M a li
B e liz e H a iti P u e rto R ic o (U S )
N ig e r E ritr e 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 so
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
T rin id a d a n d T o b ag o M a rs h a ll Is 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 ro n e s ia
V e n e z u e la G uyana S ie rra L e o n e E th io p ia
Panam a S u r in a m e C .A . R . B ru nei G u a m (U S A )
M a ld iv e s
L ib e r ia

 Became opportunity to pursue contracts to build

F r e n c h G u ia n a ( F r.) 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
S o lo m o n Is la n d s
Congo T a n z a n ia S e y c h e lle s

entire assemblies as well as just parts

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
F r e n c h P o ly n e s ia ( F r.) N e w C a led o n ia
B o ts w a n a
P a ra g u a y M a u r itiu s In d ia n O c e a n
A u s tra lia

 Morphed into international design and assembly

S w a z ila n d
S o u t h A f r i Lc ae s o t h o
U ru g u a y
S o u th P a c if ic 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

house, controlling manufacturing of complete 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 )
T a s m a n ia

assemblies, turning “a $3 (part) sale to a $103 sale”

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
Source: Charles Cohon, Vice President of Research of Manufacturers’ Representatives Educational
Research Foundation. He can be reached through his Web site, www.cohon.com.
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What Level of Investment Will Be Required, and
How Will We Allocate the Needed Resources?
 Money, human or social capital
 Human capital decisions include:
 Determining number of salespeople
 What skills and experience they must have
 What training they require
 Other decisions include:
 Whether to hire telephone prospectors or to outsource
 Who handles customer service (a sales rep or a
customer service rep)

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What Are the Detailed Objectives and
Action Plans?
 SMART format for establishing objectives

S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based

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Self-Assessment Library
 Go to http://www.prenhall.com/sal/
 Access code came with your book
 Click the following
 Assessments
I. What About Me
C. Motivation Insights
5. What Are My Course Performance Goals?

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Selling Approaches
 Finish sale as quickly and as easily as possible
Transactional  Key to success is making as many calls as
possible to as many people as possible

 Based on the friendship between the salesperson

Affiliative and the individual buyer

 Identify and solve a client’s problems

Problem Solving
 Also called needs-satisfaction selling or
or Consultative problem/solution selling

 Business-to-business (B2B) concept

Enterprise  Based on not only person-to-person relationships
but on company-to-company relationships

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The Selling Approach: 8 Steps

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Prospecting
 Prospecting involves identifying potential
customers for a particular product or service
 A prospect is a MAD buyer
 the Money to spend
 the Authority to buy
 the Desire to buy it

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Pre-Approach
 During Pre-Approach, the salesperson tries to
learn everything he can about the account
 Can take a significant amount of time

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Approach
 Approach: salesperson asks buyer to commit to
a meeting
 Opening statement must get buyer’s attention

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Needs Identification
 Needs identification: salesperson confirms
prospect is MAD (Money, Authority, Desire)
 Comprised of 3 elements

1
Questioning
2
Identification
3
Pre-commitment

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Presentation
 Presentation: salesperson describes product
and how it meets buyer’s needs

Feature Evidence

Benefit Agreement

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Handling Objections
 Objections: reasons a buyer offers to not buy
your product
 Can occur at any time
 Salesperson should find out root
of concern and resolve it

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Closing the Sale
 Close: when salesperson asks buyer for the sale
 Good close
 Reinforce decision to buy
 Confirm implementation schedule
 Thank the buyer
 Ask for referral

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Implementation/Follow-Up
 Follow-Up: After delivery, ensure that the
customer has good experience with product
 Training, service, policies and procedures

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Selling Process vs. Selling Approach
Selling Approach Selling Process

Transactional Prospecting

Affiliative

Consultative
Closing Presenting

Enterprise

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Sales Leaders

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Sales Executive

 Devise sales plan to meet strategic objectives

Plan  Develop general strategies that specify sales
approach

 Determine type of sales force

Organize  Create hiring and training policies and strategies

 Communicate and roll out the plan

Implement  Create the right culture
 Choose a compensation model
 Sales and customer satisfaction
Monitor  Salesperson recruitment, selection, training
 Take corrective action as necessary

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Field Sales Manager
 Plans, organizes, implements, and monitors for
specific sales team
 Salespeople report to Field Sales Manager
 Primary responsibility is sales quota
 Responsible for training and motivating
salespeople

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Sales Executive vs.
Sales Manager Duties
Activity Sales Executive Sales Manager
Set overall sales targets for Set quotas for each
Plan each product salesperson for each product

Decide what type of people to Interview and hire specific

Organize hire for sales positions people for sales positions

Identify each person’s

Determine the compensation motivators and find ways to
Implement plan reward good performance for
each person

Track sales by region; take Observe each salesperson’s

corrective action such as actions in the field and offer
Monitor additional training if sales are suggestions for their
too low improvement

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Ethics in Sales Management:
Maintaining NCR’s Ethical Sales Culture

We … recognize that selling

only works when everything is
right for the customer—when
we deliver value
—Rick Makos
President, NCR-Canada

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Role Play: T&G Supply
 Opportunity 1: T&G Supply
 Provides maintenance, repair, and operations items to
manufacturers
 Janitorial products, hardware products to fix machines,
and other common maintenance products
 Opportunity 2: Columbia Leasing
 Car rental and leasing company
 Your job is to sell corporate contracts

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Role Play (continued): Action Steps
 Break into pairs
 Each person picks 1 company to play sales mgr
 Think about issues that reflect a service-
dominant logic in each situation
 Using other concepts discussed in the chapter,
identify three characteristics that you would want
each new salesperson to have
 Take turns interviewing your partner for a sales
position

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Caselet 1.1:
Killebrew Manufacturing
 Makes plastic patio products
 Widow Francine took over company
 Annual growth rate ~5% for past 20 years
 Trying to grow company
 10% introductory discount
 Makes prices same as biggest competitor
 Killebrew quality is much better
 Problem: Few new accounts are reordering
 Are salespeople too quick to sell price, not quality?

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Caselet 1.1 (continued):
What Would You Do?
 Quality must be demonstrated and sold
 What sales process or approach should Francine
consider?

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Caselet 1.2:
Morton’s Ice House
 Grill and microbrewery
 Owner Sherry Morton hired Trey Denton to sell
franchises
 Trey sold 12 franchises in 1 year
 Corporate goal is to sell 200 franchises in next 2
yrs
 Hired 5 salespeople for Trey to manage

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Caselet 1.2 (continued):
What Would You Do?
 Problems
 Salespeople calling on same prospects
 Other prospects not being called on
 Sold only 22 franchises in 6 months
 2 salespeople quit
 10 franchises want out of contracts
 What should Sherry do?

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