Part IIPart II

SALES FORCE SALES FORCE ACTIVITIESACTIVITIES

Part IIPart II

SALES FORCE SALES FORCE ACTIVITIESACTIVITIES

Chapter 3:Chapter 3:

Sales Opportunity Sales Opportunity ManagementManagement

Sales Opportunity Management

GeneratingNew

Accounts

ManagingExistingAccounts

PersonalTime

Management

Sales VersusProfits

Developing a Prospect List

1. Direct Inquiry1. Direct InquiryAdvertisingAdvertising

Direct MailDirect Mail

Trade publicationsTrade publications

Trade showsTrade shows

2. Directories – Thomas 2. Directories – Thomas RegisterRegister

3. Referrals3. Referrals

4. Cold Canvassing4. Cold Canvassing

Qualifying Prospects

1.1. Needs for your products/servicesNeeds for your products/services

2. 2. Authority to make purchaseAuthority to make purchase

3. 3. Credit rating & ability to payCredit rating & ability to pay

4. 4. Rating scale applied to Rating scale applied to

characteristics by each characteristics by each

salespersonsalesperson

Table 3-1 Computing the Cost per Call for an Industrial Products Salesperson

CompensationCompensation

Salary, commissions, and bonus $69,035

Fringe benefits (hospital, life insurance, social security) $10,985 $80,020

Direct Selling ExpensesDirect Selling Expenses

Automobile 8,000

Lodging and meals 6,250

Entertainment 3,250

Communications 4,500

Samples, promotional material 1,750

Miscellaneous 1,700 25,450

Total Direct Expenses $105,470

Calls Per YearCalls Per Year

Total available days 260 days

Less:

Vacation 10 days

Holidays 10 days

Sickness 5 days

Meetings 18 days

Training 12 days 55 days

Net Selling Days 205 days

Average calls per day 3 calls

Total Calls per Year (205 X 3) 615 Calls

Average Cost per Call ($105,470/615)Average Cost per Call ($105,470/615) $171.50

Table 3-2 Sales Force Costs Across Selected Industries

Industry Sales Force Costs as A Percentage of Sales

------------------------------------------------------------------------------------------------Banking 0.9%Business services 10.5Chemicals 3.4Communications 9.9Construction 7.1Electronic components 4.9Electronics 12.6Fabricated metals 7.2Food products 2.7Instruments 14.8Machinery 11.3Manufacturing 6.6Office equipment 2.4Paper/allied products 8.2Pharmaceuticals 5.6Printing/publishing 22.2Rubber/plastics 3.6Wholesale (consumer) 11.2

Sales Opportunity ManagementKey to Productivity

Breakeven Sales VolumeBreakeven Sales Volume

(Cost per Call) x (Number of Calls to Close)

Sales Calls as a % of Sales

How Dell Achieves Selling Efficiencies

Traditional ModelTraditional Model Internet ModelInternet Model

100,000Catalog Drops

100,000Catalog Drops

10,000Calls

10,000Calls

2,000Orders

2,000Orders

100,000Website Visits

100,000Website Visits

5,000Calls

5,000Calls

500E-Orders

500E-Orders

1,750Orders

1,750Orders

Table 3-3: ABC Account Classification

No. ofNo. of TotalTotal SalesSales TotalTotal Total callsTotal calls Sales ($)Sales ($)

AccountAccount Accts.Accts. Accts.Accts. (000)(000) SalesSales Per Classif.Per Classif. Per CallPer Call

ClassificationClassification (1) (1) (2) (2) (3) (3) (4) (4) (5) (5) (6) (6)

AA 21 21 15% 15% $910 $910 65% 65% 105 105 $8,667 $8,667

BB 28 28 20 20 280 280 20 20 140 140 2,000 2,000

CC 9191 6565 210210 1515 455455 462462

TotalsTotals 140 140 100%100% $1,400$1,400100%100% 700 700 $2,000 $2,000

Core Accounts

Accounts are veryattractive.

Invest heavily in sellingresources.

Core Accounts

Accounts are veryattractive.

Invest heavily in sellingresources.

Drag Accounts

Accounts are moderatelyattractive.

Invest enough to maintaincurrent position.

Drag Accounts

Accounts are moderatelyattractive.

Invest enough to maintaincurrent position.

ProblemAccounts

Accounts are veryunattractive.

Minimal investmentof selling resources.

ProblemAccounts

Accounts are veryunattractive.

Minimal investmentof selling resources.

GrowthAccounts

Accounts are potentiallyattractive.

May want to investin heavily

GrowthAccounts

Accounts are potentiallyattractive.

May want to investin heavily

Competitive Position

Strong Weak

Acc

ount

Opp

ortu

nity

High

Low

Figure 3-1: Portfolio Model

Dol

lar

Sal

es p

er Q

uart

er

Number of Sales Calls Per Quarter

$20,000

$10,000

1 2 3 4 5 6

Figure 3-2: Number of Sales Calls Response Function

Unqualified

Qualified

Best few

50% closure probability

75% closure probability

90% closure probability

2113 15 2322 18

24 2019 17

16 14

9 12

1011

8

7 5

6

3

1 2

4

Figure 3-3: The Sales Funnel

13%

29%16%

17%25%

SellingFace-to-Face

Service Calls

AdministrativeTasks

Waiting andTravel

Figure 3-4: How Salespeople Spend Their Time

Selling overthe phone

EmergenciesEmergencies

Personal Growth

Personal Growth

TimeWastersTime

Wasters

RecreationRecreation

Importance High Low

High

LowUrg

ency

Figure 3-5: Time Management