Strategic Sales Management Ppt 2529

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STRATEGIC SALES MANAGEMENT

The world of selling must

accommodate a dramatically

changed world of buying

Territory Analysis

Why Do It?– To obtain thorough coverage of the market– To establish territory responsibilities– To evaluate Performance– To improve customer relations– To reduce cost/increase profitability– To allow better salesforce/customer

matching

Target Account Strategy

Undifferentiated Account Approach

TARGETACCOUNTS

SALESSTRATEGY

Target Account Strategy

Account Segmentation Approach– Key Account– Profitability– Size– Potential

SALESSTRATEGY

Account1

Account2

Account3

Account4

Expected Value Analysis

Determination of product potential on an account by account basis.

Estimates of Market Share and Probability are based upon the judgement of the salesperson and– Amount of past sales– Degree and kind of competition– Product,Price, and Service commitments– Economic conditions– Existing account relationships

Expected Value of an Account

EV= PPV x (SES x PES)

– EV=Expected value– PPV= Potential Product Volume– SES= Salesperson Estimated Share– PES= Probability of getting expected share

Account SES PES ExpectedShare-%

A 30% .2 6%

B 40% .4 16%

C 50% .3 15%

D 60% .1 6%

43%

Expected Value

EV=PPV X Expected Share

– $60,000 X .43 = $25,800

Sales Force Quality Impacts Financial Performance

Value of Quality Sales Force Increases as:– Customer pressure intensify– Sources of Product differentiation dry up– Supply Chain Functions become more

integrated

Sales Strategy is most important when

Product is differentiated

Product is New Product is late

in life cycle Product is

undifferentiated

Amount of Product DifferentiationProduct Life Cycle

High Low

High

Low

From Product Power to Customer Power

Over time sources of of MFG. Profitability change – Early one profits are proportional to

account size Consolidation in most customer

industries has led to much more concentration at the top of the account triangle

Shift in customer buying power requires shift in Sales Strategy

Number of Accounts

Cost Pressure

Price Pressure

Major Accounts

MiddleAccounts

Mini-Accounts

Key Determinants of Account Profitability

Account Retention Account Dominance Realized Price Selling and Service Cost Account Selection

Something Old…Something New

Get New Accounts Get the Order Pressure Firm to cut

Price Give Service to Get

Sales Manage all accounts

the same way Sell to Anyone

Retain Existing Accounts Become the Preferred

Supplier Price for Profit Manage for Profitability Manage each account for

maximum long term profitability

Concentrate on High Profit Potential accounts

Role of the Salesperson

Which Accounts? Which Products and Services? What Specific Activities are to be

accomplished? What are the key interactions with other

parts of the company?

Make the Sales Task Clear

ProductA

ProductB

ProductC

AccountType 1

Task A1 Task B1 Task C1

AccountType 2

Task B2

AccountType 3

Task C3

Sales Force Architecture

How many different sales forces should we have?

How should the sales force be structured?

What degree of specialization is needed?

What are the sales force resource requirements?

Sales Management must function as a system

Measurement Systems

Skill Creation Systems

Motivation Systems

Management Systems

Rethinking The Role of the Sales Force

Return on Investment Sales Process Control Integrated Customer Management Technology Assisted Selling Performance Management

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Direct versus Indirect Salesforce

Internal costexceeds market cost

Marketcostexceedsinternal cost

Governancecost difference

Total cost differenceProduction/distribution and governance

Production/distribution cost difference

Market preferred Integration preferred

Asset specificity

Critical point

SituationAnalysis

Economiesof addingValue

GovernanceCost ofChannel Managment

Delegationof ChannelFunctions

Pricing

Communicate

Service

Distribution

Customize

Collecting

Research

* Understanding Customer Need Requirements * Establishing Channel Objectives* Direct versus Indirect Channel Alternatives* Economic Consequences* Evaluating Channel Performance

KEY CHANNEL MANAGERIAL ISSUES

Multiple Customer Bases Create Complex Interactions

WHO IS THE CUSTOMER?

SUPPLIER

DISTRIBUTIONCHANNEL A

DISTRIBUTION CHANNEL B

INDIVIDUALCUSTOMER

INDUSTRIALCUSTOMER

Growth in Multi-channel Systems

Selling Costs Just in Time Inventory Management Supply Chain Systems Information Technology

Channels Members add Value to the Exchange Process

SuppliersLocal market KnowledgeLocal inventory and distribution outletsExchange efficienciesFinancial Services

CustomersExpert adviceCreditAccessibilityWarranty/ Guarantees

Control vs. Financial Resources in Channel Design

Financial Suppliers

Resources Control

More Financial ResourcesRequired and more control

Less Financial ResourcesRequired and more control

Few

Many

High

LOW

Distributors Economic Role

Manufacturer Distributor Customer

Transferred Business

Costs

Transferred Business

Costs

$ Inventory$ Order Handling$ Selling$Credit

$ Inventory$Freight$Storage$Order Handling

Distribution Strategies

Intensive DistributionNewspapers,Books, magazinesPackaged goodsAuto parts

Selective DistributionConsumer DurablesSevices

Exclusive DistributionRolls royce Dealers

Manufacturers Representatives

Independent firmBears all selling expensesSells on commission basisDoes not carry competing linesReplaces or supplements the direct sales forceDoes not take title to the goods

Distributors Beliefs about Factors

High cost of carrying inventoryInefficient marketing CostsIncreasing distribution costsPressure to increase volume and market shareIncreased distributor services.Lower operating costs of purchasing.

Internal costexceeds market cost

Marketcostexceedsinternal cost

Governancecost difference

Total cost differenceProduction/distribution and governance

Production/distribution cost difference

Market preferred Integration preferred

Asset specificity

Critical point