Lecture Dalrymple''s sales management: Concepts and cases – Chapter 3: Sales opportunity management

After studying this chapter, you should be able to: Describe effective steps for generating new accounts, explain how to determine the minimum opportunity a salesperson should pursue, describe four methods for setting opportunity priorities, explain why emphasis is shifting from sales volume to profit flow, tell how salespeople can manage their time more efficiently.

SALES FORCE ACTIVITIES

Chapter 3:

Sales Opportunity  

Management

Generating

New 

Accounts

Managing Existing Accounts

Personal Time Management

Sales  Versus Profits

1. Direct Inquiry

Advertising Direct Mail Trade publications Trade shows

2. Directories – Thomas Register

3. Referrals

4. Cold Canvassing

by each salesperson

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

Compensation

Salary, commissions, and bonus $69,035

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

Direct Selling Expenses

Samples, promotional material 1,750

Calls Per Year

Less:

Total Calls per Year (205 X 3) 615 Calls

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

Table 3­2     Sales Force Costs Across Selected Industries

Industry Sales Force Costs as  

A Percentage of Sales

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

Banking  0.9%

Business services 10.5 Chemicals 3.4 Communications 9.9

Construction 7.1 Electronic components 4.9 Electronics 12.6 Fabricated metals 7.2 Food products 2.7 Instruments 14.8 Machinery 11.3 Manufacturing 6.6

Office equipment 2.4 Paper/allied products 8.2 Pharmaceuticals 5.6 Printing/publishing 22.2 Rubber/plastics 3.6 Wholesale (consumer) 11.2

Key to Productivity

Breakeven Sales Volume

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

Sales Calls as a % of Sales

Traditional Model Internet Model

100,000

Catalog Drops

100,000

Catalog Drops

10,000

Calls

10,000

Calls

2,000 Orders

2,000

Orders

100,000 Website Visits

100,000 Website Visits

5,000 Calls

5,000 Calls

500 E­Orders

500 E­Orders Orders 1,750 Orders 1,750

No. of Total Sales Total Total calls Sales ($) Account Accts Accts (000) Sales Per Classif Per Call Classification    (1)    (2)    (3)   (4)       (5)      (6)

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

B    28   20     280   20      140        2,000

C    91   65     210   15      455       462

Totals   140 100% $1,400 100%      700       $2,000

Core  Accounts

Accounts are very attractive.

Invest heavily in selling

resources.

Core  Accounts

Accounts are very attractive.

Invest heavily in selling

resources.

Drag  Accounts

Accounts are moderately

attractive.

Invest enough to maintain current position.

Drag  Accounts

Accounts are moderately

attractive.

Invest enough to maintain current position.

Problem Accounts

Accounts are very unattractive.

Minimal investment

of selling resources.

Problem Accounts

Accounts are very unattractive.

Minimal investment

of selling resources.

Growth Accounts

Accounts are potentially

attractive.

May want to invest

in heavily

Growth Accounts

Accounts are potentially

attractive.

May want to invest

in heavily

Competitive Position  Strong  Weak

cc ou

nt  O

pp

or tu

ni ty High

Low

Figure 3­1: Portfolio Model 

Number of Sales Calls Per Quarter

$20,000

$10,000

  1       2       3       4       5       6     

Figure 3­2: Number of Sales Calls Response Function

Qualified

Best few

50% closure probability

75% closure probability

90% closure probability

21

24 20 19 17

16 14

9 12

10

11

8

7 5

6

3

1 2

4

Figure 3­3:  The Sales Funnel

29%

16%

Selling Face­to­Face

Service  Calls

Administrative

Tasks

Waiting and Travel

Selling over the phone

Personal  Growth

Personal  Growth

Time Wasters

Time Wasters Recreation

Importance    High      Low High

Low

rg

en cy

Figure 3­5: Time Management