Students Arriving Late

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Students Arriving Late

• 90 minute test
• Clock starts when you get here
• Finish in my office if needed

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BA 491 Personal Selling

• Test 1 Review

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Students with Disabilities

• Accommodations are Available for Students with
  Disabilities
• Please See or Contact Me

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Grading

• 6 Quizzes (50, Drop Low Score) 250
• 2 Five-Paragraph Essays (125 Each) 250
• 2 Tests (125 Points Each) 250
• Final (250 Points, Cumulative) 250
• Total Points 1000

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Grading - Tests

• 125 Points
• 50 Multiple Choice Questions
• 2 1/2 points each (50 2.5 125)
• 90 Minutes (average 45 minutes)

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Key Study Suggestions

• Focus on Most Important Topics
• Analyze Questions and Use of Class Time
• Be Familiar with Definitions and Language
• Understand Concepts

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Focus on Most Important Topics

• Only a Few Topics
• Maximum of 12-13 Multiple Choice per Chapter
• Predict What These Questions Will Cover
• Focus, Ask Yourself What Kind of Questions I am
  Likely to Ask about These Topics

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Analyze Questions and Use of Class Time

• What Do the Chapter Questions Address?
• How Much Class and Assignment Time Did We Spend
  on These?
• Where is There Overlap Between These and Topics?

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Be Familiar with Definitions and Language

• Can You Quickly Define These?
• See Class Notes For These
• A Run-through of These is a Good Test of Your
  Overall Comprehension

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Understand Concepts

• Look at the Big Picture
• Examine How the Concepts are Related to Each
  Other
• Be Able to Work examples Through a Concept

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CHAPTER 1

• Selling ASAP

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Selling ASAP

• Selling is being viewed today as an Art and a
  Science, with an emphasis on practicing Agility
  to enhance Performance

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Agility

• An agile salesperson is
• One who is quick to see opportunities
• Clever in shortening sales cycles
• Able to meet customers needs faster
• Capable of creating flexible and customer-focused
  values
• Quick at learning and unlearning

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Non-manipulative Selling

• Todays skillful salespeople practice
  non-manipulative selling
• Only after salespeople and customers reach mutual
  agreement about value does a sale occur

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Building Relationships

• Satisfied customers repeat their purchases
  because they are satisfied with the value of the
  relationship
• Taking care of existing customers reduces sales
  cycle time and increases efficiency

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Thriving in a HighlyCompetitive Selling
Environment

• Salespeople must do their homework before meeting
  with prospects
• Study the market
• Study the prospects needs
• Put the customer first
• Engage in continuous learning and professional
  development

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Understanding the Customer

• To motivate the prospect to buy a product or
  service salespeople must
• Understand how their prospects mind works
• Be able to uncover the prospects hidden needs or
  wants

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Components of ASAP

• Understanding the Sales Environment
• Implementing the Sales Process
• Mastering Sales Agility

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Figure 1.1Timely and Timeless Components of
Selling ASAP
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Figure 1.2Taking a Lifetime View of Customers
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Steps of the Sales Process

• Preparation
• Attention
• Examination
• Prescription
• Conviction Motivation
• Completion and Partnering

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B2B and B2C

• Business-to-Business (B2B) Selling
• The salesperson represents a company and sells to
  other companies
• Business-to-Consumer (B2C) Selling
• The salesperson sells directly to the consumer

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Classifications

• Retail selling
• Trade selling
• Missionary selling
• Technical selling

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Success in Sales

• Successful salespeople possess the following
• Motivation to succeed
• Empathy
• Ego-drive
• Service motivation
• Conscientiousness
• Ego-strength

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CRMCustomer Relationship Management

• CRM is a strategy and process that utilizes
  technology
• To identify, attract, and retain customers
• To leverage the sales organizations
  relationships with its customers
• The agile salesperson uses CRM technology to
  assist him in managing customer interactions and
  transactions

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Questions

• Key Elements of Quality Professional Selling?
• Everyone is a SalespersonAgree or disagree, Why?
• Likes/Dislikes about Salespeople?

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Questions

• Consumers are Rational and Sovereign
  AssumptionsComment, How Would this Affect
  Salespeople Doing their Jobs?
• Describe Types of Selling Presented in this
  Chapter, How are they Different? How are they
  Similar?

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CHAPTER 2

• The Changing World of Sales

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The Changing World of Sales

• Sales people today must be
• Flexible
• Agile
• Learning-oriented

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Figure 2.1A Framework for Change in the Sales
Force
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Key Change Forces

• Globalization
• Intensified competition
• Inflated customer expectations
• Technological innovation

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Intensified Competition

• Competitive advantage
• Sustainable competitive advantage
• Real competitive advantage

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Knowledge Updating Habitsof Successful
Salespeople

• Finding the right customers
• Listening to customers customers
• Cultivating resources in their own organizations
• Keeping an eye on bottom lines
• Anticipating problems
• Adopting a long-term view
• Reviewing each sales call after-the-fact

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Figure 2.2The Salesperson as a Knowledge
ManagerExpanding the Funnel of Value
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Table 2.1The Role of the Salespersonas
Knowledge Manager
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Five KeyOrganizational Characteristics

• Organizational culture/climate
• Organizational structure
• Market orientation
• Leadership support
• Learning

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Organizational Culture/Climate

• Culture is the deeply rooted set of values and
  beliefs that provide norms for behavior in a
  sales organization
• Climate refers to how salespeople are managed and
  how effectively they can work with colleagues on
  day-to-day sales activities

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Market Orientation

• Market-oriented firms focus on the continuous
  creation of superior customer value

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Learning

• Learning involves the identification of gaps in
  knowledge, which can shed light on how planned
  and actual performance differs

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Salespeople Respond To Change

• Many salespeople become complacent
• Many salespeople engage in some ineffective
  (obsolete) activities

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CHAPTER 3

• Selling Ethically

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Moral Standards

• Ethics are moral standards by which actions and
  situations can be judged
• Honesty
• Fairness

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What is right? What is wrong?

• Values congruity is a level of agreement among
  different people about the values that are
  important
• Salespeople interact with many different people
• Reaching agreement on what is ethical can be a
  challenging task

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Ethical Conflict

• Each party in a sales transaction brings a set of
  expectations
• Which set of interests does the salesperson
  choose to satisfycorporate interests or the
  customers interest?
• How do the values of the salesperson affect these
  decisions?
• What are the consequences of the various sales
  alternatives available to the salesperson?

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Sources of Conflict

• Conflict may exist between salespeople and others
  within the sales organizational relationship
• Norms represent standards of behavior that groups
  expect of their members (Refer to Table 3.1)
• Moral types are classes of people who are grouped
  according to the values that they hold

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Classification of Moral Types
Refer to Table 3.2--Classification of Moral Types
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Three Qualities forEthical Decision-making

• Ability to recognize ethical issues and think
  through consequences
• Self confidence to seek others points of view
• Willingness to make ethical decisions when
  theres no obvious solution

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Figure 3.1Ethical Decision Making Framework
Characteristics of the Decision-Maker
Decision
Ethical Situation
Outcomes
Significant Influences
Click on each component
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Characteristics ofthe Decision Maker

• Achievement motivation
• Need for affiliation
• Ego strength
• Locus of control
• Knowledge
• Experience
• Risk taking
• Machiavellianism

Back to Framework
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The Ethical Situation

• Opportunity
• Ethical decision history
• Moral intensity of the situation
• Selective perception

Back to Framework
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Other Significant Influenceson The Salesperson

• The Organization
• Work
• The Law
• Economics
• Professionalism
• Technology

Back to Significant Influences
Back to Framework
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Ethical ProblemsFaced By Salespeople

• Bribery
• Fairness
• Honesty
• Price Deception
• Product Deception

• Personnel Decisions
• Confidentiality
• Advertising Deception
• Data Manipulation
• Purch. Decisions

Refer to Table 3.4-- Ethical Issues Faced by
Salespeople
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CRM and Privacy Issues

• Five recognized fair information practices
  pertinent to privacy
• Notice
• Choice consent
• Access
• Security
• Enforcement

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Codes of Ethics

• Corporate benefits
• Allow salespeople to identify what their firm
  recognizes as acceptable business practices
• Help salespeople to inform others that they
  intend to conduct business in an ethical way
• Can be an effective internal control of behavior
• Generate greater employee drive/effectiveness
• Attract high caliber people more easily
• Help salespeople avoid ethical confusion

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Discussion Questions

• How Do Conflicts of Interest Relate to Ethical
  Decision Making?
• Nature of Ethical Problems? Can they Ever Be
  Resolved? How?
• Salespeople Asking for Info on CompetitorsEthical
  Issues, and How Can they Be managed?

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Discussion Questions

• Entertaining Customers is BriberyAgree or
  Disagree, Why?
• Ethical Behavior is Ultimately the Salespersons
  responsibilityHow Would You Respond to this
  Statement?

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CHAPTER 4

• Servicing the Customer
• to Build Lifetime Value

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Relationship selling isa process that occurs
over time
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How Salespeople UseCustomer Information

• To improve customer strategies
• To grow, retain, or win customers
• To maximize customer lifetime value (CLV)

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Lifetime Value Approach

• When salespeople use the information they have
  derived and accessed from every contact the
  customer has with the sales organization, they
  have the opportunity to improve their
  relationships with customers and successfully
  take a lifetime value approach

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Customer Relationship Management (CRM)

• Key aspects of a CRM program
• Knowing how much customers are worth
• Knowing where customers are in their life cycles
• Knowing customers' total profit potential

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Embracing CLV Principles

• When customers are viewed as assets, CLV concepts
  enable salespeople to estimate the monetary value
  of customers
• The foundation for profitability and sales
  sustainability lies in the retention of customers

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A Shift in Focus

• From acquisition to retention
• It costs less to serve loyal customers than to
  acquire and serve new ones
• The profitability of customers is related to the
  length of the relationship with those customers
• A daily commitment from both the salesperson and
  the sales organization is required to retain
  customers

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Customer Lifetime Value (CLV)

• Customer lifetime value is the net profit earned
  from sales to a given customer during the time
  that customer purchases from the sales
  organization
• CLV, as a sales focus, is about how the customer
  is treated over time
• Lifetime value is a measure of customer loyalty

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Knowing The Customer Lifetime Value

• Knowing the CLV helps salespeople
• Determine how much to spend acquiring new
  customers
• Determine the level of customer service needed
• Determine customer retention focus
• Shift focus from one-time sales to closer
  relationships
• Retain more customers than their counterparts
• Keep their customers for longer periods of time
• Develop more profitable customers
• Gain referrals from solid customers

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Figure 4.3Building Blocks of Lifetime Customers
Customer Loyalty
Customer Delight Over Time
Knowledge of Customer Life Cycles
A Relationship Focus
Click on each component
(Schlesinger, Sasser Heskit 1997)
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Three Main Goals ofThe Customer Life Cycle
Approach

• Attain new customers and increase the number of
  relationships
• Increase the profitability of those relationships
• Increase the duration of profitable relationships

Creating a Life Cycle
Building Blocks
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Customer Delight

• Customer delight occurs when a salesperson goes
  above and beyond customers expectations
• Tangible and intangible benefits (e.g.,
  extraordinary service) beyond the functional
  features of a product

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ConceptualizingCustomer Lifetime Value

• CLV includes the total financial contribution of
  a customer over the lifetime of that customers
  relationship with a sales company
• Calculating a customers lifetime value requires
• The cost of acquiring the customer
• Stream of revenues from customer
• Computations of the recurring costs of delivering
  service to that customer

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Figure 4.4CLV (The Approach)
Life Span of Customer
Recurring Costs
Cumulative Margin
Lifetime Value
Net Margin
Acquisition Cost
Recurring Revenues
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Understanding theLifetime Part of CLV

• Comparing ROI to CLV
• Return on Investment (ROI) represents a way to
  measure the immediate result of any sales effort
• CLV uses relationship capital to assess the
  long-term value of the customer

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Understanding theValue Part of CLV

• As salespeople gain customer understanding, they
  create value by
• Acquiring new customers
• Increasing revenues
• Retaining customers
• Reducing recurring costs
• Reducing acquisition costs

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Using CLV Concepts

• To determine customer profitability, salespeople
  can use CLV to segment customers into groups
  based on
• Revenues generated
• Including frequency of purchase and behaviors
• Costs incurred
• Products purchased, channels used, service levels

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Markup and Profit

• Markup is the actual dollar amount added to the
  products cost to determine its selling price
• Gross profit is the money available to cover the
  costs of marketing the product, operating the
  business, and profit
• Net profit is the money remaining after the costs
  of marketing and operating the business are paid

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Cost Benefit Analysis

• A cost-benefit analysis is a list of the costs to
  the buyer and the savings the buyer can expect
  from the investment

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Payback Period

• Payback period is the length of time it takes for
  the investment cash outflow to be returned in the
  form of cash inflows or savings

Payback period Investment Savings (or
profits) per year
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Customer Defectionsand Retention Programs

• Lost customers are called customer defections
• Salespeople should have a program of segmenting
  lost customers by their reasons for defection
• A customer retention program should be a core
  activity of sales organizations

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Customer Defections

• Five reasons why customers defect
• Competitors attract some customers
• Some customers are bought
• Some customers move
• Customers unintentionally pushed away
• Customers intentionally pushed away

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The Relevance of CustomerLifetime Value To
Salespeople

• Lifetime value demonstrates that it costs less to
  serve loyal customers than to acquire new ones
• Lifetime value favors up-front preparation and
  long-term profitable relationships
• Information that helps salespeople attract and
  retain customers is valuable

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Discussion Questions

• How Can the 80-20 Rule Can Help Salespeople
  Segment Customers by Profitability?
• How Does Lifetime Value Relate to Forming
  Customer Relationships?
• Relationship between Customer Loyalty and
  Delight? Four Aspects of Loyalty, Which is Most
  Powerful, Why, Which Has Greatest Customer
  Delight Potential?

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Discussion Questions

• Calculating Lifetime Value of Customers, How is
  this Different from ROI?
• How Can CLV Be Used to Determine Sales Attention
  and Effort?