Ed Jennings

www.edjennings.com

Chapter 13, Sales and Sales Management

Sales and Sales Management of a startup corporation in the USA

Senao is a Taiwanese based corporation that desired to sell in the United States.

The goal was to grow revenue by expanding into the USA and then go public in Taiwan.

I was hired as the General Manager and first American employee. The USA subsidiary grew from $0 to $5M in the first 18 months of selling.

This is the story and how it relates to chapter 13

Domestic vs. International

The interview process

The challenge

The first question I always ask:

“Who is your customer?”

Why marketing and sales need each other?

90 days

Marketing identifies the product requirements, including sales / stakeholder requirements; identifies the best customer prospects through segmentation; establishes pricing; provides sales collateral; and establishes the product positioning.

Sales contacts the customer; is responsible for the customer relationship management (CRM); represents the face of the company to the customer; represents the voice of the customer ; and are a primary source of revenue to the company.

Sources of cost-effective research

Understand what you want to know

Use your social network to gather secondary research that is already completed or contact people who work in that industry.

Contact professional organizations such as the National Restaurant Association, Mobile Marketing Association, Forrester Research, etc…

Use peer-reviewed journals of existing research. No, Wikipedia in not a peer reviewed journal.

Fill in what you do not know with primary research. This process will save your company a lot of money

Porter’s 5 competitive forces

The second question I ask is:

“Who is our competition?”

After we understand who is the customer and who is our competition, the next question is:

“What is our positioning and our value proposition?”

Branding, Positioning, trademarks and Public Relations

EnGenius is the longest range cordless phone & two-way radio phone in North America

EnGenius is number one in the category of “Industrial Cordless Phones ®”

Winner of the Consumer Electronics Show Innovation Award

Targeted to small businesses who require long range cordless phones and don’t require the expense of cellular or two-way radios

CNN, Forbes.com, Fortune Magazine, Time Magazine, New York Times, Time Digital, Wall Street Journal, Tech TV. Gave a live interview with “Into Tomorrow” Radio Broadcast across 77 cities.

Transition to selling

Additional questions are:

“How large is the market?”

“What level of experience do we need in our salespeople?”

“How do we structure the sales organization, the compensation and manage the sales team?”

“Where do our customers expect to find our products?”

What are the options?

SALES ORGANIZATION OPTIONS

1. ORGANIZE GEOGRAPHICALLY USING CITIES, STATES, COUNTRIES, ZIP CODES, BY ACCOUNT

2. ORGANIZE BY PRODUCT AND DEVELOP SPECIALISTS FOR EACH PRODUCT CATEGORY

3. USE SALES TEAMS TO DEVELOP AND KEEP NEW BUSINESS.

13-10

DO YOU OUTSOURCE THE SALES FORCE?

YES NO• Establish relationships• Salary and selling

expenses can be limited• Little/no up-front investment

• Loss of control over sales presentation

• Products may not be aselling priority withrepresentative

TO MAKE IT WORK:

INVEST IN TRAINING ANDMERCHANDISING MATERIALS

13-11

Exhibit 13-8

ALLOCATION GRID FOR SALES RESOURCES

Relatively fewerresources shouldbe allocated here

LowMaintain sufficientresources to continueto reap the salespotential and strongposition

High

Direct more salesresources here

Assign toalternative methodof communicating,such astelemarketing

Weak

Strong

MARKET LIFETIME VALUE

RELATIVEPOSITION

Sales OrganizationGM – selling to Distributors

Outside salesperson 1 – Retail

Outside salesperson 2 – Retail

(Two) Inside Salespeople sold to dealers and divided the USA into East and West.

(Two) Customer service people answered questions and could also sell accessories.

Marketing Manager sold to catalog companies

House Account vs Key Account vs Strategic AccountA house account may have one person or a team assigned to the account. The account does not pay commission.

A key account is a large account that is assigned to one salesperson. Typically, there are multiple locations for the account.

A strategic account is a key account but also important as an account that defines your product in that market segment.

Team vs Matrix vs Multilevel SellingFor a strategic account, you are likely to see all three of these techniques used simultaneously.

Team – group sell

Matrix – Leverage other resources

Multilevel – Selling at many levels

Dialing for DollarsConsultative selling – Understand the situation and provide expertise resulting in a custom, semi-custom or application specific solution

Needs satisfaction selling – Satisfying buyer needs (features and benefits)

Script-based selling – Similar customer needs

Strategic partner selling – Developing products with your customer

Strange but trueHave you ever heard of a sales force with unlisted phone numbers?

Have you ever heard of a sales force that is unionized?

Declaring a large account a “house account” after it has been sold?

The president of a company who is on a phone call with a potential customer. The customer says they will buy and the president says no. We lost the sale.

Sales CompensationSalary

Bonus

Commission Rate

Commission Base (unit sales, dollar sales or gross margin)

Combination Plan

MBO’s (management by objectives)

Balanced Scorecard

In general, non-advantageous sales compensation plans

Straight commission selling

Draw – a loan against straight commission selling

Cap – a maximum payout on sales commission

Sales Process

• Do your homework! Preparation for the call (pre-qualification)

• Introduction (interest generating statement)

• Get Your Customer Talking! (Fact Finding - Needs Analysis). This could be a survey.

• Demonstrating the Value Proposition. Follow with Features and Benefits

• Recommendations

• Overcoming Objections

• Close the sale

• Stay Connected with your customers

What products or services can I sell?

Full-line selling:- Size of the product line and support-Market application

Upgrade selling or up-selling:-What is the value proposition-Used extensively in high-tech-What is the cost to switch?

Cross Selling:-Selling unrelated products or services. May be sold by the same salesperson or may be sold by a different salesperson. Expertise (auditing vs taxes)

Preferred supplier status

Partnership

Incoming inspection and quality

Payment terms

On-time delivery (inventory stored at the customer or delivered every 2 hours)

Special packaging

Bar coding

How much can a salesperson do?Workload:-Meetings-Training-Customer Service-Cold calls-Repeat calls

Activity Quota:-Contact every customer by a certain date-Make a minimum of xx calls per day

Conversion Ratio:-Calls to reach the decision maker-Number of conversations to proposals-Number of proposals to new sales-Repeat business from new sale-Lifetime value of a new sale

QuotaPerformance Quota:

-Sales performance over a specified period of time (units, dollars, margin)

-Can be based on specific product categories - compensation algorithm

-How to handle returns or cancellations

-Intel – Japan was given an overall profit target for the head of sales

-What is fair and what motivates the sales force to meet the corporate objectives?

-Make it fun

The End

• Successful completion of IPO by starting up on time and executing the North American plan within budget

• Succeeded in placing product with 17 key distributors, 5 top 100 retailers, 1,300 value-added resellers and the top 5 targeted catalogs

• Personally carried and exceeded a $250,000 monthly sales quota while performing the responsibilities of the General Manager

• Segmented unique niche within the small and medium sized business market segment and defined requirements for a new class of cordless phones known as “Industrial Cordless,” which is the Longest Range Cordless Phone and 2-Way Radio System in North America

• Won Innovations and Workstyle awards at the Consumer Electronics Show 1999, 2000, 2001

• Generated 1 billion EnGenius impressions - Press includes: CNN Television, Good Day LA Television, Forbes.com, Fortune, Wall Street Journal, Time Magazine, Farm Industry News, Into Tomorrow radio interview carried in 77 cities

• Defined the user interface resulting in a 95% customer satisfaction survey

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