Transcript Sales Force Management - Haas School of Business

Business to Business Selling
and the Buy-Class Framework
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Today we will:
Wrap-up BMW’s and last class
Talk about how personal selling fits in
with overall marketing strategy
Discuss the organizational buying process
and a theoretical framework for thinking
about it.
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Reviewing from last class: the
personal selling process
Prospecting
Classifying Leads
Pre-call planning
Approach/relating
Needs discovery
Presentation
Handling Objections
Closing
Follow-up and servicing
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How salespeople spend their
time
Face-to-Face Selling
33%
Phone Selling
Account
Service
Coordination
16%
16%
Administration
Travel
Internal
Meetings
10%
20%
5%
SOURCE:
William A. O’Connell and William Keenan, Jr., “The Shape of Things to Come,”
Sales & Marketing Management, January 1990, pp. 36-41.
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Let’s step back and talk about
how personal selling fits in with
overall strategy
 Miles & Snow Strategy Typology
Propsector
Defender
Analyzer
 Porter Typology
Low Cost
Differentiation
Niche
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Marketing Strategy Characteristics and the
Relative Importance of Personal Selling as a
Promotional Tool
Advertising
Relatively Important
Large
Low
Small
Little
Low
Pull
Pre-set
Personal Selling
Relatively Important
Number and Dispersion of Customers
Buyers’ Information Needs
Size and Importance of Purchase
Postpurchase Service Required
Product Complexity
Distribution Strategy
Pricing Policy
Small
High
Large
Much
High
Push
Negotiated
Adapted from David W. Cravens, Strategic Marketing (Homewood, IL: Richard
D. Irwin, Inc., 1987), p. 508.
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Stages in the Organizational
Buying Process
Anticipation or recognition of problem or need
Determination and description of the
characteristics and quantity of the item needed
Search for and qualification of potential
suppliers
Acquisition and analysis of proposals & bids
Evaluation of proposals and selection of supplier
Selection of an order routine
Performance evaluation and feedback
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Buying Decision Grid
New Task
Modified Re-buy
Straight Re-buy
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Buying Decision Grid
Type of
Buying
Situation
Newness of
Information Consideration
the Problem Requirements
of New
Alternatives
New Task
High
Maximum
Important
Modified
Rebuy
Medium
Moderate
Limited
Straight
Rebuy
Low
Minimal
None
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The Relative Influence of Representatives from Various Functional Departments
at Different Stages in Two Types of Organizational Purchase Decisions.
Straight rebuy
Relative Influence
Relative Influence
New buy
50
40
30
20
10
50
40
30
20
10
0
Identify
need
Set specs
Engineering
SOURCE:
Evaluate
choices
Purchasing
Purchase Stages
Select
supplier
R&D
Production
0
Identify
need
Set specs Evaluate
choices
Engineering
Select
supplier
Purchasing
Purchase Stages
R&D
Production
Based on E. Neumann, D. J. Lincoln, and R. D. McWilliams, “The Purchase of
Components: Functional Areas of Influence, “ Industrial Marketing Management,
May 1984, pp. 113-22. Reprinted by permission of the publisher. Copyright 1984 by
Elsevier Science Publishing Co., Inc.
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New Task (rarest, most
glamorous)
Big DMU (decision-making unit)
lots of people involved in the decision
lots of people indirectly influence the decision
Slower-than-usual process
people think its’ a risky buy; novelty, precedent
Gather and weight a lot of information
Anyone can win
Your past relationship along won’t win the order
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New Task (continued)
Performance matters a lot, price doesn’t so
much
The most influential people are knowledgeable
users
technically competent
They set the specifications & then the game is
75% over
Low ranking experts can be very influential
High ranking non-experts often stand back
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Effective Salespeople in New
Task
 Listen, probe
Understand DMU
Understand needs, perceptions of you and of
competitors
 In early, influencing specifications & views of the
competitors
 Come to be viewed as consultants (“creeping
commitment”)
 Spend lots of time
 Analyze a lot
 Bring in support troops
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Straight Rebuy
 Small DMU (usually one person)
 Perceived low risk, hence low priority
 In a hurry
 Close-minded, arrogant, think they know it all
 Go on minimum acceptable quality (better doesn’t help)
 Then price and assured delivery
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Straight Rebuy
 In Supplier
“Out” suppliers find it hard to get an appointment, let alone
break in
 Pray for the “in” supplier to screw up noticeably or for
requirements to change (pressure from users, staff)
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Modified Rebuy
 A window of opportunity
 An “aging” new task
 Or a “rejuvenated” straight rebuy
 Mini-version of new task strategy can make you the “in”
supplier
 Then don’t screw-up
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Buying Influences
 In every complex sale, there are four types of buying influences.
These people are not necessarily the same for different sales
objectives even with the same company.
Economic Buying Influence: gives final approval to buy; one
person or set of people. Find EB early and demonstrate the
bottom line impact
User Buying Influences: make judgements about the potential
impact of your product/service on their job performance; there
may be several UB
Technical Buying Influences: screen out possible suppliers;
make recommendations based on how well the product meets a
variety of objective specifications; can’t give a final yes, buy
they can (and often do) give a final no.
Coach: leads you to buyers and provides information you need
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in order to position yourself effectively with each
Buying Influences
 Identify and contact all the key players in each of those
four roles for your specific sales objective.
 Periodically test your assessment of who plays what
role.
 You have to sell each buying influence in order to
achieve your sales objective
Source: Miller & Heiman, Strategic Selling
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Take-aways
 Most of a sales rep’s job is *not* face-to-face selling
 The role of the rep is dependent on the overall
strategy… they don’t work in a vacuum
 Organizational buying can vary widely … from the
routine to the intense
 Use all this for prepping Lawford Electric for Friday
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