Transcript STRATEGIC SALES MANAGEMENT

STRATEGIC SALES MANAGEMENT
The world of selling must
accommodate a
dramatically changed world
of buying
0
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
SALES
STRATEGY
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TARGET
ACCOUNTS
Undifferentiated Account Approach
Target Account Strategy
SALES
STRATEGY
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Account Account
1
2
Account Account
3
4
Account Segmentation Approach
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Key Account
Profitability
Size
Potential
Expected Value Analysis
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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
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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
A
30%
.2
Expected
Share-%
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
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Product is
differentiated
Product is New
Product is late
in life cycle
Product is
undifferentiated
High
Low
High
Amount of Product Differentiation
Product Life Cycle
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
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