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MKT 504 Midterm 2 review.docx

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Ryerson University
MKT 504
Harvey Mc Phaden

MKT 504 Midterm 2 review CH9 Prospecting – is a systematic process of identifying potential customers Prospect – is a potential customer who meets the qualification criteria established by you or your company  Buying Centre – the group of people involved in making a purchase decision o Members may include a technical influencer, user influencer, and financial influencer Prospect Base – is a list of current and potential customers Average company loses 15%-20% of its customers every year through attrition: 1. Customer may move to a new location outside the salesperson’s territory 2. A firm may go out of business or merge with another company 3. A loyal buyer may leave their position  Promotion, retirement, resignation, or illness 4. Sales are lost to competition Progressive marketers are doing three things to improve the quality of the prospecting effort: 1. Increase the number of people who board 2. Improve the quality of the prospects 3. Shorten the sales cycle by quickly determining which of the new prospects are qualified prospects Sources of Prospects Referral – is a prospect who has been recommended by a current customer or by someone who is familiar with the product or service Centre-of-influence – establishing a relationship with a well-connected influential person who is willing to provide information about potential prospects Trade publications provide a status report on every major industry Trade shows can reduce the cost of making a sales call and make many contacts in a short period of time Telemarketing – is the practice of using telephone contact to prospect for, qualify, sell to, and service customers E-mail – should ideally be sent out to existing customers and “opt-in” lists Direct-response advertising offers business-to-business impact to generate inquiries Sales letters from databases that can be purchased or generated  Require phone call follow-up 3 or 4 days after letter sent to ask for appointment  Include a promotional item to break through the clutter Web site – opportunity to acquire product information that can help make a buying decision Computerized databases – allow one to match product features with the needs of potential customers quickly and accurately Cold calling/Cold Selling – method of prospecting in which the salesperson selects a group of people who may or may not be actual prospects, and then calls, by phone or personal visit, on each one. Networking – is the practice of making and using contacts; people meeting people and profiting from the connections Barry Siskind’s* Three Act Process: (Trade show expert) 1. Approach someone and engage them in conversation 2. “net-chat” collecting and giving information to find out as much as possible quickly 3. Disengage Educational seminars  Obtain sales leads  Promote place of business  Showcase and demonstrate expertise Prospecting done by non-sales employees  Incentive programs and training help Combination Approaches  One type may not be enough Qualifying the Prospect Qualifying – the process of identifying prospects who appear to have a need for your product and should be contacted Establish qualifying criteria: 1. Does the prospect have the financial resources to buy my product? (M) 2. Does the prospect have the authority to buy my product? (A) 3. Does the prospect have the willingness to buy my product? (D) 4. Does the prospect have a need for my product? (N) 5. Look for MADN prospects Collecting and Organizing Prospect Information File cards and books may be adequate for salespeople with few small customers and simplistic selling cycles Computerized databases are required for complex sales and large territories Sales data – information available from a company’s CRM system Sales intelligence – gives salespeople access to insights into the prospect’s marketplace, firm, competitors, and even the prospects themselves Account analysis – estimate of the sales potential for each account Portfolio Models Strategic accounts (strong competitive position, high account opportunity) Attractive and necessary accounts. Need to be protected from competitive activity so must be serviced to meet their needs. Often the most resource intensive accounts. (Intensive account coverage) Problem accounts (Weak competitive position, high account opportunity) Attractive, but only if competitive weakness can be overcome. Require careful planning and execution, and deserve some effort because of their potential. (Moderate account coverage) Hold accounts (Strong competitive position, low account opportunity) Moderately attractive if current sales can be maintained with a limited commitment of resources. Should be monitored closely to see when opportunities arise but care needs to be taken to ensure that they don’t require too much resource commitment beyond their potential. (Moderate account coverage) Drag accounts (Weak competitive position, low account opportunity) Not very attractive. Could be better managed by methods other than personal selling. These accounts often require resource commitments beyond their potential and may improve your performance if they buy from a competitor. (Limited account coverage) Asset Profitability Sales process model – total set of prospects being pursued at any given time  Balanced funnel – a portfolio of prospects where there are a sufficiently large number of prospects at each stage in the sales process o Work the whole funnel:  Closing sales  Qualifying  Within the funnel Pipeline management – process of managing all the prospects in the salesperson’s sales funnel to ensure that the sales objectives are met Pipeline analytics – ability to conduct sophisticated data analysis and modelling, allow salespeople to generate new reports regarding the movement of prospects through the sales funnel Pipeline dashboards – at-a-glance visualizations that define, monitor, and analyze the relationships existing in the pipeline o Provides insight into the need to add new prospects 1. According to the publisher of Selling Power magazine, the main purpose of a salesperson is a. to add value in the selling process. 2. The primary goal of prospecting is a. to build a base of current and potential customers. 3. The average company is likely to lose what percentage of customers each year? a. 5 to 10 percent b. 15 to 20 percent 4. One thing salespeople do to improve the quality of prospects is a. None of the above. b. improve the quality of the prospects. c. All of the above. d. increase the number of potential prospects. e. increase the quality of potential prospects. 5. Some sources of prospects include a. referrals and trade shows. b. trade publications and Web sites. c. telemarketing and sales letters. d. networking and seminars. e. All of the above. 6. Cold calling means a. calling people who may or may not be actual prospects. 7. Which of the following methods of educating prospective customers has a major advantage over the others? a. educational seminars 8. One reason qualifying prospects is important is a. because salespeople need to spend time calling on legitimate prospects. 9. Lasting partnerships in business are generally based on a. strong personal relationships. 10. The major barrier to prospecting is a. lack of time. 1. Developing a sense of personal worth is an esteem need. a. False 2. A major dimension of a customer strategy is to understand customer buying needs and motives. a. True 3. A one-to-one marketing strategy means that all customers are treated the same. a. False 4. The first-time purchase of a product is considered a new-task buy. a. True 5. Systems selling appeals to buyers who prefer a packaged solution from a single seller. a. True 6. The foundation of a successful sales effort is knowing what products customers want to buy. a. False 7. In transactional sales, buyers will become frustrated when salespeople attempt to be problem solvers. a. True 8. One question that must be answered according to the Buyer Resolution Theory is "What should I buy?" a. True 9. In a world of look-alike products, emotional factors can have considerable influence. a. True 10. A product buying motive is usually based on buying from a preferred supplier. a. False 1. A buying centre in a business-to-business sale might include a. a senior executive. b. the person with authority to pay for the purchase. c. the actual user of the product. d. a technical expert. e. All of the above. 2. Methods to get prospects on the "Ferris wheel" include a. attending trade shows. b. cold calling. c. prospecting by non-sales employees. d. talking to customers, friends, and acquaintances. e. All of the above. 3. According to Gerhard Gschwandtner, many salespeople do not meet sales goals because a. they don't quickly qualify new prospects. 4. Prospecting should be thought of as a. an opportunity to identify people who would benefit from owning your product. 5. Customers are more likely to give a referral if a. they perceive there is value in the product you sell. 6. When meeting someone while networking, you should a. listen more than you talk. 7. One qualifying question that must be asked is: a. Will anyone close the sale? 8. One key result of Harvey Mackay's 66-question profile is a. knowing more about customers than competitors do. b. converting salespeople from adversaries to colleagues of customers. c. providing customized service based on the extensive knowledge gathered. d. All of the above. 9. A foundation that builds partnerships will be based on a. always treating customers as individuals. 10. A sales forecast a. outlines expected sales to targeted customers over a specific time period. 1. A prospect is someone who meets qualifying criteria that the company has established. a. True 2. In a business-to-business sale, there is likely to be only one decision maker. a. False 3. Given today's business environment, prospecting needs to be monitored only on occasion. a. False 4. Salespeople who understand the importance of prospecting do it every day. a. True 5. The centre-of-influence prospecting method involves finding an organization that has many good potential contacts. a. False 6. Research indicates that trade shows are not helpful in identifying good prospects. a. False 7. Using database technology it is now possible to match products and potential customers with great accuracy. a. True 8. Networking with people outside your own industry is not recommended. a. False 9. One important purpose of qualifying prospects is to be certain they can place large enough orders to cover expenses. a. True 10. Information needs to be collected about the prospect as an individual and as a business representative. a. True CH10 Achieving excellence is the result of: o Careful needs analysis o Correct product selection o Clear presentations o Informative demonstrations o Win-win negotiations o Flawless service after the sale Value is added when you position yourself as a resource – not just a vendor Approach – the first contact with the prospect, either face-to-face or by telephone Three objectives: o to build rapport with prospect o to capture the person’s full attention o to generate interest in the product you are selling Multi-call sales presentations are especially common in complex sales First call objectives: o Establish rapport and begin building a relationship o Obtain permission to ask need identification questions o Obtain personal and business information to establish the customer’s profile Stage two call objectives might include: o Involve the customer in a product demonstration o Provide value justification in terms of cost reduction and increased revenues o Compare and contrast relevant features Action Objective – something that you want the customer to do during the sales presentation. For example: o Provide specific financial information o Schedule a visit to your manufacturing plant o Agree to a trial use of your product o Agree to a follow-up meeting o Place an order Formally confirm the action post-meeting Adaptive Selling Builds the Four Strategic Areas of the MODEL Planning the approach involves consideration on how the relationship, product, and customer strategies can enhance the presentation strategy o Every sales call must be tailored to the unique needs, wants, and concerns of the customer o Must develop a broader repertoire of selling strategies and apply more effective information- acquisition skills Developing the Six-Step Presentation Plan With time constraints, fierce competition, and rising travel costs, face-to-face time with the customer is at a premium This plan has been described as the fundamentals of personal selling o Ensure they relate to the customer’s buying process 1. Approach 2. Presentation 3. Demonstration 4. Negotiation 5. Close 6. Servicing the sale The Social Contact (eyeball-eyeball) Three areas of conversation to consider in developing a social contact: 1. Comments on “here and now” observations 2. Sincere compliments 3. Discover mutual acquaintances and interests Guidelines can help develop the skill: 1. Prepare for the social contact 2. Initiate social contact 3. Respond to the customer’s conversations 4. Keep the social contact focused on the customer The Business Contact (eyeball-eyeball) Converting the prospect’s attention to business and arousing interest: 1. Agenda approach– when moving from social contact to business one thanks the customer and reviews meeting goals 2. Product demonstration approach – use visuals or actual product to get the customer’s attention 3. Referral approach – representing good points of what a salesperson has to offer via a third party 4. Customer benefit approach – the most important buyer benefit is included in the initial statement 5. Question approach – use of a question to trigger involvement and get the customer thinking about a problem 6. Survey approach – have the customer fill out a survey to then tailor make the business presentation 7. Premium approach – use a free sample or an inexpensive item to facilitate discussion 8. Combination approaches – using more than one technique Major concern with new hires by hiring managers Sales call reluctance – fear of making the initial eyeball-eyeball contact with the prospect Preapproach – activities that precede the actual sales call and set the stage for a personalized sales approach, tailored to the specific needs of the prospect Includes the first two prescriptions: 1. Establishing objectives 2. Creating a presale presentation plan The Approach (eyeball-eyeball) Done correctly will earn the right to make a sales presentation o Establish credibility early Three important objectives: o Build rapport o Capture attention o Generate interest to transition to need discovery stage 1. The first prescription of a well-conceived presentation strategy is a. establishing objectives for the sales presentation. 2. Preparation for the actual sales presentation involves a. the preapproach and approach. 3. An appropriate presentation objective for the first call on a customer would be a. to obtain permission to ask questions to determine needs. 4. One benefit of using sales teams is that a. they may uncover opportunities an individual working alone would not. 5. When selling to a buying team, it is important to a. make sure everyone in the meeting feels involved. 6. The primary purpose of a reminder
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