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CHAPTER 1
COMMENTS ON CHAPTER 1 QUESTIONS
1.
Major types of sales jobs are: (A) retail; (B) wholesale; (C) Manufacturer's
Representative. Ask students which type they most prefer and why.
2.
Eight (8) success characteristics described are: (A) love of job; (B) willingness to
work hard; (C) need to achieve success; (D) optimistic outlook; (E) knowledge of
job; (F) careful use of selling time; (G) ability to listen to customers; and (H)
customer service. Why are they important? Ask students why these are
important in any job.
3.
People choose a sales career for its: (A) variety; (B) freedom; (C) challenge; (D)
advancement; (E) rewards. Before discussing this question, ask students why a
sales career appeals to them. Write their answers on the blackboard.
4.
Career path--upward sequence of job movements. Ask students how one moves
into a corporation home office marketing position. Usually you begin as a
salesperson.
COMMENTS ON ETHICAL DILEMMA
The ethical guidelines of honesty and loyalty with employers do not allow for such "fake"
sales; this transaction would cost the firm shipping expenses and could cost the
salesperson his or her credibility with the employer and with John Adams. A loss of
reputation should not be worth $500 and a trip to Mexico to any salesperson.
COMMENTS ON CASES
Case 1-1:
What They Didn't Teach Us in Sales Class
SUMMARY
This case was written to illustrate the day-to-day realities of becoming a salesperson. It is
a very real case and one with which any seasoned salesperson will identify . . . especially
"missionary" or "factory-rep" salespeople who call on retail accounts. The training
program described in the case is typical of those used in similar industries such as
tobacco, candy, over-the-counter drug products, frozen foods, baby food, canned goods,
and paper products. Turnover among salespeople in these industries is higher than most
other selling jobs, and the work itself is hard. Retailers see so many salespeople that they
become tough buyers to deal with on a regular basis. Those that are trained in selling to
retail accounts, assuming that they last through one or two years, become some of the
best salespeople anywhere. It has been said that "salespeople who can sell to retail stores
can sell to anyone."
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Rick Lester, the new salesperson in the case, is struggling to adjust to the real
world. It is true that he made an "A" in his sales course in college, but neither the
textbook nor his professor discussed the feelings of low status and vulnerability that he
now faces. He must overcome these feelings or get out of selling to retail accounts. Rick
is the one who must adjust, not the system. It is true that Mr. Brown can be helpful in
this situation, but it would not be in anyone's best interest to "talk him into staying on the
job."
STUDENT REACTIONS
Two main groups of thought are typically offered by students. Undergraduates most
often suggest that Mr. Brown should not have said, "Buy a raincoat," and that Mr. Brown
had not adequately prepared Rick Lester to perform his job. Many undergraduates agree
that Rick should quit his job and find another one that is better.
Graduate students, on the other hand, most often suggest that Mr. Brown had
hired an "incompetent" salesperson. Some recommend that Rick's resignation be
accepted and that he should be replaced with a better applicant.
Both of these positions have good and weak reasoning behind them. It is true that
Rick is young and inexperienced. But his feelings are real and they need to be addressed
by Mr. Brown. In the end, however, he must decide on whether he is willing to pay the
price--that is, stick with the job until his skills and ability allow him to deal with the
practical world of selling.
Rick cannot be called "incompetent" at this point. He is the type of person that
applies for similar jobs today--average or slightly above, and relatively inexperienced.
The fact is that many selling jobs go unfilled around college campuses. The top students
with strong academic credentials and work experience oftentimes do not apply for selling
positions. Any good sales manager will tell you that he or she has problems finding top
people to recruit.
QUESTIONS AT END OF CASE
1.
Should Rick Lester "turn in his keys?"
Probably no . . . at this point. All jobs are challenging at first. He needs to talk
with Mr. Brown and others who sell to learn that all jobs have their bad points.
He needs patience and determination to see him through the learning stage. To
make a change at this time will be setting a pattern for the future.
2.
How should Mr. Brown handle this situation ? What should he say to Rick?
Mr. Brown should listen and give Rick some "good strokes." He probably should
explain that he went through the same thing when he first started selling. He
should also go over the benefits of being with a big, secure company and explain
that the opportunities and rewards are greater in this position than working in a
bank or less challenging industry. His approach should be "soft-sell" rather than
pushing Rick to stay with the present job. Invariably, when a manager "talks
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someone into staying" or promises too much, the employee will end up quitting,
anyway.
3.
How can firms reduce high turnover among new sales personnel?
Better recruiting and training is the answer. Some companies only recruit new
sales people with work experience. Further, they are using tests to determine if
applicants have a good aptitude for selling. Better training is also a trend. In the
present case, the company now requires all serious applicants to spend a full day
with an experienced salesperson as part of the screening process. After
employment, more time should be spent preparing the new salesperson.
Applicants and new employees need to know, realistically, what they are getting
into.
4.
What can firms do to increase salesperson status?
There are many things a firm can do to help show how important the salesperson
is to the company. Mr. Brown could have been more personable to the new
salesperson and probably should have met his wife. The company needs to
impress salespeople with the fact that "nothing happens until a sale is made."
There are other things like providing a nice new vehicle (in Rick's case),
providing business cards, even changing the title "Salesman" to "Area
Representative," "Account Executive," or "Sales Associate." And there are other
ways to visibly recognize sales achievement such as trophies, plaques, or travel
awards.
5.
What can professors do to better prepare students in sales classes?
Provide them with realistic job expectations. A good professor should tell them
about the frustration, disappointment, and low status that many salespeople face.
Textbooks should cover the bad things about selling as well as the good things.
Internships in selling are becoming very popular. Also, young salespeople should
be invited into the classroom to relate their experiences to students.
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CHAPTER 2
COMMENTS ON CHAPTER 2 QUESTIONS
1.
Retailers sell (or should sell) like industrial salespeople.
2.
Suggestion selling recommends complimentary or related products, such as socks
with shoes, tie with suit, radio with car.
3.
A.
B.
C.
4.
A. The salesperson was very positive and reinforced the buyer’s purchase
decision.
B. Needs to suggest products to accompany the sports coat.
5.
Three types of business demand are:
A.
Derived--electric motors of refrigerators.
B.
Inelastic--increased motors’ price of 5% not an influence on the price of
refrigerators.
Joint--IBM Supermarket System (computer, scanners).
C.
6.
No
Help the customer by substituting another product.
The customer does not have a gift; the clerk and store lost a sale.
In computer sales, the salesperson has to be an expert on how the equipment can
be used and what it can do for the consumer. The quality, features, and other
“physical” characteristics should be emphasized.
In the insurance sales job, a tangible good is not present to demonstrate how it
functions; thus, the product cannot sell itself. The salesperson is responsible for
persuading the buyer on the benefits the service will provide. This is the most
difficult type of selling due to the clients’ inability to fully understand concepts
they can’t see.
In nonprofit sales, the job entails attracting resources which is different from
selling goods or other services. This is an important job so that resources are not
wasted.
COMMENTS ON ETHICAL DILEMMA
In such a situation, many people would be tempted to confront the supervisor or go over
his head and complain to his supervisors. A confrontation could result in the
salesperson's termination, as could going over the boss' head. The salesperson may find
the "theft" of his hard work unbearable; he or she may want to seek another position in
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the company or with another firm. Once another position is secured, and the present boss
has little or no influence on the salesperson's future, the salesperson might then be able to
confront the supervisor or even go to his supervisors without fear of reprisal. Sabotaging
the boss' "new" programs may seem personally satisfying to the salesperson, but such
actions would be disloyal to the firm as well as improper. Just because the supervisor has
done something wrong is no justification for the salesperson to respond in kind.
COMMENTS ON CASES
Case 2-1:
Plimpton’s Tire Service
1.
He is an order-taker not order-getter. He did not have the selling skills to help me
solve my problem.
2.
He did not get a conversation going by asking questions. He had no response
when I said “Well, I guess I’ll have to shop around.”
These experiences make great stories for class discussion. Ask students if this has
ever happened to them.
3.
The salesperson could ask about the 1966 Mustang itself. Questions such as
“How do you use the car?” could be asked. Often the cheapest tire is not the
lowest price when you consider the life of a tire. He could point up a return-oninvestment selling point.
Case 2-2:
Competition Shoes, Inc.
Note: This is a real case. The salesperson was a young woman, approximately 20 years
old When asked if she had ever had a selling course and she said “no.” Her questions
were natural ones aimed at helping a customer. The situation reminds me of how a
medical doctor or lawyer asks questions.
1.
The salesperson did an outstanding job- no errors.
2.
She could sell anyone.
3.
This person was interested in selling a product that would help the customer.
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CHAPTER 3
COMMENTS ON CHAPTER 3 QUESTIONS
1.
Three types of buying situations are: (A) routine; (B) limited; (C) extensive.
A.
B.
C.
2.
Routine buying decisions are low-involvement and made out of habit.
Limited decision making involves a moderate level of involvement.
Buyers seek more information before making a purchase decision.
Extensive decision making is high involvement. Buyers require large
investments of time and money.
Motivations, perceptions, learning, attitudes, and personality.
3.
A. The techniques that can be used include research, questioning, listening and
observation.
B. Try to find out about each prospect's needs, attitudes, and beliefs and use this
information in the presentation.
4.
Most students will recall their purchase of a car, stereo, cell phone, computer etc.
With thought, they should be able to apply the steps in the selling process to their
purchase. Major influences typically are price, function, friends, parents.
5.
Purchasing agents are subject to just as many influences, however they are
different. For example, where a consumer may be influenced by friends and family,
purchasing agents will be influenced by colleagues in functional areas of their company
COMMENTS ON ETHICAL DILEMMA
If Linda listened to the customer's statement and question, her answer should be clear. In
telling Linda which kind of car she wanted and by asking her which car she should buy,
the widow has placed her trust in Linda. Linda should suggest that the woman buy the
less-expensive car out of concern for her customer's welfare and because it best satisfies
the customer's needs. Treating customers fairly and maintaining their trust and
confidence is a top priority for ethical salespeople, and therefore Linda should refrain
from taking advantage of the buyer.
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COMMENTS ON CASES
Case 3-1:
Economy Ceiling Fans, Inc.
SUMMARY
1.
Ask questions to uncover the customer's needs, and bring out the
customer's attitude and beliefs towards product relative to price, quality,
and style.
2.
While not illustrated or discussed in the chapter, you can bring out in your
class a discussion on how an individual might weigh or place a value on a
product's attribute using the following:
Attribute
Hunter
Belief
Casa Blanca
.2
Price
.2
.2
.8
.3
Quality
.6
.10
.4
.5
1.00
Style
.8
.4
.2
Values
Hunter = (.2) (.2) + (.3) (.6) + (.5) (.8) =
Economy
.62
Casa Blanca
= (.2) (.2) + (.3) (.10) + (.5) (.4) =
.27
Economy
= (.2) (.8) + (.3) (.4) + (.5) (.2) =
.38
Preferences are for Hunter, Economy, Casa Blanca in this order.
The proceeding chart is an expectancy-value model whereby consumers form an
N
Ajk   Wik  Bi jk
i 1
attitude toward each brand based on the importance (weight) of attributes times
his brand beliefs.
Where:
Ajk
=
Wik
=
Bijk
=
N
=
consumer k's attitude score for brand j
the importance weight assigned by consumer k to attribute I
consumer k's belief as to the amount of attribute I offered by brand j
the number of attributes important in the selection of a given brand
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Case 3-2
1.
McDonald's Ford Dealership
The buyer is:
A.
Maybe in either a limited problem or extensive problem solving situation.
B.
Has little product knowledge, bad attitude toward a used car, and may
believe the salesperson is not trustworthy.
C.
She has a need for transportation but does not want the type of car she
described to the salesperson--dependable, economical, not too big, not
expensive.
D.
Her perceptions may be distorted:
1. Selective exposure--only listen to what is of interest.
2. Selective perception--she may discount the good features stressed by
the salesperson.
3. Selective retention--once she leaves, she will forget everything the
salesperson has told her.
E.
2.
She may be looking for the ideal car, which is not realistic.
The salesperson should:
A.
Get her to continue talking by asking questions and listening.
B.
Smoke-out her specific needs.
C.
Be patient because he has a great deal to overcome, such as her distorted
perceptions toward salespeople and used cars.
D.
Get her to drive one or more cars that may meet her needs.
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CHAPTER 4
COMMENTS ON CHAPTER 4 QUESTIONS
1.
See chapter for drawing of communication process. Two-way communication is
essential for the salesperson to be successful. It allows the salesperson to know
buyer's attitude and beliefs towards his products. This helps channel the direction
of the presentation towards the buyer's interest.
2.
A.
B.
3.
Communication barriers are: (A) differences in perception; (B) buyer does not
recognize need; (C) selling pressure; (D) information overload; (E) disorganized
sales presentation; (F) distractions; and (G) poor listening.
4.
Establish two-way communications by asking questions, getting the buyer
involved in the demonstration and also examining your product.
5.
Situation
Firm handshake, looking a person directly in the eyes.
Watch for green, yellow, and red signals. See chapter for examples.
1
2
3
6.
Situation
1
2
3
4
Buyer's Nonverbal Signal
Caution
Caution-Red
Green
Buyer's Nonverbal Signal
Caution
Caution-Red
Green
Green
Your Nonverbal Signal
Green
Green
Green
Your Nonverbal Signal
Green
Green
Green
Green
In situation 1, stop and ask "Have I said something you are unsure of?" In
situation 2, ask several questions after buyer hangs up the telephone. Find out
what he thinks so far. You may have lost him. Also you could summarize; if you
then get positive feedback, keep going. In situation 3, quickly decide whether to
give the buyer materials. In situation 4, buyers often test or tease salespeople,
especially new ones. Do not let what the buyer says bother you.
COMMENTS ON ETHICAL DILEMMA
The salesperson witnessing this attack on the employing firm and the boss may want to
ask the upset salesperson why he or she feels that way and why he or she said the
malicious untrue statements. The angry salesperson's reasons might then be heard by the
other five salespeople, who can judge the accuracy of the statements themselves. The
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group might then discuss the allegations, as it is given to the "spirited" discussions. This
would allow all sides of the story to be heard. It would be easy to ignore or even join in
the attack on the firm and the boss, but doing so would be disloyal, unfair, and improper.
Allowing malicious falsehoods to be spread is close to condoning those falsehoods.
COMMENTS ON CASE
Case 4-1:
1.
2.
Skaggs Manufacturing
Both buyer and seller gave off red signals.
Give off green signals. Most salespeople would leave and plan a new sales
presentation strategy based on buyer not being sold on your product. First try
saying "Before I go, I need advice on something. Could I ask you one question?"
Ask the buyer what he thinks of your product. Mention a special price/offer,
penalty for delay, benefits of your offer.
Case 4-2:
Western Office Supply
Salesperson should say, “Are you saying some executives do not want to use cellular
phones?” It is apparent the purchasing agent likes Judy’s cellular phones and wants
people to use them. If Judy can find out who is reluctant to use the cellular phone, she
should go and see them.
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CHAPTER 5
COMMENTS ON CHAPTER 5 QUESTIONS
1.
The student's answer should demonstrate a basic understanding of "why" the
salesperson should know this information plus "how" it would be used in the
presentation.
2.
Formal training programs and experience (on the job training) can provide
salespeople with knowledge of their job.
3.
Knowledge of the customer's past and present operations aid the salesperson in
suggesting what to buy, how much, and how to promote or use the product.
Knowledge of promotional activities of the firm can also aid the salesperson in
persuading a customer to buy.
4.
A salesperson should become an "expert" on the economy's influence on his
industry. This helps set him apart from other salespeople. As a problem-solver
and advisor, the salesperson is often asked about the economy and industry.
5.
Shelf-positioning -- where the product is located; shelf-facing -- number of
products side-by-side on shelf. The better shelf-position and more shelf-facing
you have, the more sales. Use SAMI data, your own data on specific store sales,
and your own persuasive power to increase positioning and facings.
6.
Premiums are used to increase sales. Three major categories of premiums are:
(A) contests and sweepstakes, (B) consumer premiums, and (C) dealer premiums.
7.
A manufacturer might use five basic types of advertising: national, retail, trade,
industrial, and direct-mail. It is a good idea to point out that your firm does carry
on an active advertising campaign and perhaps show your customers magazine or
newspaper advertisements to confirm this. Often wholesalers and retailers are
more apt to buy a product that is already in demand because it has been
advertised.
8.
A good way to convince a buyer to purchase a new, untried product is to show
him the results of its market test. Carefully prepared statistics of such things as
market share and profitability can be extrapolated into your buyers' market.
Profitable figures sell!
9.
Cooperative advertising usually requires the manufacturer to pay for some
percentage or all of the advertising of its product conducted by the retailer. The
steps are: 1) agree on the size of the order, 2) have retailer sign advertising
agreement, 3) leave him a copy of the advertisement as proof that he complied
with the contract, 5) send the agreement and advertisement to your company for
approval, 6) company sends you a check with which you reimburse the retailer.
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10.
Companies advertise to: 1) increase overall and specific product sales, 2) aid
salespeople by building product recognition, 3) give salespeople additional selling
information, 4) develop leads for salespeople, 5) increase cooperation from
middlemen, 6) educate the consumer about products, 7) inform consumers that the
product is available, 8) reduce cognitive dissonance, and 9) create sales between
salespersons' calls.
11.
A.
B.
C.
D.
E.
F.
G.
Coupons on or inside packages--Consumer
example: found in many grocer products.
Free installations--Trade
example: purchase a new machine and it will be installed at no
extra charge.
Displays--Trade
example: displays are often "Thrown-in" with purchases of a new
product. An example would be a display of Legg's pantyhose.
Sales contests--Trade
example: a sales representative can earn a trip to Hawaii by selling
more than others in the sales force.
Drawing for gifts--Consumer or Trade
example: consumer--retail stores often conduct drawings; trade-could be done to add "excitement" to a sales meeting.
Demonstrations--Consumer
example: test driving a new car.
Samples--Usually Consumer
example: a sausage maker may set up a table in a grocery store to
distribute bite-sized nibbles of his product.
COMMENTS ON ETHICAL DILEMMA
George definitely should not overstate the amount of TV advertising Aggie Novelty
Company will run; this would be dishonest and he probably would get caught. If
advertising is a very big issue with the toy chain, George could work to sell the buyer on
other benefits or he could try to convince Aggie Novelty Company to offer more
advertising support for the chain. Treating this buyer unfairly by being dishonest and
violating his trust would cost George his credibility and any future sales to this toy chain.
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CHAPTER 6
COMMENTS ON CHAPTER 6 QUESTIONS
1.
The prospect has been "qualified" as having the potential to buy. The lead, or
suspect, is suspected of being a prospect. To qualify a potential customer, follow
the MAD sequence:
A.
Does the prospect have the Money to buy?
B.
Does the prospect have the Authority to buy?
C.
Does the prospect have the Desire to buy?
2.
A.
B.
Prospects are found everywhere. Depending on what you sell, everyone
could be a prospect.
Prospecting methods are the cold canvas, endless chain, group, public
exhibitions and demonstrations, center of influence, direct mail, and
telephone (including telemarketing).
3.
Using the telephone Yellow Pages, and observing the business are two of the
easiest ways to uncover leads. You would have to contact them to see if they
would be a true prospect.
4.
A.
B.
5.
A.
B.
"I sell paper and metal containers designed to save your company money.
Companies like yours really like our products. Could you help me talk
with Mr. Firestone?"
Say the first two sentences above and then say, "Do you feel I should call
back this afternoon or tomorrow?"
Local banks, Better Business Bureau, and Dun and Bradstreet can all
provide information. If the sale is large it would be best to check out the
customer.
The customer benefit plan would be similar for each sales call. Each plan
should include (1) FAB; (2) marketing plan; and (3) business proposition.
COMMENTS ON ETHICAL DILEMMA
Offering this information is unethical behaviour for the personnel manager and accepting
the file of personal data would be unethical for the salesperson. It would be better for the
salesperson to ask his or her friend for some personal referrals; this would require more
effort, but the salesperson could then be honest with the people he or she contacts if they
ask "where did you get my name?"
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COMMENTS ON CASES
Case 6-1:
1.
Canadian Equipment Corporation
Five salespeople ranked the four alternatives, with “C” ranked the best. People
who choose this alternative sold the maximum dollar amount of $1000.
Alternatives
A
B
C
D
Ranking
Second
Third
First
Third
Dollar Amount Sold
(Maximum = $1,000)
$500
-0$1,000
-0-
Getting by the receptionist or switchboard operator, at times, requires a certain amount of
skill. Too often, a salesperson unequipped to handle the protective front line can get
bogged down and fail before he even has a chance to see the prospect.
A.
This method is not as good as “C”, but it is a good second choice. Make her feel
important, build up her ego by taking time (if `she can afford it) to give her a meaningful
message. Don’t get trapped into telling her everything. She can’t do the buying. Whet
her appetite and get her on your team.
B.
We’re afraid that under normal circumstances this answer will provoke the typical
response: “We don’t need any.” You can rest assured that the hurried, often protective
person who answers the switchboard will try to get rid of salespeople.
C.
This is the best answer because it’s direct and to the point. You really haven’t
told her what the product is so it’s difficult for her to say the company “doesn’t need
any.” Secondly, you have given her some of the benefits; hopefully she won’t want to
take the responsibility for her company missing out on them. Thirdly, you’ve repeated
your request for her to direct you to the purchasing agent (or reasonable facsimile).
D.
Same as B.
Case 6-2:
1.
Montreal Satellites
Salesperson: Hello Mr. Butler. My name is
with Montreal Satellites. I met
with Jeff Sager last week and installed a satellite in his home. His family really
loves it. Have you seen it?
Salesperson: I’d like to set up a time to stop by your home or office and visit
with you about our program you may find of great benefit. It’s not really
important to me that we do business; all I ask is if you appreciate the time we
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share together, if you feel that you benefit from the time we spend together, and
most important, if you respect my integrity, you would be willing to pass my
name on to a friend or business associate who may also benefit from my services
just as the Sagers did. Is that fair enough?
2.
It’s often impossible to say exactly where the request for referrals should come.
However, somewhere say something like:
Salesperson: My success and the success of my business is totally dependent
upon getting quality referrals from my clients. I realize that you will introduce
me to your friends, family, and business associates only if the quality and
integrity of the service I provide surpasses that to which you’ve grown
accustomed. If I do a good job for you, Mr. Butler, would you be willing to
provide names of others who would also benefit from my services?
Either now or later in the presentation, hand pen and paper to Mr. Butler and ask
him to write down names and telephone numbers.
3.
Salesperson: Mr. and Mrs. Butler, I’m sure by now you realize I work through
referrals. You see I work very hard to help my customers as I’ve done for you
(pause) and I’d like to do the same for your friends. Who could you recommend I
contact?
4.
Salesperson: Hello Mr. Butler. This is
. As I promised when we first did
business, I’d check with you periodically. Do you have any questions? Is there
anything I can do for you?
Respond to the client’s needs, if any, as appropriate. End your follow-up by
requesting referrals one more time:
Salesperson: I’ll let you go now. Don’t forget, you’ve got my number if you
need any help. Please keep me in mind when talking to your friends and business
associates. As you know, Mr. Butler, I depend on quality clients like you to keep
me in business. One of the reasons I work so hard to help my customers is
because of the people you refer to me. Your referrals are really appreciated.
(Pause). Mr Butler, is there anyone you feel I should help? (Pause) Thank you
very much! I look forward to seeing you soon. Goodbye.
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CHAPTER 7
COMMENTS ON CHAPTER 7 QUESTIONS
1.
2.
3.
4.
Elements of sales call planning are: (A) determining the sales call objective; (B)
developing or reviewing the customer profile; (C) development of a customer
benefit plan; and (D) the development of the individual sales presentation.
The customer benefit plan for a Proctor and Gamble salesperson includes
suggestions on how the reseller can sell the products to his customers. IBM
suggests how the product will be used within the firm.
Refer to Page 183 to summarize the sequence of events.
The selling process refers to a "sequential series of actions by the salesperson
which leads toward the customer taking a desired action and ends with a followup to ensure purchase satisfaction.
Selling Process
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
5.
Mental Steps
Prospecting
Preapproach
Approach ..................
Presentation .............. .
Trial Close ................
Objections .................
Meet Objections .......
Trial Close ................
Close .......................
Follow up
Attention
Interest
Interest
Desire
Desire
Desire
Desire
Conviction
Conviction increases
Action
Caution--these answers are controversial among students. It is difficult to know
which stage is represented. I am using them for discussion purposes only.
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
Attention
Desire (or interest)--Prove it! (Advantage)
Interest (or desire)--So what? (Feature)
Interest
Desire
Attention
Conviction
Interest
Attention
Conviction--A buying signal
Desire
Desire
Attention or interest--hard to tell
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6.
The student needs to refer to both Chapters 5 and 6. You would need to know
such things as: (A) promotional activities planned for the product, such as
advertising, coupons; (B) special prices and discounts available; and (C) past sales
of the product.
Feature
Nationally advertised
Price discount
Advantage
Sell more
Can reduce price
Benefit
Make more profits
Draw customers
7.
1.
Sales Presentation Methods are: (A) Memorized; (B) Formula; (C) NeedSatisfaction; and (D) Problem-Solution. See chapter for differences.
8.
Yes, the salesperson shows how the product will satisfy mutually agreed upon
needs.
9.
When you already know the customer's needs, many times you can use a
"formalized" sales presentation. The salesperson can quickly go directly to the
close. Consumer goods salespeople who have called upon a customer several
times frequently use this method.
10.
The salesperson needs to know the prospective buyer's background such as past
purchases and likes and dislikes.
11.
Skillful questioning on needs and understanding the prospect's needs.
COMMENTS ON CASES
Case 7-1:
Ms. Hansen's Mental Steps in Buying Your Product
1.
The salesperson's first statement is to get a reorder. The second statement
concerns the primary objective of the call--sell new distribution of family size
Tide. Since P&G salespeople call on the same customers routinely, the customer
profile has been developed. It was reviewed before the call. The third and fourth
comments present the marketing plan.
2.
Feature -- family size Tide
Advantage -- makes it more economical for families to purchase
Benefits -- additional sales and profits.
3.
A.
B.
C.
D.
Ms. Hansen's first reply--Action stage on reorder.
Ms. Hansen's second reply--Interest stage.
Ms. Hansen's third reply--Interest stage.
Ms. Hansen's fourth reply--Desire-Conviction. This is a buying signal, so
time to ask for the order.
113
4.
Alternatives
A
B
C
D
E
Ranking
Second
Third
First
Fourth
Fourth
Dollar Amount Sold
(Maximum = $8,000)
$2,000
$2,000
$8,000
-0-0-
Five salespeople profiled in the text ranked the five alternatives with "C" ranked
the best. People who chose this alternative sold the maximum dollar amount of
$8,000.
A.
B.
C.
Case 7-2:
1.
You might want to further explain the benefits of your marketing program.
This could help you close the sale. However, it is not the best course of
action.
If still unsure of the buyer's attitude, you might probe more using another
trial close such as "Does the concept sound good to you?"
It is time to close by saying "May I enter the six cases of family size Tide
in the order book now?" or "Will six cases be enough?" or "With your
sales being really up, should we use six or eight cases?"
Machinery Lubricants, Inc.
Rami should have: (A) visuals, such as pictures of the storage system; (B) a
suggested location; (C) a prepared value analysis such as the following:
20,000 gal @ $1.39 = $27,800
20,000 gal @ $1.25 = -25,000
savings = $ 2,800
The cost of the new arrangement will be $2,795. By saving 14 cents per gallon of
lubricant purchased, the system will pay for itself in the first year. Also there will
be other savings and advantages:
* no lost oil left in bottom drums
* no more $20 deposit/drum (and the risk of losing the deposit with
lost/damaged drums)
* less order processing, reduction in storage space, less handling of oil
(Overall, there should be a substantial cost savings from the purchase.)
114
Case 7-3:
1.
2.
Cascade Soap Company
Formula.
Syed did a good job. He has done his homework, presented a good business
proposal, and effectively asked for the order. Have two students read out loud in
class. Comment on each element of dialogue between the salesperson and buyer.
Case 7-4:
A Retail Sales Presentation
A customer is looking at a display of Cross gold pens and pencils
Customer:
I'm looking for a graduation gift for my brother, but I'm not
necessarily looking for a pen and pencil set.
Salesperson: Is your brother graduating from college or high school?
Customer:
He is graduating from college this spring.
Salesperson: I can show you quite a few things that would be appropriate gifts.
Let's start by taking a look at this elegant Cross pen and pencil set.
Don't they look impressive? [Trial Close]
Customer:
They look too expensive. Besides, a pen and pencil set doesn't
seem like an appropriate gift for a college graduate. [Objection]
Salesperson: You're right, a Cross pen and pencil set does look expensive.
[Acknowledge objection] Just imagine how impressed your
brother will be when he opens your gift package and finds these
beautiful writing instruments. Even though Cross pen and pencil
sets look expensive, they are actually quite reasonably priced,
considering the total value you are getting.
Customer:
How much does this set cost?
Salesperson: You can buy a Cross pen and pencil set for anywhere from $15 to
$300. The one I am showing you is gold-plated and costs only
$28. For this modest amount you can purchase a gift for your
brother that will be attractive, useful, will last a lifetime, and show
him that you truly think he is deserving of the very best. Don't you
think that is what a graduation gift should be like? [Trial close]
Customer:
You make it sound pretty good, but frankly I hadn't intended to
spend that much money. [Objection]
115
Salesperson: Naturally, I can show you something else. However, before I do
that, pick up this Cross pen and write your name on this pad of
paper. [Demonstration] Notice that in addition to good looks,
Cross pens offer good writing. Cross is widely acclaimed as one
of the best ball point pens on the market. It is nicely balanced, has
a point that allows the ink to flow on the paper smoothly, and rides
over the paper with ease.
Customer:
You're right, the pen writes really well. [Positive buying signal]
Salesperson: Each time your brother writes with this pen he will remember that
you gave him this fine writing instrument for graduation. In
addition, Cross offers prestige. Many customers tell us that Cross
is one of the few pens they have used that is so outstanding that
people often comment on it by brand name. Your brother will
enjoy having others notice the pen he uses is high in quality.
Customer:
You're right, I do tend to notice when someone is using a Cross
pen.
Salesperson: You can't go wrong with a Cross pen and pencil set for a gift.
Shall I wrap it for you? [Close]
Customer:
It's a hard decision.
Salesperson: Your brother will be very happy with this gift.
Customer:
Okay, go ahead and wrap it for me.
Salesperson: Fine, would you like me to wrap up another set for you to give
yourself? [Suggestion selling]
Customer:
Case 7-5:
No, one is enough. Maybe someone will buy one for me someday.
Negotiating with a Friend
1.
Barney’s objective is to sell his existing vehicle for enough to finance a new one.
He wants $2,000 but he knows the dealer will only give him $1,200. He needs
$1,500 to finance the new one. Chances are good he will be satisfied with $1,500.
2.
Billie’s objective is to buy a good used car for her daughter for under $1,800. She
wants to keep a small reserve for repairs and enough to buy some snow tires.
3.
Points of conflict between Barney and Billie are most likely to be price and
equipment to be included with the car.
116
4.
Barney’s power comes from having a car in good repair, that Billie’s daughter
likes, in Billie’s price range. Additional power comes from the fact that Barney’s
car will also be attractive to others.
5.
Billie has power because there are many used cars in her price range to choose
from.
6.
Billie also has power because time is important to Barney.
7.
Since Billie has 3 months to shop, time is less important to her.
8.
Possible points of compromise include the price, whether or not the snow tires
and/or stereo are included, and what can be done about the minor dents. Many
variations are possible and both parties should think them through before
negotiations begin.
117
CHAPTER 8
COMMENTS ON CHAPTER 8 QUESTIONS
1.
Use questions to: (A) obtain information; (B) develop two-way communications;
and (C) increase participation.
Three rules for Using Questions: (1) be able to anticipate answer; (2) wait for
answer; (3) listen.
2.
Statement--"Mr. Buyer, you certainly have a thriving business."
Demonstration - (see chapter for example).
Question(s)--"Would you be interested in saving 20 percent on your next
purchase?"
3.
A.
B.
C.
D.
4.
Approaches "A" and "B" are good approaches. They both summarize the
customer's situation. Approach "C" is a weak opening statement.
5.
A.
Salesperson's first question is a problem question.
Salesperson's second question is an implication question.
Salesperson's third question is an implication question.
Salesperson's fourth question is a situation question. (Also direct and
qualifying).
Salesperson's fifth question is a need-payoff question.
B.
Move into the presentation
C.
Move back to a different "problem" question and cycle through PIN part
of SPIN.
Direct
Nondirective
Direct
Redirect
E.
F.
G.
Nondirective
Rephrasing
Redirect
6.
Salesman Cliff Defee is "telling" not "selling". He should have asked questions
concerning the construction foreman's experiences with the present equipment.
7.
Alternatives
A
B
C
Ranking
Third
First
Second
118
Dollar Amount Sold
(Maximum = $12,000)
-0$12,000
$ 4,000
When asked to rank the best alternative, experienced sales people ranked "B" the
best. People who chose this alternative sold the maximum dollar amount of
$12,000.
Questions are important tools for any salesman. They help uncover needs and
problems, obtain valuable selling information, qualify the prospect's interest and
buying authority. So, it pays to ask good ones. Let's examine the three choices
you were confronted with.
A.
B.
C.
This is a weak question because it asks for a "yes" or "no" answer--no
more. Remember, you wanted information and a "yes" or "no " is the bare
minimum.
This is a good question. It's direct, well-aimed, and most importantly, it
forces the prospect to talk about a specific problem. An open-ended
question (one that can't be answered by "yes" or "no") often provides
additional information--things you didn't ask for--and this is a plus.
This question is adequate, but lacking in some aspects. It's open-ended
and that's good--it'll encourage the prospect to talk. However, it's too
loose, too general. It won't easily trigger the prospect to give you the
information you seek. And you do want to make it easy for him.
COMMENTS ON ETHICAL DILEMMA
Salespersons' loyalty is to customers and their employers, not to competitors. If the
buyer has expressed a sincere desire to work with the supplier firm and is not trying to
force the bids down by sharing information with other bidders, then accepting the bid list
may not be wrong for the salesperson. Both parties to whom salespersons should be
honest and trustworthy would benefit from the information exchange. However, if the
company accepting bids is in the habit of sharing bids with preferred suppliers, there is no
reason that it may not share the salesperson's firm's bids on other products. Condoning
such activities might lead the buyer to believe that other "favours" may be forthcoming
from the salesperson. The situation is very complex and has no cut-and-dried answer.
119
COMMENTS ON CASES
Case 8-1:
1.
The Thompson Company
Alternatives
A
B
C
Ranking
Second
Third
First
Dollar Amount Sold
(Maximum = $4,000)
$1,500
$ 500
$4,000
Five salespeople profiled in the text ranked the three alternatives, with "C" ranked
the best. People who choose this alternative sold the maximum dollar amount of
$4,000.
A.
This attention-getter is reasonably good because it points out a benefit to
the buyer. Under most circumstances it would capture her attention.
Further, the use of your product in the opener may also arouse her
curiosity since she probably doesn't know what it is. The weak spot here
is "time and money." Basically, time and money are benefits--but very
general in nature. "Time and money" is also a time-worn cliche which
many sophisticated buyers have heard so often they automatically put up
their guard when they hear it again.
B.
This attention-getter may do more harm than good. First of all it sounds a
little humbling to "beg" for a few minutes of time. If your product is good
(and it is!) then you deserve the time to tell your complete story. It's up to
you to motivate the prospect sufficiently so she wants to hear it. "To talk
about shelving" implies a friendly discussion and offers no benefit or
motivation. This type of opener may encourage prospects to say "I'm too
busy right now."
C.
Curiosity and benefit are compelling attention-getters and this opener
combines both. It offers a benefit but doesn't say how it can be gained,
thus arousing curiosity. In addition, it asks a question--another useful
device for getting attention. A question usually demands an answer and
when the prospect does respond she forfeits her divided attention.
Case 8-2:
1.
2.
The Copy Corporation
The salesperson is "telling" not "selling." He/she should ask questions concerning
the person's experiences with the equipment.
Students can be asked for specific examples of questions, such as "Mr. Buyer,
how have my copy machines been working for you?"
120
Case 8-3:
1.
2.
3.
Electronic Office Security Corporation
Most students say "Yes" this is a natural dialogue.
Most students say "Yes" or "About right."
Salesperson's SPIN questions based upon number by dialogue statements.
Statement
1 -Situation Question.
2 -"
3 -"
4 -"
5 -Problem
"
6 -"
7 -Implication "
8 -Situation
"
9 -"
"
10 -- Problem
"
11 -- Implication
"
12 -- "
"
13 -- "
"
14 -- Problem
"
15 -- Implication
"
16 -- Situation
"
17 -- "
"
18 -- Problem
"
4.
Statement
1. -- Buyer doesn't recognize need.
2. -- Important need stated but not recognized as something that could
happen.
3. -- Important need stated but not recognized as something that could happen
4. -- Important need stated and but not recognized.
5 -- Important need stated and recognized as something that could happen.
6 -- Important need stated and recognized. The presentation now begins to
turn in the salesperson's favour.
7. -- Important need stated and recognized.
8. -- "
"
"
"
"
9. -- "
"
"
"
"
10. -- "
"
"
"
"
11. -"
"
"
"
"
12. -- "
"
"
"
"
13. -"
"
"
"
"
14. -- "
"
"
"
"
15. -- "
"
"
"
"
16. -- "
"
"
"
"
121
17. -18. --
"
"
"
"
"
"
"
"
"
"
5.
She did a great job of converting the buyer from the attitude of "I do not need a
security alarm system" to "I have a security problem."
6.
Alternatives
A
B
C
D
Ranking
Second
Third
First
Fourth
Dollar Amount Sold
(Maximum = $8,000)
$1,000
$ 500
$8,000
-0-
Five salespeople profiled in the text ranked the four alternatives, with "C" ranked
the best. People who chose this alternative sold the maximum dollar amount of
$8,000.
A.
B.
C.
D.
It is possible to move on into your presentation. The prospect does not
recognize he has a problem and its implications. However, you are not
sure if he wants to solve his problem.
You could continue to ask problem questions. However, the prospect does
recognize he has a problem and its implications.
Yes, give your need-payoff question.
Do not do this! You have his attention and interest. Keep on selling!
122
CHAPTER 9
COMMENTS ON CHAPTER 9 QUESTIONS
1.
Alternative "A" is preferred since the prospect actually participates in the
demonstration.
2.
Alternative "B" is preferred since you maintain control of the visuals.
3.
Briefly restate selling points that the prospect is interested in; get the prospect to
participate; watch to see if you have regained the prospect's interest; if you have
his interest, move into the presentation.
4.
The "presentation mix" consists of these six elements:
(A) persuasive
communication; (B) participation; (C) evidence statements; (D) visual aids; (E)
dramatization; and (F) demonstration. Visuals allow you to "show and tell"
which greatly increases the effectiveness of your presentation.
5.
A.
B.
6.
Salesperson's first sentence--Restatement of the benefit.
Salesperson's second sentence--Expansion of the benefit.
Salesperson's third sentence--Evidence of the benefit.
Salesperson's fourth sentence--Expansion of the benefit.
7.
Alternatives
Correct
Not Correct
A
B
C
C.
D.
Not Correct
Correct
Ranking
Second
First
Second
Dollar Amount Sold
(Maximum = $9,000)
-0$9,000
-0-
Five salespeople ranked the three alternatives, with "B" ranked the best. People
who chose this alternative sold the maximum dollar amount of $9,000.
A.
B.
C.
Poor choice. We can understand your concern about a poor looking
presentation. But what kind of impression would you create canceling
your appointment two hours ahead of time?
Good idea. Let your prospect know you are concerned about doing things
first class. If your prospect's the least bit human, he'll understand the
problem and won't hold it against you.
We wouldn't. You may think you can pass off the stains, but don't count
on it. Why take chances on making a poor impression.
123
COMMENTS ON ETHICAL DILEMMA
In this situation (or any other client contact), a cool head is essential for the salesperson;
losing one's temper would not impress the buyer. The longer lifetime claim should be
dissected first, followed by the testimonial letter. Then the Brand X marketing research
chart can be tackled. The salesperson might question the validity of the comparison, as it
was compiled by Brand X. If the results (with Brand X on top) are untrue, third party
evidence that is unbiased may convince the buyer that the Brand X salesperson was not
being truthful. Brand X's claimed cost advantage can be proven false in this manner. By
carefully avoiding criticizing Brand X's sales techniques or products, the salesperson can
maintain his or her credibility and integrity with the buyer. By conducting one's self as a
professional, a salesperson can effectively combat the efforts of salespeople with
questionable ethics.
COMMENTS ON CASES
Case 9-1:
1.
Dyno Electric Cart Company
Alternatives
A
B
C
Ranking
First
Second
Third
Dollar Amount Sold
(Maximum = $2,000)
$2,000
$1,000
$ 500
Five salespeople ranked the three alternatives, with "A" ranked the best. People
who chose this alternative sold the maximum dollar amount of $2,000.
A.
2.
No matter how easy the demo looks when you handle it, it will be more
convincing if you can get the prospect in the act. By doing it himself, the
prospect will be intimately involved--he'll be interested, he'll see the
benefits more clearly. You will also have a better chance to eliminate or
smoke out any hidden objections.
Alternatives
A
B
Ranking
Second
First
Dollar Amount Sold
(Maximum = $2,000)
-0$2,000
Five salespeople ranked the two alternatives, with "B" ranked the best. People
who chose this alternative sold the maximum dollar amount of $2,000.
124
A.
There are some times when you may not want to get the prospect in the act. One
example is when you're using catalogs, sales presentation binders--or any material
that offers reading opportunities. If the prospect gets a chance to hold this type of
material, he may start to read the fine print (you've lost his attention!), or if the
sales aid has a number of pages, he can leap ahead and upstage you. In these
cases, protect the continuity of your presentation by controlling the sales aid. (If
there is something you want him to read, leave it with him to read when you're
gone.)
Case 9-2:
Major Oil, Inc.
Note: This case is a greatly expanded version of 7-2 “Machinery Lubricants, Inc.” Case
7-2 has students thinking about planning the sales call. This case (9-2) has students
evaluating the sales presentation.
1.
Overall Tim’s sales presentation was well done.
2.
Tim should have: (A) visuals—such as pictures—of the storage system; (B) a
suggested location; and ( C) prepared a value analysis such as the following:
20,000 litre @ $1.39 = $27,800
20,000 litre @ $1.25 = -25,000
savings = $ 2,800
Savings of $ .14 per litre x 20,000 = $2,800
The cost of the new arrangement will be $2,795. By saving $ .14 per litre of
lubricant purchased, the system will pay for itself in the first year. Also, there will be
other savings and advantages.
*
*
no lost oil left in the bottom of the drums.
no more $20 deposit/drum (and the risk of losing the deposit with
lost/damaged drums).
*less order processing, reduction in storage space, less handling of oil.
(Overall, there should be a substantial cost saving from the purchase.)
3.
Follow-up after the sale to make sure the installation is done properly and that the
buyer is satisfied with it.
125
CHAPTER 10
COMMENTS ON CHAPTER 10 QUESTIONS
1.
You must determine why the prospect is stalling by asking questions such as
"What are some of the issues you have to think about?"
2.
See if there are other products you can sell them.
3.
"A" is a lack of knowledge--needs more information.
"B" is not a feature wanted by the customer.
"C" is a lack of knowledge--needs more information.
4.
"A", "B", "C", and "E".
5.
No, Jamison did not handle the situation correctly. You should not criticize
someone as did Jamison.
6.
Alternative “C” is best since you must find out why he wants to “think it over.”
COMMENTS ON ETHICAL DILEMMA
In checking with his or her supervisor, the salesperson has fulfilled the obligation of
loyalty to his or her employer. Because the manager has approved the donation, the
salesperson is not in an ethical "tight spot." It is not unusual for organizations that do
business to support each other in non-business ways, such as donations. Keeping an
existing customer happy is easier than finding new customers, and the donation is a small
price to pay for such a large order. Maintaining secrecy about the transaction is less a
matter of ethics than one of good business sense. Other large schools may be in a
position to expect such donations, but there is no reason for the firm to offer them
without schools asking first.
COMMENTS ON CASES
Case 10-1:
1.
Ace Building Supplies
Alternatives
A
B
C
Ranking
Third
First
Second
Dollar Amount Sold
(Maximum = $6,000)
$ 500
$6,000
$2,500
Five salespeople ranked the three alternatives, with "B" ranked the best. People
who chose this alternative sold the maximum dollar amount of $6,000.
126
2.
A.
B.
C.
Case 10-2:
1.
Calling back in two months at the request of Mr. Newland is the path of
least resistance--the easy way out. While it may get you the order in the
long run, it can also set up many obstacles. A lot of things can occur in
two months: a competitor could get in to see Mr. Newland: Ace’s business
could fall off: money may be tight, etc. By waiting (without trying for an
immediate order) you are encouraging problems.
There's nothing better than a firm purchase order in hand. Perhaps some
good old-fashioned persistence would have done the job; after all, Mr.
Newland said he liked the equipment, admitted that it would solve his
problem and indicated that he would buy. Why not now? If you can't get
an immediate order, perhaps you can get one for delivery in thirty days
("Let's not wait until the last minute") or in sixty days. At minimum, a
stronger verbal commitment would help--to pin him down, to obligate
him, and to bring him closer to that actual order.
If you can't get the order now, a good alternative would be to telephone.
A personal call takes time, is expensive and can't accomplish much more
than a phone call (especially when your objective is to get a "go ahead").
Why wait the full two months? You'll probably need some time for
delivery. Besides, it's a good way to remind him that you're on your toes-anticipating problems and taking care of his needs.
Electric Generator Corporation (B)
Alternatives
A
B
C
Ranking
Second
Third
First
Dollar Amount Sold
(Maximum = $10,000)
$ 1,000
-0$10,000
Five salespeople ranked the three alternatives, with "C" ranked the best. People
who chose this alternative sold the maximum dollar amount of $10,000.
A.
B.
C.
Don is not interested in the generator's capabilities or talking to an
engineer. He wants YOU to solve his problem. Talk with him. Do
everything it takes to solve his problem. Only then can you sell him more
products.
Chicken! You have to take care of Don's problems--NOW! His project is
in trouble because of your products. Do not leave. Do everything it takes
to solve his problem. Only then can you sell him more products.
Now you're selling! Get Don to discuss the problems. Look into it. Do
your best to take care of the problems. Bring in people from ECG's
engineering department--if needed. Your company needs to know of the
problems if the generators are defective. Once you have satisfied Don,
then you can sell him additional products.
127
CHAPTER 11
COMMENTS ON CHAPTER 11 QUESTIONS
1.
"A" and "C" have the salesperson handling all of the "details," thus making it
easier for the buyer to say "Yes."
2.
A--2
B--1
C--3
D--3
3.
C--not asking for the order. The reason is fear of hearing a negative response
from the buyer.
4.
Yes, it's best to always ask the customer.
5.
True. As soon as you have finished the presentation it is time to ask for the order.
6.
Visual aids can have a "trial close."
7.
A.
B.
8.
Alternatives B, E, and F.
9.
Yes, once you get the order, get out. Do not give the customer an opportunity to
change his/her mind.
10.
The salesperson should answer a question with a question such as "would you buy
if they leave the rugs and drapes?"
E--2
F--2
G--3
Alternatives 1 and 2 are correct.
Alternative 3
COMMENTS ON ETHICAL DILEMMA
This salesperson is in a painful situation; the insurance policy could be very valuable.
However, the salesperson would be forced to lie to his employer to make the deal. This
would be dishonest, disloyal, in violation of company rules, and generally unfair to the
insurance company. The salesperson could easily lose his or her job over the sale, and
the applicant might not even pass the physical (the doctor might catch the bank
president's smoking). He or she should let someone else write the policy; there is too
much at stake to break the rules.
128
COMMENTS ON CASES
Case 11-1:
1.
A.
This isn't much of a close. It's weak and may encourage negative
comments or objections.
B.
This is often called a "trial" or "choice" close. It's a useful technique that
can be used anywhere in a presentation. By sending up a "trial balloon"
you will feel for the prospect's attitude. Simply give him a choice of two
things relating to the order. If he chooses either one, it indicates he's
mentally purchased the kits (or is seriously thinking about an order) and
you're on the way. The trick is to give him a choice of two items (colours,
sizes, models, delivery dates, etc.) but not "yes" or "no."
C.
Here you're giving him a choice of "yes" or "no" which is somewhat
dangerous. If he says "yes," fine. But a "no" can be deadly. Since you
have a fifty percent chance of being turned down, we can only give you
half the order.
D. The close used here is called an "assumptive" close. It's direct, it's positive,
it's effective. Just assume the prospect is ready to buy and ask him to take
some specific action--like signing the order, giving you a purchase order,
supplying credit reference, etc. The important thing is to ask.
Case 11-2:
1.
Skaggs Omega
Central Hardware Supply
A.
Gillespie seems to be wavering when he says "I'd like to think this over,
however." His stall or objection is certainly weak--especially when preceded by a
commitment that your product will solve his problem. If you accept his excuse,
you could be in trouble. He could have a valid reason for delaying, but if you
don't find out what it is now, you may never have an opportunity to answer it.
Evidently there's something on his mind and it behoves you to find out what it is.
B. Ignoring his "stall" (since it was expressed weakly) is a good technique in
some selling situations. It's especially good when the objection or stall is a
trivial one, or not expressed with conviction. You don't want to blow it up,
or make it seem important, by discussing it. In this case there may be
something more serious on his mind. It's a good secondary technique,
however, so you should be rewarded for using it.
C. This is a good technique. Let him tell you what's holding him back. Being
an effective salesman requires lots of detective work. If you ask tactfully,
he's apt to tell you what you have to do in order to sell him! "Thinking it
over" is not important--the key is to find out exactly what he's got to think
about.
129
Case 11-3: Furmanite Service Company--A Multiple-Close Sequence
1.
Label each of the selling techniques used by Chris.
S. Let me summarize what we have talked about. You have said that you like
the money you will save by doing the repairs. You also like our response
time in saving the flanges so they can be rebuilt when needed. Finally, you
like our three-year warranty on service. (Summary of Benefits close) Is
that right? (Trial close)
B.
Yes, that is about it.
S.
Gary, I suggest we get a crew in here and start repairing the leaks. What
time do you want the crew here Monday? (Assumptive close)
B.
Not so fast, how reliable is the compound?
S.
Gary, it's very reliable. I did the same service for Petro Canada last year and
we have not been back for warranty work. (Third party objection
handling technique) Does that sound reliable to you? (Trial close)
B.
Yeah, I guess so.
S.
I know you always make experienced, professional decisions and I know
that you think this is a sound and profitable service for your plant. Let me
schedule a crew to be here next week or maybe in two weeks.
(Compliment close combined with Alternative choice)
B.
Chris, I am still hesitant.
S.
There must be a reason why you are still hesitating to go ahead now. Do
you mind if I ask what it is? (Steps 1 and 2 of the four-step handling
objection sequence)
B.
I just don't know if it is a sound decision?
S.
Is that the only thing bothering you?)
B.
Yes, it is.
S.
Just suppose you could convince yourself that it is a good decision. Then
would you want to go ahead with the service? (Note how the question is
phrased...you could convince yourself that...)
B.
Yes, I would.
130
S.
Gary, let me tell you what we have agreed upon so far. You like our online
repair because of the cost you would save, you like our response time and
the savings you would receive from the timely repair of the leaks, and you
like our highly trained personnel and the warranty they enable us to give
you. Right? (Summary of benefits. Note trial close)
B.
Yes, that's true.
S.
When would you like to have the work done? (Direct)
B.
Chris, the proposition looks good, but I don't have the funds this month.
Maybe we can do it next month.
No problem at all, Gary; I appreciate your time, and I will return on the fifth
of next month to set a time for a crew to start. (Leaving on a positive note)
S.
2.
Chris had no real weaknesses. He closed in a low-key, natural, conversational
manner.
3.
Chris probably had closed enough, especially if his research on the firm verified
that Chris was telling the truth when he said, "...I don't have the funds this month.
Maybe we can do it next month."
4.
He should use the "four step objection handling sequence" to verify if Chris really
didn't have the money and attempt to address it. Then, assuming the objection
was successfully met, he can close again.
131
CHAPTER 12
COMMENTS ON CHAPTER 12 QUESTIONS
1.
Account penetration refers to the ability to work and contact people throughout
the account, discussing your product.
2.
To help insure that your customers will continue to buy from you, you should:
A.
B.
C.
D.
E.
F.
3.
If you lose a customer then:
A.
B.
C.
D.
4.
concentrate on improving your account penetration.
contact new accounts on a frequent and regular schedule.
handle complaints promptly.
always do what you say you will do.
service him as if he were a "king."
show your appreciation.
visit and investigate.
be professional.
never criticize a competing product.
keep calling on the customer.
To help salespeople increase their customer's sales you can:
A.
B.
C.
D.
E.
F.
G.
H.
develop an Account Penetration Program.
examine your distribution.
keep merchandise in the warehouse and on the shelf.
fight for shelf space and shelf positioning.
assist the product's users.
assist retailer's salespeople.
demonstrate your willingness to help.
obtain customer support.
5.
Being a sales professional sets you off from the rest of the crowd. It aids in your
sales success and, by being recognized as a professional, increases your chances
of promotion within your company.
6.
Poor image losing many sales; no one knows how many since the customer will
not tell the salesperson.
7.
A. Tom may get mad if you wait too long to provide him service and cut his
order down to $1,000.
B. Tom would send back all merchandise and throw you out of the store when
he next sees you.
132
C.
D.
E.
You shipped back the merchandise which canceled out your sale and maybe
even future business.
Your prompt service will save your sale and keep Tom as a customer.
You should know what to do. Do not delay! What if you cannot reach your
regional manager?
COMMENTS ON ETHICAL DILEMMA
Some firms have rules regarding gift giving and acceptance; companies use such rules to
prevent gift giving in the interest of gaining influence or favours. If the salesperson's and
the buyer's firms allow gift exchange, the salesperson can ethically give the season
basketball tickets to the buyer. This salesperson is sincerely interested in showing
appreciation, not in "buying" influence; he or she does not have ulterior motives. Giving
or accepting gifts when company rules prohibit such an exchange or when seeking
favours would be unethical; such behaviour would be unprofessional and improper for a
salesperson.
COMMENTS ON CASES
Case 12-1: Canada Adhesives Corporation
Note: This is a real case.
1.
Marilyn must prove herself to each and every customer. It may take several
routine calls to establish trust.
2.
It took Marilyn over one year before many customers began to trust her.
Case 12-2: Sport Shoe Corporation
1.
A and B – Prompt attention to this matter is a necessity. An immediate call
would be useful so the customer knows of your concern – then delivering a new
order yourself would demonstrate your commitment to satisfaction.
133
CHAPTER 13
COMMENTS ON CHAPTER 13 QUESTIONS
1.
Traveling can be a large part of a salesperson’s job. This means time not spent in
the office. Thus, technology can be an efficient tool for communication.
Scheduling efficiency can be maximized by management software, while E-mail
enables the salesperson to keep in contact with his or her associates and transport
memos instantaneously. The cellular phone can be helpful if a customer needs to
contact the salesperson. These tools increase flexibility and efficiency, helping
the salesperson cater more easily to the customer’s needs in the territory.
2.
A "sales territory" comprises a group of customers or a geographical area
assigned to a salesperson. Please see chapter for why firms establish or do not
establish territories.
3.
Please see chapter for elements of time and territory management.
4.
The undifferentiated selling approach says that you sell all customers as if they
were the same. The account segmentation approach says that you classify
accounts from extra large to small and treat each group differently.
5.
A.
Breakeven for a year would be:
Sales
Cost of goods sold
= $500,000
= - 325,000
$175,000
Gross profit % (175,000 / 500,000)
Direct salesperson's cost
= 35%
$35,000
BEP = $35,000 = $100,000
.35
If the salesperson sells $100,000 worth of merchandise, it will exactly cover
the territory's direct costs for the year.
B.
Breakeven for the day is:
If the salesperson works 48 out of 52 weeks or 240 days each year, works 5
days a week, 8 hours a day and makes 5 calls per day, there are 1920
working hours per year (240 x 8 = 1920) and 1200 sales calls (240 x 5)
made each year in the territory.
The breakeven volume per hour is: $18.23 = ($35,000 / 1,920)
breakeven per hour = $52.09 = ($18.23 / .35)
134
breakeven each day = $416.02 = ($52.09 x 8)
C.
Breakeven each sales call: $83.20 = ($416.02/5)
6.
The key account refers to where the loss of this customer would substantially
affect the territory's sales and profits.
7.
Refer to the "Territory-Time Allocation" section for the seven basic factors to
consider in time allocation.
8.
The customer sales planning is where the "tire hits the road." It is what all
salespeople are trained to do.
9.
Scheduling refers to establishing a fixed time (day and hour) when the
salesperson will be at a customer's place of business. Routing is the travel pattern
that the salesperson uses in working the territory.
COMMENTS ON ETHICAL DILEMMA
Because the salesperson is still a "new" employee, he or she should not speculate on the
situations in other territories. The salesperson could, however, tell the boss what seems
to be working in his/her territory; the manager may have some suggestions or may find
things to suggest to other employees. The underservice of the territory by the previous
salesperson may or may not be obvious to the boss; the salesperson could mention the
fact that several customers felt neglected, but should keep speculations about this neglect
to him or her self. This would help the new salesperson seem loyal to co-workers and to
the firm. The older salespeople may begin to put pressure on the newer employee; he or
she should not "slack off" on his/her efforts because of peer pressure. This would be
unfair and disloyal to the firm, to customers, and to the salesperson himself. The new
salesperson must be careful about what he/she does and says, in order to win the trust of
co-workers and the boss and to prove him/her self to be a loyal, honest employee of the
firm.
135
COMMENTS ON CASES
Case 13-1: Your Selling Day: A Time and Territory Game
SUMMARY
Customer
Number
=
Sales
Potential
First Day
Travel
Time +
Sales
Time
=
3 x 15
3 x 15
2 x 15
2 x 15
2 x 15
1 x 15
2 x 15
3 x 15
30
30
30
30
30
30
30
30
=
=
=
=
=
=
=
=
Time
(Minutes)
Home
G
C
O
K
H
M
N
P
=
=
=
=
=
=
=
=
$ 4,000
6,000
8,000
10,000
6,000
8,000
9,000
10,000
$61,000
+
+
+
+
+
+
+
+
75
75
60
60
60
45
60
75
510
510/60 = 8 1/2 hours
Second Day
Customer
Number
=
Sales
Potential
Travel
Time +
Sales
Time
=
Time
(Minutes)
Home
A
I
D
B
L
E
F
=
=
=
=
=
=
=
$ 4,000
1,000
2,000
3,000
12,000
2,000
8,000
$32,000
2 x 15
1 x 15
2 x 15
5 x 15
2 x 15
1 x 15
1 x 15
420/60 = 7 hours
136
+
+
+
+
+
+
+
30
30
30
30
30
30
30
=
=
=
=
=
=
=
60
45
60
105
60
45
45
420
Case 13-2:Naomi Beaupre's District: Development of an Account Segmentation Plan
1.
Account
Classification
A
B
C
D
E
Number of calls
2.
Number of
Accounts
10
20
45
12
10
Cycle
1
Cycle
2
Cycle
3
Cycle
4
Cycle
5
1-10
1-10
1-15
1-3
1-2
1-10
1-20
16-30
4-6
3-4
1-10
1-10
31-45
7-9
5-6
1-10
11-20
1-15
10-12
7-8
1-10
1-10
16-30
1-3
9-10
40
40
40
40
40
It may be seen from this schedule that all A accounts are called on in every cycle,
the first ten B accounts in cycles 1 and 3, and the second ten B accounts in cycles
2 and 4. Since the cycles are of two weeks' duration, these accounts will be called
on every four weeks according to the call frequency shown. By definition, it
takes one cycle to call on all A accounts (two weeks), two cycles for all B
accounts (four weeks), three cycles for all C accounts (six weeks), four cycles for
all D accounts (eight weeks), and five cycles for all E accounts (ten weeks).
137
Your Selling Day
Your sales manager is working with you tomorrow, and wants to call on customers with
the greatest sales potential (see Exhibit A). Because you are on a straight commission,
you will also have the opportunity to maximize your income for that day. That area of
your territory that you want to cover contains 16 customers (see Exhibit B). To determine
travel time, allow 15 minutes for each side of the square. Each sales call takes 30
minutes. You can leave house at 8:00 A.M. or later. If you take time for lunch, it must be
in 15-minute time blocks (15, 30, 45, or 60 minutes). Your last customer must be
contacted by 4:30 P.M. to allow you enough sales time. Your customers do not see
salespeople after 5:00 P.M. You travel home after 5:00 P.M.
EXHIBIT A: Customers’ sales potential
Customer
A
B
C
D
E
F
G
H
Sales Potential
$ 4,000
3,000
6,000
2,000
2,000
8,000
4,000
6,000
Customer
I
J
K
L
M
N
O
P
Sales Potential
$ 1,000
1,000
10,000
12,000
8,000
9,000
8,000
10,000
EXHIBIT B: A partial map of your sales territory
L
E
F
H
N
K
O
B
M
J
R
Your
Favourite
Restaurant
C
D
P
I
 Case copyright  1998 by Charles M. Futrell.
A
G
START
138
QUESTIONS:
1. Develop the route that gives the highest sales potential for the day your boss works
with you. Write the customer letters in the sequence you would call on each account,
such as D, R, K, etc.
2. For the next day, develop the route allowing you to contact the remaining customers
in this part of the territory. Write the customer letters in the sequence you would call
on each account, such as D, R, K, etc.
3. Now make sales calls on all the 16 customers -- customers A through P. For each of
the 16 customers shown on the next pages choose the best course of action among the
alternatives.
CUSTOMER A
You are a salesperson for the Sport Shoe Corporation. On arrival at your office you
check your e-mail and find a message marked "urgent". This e-mail is from the athletic
director of Simon Fraser University, and pertains to the poor quality of football shoes you
sold him. The director cited several examples of split soles and poor overall quality as his
main complaints. In closing, he writes that since the season was drawing near he would be
forced to contact the ACME Sport Shoe Company if the situation could not be rectified.
What actions on your part would be appropriate?
A.
B.
C.
D.
Place a call to the athletic director assuring him of your commitment to
service. Promise to be at Simon Fraser University at his convenience to rectify
the problem.
Go by the warehouse and take the athletic director all new shoes and apologize
for the delay and poor quality of the merchandise.
Write an e-mail to the athletic director assuring him that SSC sells only highquality shoes and that this type of problem rarely occurs. Assure him you'll
come to his office as soon as possible but if he feels ACME would be a better
choice than Sport Shoe he should contact them.
Don't worry about the letter because the athletic director seems to have the
attitude that he can put pressure on you by threatening to switch companies.
Also, the loss in sales of 20-40 pairs of football shoes will be a drop in the
bucket compared to the valuable sales time you would waste on a piddly
account like Simon Fraser.
139
CUSTOMER B
Sam Gillespie, the owner of Central Hardware Supply, was referred to you by a
mutual friend. Gillepsie had been thinking of dropping two of their product suppliers of
home building supplies. "The sales should be guaranteed," your friend has stated.
Your friend's information was correct and your presentation to Gillepsie convinces
you he will benefit from buying from you. He comments as you conclude your
presentation: "Looks like your product will solve our problem. I'd like to think this over,
however. Could you call me tomorrow or the next day?" The best way to handle this would
be to:
A.
B.
C.
Follow his suggestion.
Ignore his request and try a second close.
Probe further. You might ask: "The fact that you have to think this over
suggests that I haven't convinced you. Is there something I've omitted or failed
to satisfy you with?"
CUSTOMER C
In order to convince your customers that your product's benefits are important, you
must show how your product's benefits will meet their needs.
Suppose your customer says: "I need some kind of gadget that will get me out of
bed in the morning." Check the statement below which best relates your product feature, the
G.E. clock radio's snooze alarm, to this customer's need:
A.
B.
C.
"Ms. Jones, this G.E. radio has a snooze alarm which is very easy to operate.
See, all you do is set this button and off it goes..."
"Ms. Jones, the G.E. radio is the newest radio on the market. It carries a oneyear guarantee and you can trade in your present radio and receive a
substantial cut in the price."
"Ms. Jones, since you say you have trouble getting up in the morning, you
want an alarm system that will make sure you wake up. Now, G.E.'s snooze
alarm will wake you up no matter how often you shut the alarm off. You see,
the alarm goes off every seven minutes until you switch off the "early bird
knob."
140
CUSTOMER D
You are planning a call back on Mr. Pride and the president of his company to sell
them several of your electric carts. The company's manufacturing plant covers some 200
acres and you have sold many companies smaller than this one up to 10 carts. Since Mr.
Pride is allowing you to meet with his company's president and maybe other executives, you
know he is interested in your carts.
You are determined to make a spellbinding presentation of your product's benefits,
which will make use of visual aids and a demonstration of the cart itself. Mr. Pride raised
several objections on your last presentation that may be brought up again by other
executives. Your challenge is to develop a dramatic, convincing presentation. You plan to
give a "live" demonstration of the cart to show how effective it is to move around the plant.
Which of the following is the best technique for the demonstration?
A.
B.
C.
Get Mr. Pride and the president involved by letting them drive the cart.
You drive letting them ride so they will listen more carefully to you.
Leave a demonstrator and check back the next week to see how many they will
buy.
CUSTOMER E
You are also planning to use your 10 page visual "presenter" to guide Mr.Pride
through your benefit story. This selling aid is in a binder form and contains photographs of
your cart in action, along with its various color option, guarantee, and testimonials. Should
you:
A. Get Mr. Pride to participate by letting him hold it.
B. Handle it yourself, let him watch and listen while you turn the pages and tell
your story.
CUSTOMER F
Picture yourself as a Procter & Gamble salesperson who plans to call upon Ms.
Hansen, a buyer for your largest independent grocery store. Your sales call objective is to
convince Ms. Hansen that she should buy your "family" size of Tide detergent. Her store
now carries the three smaller sizes. You have developed a marketing plan that you feel will
help convince her that she is losing sales and profits by not stocking Tide's family size.
You enter the grocery store, check your present merchandise, and quickly develop a
suggested order. As Ms. Hansen walks down the aisle toward you, she appears to be in her
normal grumpy mood. After your greeting and handshake, your conversation goes like this:
Salesperson:
Buyer:
Your sales are really up? I've checked your stock in the warehouse
and on your shelf. This is what it looks like you need. [You discuss
sales of each of your products and their various sizes, suggesting a
quantity she should purchase based upon her past sales and present
inventory.]
OK, that looks good. Go ahead and ship it.
141
Salesperson:
Buyer:
Thank you. Say, Ms. Hansen, you've said before that the shortage of
shelf space prevents you from stocking our family size Tide--though
you admit you may be losing some sales as a result. If we could
determine how much volume you're missing, I think you'd be willing
to make space for it, wouldn't you?
Yes, but I don't see how that can be done.
Salesperson:
Buyer:
Well, I'd like to suggest a test--a weekend display of all four sizes of
Tide.
What do you mean?
Salesperson:
Buyer:
My thought was to run all sizes that are regular shelf price without
any ad support. This would give us a "pure" test. Six cases of each
size should let us compare sales of the various sizes and see what
you're missing by regularly stocking only the smaller sizes. I think
the additional sales and profits you'll get on the family size will
convince you to start stocking it on a regular basis. What do you
think?
Well, maybe.
At the end of your conversation, Ms. Hansen said, "Well, maybe." Which of the following
should you do now?
A.
B.
C.
D.
E.
Continue to explain your features, advantages, and benefits.
Ask a trial close question.
Ask for the order.
Back off and try again on the next sales call.
Wait for Ms. Hansen to say "OK, ship it."
142
CUSTOMER G
Before making a cold call on the Thompson Company, you did some research on the
account. Barbara Thompson is both president and chief purchasing officer. In this dual
capacity she is often so rushed that she is normally impatient with salespeople. She is
known for her habit of quickly turning down the salesperson, and shutting off the discussion
by turning and walking away. In looking over Ms. Thompson's operation, you notice that
the inefficient metal shelving she is using in her warehouse is starting to collapse.
Warehouse employees have attempted to remedy the situation by building wooden shelves
and reinforcing the weakened metal shelves with lumber. They have also begun stacking
boxes on the floor requiring much more space.
You recognize the importance of getting off to a fast start with Ms. Thompson. You
must capture her attention and interest quickly or she may not talk with you. Which of the
following attention-getters would you choose?
A.
B.
C.
"Ms. Thompson, I'd like to show you how Hercules shelving can save you
both time and money."
"Ms. Thompson, can you spare a few moments of your time to talk about new
shelving for your warehouse?"
"Ms. Thompson, how would you like to double your storage space?"
CUSTOMER H
This is your fourth call on Ace Building Supplies to get them to begin carrying and
selling your home building supplies to local builders. Joe Newland, the buyer, has given
you every indication the he likes your products.
During the call, Joe reaffirms his liking for your products and attempts to end the
interview by standing up and saying "We'll be ready to do business with you in three
months--right after this slow season ends. Stop by then and we'll definitely place an order
with you."
Under these circumstances, which one of the following would you do? Why?
A.
B.
C.
Call back in three months to get the order as suggested.
Try to get a firm commitment or order now.
Telephone Joe in a month (rather than make a personal visit) and try to get the
order.
143
CUSTOMER I
You work for the Lanier Pager Equipment Corporation selling pagers and other
equipment. Imagine yourself as just entering the lobby and reception room of a small
manufacturing company. You hand the receptionist your business card and ask to see the
purchasing agent. "What is this in reference to?" the secretary asks, as two other salespeople
approach. Which of the following alternatives would you use and why?
A.
B.
C.
D.
Give a quick explanation of your equipment, ask whether the secretary has
heard of your company, or used your equipment, and again ask to see the
purchasing agent.
"I would like to discuss our paging equipment."
"I sell paging equipment designed to save your company money and provide
greater efficiency. Companies like yours really like our products. Could you
help me get in to see your purchasing agent?"
Give a complete presentation and demonstration.
CUSTOMER J
Skaggs Omega, a large chain of supermarkets, has mailed you an inquiry on
hardware items. They specifically wanted to know about your hammers, screwdrivers, and
nails. Upon your arrival, you make your presentation to the purchasing agent, Linda
Johnson. You start out by stating that you had visited several of their stores. You discuss
your revolving retail display, which contains an assortment of the three items Johnson had
mentioned in her inquiry and relate the displays and advantages and features to benefits for
Skaggs.
During your presentation, Johnson has listened but has said very little and has not
given you any buying signals. However, it does appear she is interested. She did not object
to your price nor did she raise any other objections.
You are approaching the end of your presentation, and it is time to close. Actually
you have said everything you can think of. What is the best way to ask Johnson for the
order?
A.
B.
C.
"How do you like our products, Ms. Johnson?"
"What assortment do you prefer, the A or B assortment?"
"Can we go ahead with the order?"
144
CUSTOMER K
As you drive up into the parking lot of one of your best distributors of your home
building supplies, you recall how only two years ago they purchased the largest opening
order you ever sold. Last year their sales doubled and this year you hope to sell them over
$100,000 worth.
As you wait, the receptionist informs you that since your last visit your buyer, John
Smalley, was fired and another buyer was transferred in to take his place. John and you had
become reasonably good friends over the past two years and you hated to see him go.
As you enter the new buyer's office, she asks you to have a seat and then says: "I've
got some bad news for you. I'm considering switching suppliers. Your prices are too high."
Under these circumstances the best way to react to this objection would be:
A.
B.
C.
"It's certainly a good idea to compare prices, because price is always an
important consideration. When you add up all the benefits we offer, however,
I think you'll find that our prices--over the long haul--are actually lower than
the competition's."
"Would you mind telling me exactly why you're considering this move?"
"Gee, I'm really surprised at this move. After all, we were the ones who
originally got you interested in handling home building supplies. Our service
has been good, and most importantly, you've derived excellent profits from our
line."
CUSTOMER L
This is a cold call on the warehouse manager for Coat's Western Wear, a retailer
with four stores. You know most of the manager's work consists of deliveries from the
warehouse to the four stores. Based on your past experience, you suspect that the volume of
shipments to the warehouse fluctuates, with certain seasons of the year being extremely
busy.
As a salesperson for the Hercules Shelving, you want to sell the manager your
heavy-duty gauge steel shelving for use in the warehouse. Since this is a relatively small
sale, you decide to go in cold, relying only on your questioning ability to uncover potential
problems and make the prospect aware of them.
You are now face-to-face with the warehouse manager. You have introduced
yourself and after some small talk you feel it is time to begin your approach. Which of the
following questions would serve your purpose best?
A.
B.
C.
Have you had any recent storage problems?
How do you take care of your extra storage need during your busy seasons
such as Christmas?
Can you tell me a little about your storage problems?
145
CUSTOMER M
You have been working for two months on an industrial account to obtain a firm
commitment for a $185,000 computer system. Over the past three years, this particular firm
has purchased $575,000 from your company. If you can land the order today, you will
become eligible for a quarterly commission bonus of $2,500. To meet your competitor's
lower price, your manager decides to give you special authorization to offer your client a
$9,000 package consisting of free software, specialized operation training, and extendedservice contract terms. Similar incentives have been offered on special occasions in the past.
All customers are eligible for the package. You feel this sweetened offer will bring you
below your competitor's rock-bottom price. You know your customer is a price buyer.
As you drive to your customer's office, you get tied up in a huge traffic jam. You
call your client from your car phone and ask her secretary if it would be okay to come about
30 minutes later than scheduled. He tells you not to worry.
As you are ushered into the buyer's office, you greet your customer with a smile,
ready to announce the good news. She informs you that she signed a contract with your
competitor just ten minutes ago. Upon your insistence, she shows you the bottom line on the
signed contract. You realize that by purchasing your system, she could have saved as much
as $12,000. What do you do?
A.
B.
C.
Compare the two offers for the buyer, and ask her to cancel the signed
contract.
Tell her about your proposal, but do not suggest she cancel the signed contract.
Say nothing. Keep your cool - act professionally. Otherwise, you will lose the
customer forever. Accept the loss in a gracious and courteous manner.
CUSTOMER N
After a two-hour drive to see an important new prospect, you stop at a local coffee
shop for a bite to eat. As you are looking over your presentation charts, the coffee spills on
about half a dozen of them. You don't have substitute presentation charts with you. What
should you do?
A. Phone the prospect and say that you'd like to make another appointment. Say
that something came up.
B. Go ahead and keep the appointment. At the start of your presentation, tell the
prospect about the coffee spill and apologize for it.
C. Go ahead with your presentation. But don't make excuses. The coffee stains
are barely noticeable if you're not on the lookout for them.
146
CUSTOMER O
Using your knowledge of negotiation, which of these methods would be the best
way to handle a prospective new car purchaser and why? A customer has told you she is
only looking, prices are too high, and she cannot afford a new automobile at this time.
A.
B.
C.
D.
Agree with her, then proceed to the next available customer.
Show the customer a cheaper model of the same car.
Explain to the customer how payments can be tailored to fit almost anyone's
budget.
Ask her why she is wasting her time looking at new cars.
CUSTOMER P
You have just learned that one of your customers, Tom's Discount Store, has
received a shipment of faulty goods from your warehouse. The total cost of the
merchandise is $2,500. Your company has a returned-goods policy that will only allow you
to return $500 worth of your product at one time unless a reciprocal order is placed. What
would you do?
A.
B.
C.
D.
E.
Call Tom's and tell them you will be out to inspect the shipment in a couple of
days.
Ask Tom's to patch up what they can and sell it at a reduced cost in an
upcoming clearance sale.
Send the merchandise back to your warehouse and credit Tom's account for
the price of the damaged goods.
Get over to Tom's as soon as possible that day, check the shipment to see if
there are any undamaged goods that can be put on the shelf, get a replacement
order from Tom's manager, and phone in the order immediately.
Call your regional sales manager and ask what to do.
147
Your Selling Day: Solutions
CUSTOMER A
Alternatives
A
B
C
D
Ranking
Second
First
Third
Fourth
Dollar Amount Sold
(Maximum = $4,000)
$ 1,500
$ 4,000
$ 0,000
$ 0,000
Five salespeople ranked the four alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $4,000. Alternative "A"
was second. Both alternatives "C" and "D" were unacceptable to all five judges.
CUSTOMER B
Alternatives
Ranking
Dollar Amount Sold
(Maximum = $3,000)
A
B
C
Third
Second
First
$ 0,000
$ 1,500
$ 3,000
Five salespeople ranked the three alternatives, with "C" ranked the best. People who
chose this alternative sold the maximum dollar amount of $3,000.
A.
B.
C.
Gillespie seems to be wavering when he says, "I'd like to think this over,
however." His stall or objection is certainly weak--especially when preceded
by a commitment that your product will solve his problem. If you accept his
excuse, you could be in trouble. He could have a valid reason for delaying, but
if you don't find out what it is now, you may never have an opportunity to
answer it. Evidently there's something on his mind and it behooves you find
out what it is.
Ignoring his "stall" (since it was expressed weakly) is a good technique in
some selling situations. It's especially good when the objection or stall is a
trivial one, or not expressed with conviction. You don't want to blow it up, or
make it seem important by discussing it. In this case there may be something
more serious on his mind. It's a good secondary technique, however, so you
should be rewarded for using it.
This is a good technique. Let him tell you what's holding him back. Being an
effective salesman requires lots of detective work. If you ask tactfully, he's apt
to tell you what you have to do in order to sell him! "Thinking it over" is not
important--the key is to find out exactly what he has got to think about.
148
CUSTOMER C
Alternatives
Ranking
Dollar Amount Sold
(Maximum = $6,000)
A
B
C
Second
Third
First
$ 1,000
$ 0,000
$ 6,000
Five salespeople , ranked the three alternatives, with "C" ranked the best. People
who chose this alternative sold the maximum dollar amount of $6,000.
A.
B.
C.
This response stresses only features of the radio. Yes, the features are related
to the prospect's needs. However, it is a very weak selling response.
This response stresses only features of the radio. These features are not related
to the prospect's needs. The prospect may say, "Thanks, but I'd better shop
other stores before deciding."
This response is excellent since it relates directly to the prospect's needs.
CUSTOMER D
Alternatives
A
B
C
Ranking
First
Second
Third
Dollar Amount Sold
(Maximum = $2,000)
$ 2,000
$ 1,000
$ 500
Five salespeople ranked the three alternatives, with "A" ranked the best. People who
chose this alternative sold the maximum dollar amount of $2,000.
A.
No matter how easy the demo looks when you handle it, it will be more
convincing if you can get the prospect in the act. By doing it himself, the
prospect will be intimately involved--he'll be interested, he'll see the benefits
more clearly. You will also have a better chance to eliminate or smoke out any
hidden objections.
149
CUSTOMER E
Alternatives
A
B
Ranking
Second
First
Dollar Amount Sold
(Maximum = $2,000)
$ 0,000
$ 2,000
Five salespeople ranked the two alternatives with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $2,000.
CUSTOMER F
Alternatives
Ranking
Dollar Amount Sold
(Maximum = $8,000)
A
B
C
D
E
Second
Third
First
Fourth
Fourth
$ 2,000
$ 2,000
$ 8,000
$ 0,000
$ 0,000
Five salespeople ranked the five alternatives with "C" ranked the best. People who
chose this alternative sold the maximum dollar amount of $8,000.
A.
B.
C.
You might want to further explain the benefits of your marketing program.
This could help you close the sale. However, it is not the best course of action.
If still unsure of the buyer's attitude, you might probe more using another trial
close such as "Does the concept sound good to you?"
It is time to close by saying, "May I enter the six cases of family size Tide in
the order book now?" or "Will six cases be enough?" or "With your sales being
really up, should we use six or eight cases?"
150
CUSTOMER G
Alternatives
A
B
C
Ranking
Second
Third
First
Dollar Amount Sold
(Maximum = $4,000)
$ 1,500
$ 500
$ 4,000
Five salespeople ranked the three alternatives, with "C" ranked the best. People who
chose this alternative sold the maximum dollar amount of $4,000.
A.
B.
C.
This attention-getter is reasonably good because it points out a benefit to the
buyer. Under most circumstances it would capture his attention. Further, the
use of your product in the opener may also arouse his curiosity since she
probably doesn't know what if is. The weak spot here is "time and money."
Basically, time and money are benefits--but very general in nature. "Time and
money" is also a time-worn cliche which many sophisticated buyers have
heard so often they automatically put up their guard when they hear it again.
This attention-getter may do more harm than good. First of all it sounds a little
humbling to "beg" for a few minutes of time. If your product is good (and it
is!) then you deserve the time to tell your complete story. It's up to you to
motivate the prospect sufficiently so she wants to hear it. "To talk about
shelving" implies a friendly discussion and offers no benefit or motivation.
This type of opener may encourage prospects to say "I'm too busy right now."
Curiosity and benefit are compelling attention-getters and this opener
combines both. It offers a benefit but doesn't say how it can be gained, thus
arousing curiosity. In addition, it asks a question--another useful device for
getting attention. A question usually demands an answer and when the
prospect does respond he forfeits her divided attention.
CUSTOMER H
Alternatives
A
B
C
Ranking
Third
First
Second
Dollar Amount Sold
(Maximum = $6,000)
$ 500
$ 6,000
$ 2,500
Five salespeople ranked the three alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $6,000.
A.
Calling back in two months at the request of Mr. Newland is the path of least
resistance--the easy way out. While it may get you the order in the long run, it
151
B.
C.
can also set up many obstacles. A lot of things can occur in two months: a
competitor could get in to see Mr. Newland; Aces' business could fall off;
money may be tight, etc. By waiting (without trying for an immediate order)
you are encouraging problems.
There's nothing better than a firm purchase order in hand. Perhaps some good
old-fashioned persistence would have done the job; after all, Mr. Newland said
he liked the equipment, admitted that it would solve his problem, and indicated
that he would buy. Why not now? If you can't get an immediate order,
perhaps you can get one for delivery in thirty days ("Let's not wait until the last
minute") or in sixty days. At minimum, a stronger verbal commitment would
help--to pin him down, to obligate him, and to bring him closer to that actual
order.
If you can't get the order now, a good alternative would be to telephone. A
personal call takes time, is expensive and can't accomplish more than a phone
call (especially when your objective is to get a "go ahead"). Why wait the full
two months? You'll probably need some time for delivery. Besides, it's a
good way to remind him that you're on your toes--anticipating problems and
taking care of his needs.
CUSTOMER I
Alternatives
Ranking
Dollar Amount Sold
(Maximum = $1,000)
A
B
C
D
Second
Third
First
Third
$ 500
$ 0,000
$ 1,000
$ 0,000
Five salespeople ranked the four alternatives, with "C" ranked the best. People who
chose this alternative sold the maximum dollar amount of $1,000.
Getting by the receptionist or switchboard operator, at times, requires a certain
amount of skill. Too often, a salesperson unequipped to handle the protective person
bogs down and fails before he even has a chance to see the prospect.
A.
B.
This method is not as good as "C", but it is a good second choice. Make her
feel important, build up her ego by taking the time (if she can afford it) to give
her a meaningful message. Don't get trapped into telling her everything. The
receptionist can't do the buying. Whet her appetite and get her on your team.
We're afraid that under normal circumstances this answer will provoke the
typical response: "We don't need any." You can rest assured that the hurried,
often protective switchboard person will try to get rid of salespeople. Since
she knows what "dictaphones" are you are giving her a great opportunity for a
negative reaction.
152
C.
D.
This is the best answer because it's direct and to the point. You really haven't
told her what the product is so it's difficult for her to say the company "doesn't
need any." Secondly, you have given her some of the benefits; hopefully she
won't want to take the responsibility for her company missing out on them.
Thirdly, you've repeated your request for her to direct you to the purchasing
agent (or reasonable facsimile).
Same as B.
CUSTOMER J
Alternatives
Ranking
A
B
C
First
Second
Dollar Amount Sold
(Maximum = $1,000)
$ 0,000
$ 1,000
$ 500
Five salespeople ranked the three alternatives, with "B" earning the maximum dollar
amount of $1,000.
A.
B.
C.
This isn't much of a close. It's weak and may encourage negative comments or
objections.
This if often called the "alternative-choice" close. Simply give her a choice of
two things relating to the order. If she chooses either one, it indicates she's
mentally purchased the kits (or is seriously thinking about an order) and you're
on your way. The idea is to give her a choice of two items (colors, sizes,
models, delivery dates, etc.) but not "yes" or "no."
Here you're giving her a choice of "yes" or "no" which is somewhat dangerous.
If she says "yes," fine, but a "no" can be deadly. Since you have a fifty percent
action--like signing the order, giving you a purchase order number, supplying
credit reference, etc. The important thing is to ask.
153
CUSTOMER K
Alternatives
A
B
C
Ranking
Second
First
Third
Dollar Amount Sold
(Maximum= $10,000)
$ 5,000
$ 10,000
$ 2,500
Five salespeople ranked the three alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $10,000.
A.
B.
C.
This is a good technique for handling an objection--agreeing first (partially)
and then answering the objection. A little agreement or complimentary remark
acknowledging the prospect's statement will often open the prospect's mind
and soften the blow of your rebuttal. In this case, however, rebuttal would be
premature. Better find out the exact problem before you try to answer.
Before handling an objection, it's important to find out what the exact
objection is. Is price a stall or her bona fide reason for changing suppliers? Is
it the competitor's cheaper price that's attractive or does the problem exist with
SOS's own salespeople--and their inability to sell a high-priced line? There
could be many problems so before you answer the objection, do some probing
and find out what the real one is.
This is a good point but a bad time to remind her about it. Throw it in later
perhaps, but don't rely on past favour too heavily. After all, you and your
company have also profited from the relationship with SOS.
CUSTOMER L
Alternatives
A
B
C
Ranking
Third
First
Second
Dollar Amount Sold
(Maximum= $12,000)
$ 00,000
$ 12,000
$ 4,000
Five salespeople ranked the three alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $12,000.
Questions are important tools for any salesperson. They help uncover needs and
problems, obtain valuable selling information, qualify the prospect's interest and
buying authority. So it pays to ask good ones. Let's examine the three choices you
were confronted with.
154
A.
B.
C.
This is a weak question because it asks for a "yes" or "no" answer--no more.
Remember, you wanted information and a "yes" or "no" is the bare minimum.
This is a good question. It's direct, well-aimed, and most importantly, it forces
the prospect to talk about a specific problem. An open-ended question (one
that can't be answered by "yes" or "no") often provides additional information-things you didn't ask for--and that is a plus.
This question is adequate, but lacking in some aspects. It's open-ended and
that's good--it'll encourage the prospect to talk. However, it's too loose, too
general. It won't easily trigger the prospect to give you the information you
seek. And you do want to make it easy for him.
CUSTOMER M
Alternatives
Ranking
A
B
C
Third
First
Second
Dollar Amount Sold
(Maximum = $8,000)
$ 0,000
$ 8,000
$ 3,000
Five salespeople ranked the three alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $8,000.
A.
B.
C.
Even though you know that your offer is the best one, asking the buyer to
cancel a signed contract is wrong. Not only is such an action unethical, it
would cost you the customer's business in the future.
Here, you are acting in the best interest of your company, your customer, and
yourself. By not asking your client to cancel her contract and sign your
contract, you have maintained the client's trust. Asking her to void the contract,
on the other hand, would have been highly unethical. However, it is important
that you take the time to explain to your client the proposal that you were
prepared to present. That way, perhaps your client will keep your company in
mind the next time the firm needs your products. Then, both her company and
your company can benefit.
By saying nothing about the signed contract, you are acting in a professional
manner. You are following the rules and employing conventional behaviour.
155
CUSTOMER N
Alternatives
A
B
C
Ranking
Second
First
Second
Dollar Amount Sold
(Maximum = $9,000)
$ 0,000
$ 9,000
$ 0,000
Five salespeople ranked the three alternatives, with "B" ranked the best. People who
chose this alternative sold the maximum dollar amount of $9,000.
A.
B.
C.
Poor choice. We can understand your concern about a poor looking
presentation. But what kind of impression would you create canceling your
appointment two hours ahead of time?
Good idea. Let your prospect know you are concerned about doing things first
class. If your prospect's the least bit human, he'll understand the problem and
won't hold it against you.
We wouldn't. You may think you can pass off the stains, but don't count on it.
Why take chances on making a poor impression.
CUSTOMER O
Alternatives
A
B
C
D
Ranking
Second
First
Dollar Amount Sold
(Maximum = $8,000)
$ 0,000
$ 500
$ 8,000
$ 0,000
Five salespeople ranked the four alternatives, with "C" ranked the best. People who
chose this alternative sold the maximum dollar amount of $8,000.
A.
B.
C.
D.
No sale -- no way! You blew it!
You sold her a junk car worth $500.
You sold her an $8,000 car.
No sale --no way! You blew it!
156
CUSTOMER P
Alternatives
A
B
C
D
E
Ranking
Second
Second
First
Second
Dollar Amount Sold
(Maximum= $10,000)
$ 500
$ 500
$ 0,000
$ 10,000
$ 500
Five salespeople ranked the five alternatives, with "D" ranked the best. People who
chose this alternative sold the maximum dollar amount of $10,000.
A.
B.
C.
D.
E.
Tom may get mad if you wait too long to provide him service and cut his order
down to $1,000.
Tom would send back all merchandise and throw you out of the store when he
next sees you.
You shipped back the merchandise which canceled out your sale and maybe
even future business.
Your prompt service will save your sale and keep Tom as a customer.
You should know what to do. Do not delay! What if you cannot reach your
regional manager?
157
CHAPTER 14
COMMENTS ON CHAPTER 14 QUESTIONS
1.
Retailers sell (or should sell) like industrial salespeople.
2.
Suggestion selling recommends complimentary or related products, such as socks
with shoes, tie with suit, radio with car.
3.
A.
B.
C.
4.
A. The salesperson was very positive and reinforced the buyer’s purchase
decision.
B. Needs to suggest products to accompany the sports coat.
5.
Three types of business demand are:
A.
Derived--electric motors of refrigerators.
B.
Inelastic--increased motors’ price of 5% not an influence on the price of
refrigerators.
Joint--IBM Supermarket System (computer, scanners).
C.
6.
No
Help the customer by substituting another product.
The customer does not have a gift; the clerk and store lost a sale.
In computer sales, the salesperson has to be an expert on how the equipment can
be used and what it can do for the consumer. The quality, features, and other
“physical” characteristics should be emphasized.
In the insurance sales job, a tangible good is not present to demonstrate how it
functions; thus, the product cannot sell itself. The salesperson is responsible for
persuading the buyer on the benefits the service will provide. This is the most
difficult type of selling due to the clients’ inability to fully understand concepts
they can’t see.
In nonprofit sales, the job entails attracting resources which is different from
selling goods or other services. This is an important job so that resources are not
wasted.
158
COMMENTS ON ETHICAL DILEMMA
In such a situation, many people would be tempted to confront the supervisor or go over
his head and complain to his supervisors. A confrontation could result in the
salesperson's termination, as could going over the boss' head. The salesperson may find
the "theft" of his hard work unbearable; he or she may want to seek another position in
the company or with another firm. Once another position is secured, and the present boss
has little or no influence on the salesperson's future, the salesperson might then be able to
confront the supervisor or even go to his supervisors without fear of reprisal. Sabotaging
the boss' "new" programs may seem personally satisfying to the salesperson, but such
actions would be disloyal to the firm as well as improper. Just because the supervisor has
done something wrong is no justification for the salesperson to respond in kind.
COMMENTS ON CASES
Case 2-1:
Plimpton’s Tire Service
1.
He is an order-taker not order-getter. He did not have the selling skills to help me
solve my problem.
2.
He did not get a conversation going by asking questions. He had no response
when I said “Well, I guess I’ll have to shop around.”
These experiences make great stories for class discussion. Ask students if this has
ever happened to them.
3.
The salesperson could ask about the 1966 Mustang itself. Questions such as
“How do you use the car?” could be asked. Often the cheapest tire is not the
lowest price when you consider the life of a tire. He could point up a return-oninvestment selling point.
Case 2-2:
Competition Shoes, Inc.
Note: This is a real case. The salesperson was a young woman, approximately 20 years
old. When asked if she had ever had a selling course and she said “no.” Her
questions were natural ones aimed at helping a customer. The situation reminds
me of how a medical doctor or lawyer asks questions.
1.
The salesperson did an outstanding job- no errors.
2.
She could sell anyone.
3.
This person was interested in selling a product that would help the customer.
159
COMMENTS ON CHAPTER 14 QUESTIONS
1.
Who knows? It is often difficult to tell if these are socially responsible actions.
Yes, managers feel there is much room for improved business ethics. Sales
managers face many ethical situations including: (A) the level of sales pressure;
(B) decisions affecting territory; (C) telling the truth; and handling the ill
salesperson.
2.
In such a situation, both individual moral development and the cultural values of
the company for which the individual worked would affect the decision. Which
influence is stronger would depend upon the individual.
3.
Have students discuss ethical dilemmas with respect to such a situation having no
true right or wrong response. Lead a discussion on how each alternative would
impact the individuals involved.
4.
In general, the more attention and emphasis a company places on the importance
of ethical behaviour, the more effective it will be in instilling such values in
company employees. Therefore, a code of ethics combined with an ethics
committee is likely to be more successful because there will exist both a guide for
behaviour and a group available for advice and enforcement.
COMMENTS ON ETHICAL DILEMMA
By urging the buyer to cancel the contract with the competing firm, the salesperson
would be taking a chance of losing that customer forever. If she is willing to listen to the
proposed package, the salesperson should make the presentation. It is very unlikely that
the buyer could void the contract, so the salesperson should be gracious and courteous
and accept the lost sale. This would prove to the buyer that the salesperson is mature and
would not put undue pressure on clients, therefore keeping her trust.
160
COMMENTS ON CASES
Case 14-1:
Fancy Frozen Foods*--The Buyer Asks For A Kickback!
SUMMARY
Fancy Frozen Foods (FFF) manufactures and wholesales a complete line of frozen
foods at prices below most of their competitors. The company currently employs 20
salespeople to cover the Manitoba and Saskatchewan markets. Territories and sales
quotas are viewed as fair and realistic.
FFF has no formal, written policy regarding gift giving and entertainment,
although $25 is unofficially set as the upper limit for gifts given to accounts. Customers
are also invited for a 3-day hunting/outdoor sports vacation at the FFF ranch in
Saskatchewan.
Bill Wilkerson, FFF's regional sales coordinator, has recently run into an ethical
issue with one of his major accounts. Grady Bryan, warehouse ordering agent for Smith
Supermarket Chain (SSC), has indicated that in order for FFF to keep SSC's account, he
will have to receive an inboard-outboard engine for his new boat. SSC, which operates
13 Manitoba and 15 Saskatchewan based supermarkets and buys all of its frozen foods
exclusively through FFF, has been an important account for the past four years.
The question is, "Should Bill succumb to the bribe?"
CASE OBJECTIVE
The case objective is to develop a means of handling unusual and/or unethical
customer demands so that policy decisions are not made at all levels of the organization.
PRIMARY DECISIONS
1.
2.
Whether or not to offer the bribe to Grady.
How to deal with these types of ethical issues in the future.
SECONDARY DECISIONS
1.
2.
Whether or not to investigate the actions of the territorial sales representative for
possibly initiating the bribe.
Whether or not to investigate the possible unethical implication of the 3-day ranch
vacation.
161
ANALYSIS OF ALTERNATIVES
1.
Ignore the incident and hope that it does not come up again.
A.
Advantages
1.
2.
B.
Disadvantages
1.
2.
2.
The problem is not likely to go away.
FFF will still have no formal means to guide employee behaviour
under these circumstances.
Offer Grady the bribe.
A.
Advantages
1.
2.
B.
Solves the immediate problem of keeping SSC's account.
May be the only way to keep SSC's account in view of unethical
competitive tactics.
Disadvantages
1.
2.
3.
4.
5.
3.
The problem does not have to be dealt with immediately.
Grady may decide against repeating his request.
Grady may demand more expensive gifts in the future.
Other accounts may begin to make similar demands.
Salesmen's morale may suffer as they discover they are selling
bribes, not products and service.
Company image suffers.
Creates a bribery war with competitors that FFF may be unwilling
or unable to successfully engage in.
Do not offer Grady the bribe.
A.
Advantages
1.
2.
3.
4.
The company maintains its ethical, respectable image.
Morale increases as sales force does not have to compromise
personal ethics.
Grady finds he cannot get leverage through the use of threats.
Grady can be made to see the advantages of dealing with a highly
ethical firm that bases sales promotions on superior service.
162
B.
Disadvantages
1.
2.
Risk loss of SSC account.
Competition gains an effective tool against FFF.
ASSUMPTIONS
1.
2.
3.
4.
5.
6.
SSC business is of major significance to FFF.
FFF's territorial sales representative did not initiate the idea of a bribe to Grady.
FFF has not given bribes in the past.
FFF offers reliable, quality products and services that compare favourably with
competitors.
FFF's executive management desires to run a highly ethical and respectable
organization.
This case is governed by federal and provincial regulations, including the
Competition Act.
QUESTIONS AT END OF CASE
1.
What is the main problem presented in this case?
The main problem is: should Bill offer Grady the bribe to maintain the SSC
account? It is basically a problem of marketing ethics and social responsibility.
2.
What must Bill do?
Bill should not offer Grady the bribe for the reasons discussed in the Analysis of
Alternatives and in the Case Solution. Bill should tactfully explain to Grady that,
although competition may offer bribes to sell inferior services, FFF promotes
itself on the basis of superior service and quality products. He should emphasize
that while FFF will always treat SSC as a respected account, it is company policy
not to offer gifts in excess of $25.
163
CASE SOLUTION
Bill must not offer the bribe for two basic reasons.
1.
In a situation where bribery becomes the basis for competition, not quality and
service, there will always be someone who can outbid your company and win the
sales.
2.
And more importantly, employees must be able to differentiate between what is
ethical and unethical and forego the unethical regardless of possible short-run
gain for the following six major reasons:
A.
B.
C.
D.
E.
F.
It is expected by society.
Allows the business to operate in the long-run.
Community responsibility.
Salespeople are company representatives.
Minimize competitor's retaliation.
Decrease government intervention.
Instead, Bill should discuss:
A.
B.
C.
D.
His long-term friendship and professional relationship with Grady.
The superior service at low cost that FFF offers SSC.
That under no circumstances are FFF employees allowed to offer such
expensive gifts.
That the long-term benefits of dealing with an ethical firm far outweigh
any short-term rewards offered by unethical competitors.
To deal with future problems of this nature, FFF's top management must establish
a formal, written policy or code of ethics regarding gift-giving and other behaviours.
There exists too large a gray area for these decisions to be made at the sales force level.
Money, gifts, entertainment, and travel may be offered. At times there is a fine
line between good business and the misuse of a bribe or gift. A $10 gift for a $10,000
customer may be a gift but what about a $1,000 gift for a $1 million customer?
The code of ethics must be explicit and include a means of imposing penalties for
failure to comply.
The following may be a helpful series of questions for FFF's sales force to ask in
determining if a certain act is ethical.
1.
2.
3.
4.
Is this sound from a long-run point of view?
Would I do this to a friend?
Would I be willing to have this done to me?
If other people learn of this act, what would be their reaction?
164
Note: See section entitled "What to Do?" in Chapter 14.
The above inserts may be helpful examples of codes of ethics for FFF in writing
their Policy Statement.
Bill should also explore the actions of his territorial sales representative to
determine if he offered Grady the bribe in response to aggressive competitive action. If
this is the case, the sales representative must be shown the error of his ways.
SUPPORTING ANALYSIS
There often exists a very fine line between what is considered ethical and
unethical behaviour. Ethics, however, are not the only issue; legality cannot be ignored.
The offering of a bribe is clearly in violation of the Competition Act.
FFF must adopt a code of ethics that explicitly states what types of behaviours are
illegal and, more broadly, unethical. These behaviours would then become unacceptable
and grounds for dismissal. Frank T. Cary, a past chairman of IBM, believes that strong
codes will help restore society's faith in business. He advocates starting "at the top"
because "if the chief executive winks, some of his employees will wink back."
A simple test to determine what is ethical behaviour was proposed by Arjay
Milly, the Dean of Stanford University School of Business, who allowed only those
behaviours "...you would feel comfortable explaining on television." Certainly, using this
guide Bill could not justify offering an inboard-outboard engine.
FFF must provide an official corporate statement governing employee behaviours.
If FFF had such a policy, which Bill believed would be enforced, the issue of whether or
not to offer a bribe would be a moot one; the SSC account would have to be risked.
Case 14-2:
Sport Shirts, Inc.
SUMMARY
Sports Shirts, Inc. (SS) markets a line of men's clothing consisting mainly of 3 styles of
shirts. The shirts are rated to withstand 10 washing and wearing cycles without decreases
in appearance. Customer complaints have been received concerning the inability of these
products to meet stated minimum standards.
Anne Jackson, SS sales manager for the Maritime region, is currently faced with
confronting her top salesperson, Marge Phillips, who has been using unethical and illegal
selling techniques. Marge has achieved great selling success by entertaining lavishly,
overstocking, blackmailing, and using tying contracts. Seeing Marge's success, many of
SS's salespeople are copying her methods. Management has also considered using Marge
as a sales trainer to increase sales of all SS sales representatives. Anne has received an
increasing number of complaints from Marge's customers. What should Anne do? She
does not want to lose the revenue that Marge generates.
165
CASE OBJECTIVES
1.
2.
To present the case of a highly successful and highly motivated salesperson who
uses unethical practices.
To illustrate a problem many managers face when by her action of correcting
Marge, the manager's success and commission will be negatively affected.
PRIMARY DECISIONS
1.
2.
3.
How should Anne Jackson deal with Marge's selling methods, and should she risk
the loss of her highest volume salesperson?
Should SS establish a formal, written code of ethics to guide the behaviours of all
employees?
Should SS improve the quality of its line of shirts?
SECONDARY DECISIONS
1.
2.
3.
4.
5.
6.
Who should be responsible for training salespeople?
Should there be some auditing of sales force selling methods?
What should be done about Marge's rumored business venture?
What could be done to increase customer satisfaction with SS's product?
How could sales be increased by ethical means?
How to counteract SS's damaged public image and poor customer relations?
ANALYSIS OF ALTERNATIVES
I.
Ignore situation and not confront Marge.
A.
Advantages
1.
2.
3.
B.
Allows sales to remain at high levels.
Anne does not have to risk losing Marge and face a decrease in
sales and in salespeople's morale.
She does not have to address the issue of sales representative's
ethics and morality.
Disadvantages
1.
2.
3.
4.
5.
6.
This is only a temporary postponement; the problem will not go
away.
Marge will have more time to damage the company image.
Marge will have more time to sway other salespeople over to her
sales methods.
You do not solve the problems.
Risk of possible legal action.
Risk of losing accounts due to unethical sales tactics.
166
II.
Confront Marge, give her the option to either alter her methods or lose her
position.
A.
Advantages
1.
2.
3.
B.
Disadvantages
1.
2.
3.
III.
You do not avoid the problem at hand.
You offer Marge the opportunity to change her selling style.
You show Marge and other sales representatives that good
salespeople use only ethical sales means and SS retains only good,
ethical sales representatives.
You lose Marge if she doesn't change, and thus all the potential
sales and new accounts she could generate.
Long-term, your company will benefit, but short-term effects
would appear disastrous, i.e., decreased sales volume, loss of
perhaps more sales representatives, and/or decreased morale.
Involves effort and time to develop a code of ethics and make it
enforceable.
Fire Marge and use as an example for other employees.
A.
Advantages
1.
2.
3.
4.
B.
Show employees that unethical behaviour will not be tolerated.
Repair good customer relations by removing source of ill-will.
Maintain a strong, socially-responsive corporate image.
Avoid possible legal action.
Disadvantages
1.
2.
3.
4.
You do so without giving her opportunity to change.
She may take with her your best sales representative.
Other sales representatives may view this treatment as unfair and
morale will decrease.
Lose sales and potential new accounts.
167
IV.
Praise Marge for her sales and adopt her selling technique in a sales training
program.
A.
Advantages
1.
2.
3.
B.
Disadvantages
1.
2.
3.
4.
V.
Maintain high sales volume.
Train other sales representatives to increase sales volume by using
Marge's techniques.
Keep accounts happy with inferior service and products by
entertaining lavishly and avoid expense of increasing quality and
changing sales force.
Corporate image becomes extremely poor.
Ultimate loss of customer due to unethical sales tactics.
Risk of possible legal action.
Lower morale and lose sales representatives as some sales
representatives are trained in techniques that they find immoral.
Institute a formal code of ethics of SS.
A.
Advantages
1.
2.
3.
B.
Employees know what is acceptable and unacceptable behaviour.
Management has a means of evaluating employee performance.
Management has a standard set for taking punitive action against
non-compliance.
Disadvantages (of not having a code of ethics)
1.
2.
Unacceptable behaviour is left undefined.
Unethical and illegal acts will continue to be performed which
directly reflect on the corporate image.
168
THE CASE INDICATES
1.
2.
3.
4.
5.
SS does not currently have a formal, written code of ethics for employee
behaviour.
SS executive management desires to run a highly ethical and respectable
organization.
SS executive management does not stress volume at any cost.
SS does not set unrealistically high sales goals.
SS executive management has recommended Marge to train other sales
representatives without knowledge of her selling methods.
QUESTIONS AT END OF CASE
1.
How would you describe Marge Phillips' success with Sports Shirts?
Marge Phillips' success with SS has been based solely on sales volume. She has
consistently generated sales over her quota and established many new accounts.
Using these figures alone, her success has been remarkable. Unfortunately, these
sales are made by unethical and often illegal means.
2.
Is Marge a good salesperson? Do her sales results justify her methods of
selling?
As for if you consider her a good salesperson, it is a question of ends versus
means. She produces greater than expected revenue in the short run but her sales
tactics may alienate customers and decrease SS's public image so that sales
decrease in the long run. Most students would say they would not consider Marge
a good salesperson, and do not believe her results justify her methods.
Anne Jackson is faced with controlling the sales method of her top salesperson,
Marge, who directly through her selling efforts and indirectly through her
influence on other salespeople, has helped increase SS's annual sales by 17%. If
Anne confronts Marge and requires her to modify her tactics, she risks losing
Marge, decreasing sales volume, and lowering the morale of the rest of the sales
force.
3.
What should Anne do?
Anne Jackson must confront Marge with her unethical selling tactics and risk the
problem associated with her resignation. If Marge cannot operate within ethical
and legal constraints, then she should be dismissed along with any other
salespeople sympathetic to her methods.
Marge should not be allowed to train other sales representatives using her current
selling techniques.
169
CASE SOLUTION
Anne must deal with Marge's selling techniques and set stringent sales guidelines. Anne
must risk the loss of her highest volume salesperson to maintain an ethical, socially
responsible sales force. Marge's use of illegal and unethical tying contracts, threats, and
bribes cannot be overlooked by SS management. If Marge cannot abide by company
standards, then she must be released from service.
It is imperative that Anne acts decisively and set an example for the rest of the
sales force. She must certainly not recommend Marge as a sales trainer.
Employees must be shown how to differentiate ethical and unethical behaviours
and forego the unethical, regardless of possible short-run gain for the following six
reasons:
1.
2.
3.
4.
5.
6.
It is expected by society.
Allows the business to operate in the long run.
Community responsibility.
Salespeople are company representatives.
Minimize competitor's retaliation.
Decrease government intervention.
Anne should review SS's quota system to determine if quotas are fair and
equitable. If the quotas are set too high, putting undue pressure on the sales
representatives, and if management has hitherto stressed making quotas above "all else,"
then the source of the problem lies in corporate policy. Encouraging the sales force to
oversell will yield high returns in the short run, but cause customer dissatisfaction and
decrease sales in the long run.
The last major point that Anne must deal with is the quality of her product line. A
company that purports high ethical standards and social responsiveness must back those
claims by selling a high quality product. Customers will accept the pat answer "we sell
good shirts but you can't expect a shirt to last forever" for only a short time before they
drop the merchandise to their own customers. If their customers are unhappy with SS's
shirts, then the buyer will drop the SS line rather than risk customer goodwill. Shabby
merchandise and disreputable selling techniques will have taken their toll on SS's
customer relations. Thus, the entire image of SS will need a dramatic overhaul.
170
Appendix B – Sales Arithmetic and Pricing
Comments on Appendix B
1. Discounts represent a reduction in price from the list price. The main types of
discounts are: quantity, cash, trade, and consumer discounts. Quantity discounts are
offered when buyers purchase large quantities of a product. Cash discounts are
allowed for prompt payment. A trade discount is used when the manufacturer
reduces the price to middlemen (wholesaler, distributors) as compensation for the
service they perform. Consumer discounts are one-time price reductions offered in
hopes of increasing sales to consumers.
2. The salesperson should mention the discount in the middle of the presentation. If
he/she waits too long to present this selling bonus the customer may lose interest.
3.
Manufacturer
$4.00
$10.00 =40%
Wholesaler
$2.00
$12.00 =17%
Retailer
$12.00
$24.00 =50%
Percentage
markup on cost
$4.00
$6.00 =67%
$2.00
$10.00 =20%
$12.00
$12.00 =100%
4.
.25
1.00 = 25%;
.50
1.00 = 50%;
1.00
1.00 = 100%
5.
Make a strong sales presentation and secure the buyers' interest in purchasing
more products from you. Then come right to the point and ask the buyer to pay
his past due bill. Explain that when the bill is paid the new order will be shipped.
Above all, try to keep your accounts in better standing in the future because in this
case you are essentially asking for payment on five months’ worth of purchases;
you may not be able to convince the store to pay up all at one time.
6.
List price--standard price charged to customers.
Net price--price after allowance for discounts.
Zone price--determined by geographical location.
FOB shipping point--buyer must buy transportation charges.
FOB destination--seller pays all shipping costs.
7.
A.
Percentage
margin on
Selling Price
B.
Noncumulative discount is being offered.
$45,000/50 = $900/unit; cost has been reduced 10% per unit.
You are offering a cash discount which will reduce the cost by 2%. Total
cost under terms of 2/10 net 30 is:
150 @ $10=
$1500
X.98
171
$5000
X.95
1470
+
4750 = $6220
If the Storage Bin does not pay until the 25th day it will receive no
discount and the total cost will be $6500.
C.
You are offering a cumulative discount. The total cost will be reduced by
five percent.
10 @ $3000
15 @ $3500
=
=
discount
D.
8.
Both offers represent types of noncumulative discounts.
Buy 11--Get 1 Free
10% Off
1/12 = 8.3% discount discount = 10%
EC 600 generator.
less than
10
generators
10-20
more than
20
$70,000
$65,000
$58,000
3,000
3,000
3,000
expected life
10 years
10 years
10 years
7years
total oper. exp.
30,000
30,000
30,000
35,000
total cost of each
generator
100,000
100,000
95,000
88,000
avg. cost/year of each generator
10,000
9,500
8,800
purchase price
$65,000
yearly oper. exp.
9.
$30,000
$52,500
$82,500
x .95
$78,375
present
5,000
14,285
A value analysis determines the best product for the money. It is the "business
proposition" in industrial selling.
172
COMMENTS ON CASE
Case B-1:
Claire Cosmetics
SUMMARY
1.
The "key" is that June should "do her homework" well in advance of the meeting.
She should hint at some of the upcoming promotions on this product to her
customers, although being careful not to "spill the beans" before the campaign is
actually underway. She may see that her customers will, in fact, be receptive to a
new promotional offer, and this in itself may help to reduce her nervousness.
2.
By discussing the program, however vaguely with her customers, June may begin
to get a feel for what they really expect to get from a new promotion. She may
uncover areas that are really important to her clients. For example, some buyer
may see a new floor display as bothersome, and in the way of customers. It is
best to consider her client's need, not her own speculations for her presentation at
the sales meeting.
Case B-2:
McBath Women's Apparel
1.
Lynn should not approach Ms. Bruce with an all or nothing proposition because
she has proved in the past that she will say no. She should stress the benefits
which Federale will receive from carrying a new line. She should tell Ms. Bruce
about the great sales increases other stores have experienced, and that the display
will be small and will make shopping easier, not more confusing, for her
customers. Also, tell of the advertising campaign, and special promotions
planned which should further help sales.
2.
Quantity discount - $10 off-invoice for each display purchased.
Cash discount - 2/10 net 30.
Trade discount - 20% off to retailers.
Consumer discount - $1.00 off coupons in local newspapers.
The trade discount may be the most effective because it offers a substantial
advantage over the other discounts. The consumer discount would probably be
the least effective because the retailer would get no immediate benefit from it,
since it is naturally supposed to benefit consumers.
3. Sales and profits cause people to buy and thus price is extremely important. These
discounts will be a major “reason to buy.”
173
Case B-3:
Electric Generator Corporation
1.
Thorough background of company, its operation, present generators used, and its
buying policies are several factors helping to formulate a sales call plan.
2.
The value analysis will be the main selling tool Sandy will use in her presentation.
It must show how the reduced maintenance cost of her generator will quickly offset their higher price.
Case B-4:
1.
Frank's Drilling Service
A value analysis
Drilling costs
Competitor's
Frank's
.90x10000 ft=$9,000
$1x10000 ft=$10,000
Personnel cost per day
$1200x24
$1200x24hrs*=$28,800per day
hrs*=28,800
Total personnel costs $28000x16 days=$460,800
$28800x12 days=$345,600
Total costs
$355600 (10000+345600)
$469800 (9000+460800)
Frank's savings = $114,200 ($469,800 - $355,600) for 1 well.
Savings for 12 wells = $1,370,400.
2.
Fast and efficient service (features) which save time (advantage) and money
(benefit).
*Assumes drilling 24 hours each day.
174