New Home Sales Teams
New Home Sales Teams document sample
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Outsourcing Field Sales A Better-Than-Ever Response to the Competitive Pressures Facing Today’s Top Executives Presented by the Manufacturers Representatives Educational Research Foundation Corporate pressures and responses Greater profits Faster buildup of shareholder equity Focus on core competencies Outsource - security, maintenance, payroll, human resources, purchasing - and now field sales Roots of the trend to outsource field sales Performance-based compensation Practical approach to downsizing Diversification into multiple markets and specialized distribution channels Explore new opportunities with minimal investment in sales infrastructure Lower overhead, standardized sales costs Benefits of outsourcing field sales 1. Increased sales 2. Predictable sales costs that go up and down with sales 3. Standardized sales costs 4. Lower sales costs 5. Immediate market access 6. Broader market penetration 7. More experienced sales force Benefits of outsourcing field sales 8. Multifaceted, multi-skilled sales team 9. Wider, deeper coverage 10. Stronger local relationships 11. Reduced sales force turnover 12. Training required only on product 13. Closer-to-the-customer forecasting 14. Better market intelligence More benefits of outsourcing field sales 15. Knowledgeable advice and information - hear it like it is! 16. Risk-free exploration of new market niches 17. Problem-solving approach outperforms product selling 18. Vested partner in manufacturer’s success What is a manufacturers’ representative? Independent professional provider of field sales and marketing services to manufacturers or suppliers Typically handle a portfolio of related but non- competitive lines Work under contract in a defined territory on an exclusive basis Income directly tied to productivity The traits of today’s manufacturers’ representative Professional Multifaceted Technologically adept Ubiquitous Come in all shapes and sizes, from small defined- focus firms to multiple-office firms handling all facets of marketing Bringing value to buyers and sellers Portfolio synergies Broad-based solutions Consultative approach Partnering relationship with customer Greater speed of market penetration Entrée through portfolio leverage Basic economics of sales before sales costs What manufacturers’ representatives are not Not an additional channel - they are the manufacturer’s sales force paid differently Not middlemen - they neither take title nor mark up costs Not distributors - and very different from distributors Differences REPS DISTRIBUTORS Sell only in a defined territory May sell anywhere Do not handle competitive Often handle competitive lines lines Sell as agents; do not take Buy for resale; take possession ownership Compensated largely by Compensated by margin of commission on sales sale price over cost More differences REPS DISTRIBUTORS Typically handle 12 to 14 Often handle several lines hundred lines Typically entrepreneurial, Large firms often publicly owner-operated traded Add value through design-in, Add value through time- application engineering, place utility product synergy More differences REPS DISTRIBUTORS Interface with Rely heavily on rep for distributors, refer orders referrals, training, to distributors, receive engineering support commission on sales through distributors May warehouse (for a Maintain inventory fee), but do not maintain inventory The big difference REPS DISTRIBUTORS Focus on customer Focus on selling what’s needs on the shelf More than a source, a resource High caliber personnel - entrepreneurial, competitive, goal-oriented Success tied to contacts in the territory rather than the corporate hierarchy Rooted geographically, creating stable relationships Saves time for the buyer by presenting multiple lines in a single call Win - Win - Win The Customer Benefits Too Bringing value to the customer Stable relationship with someone who knows the corporate culture Long-term commitment to the territory Multifaceted resource More efficient (multiple line) sales calls Consultative selling Bridges intra-company communications gap More customer benefits Advocacy, ability to secure exceptions to supplier policy Help in order strategy, distribution or direct Perspective on market conditions and trends Solutions approach -- looking at the forest, not the trees What happens when buyer needs diverge from seller’s SOP? Rep has more at stake with other products sold to the company, and thus will fight harder for needed accommodations Rep has more freedom than direct salesperson to carry the fight to the top The Economics Comparing commissions with the cost of hiring some- one full time is misleading 1. It ignores costs borne by representatives that would transfer to the manufacturers 2. It ignores administrative and facilities costs in the territory and the home office 3. It overlooks the likely faster growth a team can bring compared to one person What costs does the rep cover? Finances the sale, usually receiving commission only after goods are shipped Pays for recruiting, training, employee benefits, travel, client entertainment, automation, order entry, and more Handles extra roles in expediting, returns, trade shows, administration Eliminates manufacturer’s legal exposures Myths and misconceptions Myth: The distributor can handle the whole field sales process Truth: Distributor function is different, logistical instead of problem-solving Truth: Distributors, stocking competitive brands, cannot be one manufacturer’s advocate Truth: Reps and distributors work as teams Myths and misconceptions Myth: The Internet, EDI and eCommerce render personal contact superfluous Truth: they support sales by delivering and gathering information, so “face time” is more productive Truth: High tech can’t replace high touch in creating demand, negotiating contacts, analyzing solutions, dealing with exceptions Myths and misconceptions Myth: Reps don’t take a long-term perspective Truth: It would be reasonable not to, given the reality of 30 day termination clauses Truth: Reps invest in their territories and clientele, and in sales that develop slowly Truth: Reps needs long-term mutually profitable relationships with principals Myths and misconceptions Myth: Reps are independent and difficult to control Truth: Independent is a legal term that protects manufacturers Truth: The best control is from directing, motivating, and partnering with reps Truth: Reps and manufacturers need to feel inter- dependent Advancing the profession Enhancing management skills for reps and manufacturer personnel who manage reps Disseminating information and advancing public understanding of the rep system Three-year Certification program shows commitment and demonstrates achievement Reps offering new services, participating in new selling paradigms Leading indicators of skilled rep firms Have strategic plans Strong territory relationships Able to share intimate market knowledge Technologically current Active in industry associations Network for best practices CPMR certified management Information sources about reps Manufacturers Representatives Educational Research Foundation www.mrerf.org Agency Sales Magazine (MANA) www.manaonline.org Industry-specific rep organizations, such as (person using presentation should put in the appropriate association name) Reps -- More than a source Synergy of multiple lines Economy of shared costs Permanence of shared costs Intimate knowledge of customers Solutions orientation Perspectives they bring to principals Prosper only by creating prosperity!