Sales Resource Opportunity Grid

Sales Resource Opportunity Grid Companies who sell more than one product or service can often utilize cross-selling techniques to sell different products to their existing customers. In order to minimize duplication of efforts in the sales force and to ensure the company is matching its sales resources to its marketing opportunities, a Sales Resource Opportunity Grid (SROG) is often used to plan and control the sales portfolio. Using the SROG in Figure 16.4 in your textbook as a guide, create and explain an SROG for a company of your choosing. This can be your current or former place of employment or a company you have researched in the CSU Online Library or on the Internet. Make sure you take into account all of the company’s planning and control units when designing your grid. Chapter 16 Busivzcsx [Mar/eetiizg Commmzicxztions: ll/Izzmzgzfizg the Persomzl Selling Fzmction 429 At various points in deployment decision making, the sales resource opportunity grid is important for screening the size of the sales force, the territory design, and the allocation of sales calls to customer segments. This method can isolate deploy- ment problems or deployment opportunities worthy of sales management attention and further data analysis. Personal selling is a significant demand-stimulating force in the business market. Given the rapidly escalating cost of personal sales calls and the massive resources invested in personal selling, the business marketer must carefully manage this function and take full advantage of available technology to enhance sales force productivity. Relation- ship marketing (RM) activities represent dedicated relationship marketing programs, developed and implemented to build strong relational bonds with customers. These activities influence the three important drivers of RNI effectiveness-relationship quality, breadth, and composition. To strengthen relational ties with customers, three types of RM programs are used: social, strucmral, and financial. Returns on RM in- vestments improve when business marketers are able to target customers on the basis of their relationship orientation rather than size. To manage the complex web of influences that intersect in buyer-seller relation- ships, an account manager must initiate, develop, and sustain a network of relationships, within both the firm and the customer organization. Compared with their colleagues, high-performing account managers excel at building relationships and develop a richer base of customer and competitor knowledge that they use to create superior solutions for the customer. Managing the sales force is a multifaceted task. First, the marketer must clearly define the role of personal selling in overall marketing strategy. Second, the sales organization must be appropriately structured-by geography, product, market, or some combination of all three. Regardless of the sales force organization, an increas- ing number of busi11ess-to-business firms are also establishing a key account sales force so they can profitably serve large customers with complex purchasing require- ments. Third, the ongoing process of sales force administration includes recruitment and selection, training, supervision and motivation, and evaluation and control. A particularly challenging sales management task is deploying sales effort across products, customer types, and territories. The sales resource opportunity grid is a useful organizing framework for sales deployment decisions. Likewise, the business marketer can benefit by implementing a CRM system. Such tools can help the sales manager pinpoint attractive accounts, deploy the selling effort, coordinate activities across multiple sales channels, and build customer loyalty. Discussion Questions 1. As drivers of relationship marketing effectiveness, compare and contrast relationship breadth and relationship composition. 2. Some customers are more open to relationship marketing initiatives than others. Under what conditions would customers tend to be more responsive to relationship-building efforts by the salesperson? Chapter 16 Bzmfless fl/1m‘/eating Commm2imtz'om.- 1‘!/Immgmg the Person/11 Selling Fzmction 42 7 TABLE 16.2 [ DEPLOYMENT DECISIONS FACING SALES ORGANIZATIONS Type of Decision Specific Development Decisions Set total level of selling effort Determine sales force size Organize selling effort Design sales districts Design sales territories Allocate selling effort Allocate effort to trading areas Allocate sales calls to accounts Allocate sales calls to prospects Allocate sales call time to products Determine length of sales call SOURCE: Reprinted by permission of the publisher from “Steps in Selling Effort Deployment,” by Raymond LaForgc and David VV. Cravens, Indnrtri/21 M'm'.{’eti71g.Mmz/zgement 11 (July 1982): p. 184. Copyright © 1982 by Elsevier Science Publishing Co,, Inc. TABLE 16.3 [ SELECTED DETERMINANTS or TERRITORY SALEs RESPONSE 1. Environmental factors (e.g., health of economy) 2. Competition (e.g., number of competitive salespersons) 3. Company marketing strategy and tactics 4. Sales force organization, policies, and procedures 5. Field sales manager characteristics 6. Salesperson Characteristics 7. Territory characteristics (e.g., potential) 8. Individual customer factors SOURCE: Adapted from Adrian B. Ryans and Charles B. Weinberg, “Territory Sales Response,” ]'om*m1l offi/I1z1‘keting Remzrc/J 16 (November 1979): pp. 45 3-465 of estimating sales response functions. Such estimates are needed, however, to make meaningful sales allocations. Three territory traits deserve particular attention in sales response studies: potential, concentration, and dispersion.“ Potential (as discussed in Chapter 5) is a measure of the total business opportunity for all sellers in a particular market. Concentration refers to how much potential lies with a few larger accounts in that territory. If potential is concentrated, the salesperson can cover with a few calls a large proportion of the potential. Finally, if the territory is geographically dispersed, sales are probably lower because of time wasted in travel. Past research often centered on territory workload-the number of accounts. However, Adrian Ryans and Charles Weinberg report that workload is of questionable value in estimating sales response: “From a managerial standpoint, the recurrent finding of an association between po- tential and sales results suggests that sales managers should stress territory potential when making sales force decisions.”"9 Sales Resource Opportunity Grid Deployment analysis matches sales resources to market opportunities. Planning and control units such as sales territories or districts “Adrian B. Ryans and Charles B. Vlfeinbcrg, “Territory Sales Response,” fozmml qf1l“Im'/eetirzg Rt’.S‘£’(I7T/J 16 (November 1979): pp. 453-465; see also Ryans and Weinberg, “Territory Sales Response Models: Stability over Time,” fozmml fl‘ A/I/17'/eetiizg Reremflv Z 4 (May 1987): pp. 229-233. “Ryans and Weinberg, “Territory Sales Response,” p. 464. Part IV Formulating Business Marketing Strategy FIGURE 16.4 I SALES Resouncrs OPPORTUNITY Gmo PCU offers good opportunity PCU may offer good opportunity if because it has high potential and sales organization can strengthen because sales organization has its position strong position High Soles Resource Assignment Sales Resource Assignment Either direct a high level of sales High level of sales resources to resources to improve position and take advantage of opportunity take advantage of opportunity or shift resources to other PCUS PCU Oppommlly Opportunity Analysis Opportunity Analysis PCU offers stable opportunity PCU offers little opportunity because sales organization has strong position Sales Resource Assignment Minimal level of sales resources; LOW Sales Resource Assignment selectively eliminate resource Moderate level of sales resources coverage; possible elimination of to keep current position strength PCU ly High low Sales Organization Strength SOURCE: Reprinted by permission of the publisher from “Steps in Selling Effort Deployment,” by Raymond LaForge and David W’. Cravcns, Imz'u.ctri/rl .Mm'leetz'ngiwmuzgezrzerzt 11 (July 1982): p. 187. Copyright © 1982 by Elsevier Science Publishing Co., Inc. are part of an overall portfolio, with various units offering various levels of opportunity and requiring various levels of sales resources. A sales resource opportunity grid can be used to classify the business-to-business firm’s portfolio of PCUS.So In Figure 16.4, each PCU is classified on the basis of PCU opportunity and sales organization strength. PCU opportunity is the PCU’s total potential for all sellers, Whereas sales organization strength includes the firm’s competitive advantages or distinctive competencies within the PCU. By positioning all PCUs on the grid, the sales man- ager can assign sales resources to those that have the greatest level of opportunity and capitalize on the particular strengths of the sales organization. For example, existing customers and prospects that are most appropriately positioned in the upper left cell of the grid represent the most attractive target While those in the lower right cell represent the least attractive. 5°LaForge and Cravens, “Steps in Selling Effort Deployment,” pp. 183-194.