Sales Learning Curve - Sales Management
- 1. A C A S E S T U D Y O N SALES LEARNING CURVE B Y M A R K L E S L I E A N D C H A R L E S A . H O L L O W A Y P R E S E N T E D B Y: R A H U L TA N W A R
- 2. When a company launches a new product into a new market, the temptation is to immediately ramp up sales force capacity to gain customers as quickly as possible. But hiring a full sales force too early just causes the firm to burn through cash and fail to meet revenue expectations. Before it can sell an innovative product efficiently, the entire organization needs to learn how customers will acquire and use it, a process the authors call the sales learning curve. What generally happens !!!
- 3. The concept of a learning curve is well understood in manufacturing. Employees transfer knowledge and experience back and forth between the production line and purchasing, manufacturing, engineering, planning, and operations. The sales learning curve unfolds similarly through the give-and- take between the company—marketing, sales, product support, and product development—and its customers. As customers adopt the product, the firm modifies both the offering and the processes associated with making and selling it. Manufacturing Learning Curve
- 4. S M A R T C O M P A N I E S G I V E T H E M S E L V E S T I M E E N O U G H T O C L I M B T H E S A L E S L E A R N I N G C U R V E B E F O R E R A M P I N G U P T H E S A L E S F O R C E
- 5. COMPARISON MLC ■ measured by tracking cost per unit ■ more a firm learns about the manufacturing process, the more efficient it becomes, and the lower the unit cost goes SLC ■ measured by tracking sales yield over time ■ more a company learns about the sales process, the more efficient it becomes at selling, and the higher the sales yield
- 6. S A L E S Y I E L D F O R A N E W P R O D U C T S T A R T S O U T S L O W L Y , A C C E L E R A T E S F O R A W H I L E , A N D T H E N F L A T T E N S O U T A S T H E P R O D U C T M A T U R E S , I N A C L A S S I C S - S H A P E C U R V E .
- 7. Initiation Stage: Encouraging SRs to learn about customers, product marketing & marketing communication. Transition stage: Sales management should focus on developing a repeatable sales model, refining market positioning, and adding sales capacity at a rate commensurate with the rise in the slope of the curve. Execution Stage: SRs can be hired as rapidly as the company’s management and financial constraints will allow. Strategies Followed At Each Stage
- 8. BENEFITS OF SALES LEARNING CURVE As the sales yield increases, the sales learning process unfolds in three distinct phases- 1) initiation, 2) transition, 3) execution. Each phase requires a different size and kind of sales force and represents a different stage in a company’s production, marketing, and sales strategies. Adjusting those strategies as the firm progresses along the sales learning curve allows managers- I. to plan resource allocation more accurately, II. set appropriate expectations, III. avoid disastrous cash shortfalls, IV. and reduce both the time and money required to turn a profit.
- 9. THANK YOU .