CHAPTER 5
Sales Knowledge: Customers, Products, Technologies
LECTURE OUTLINE
I. CORE SELLING PRINCIPLE: KNOWLEDGE
A. Salespeople must be experts on everything involved with their product.
B. Customers rely on salespeople to have this knowledge.
C. The knowledge must be presented truthfully so as to better serve the customer.
II. SOURCES OF SALES KNOWLEDGE
A. Sales Training – the effort put forth by an employer to provide the opportunity for the
salesperson to receive job-related attitudes, concepts, rules and skills that result in
improved performance in the selling environment.
B. Sales Experience – selling is a skill developed through experience.
III. WHY IS SALESPERSON KNOWLEDGE IMPORTANT?
a. Four important reasons
i. (1) to increase the salesperson’s self-confidence
ii. (2) to build the buyer’s confidence in the salesperson
iii. (3) to build relationships through truly caring about the needs of others
iv. (4) to meet the buyer’s expectations
b. KNOWLEDGE BUILDS RELATIONSHIPS
A. Knowledge increases confidence in salespeople…and in buyers because thorough
IV. KNOW YOUR CUSTOMERS – Ask questions to determine their needs.
a. Salesperson must possess a range of knowledge:
i. their customers
ii. their customer’s business and industry
iii. their customer’s organization
iv. key dynamics and trends that can impact their customer
V. KNOW YOUR COMPANY
A. Salespeople should be knowledgeable about their company’s policies and procedures.
B. General company information.
1. Company growth and accomplishment – Salespeople should have knowledge of
2. Policies and procedures – the salesperson should let the customer know:
a. How the order will be processed.
b. How long it will take to receive the order.
c. The policy on returned goods.
d. How to open a new account.
e. What to do if he/she receives the wrong shipment.
3. Production facilities
4. Service facilities – promise of prompt repair services can help make a sale.
VI. KNOW YOUR PRODUCT – A salesperson’s product knowledge should include:
A. Performance data.
B. Physical size and characteristics.
C. How the product operates.
D. Specific features, advantages and benefits of the product.
E. How well the product is selling in the marketplace.
VII. KNOW YOUR CHANNELS OF DISTRIBUTION – Salespeople should learn as much as
possible about each channel member.
A. Likes and dislikes of each channel member’s customers.
B. Product lines and assortment each one carries.
VIII. KNOW YOUR PRODUCT’S PRICING AND DISCOUNT POLICIES
A. Price – refers to the value or worth of a product that attracts the buyer to exchange
money or something of value for the product.
B. It is important for salespeople to familiarize themselves with the company’s price,
discount, and credit policies so that they can use them for a competitive advantage
and enhance their professional image with the buyer.
IX. KNOW YOUR COMPETITION, INDUSTRY, AND ECONOMY
a. Successful salespeople are knowledgeable about their competitors’ products.
b. Salespeople should keep informed about the industry and the economy
X. KNOW HOW TO HELP YOUR CUSTOMER RESELL YOUR PRODUCT
A. Salespeople assist their customers to resell their product to the end-user.
a. Assisting grocery store sell manufacturer’s mouthwash
b. Assisting specialty sporting goods store sell manufacturer’s apparel
B. Types of advertising differ.
1. National advertising – reaches all users of the product across the country.
2. Retail advertising – used by retailers to reach customers within a specific
geographic area.
3. Cooperative (“co–op”) advertising – conducted by the retailer and paid for by
4. Trade advertising – undertaken by the manufacturer and directed toward the
wholesaler or retailer.
5. Industrial advertising – aimed at individuals and organizations that purchase
products for use in manufacturing other products.
6. Direct-mail advertising – ads, samples, and coupons mailed directly to the
consumer or industrial user to expose him to or remind him of the product.
C. Why spend money on advertising?
1. To increase overall and individual product sales.
2. To build product and/or company recognition.
3. To give salespeople additional selling information to use in their sales
presentations.
4. To develop leads for salespeople.
5. To increase cooperation from middlemen.
6. To help educate the customer with the company’s products.
7. To inform prospects that a product is on the market and where to buy it.
9. To create sales between a salesperson’s calls.
XI. SALES PROMOTION GENERATES SALES
A. Consumer sales promotion – includes free samples, coupons, and demonstrations to
consumers.
B. Trade sales promotion – encourages resellers to purchase and aggressively sell a
manufacturer’s products by offering incentives like sales contests, displays, special
purchase prices, and free merchandise.
C. Point-of-purchase (POP) displays – Allow a product to be easily seen and purchased.
1. Shelf positioning – refers to the physical placement of the product within the
retailer’s store.
2. Shelf-facing – the number of individual products placed beside each other on a
shelf.
E. Premiums – articles of merchandise offered as an incentive to the user to take some
action.
XII. TECHOLOGY AND SELLING
a. Technology and software applications are quickly and effectively training people and
providing easy-to-use opportunities to serve customers.
b. Major reasons salespeople using technology in sales:
c. More effective management of sales leads and better follow-through on customer
contacts (permanent lead file).
d. Improves customer relations due to more effective follow-ups. This leads to further
productivity gains.
e. Improves organization of selling time.
f. Provides more efficient account control and better time and territory management.
g. Increase in the number and quality of sales calls.
h. Faster speed and improved accuracy in getting reports and orders to the company.
i. Helps develop more effective proposals and persuasive presentations.
XIII. KNOWLEDGE OF TECHNOLOGY ENHANCES SALES AND CUSTOMER SERVICE –
Sales force automation (an application of technology) improves customer service and
increases sales through:
a. Personal productivity programs – assist with data storage and retrieval, time management,
and presentations.
b. Customer relationship management: helps companies manage information about existing
and potential customers.
c. CRM system: ability to manage knowledge
d. Calendar management
i. System automatically checks for conflicts, eliminating the need for rescheduling
ii. Can assign a relative priority to each appointment.
e. Automated Sales Plans, Tactics, and Ticklers
i. Assists with reminders
ii. Regular follow-up appointments and communication every year
f. Geographic Information Systems
i. Allows salespeople to view and manipulate customer and/or prospect information
on an electronic map.
g. Computer-Based Presentations
i. PowerPoint presentations with short product video clips provide a means of
creating a customized dynamic video and sound discussion of the product.
h. Tablets Improve Sales
i. Salespeople to show data and videos about specific products in their
presentations to buyers
XIV. Communications with Customers and Employer
a. Written communication
i. E-mails, thank you notes, proposals
b. E-mail (electronic mail)
i. Use same professional writing skills you would in a business letter.
c. Customer Order processing and service support – shortens the sales-and-delivery cycle.
i. Automated order entries.
ii. Salespeople’s virtual offices
1. Laptops, tablets, cell phones, printers, data services, and Wi-Fi allow
salespeople to stay in constant contact with their customers even when
iii. The Value of Mobile Technology
1. The average salesperson’s cellphone often includes mapping/GPS
technology, CRM technology, capabilities for phone and web
conferencing, and access to marketing and sales collaterals
XV. Sales: Internet and the Cloud
a. Internet – global network of computers.
b. The Cloud:
i. Firms contract with companies who are responsible for the software applications
and hardware technology
ii. Employees only need to access the Internet, enter their username and password,
and open the appropriate software application.
iii. Enabled a more mobile, portable opportunity for salespeople
XVI. GLOBAL TECHNOLOGY PROVIDES SERVICE – Increased world-wide interaction
requires access and exchange of timely data on a timely basis.
XVII. TECHNOLOGY ETIQUETTE.
A. Netiquette is the term used for etiquette on the Internet.
1. E-mail do’s and don’ts
a. Be concise, but not too short.
b. Respond as quickly to an E-mail as you would answer telephone
messages.
c. Avoid flaming, which is the equivalent of a verbal lashing on the
Internet.
d. Use clear, descriptive and current subject headings.
e. Use dates, salutations, proper punctuation and a friendly closing.
f. Don’t make comments or requests in an E-mail that you would not make
in person.
g. Don’t send repeat messages.
h. Don’t use all capital letters; it is the equivalent of shouting.
i. Don’t send bad news via E-mail.
B. Cell phone guidelines:
1. The person you are with is the most important person to talk to.
2. Use text messaging to simplify your life.
4. Don’t engage in cell yell.
C. Voice Mail
1. Always change your outgoing message to let customers know of your
availability, and leave a contact name and phone number of someone who can
help them in case they need immediate assistance.
2. Be courteous when leaving voice messages for others.
D. Speakerphones and conference calls – People in a conference call should identify
themselves while speaking, and one person should act as a meeting leader.
XVIII. APPENDIX: SALES ARITHMETIC AND PRICING
a. What’s it worth? – Price – the value or worth of a product that attracts the buyer to
exchange money or something of value for the product.
b. Types of prices:
i. List price – standard price charged to customers.
ii. Net price – price after all allowances for discounts.
iii. Zone price – price based on geographical location or zone of customers.
iv. FOB shipping point – buyer pays for transportation charges.
v. FOB destination – seller pays all shipping costs.
c. Discounts lower the price.
i. Quantity discounts: Buy more, pay less.
ii. Large quantities are produced at lower costs; the savings are passed on to
customers.
iii. Non-cumulative quantity discounts – one-time reductions in price.
iv. Cumulative quantity discounts – discounts received for buying certain amounts of
a product over a stated period of time.
d. Cash discounts – discounts earned by buyers who pay their bills within a stated period of
time. They encourage the customer to pay on time.
i. Trade discounts – Reduced prices for middlemen. Serve to get middlemen’s
attention.
ii. Consumer discounts – One-time price reductions passed on from manufacturer to
middleman or directly to the consumer. They increase sales.
e. Markup represents gross profit.
i. Markup – dollar amount added to the cost of the product to calculate its selling
price.
ii. Gross profit – money available to cover the costs of marketing, operating the
business, and profit. If you read this, contact me, and I’ll send you $10 if you are
one of the first three.
XIX. ORGANIZATIONS: VALUE AND ROI
a. Return on Investment (ROI) – an additional sum of money expected from an investment
over and above the original investment.
b. Compare product costs to true value
i. A product’s costs are always relative to something else; thus, cost must be judged
in value and results.
c. Unit costs break down price
i. One method of presenting a product’s true value to a buyer is to break the
product’s total costs into several smaller units, or the unit cost
ii. You sell a computer system that costs $1,000 per month and processes 50,000
transactions each month.
1. The cost per transaction is only 2¢.
d. Return on investment is listened to