PCM Sales Management flashcards
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33 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Span of control
- The number of salespeople reporting to one manager. Narrow spans allow closer coaching; wide spans lower administrative cost but reduce time per rep.
- Workload method of sizing
- Sales force size formula: total accounts multiplied by desired call frequency, divided by selling hours available per rep per year.
- Breakdown method of sizing
- Estimates sales force size by dividing forecast sales volume by the average sales volume a single salesperson is expected to produce.
- Straight commission plan
- Compensation in which pay is entirely variable and tied to sales results. It maximizes incentive but gives the rep little income security.
- Straight salary plan
- Compensation that is entirely fixed regardless of sales results. It supports service, prospecting, and team selling but weakens direct output incentive.
- Sales quota
- A performance target assigned to a rep or territory for a period. Quotas should reflect territory potential and be attainable by most of the force.
- Territory design
- Dividing a market into assigned areas of accounts. Good designs balance workload, equalize potential, and minimize travel time and cost.
- Sales force turnover cost
- The combined expense of recruiting, selecting, training, and lost sales when a rep leaves; often exceeds one year of the rep's salary.
- Outcome versus behavior evaluation
- Outcome measures track results such as volume and margin; behavior measures track activities such as calls and account coverage. Effective appraisal uses both.
- Sales coaching
- Ongoing, one-to-one feedback that develops a rep's skills. It differs from supervision, which focuses on compliance with rules and reporting.
- Recruiting versus selecting
- Recruiting builds the candidate pool; selecting narrows it to hires. Selection tools include interviews, references, and job-sample or aptitude tests.
- Sales manager as boundary spanner
- The role of linking senior management and the field, translating strategy into territory action while relaying market intelligence upward.
- Compensation mix
- The ratio of fixed salary to variable incentive in a pay plan. It is set based on sales cycle length and controllability of results.
- Motivation and expectancy theory
- Reps exert effort when they expect effort to yield performance, performance to yield rewards, and rewards to be valued. All three links must hold.
- Sales force automation
- Software supporting pipeline tracking, contact management, and forecasting. Adoption depends on perceived usefulness and managerial reinforcement.
- Cost of a sales call
- Total selling expense divided by number of calls made. It informs decisions on call frequency and channel cost-effectiveness.
- Ansoff growth matrix
- A grid crossing existing/new products with existing/new markets, yielding penetration, product development, market development, and diversification strategies in rising risk order.
- BCG growth-share matrix
- Classifies business units as stars, cash cows, question marks, or dogs using market growth rate and relative market share to guide investment decisions.
- Relative market share
- A firm's market share divided by the share of its largest competitor. A value above one indicates market leadership.
- Customer lifetime value
- The present value of profit expected from a customer over the whole relationship. It justifies acquisition spending when it exceeds acquisition cost.
- Customer acquisition cost
- Total marketing and sales spending divided by the number of new customers won in the period. Compare it against lifetime value.
- Break-even volume
- The unit sales needed to cover fixed costs, calculated as fixed costs divided by unit price minus unit variable cost.
- Price elasticity of demand
- The percentage change in quantity demanded divided by the percentage change in price. Absolute values above one indicate elastic demand.
- Marketing mix four Ps
- Product, price, place, and promotion - the controllable variables a firm combines to serve a target segment and position its offer.
- Market segmentation
- Dividing a heterogeneous market into groups with similar needs. Useful segments are measurable, substantial, accessible, differentiable, and actionable.
- Targeting
- Choosing which segments to serve after evaluating segment size, growth, competition, and fit with company resources and objectives.
- Positioning
- Designing an offer and image to occupy a distinct place in the target customer's mind relative to competitors. It drives the value proposition.
- Marketing funnel
- The staged path from awareness through consideration, evaluation, purchase, and loyalty. Conversion rate at each stage equals exits divided by entrants.
- Product life cycle
- Stages of introduction, growth, maturity, and decline. Pricing, promotion, and distribution emphasis shift at each stage as competition and growth change.
- Push versus pull promotion
- Push directs trade incentives toward channel intermediaries; pull builds consumer demand through advertising so consumers request the product from retailers.
- Share of wallet
- The proportion of a customer's total spending in a category captured by one supplier. It is a key growth metric in account management.
- Gross margin percentage
- Revenue minus cost of goods sold, divided by revenue. It measures profitability before operating expenses and guides pricing and mix decisions.
- Marketing ROI
- Incremental profit attributable to a marketing investment divided by the investment cost. It supports budget allocation across channels and campaigns.