Sales, Channel and Customer Relationship Management
This domain tests pipeline discipline, route-to-market choices and the economics of customer relationships. Questions often hand you margin chains or funnel conversion rates.
Selling and pipeline
- Funnel: lead → qualified → opportunity → proposal → won. Track conversion at each stage, not just total leads.
- Pipeline coverage is typically 3–4× target to absorb normal loss rates; unweighted pipeline value flatters.
- Qualification: BANT (budget, authority, need, timing); SPIN moves from situation and problem questions to implication and need-payoff.
- Activity metrics (calls, meetings) predict outcomes but should not replace them.
Channel and CRM
- Route to market: direct vs indirect; intensity options are intensive, selective and exclusive.
- Channel conflict arises when direct online pricing undercuts partners; manage with differentiated SKUs, territory rules or margin support.
- CLV ≈ average annual margin per customer ÷ churn rate; retention rate = 1 − churn. RFM (recency, frequency, monetary) prioritises accounts.
Worked example
A manufacturer sells to a distributor at £100. The distributor takes a 25% margin on its selling price, so it resells at £100 ÷ 0.75 = £133.33 - not £125. A retailer then takes 40% on the retail price: £133.33 ÷ 0.6 = £222.22. Reasoning: margins quoted "on price" divide; only markups on cost multiply. Misreading this understates consumer price by roughly £22 and distorts every downstream elasticity judgement.
Traps
- Confusing margin with markup when stacking channel partners.
- Treating churn and retention as the same number rather than complements.
- Judging salespeople on revenue alone, which quietly rewards discounting.