Internal Selling: “Putting Theory Into Practice”
Mental Model: As mentioned by John Bradley Jackson, “internal selling can be the hardest sale”. A salesperson might feel that convincing the customers and winning the deal is the end to it, but that is not true. Convincing the people within the organization and specially the higher management is a tougher job to do. There is resistance and inflexibility to change. The internal sales cycle is almost similar to the process of selling to the end customers. A salesperson has to understand the process, his role in it and then communicate everything to everyone (From John Bradley Jackson).
After studying the course “Internal Selling”, I have understood the importance of selling within the organization. Like a ray of white light consists of all the colors, behind any decision in a company, there are different persons involved. These people have different ideologies, mental models, constraints and resistances. To be a successful internal seller, one has to accept this fact and be adaptable to apply different approaches to convince these people with the help of three types of selling skills: strategic, tactical and self-management. Thus he will be able to network and effectively implement any idea or plan internally.
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Executive Summary: This report talks about the Super-Ware case and tries to analyze how different internal selling concepts can be used in such a scenario in real life. There are two challenges here. The first one is to win over the customer Australian Home and the second one is to convince the people within the organization to agree to the demands of Australian Home. SPIN selling techniques can be used to convince Australian Home. For the second part, six stage internal sell process is explained. For each of the stages, relevant theories and concepts have been used.
The final goal is to convince both the companies to strike a deal so that a long term good business relationship can be started. Putting Theory into Practice: I will consider the “Super Ware” case and try to analyze it in the lights of the theories learnt in the course “Internal Selling”. First, I will describe the situation in brief. Then the two parts will be discussed separately. The first part, convincing the customer, Australian Home will have discussion on how SPIN selling technique can be used here. The second part, convincing the company people, will be dealt with the six stage internal sell process.
Situational Analysis: Super-Ware is a cookware company. It designs products to simplify people’s lives. For more than 100 years, they are helping people to save money and time by keeping their food fresh for longer. Super-Ware offers a wide range of products for storing food, food preparation, cookware, storage and serving items. They have designed a new technology cookware. This is called Snap-Shut which has the patented Easy-Find technology. The first challenge of the sales representative is to win the deal from the most shopped general merchandise retailer of Australia, Australian Home.
Then the second challenge is to convince the departments within the organization to agree to the needs of Australian Home. 1. Convincing the End Customer: Australian Home 1. 1 SPIN selling technique: First, I will try to apply the SPIN selling technique as proposed by Rackham, 1987 to be able to win over the customer, Australian Home. •Situation: Australian Home is one of the biggest retailers of Australia. It is part of Australian Home Corporation, Limited which operates in retail, financial services and petroleum. More than 25,000 Australians work across the company.
It has 254 stores in a wide range of communities nationwide. Australian Home stores offer a unique mix of products and services through the leadership of three specialty stores under one roof- Automotive, Sports and Leisure and Home Products. The product in question, Snap-Shut is currently not listed in Australian Home but other products of Super-Ware are sold in Australian Home as well as other competitive products like Lite-Box and Snap-Tight. Snap-Shut is sold in three retailer stores in Australia currently: All-Mart, Wellworths and Dollarland.
The objective of the salesperson is to secure full listing of the Snap-Shut product line before the key summer picnic season. It is known that the future relationship with Australian Home is dependent on successfully getting this deal. •Problem: Consumers cannot find the lids of their containers and the Easy-Find technology of Super-Ware solves this problem. But there are some issues. Super-Ware does not accept returns of products and there is no guarantee that the products will sell as it is a new innovative range of cookware. The shipping policy of Super-Ware is FOB (freight on board) to the retailer.
This means Super-Ware’s responsibility ends once the products are on board and the retailer has to bear the responsibility from then onwards. To add to these, Australian Home wants the products to be delivered in boxes of 20 instead of the Super-Ware convention of 10. They also want the boxes to have red transparent lids and not blue. Moreover, they demand to sell below the MSRP (manufacturer’s suggested retail price) by at least 2 cents for each if the items. They do not want the FOB policy for shipping and want the products to be delivered directly to their Melbourne depot. Implication: Over 70% of consumers are routinely unable to find the lid that matches their containers and another 52% loose the lid completely. The Snap-Shut products solve two problems, leakage and easy organization. They have unique locking tabs for secure storage and the lid snap to the base so that it cannot get lost. The lids are transparent which means whatever is stored within the boxes can be seen easily. It will help the customers to find what they want in a time efficient manner. This Easy-Find technology is patented by Super-Ware. So these boxes will attract more customers than competitors.
This will mean more business for Australian Home. The competitors of Australian Home: All-Mart, Wellworths and Dollarland currently sell Snap-Shut products. So not listing this range will result in competitive disadvantage for Australian Home. Moreover, after the Christmas season, customers will have many leftover foods and Summer being a picnic season, they will need more food storage boxes. These customers will be more than happy to buy the unique Snap-Shut products. These are some of the main reasons why Australian Home should store this new product range. Need-Payoff: Australian Home is convinced about the innovative Snap-Shut products. But they have raised some demands to be fulfilled before placing the order. Getting this deal is very important for Super-Ware. This will ensure start of a good professional relationship with Australian Home which can be turned into a long term one. Australian Home is the biggest player in Australia and having a good relation with them will help Super-Ware to gain more profits. If the demands of Australian Home are fulfilled and they are given guarantee of sales, they will order the products.
This will mean gaining their trust and future orders. To make it a success, the sales representative has to use his selling skills to convince the people within different departments in the organization to accept the demands of Australian Home. 2. Convincing the Internal People of the Company: Super-Ware I will use the six-stage Internal Sell Process as proposed by Friesen, M. E. , 1998 to describe how the people within the organization, Super-Ware can be convinced to agree to the demands of Australian Home so that the deal comes to a successful end.
The sales representative has to use the three selling skills of Strategic, Tactical and Self-management to do this task. 2. 1 Identify the Problem: There are four demands of Australian Home which is related to four departments. •The Marketing/Brand team has to be convinced that supplying red lids will be beneficial and cost effective •The Production team has to be convinced that changing the pack box quantities from 12 to 20 is viable •The Sales, Finance and Marketing teams are to be convinced that selling 2 cents below the MSRP will benefit the company •The Supply Chain team should agree to ship the products to the Melbourne depot 2. Generate Ideas: People are different. They have different mental models. These models influence how they observe and understand the world and finally how they take actions and behave. They have different constraints and resistances. To convince these people, one has to accept that they are different and try to think in the same way as they do. Different approaches are needed to accomplish this. One has to be ready to apply them and be effective at gathering information to successfully apply them (Spiro, & Weitz, 1990). This is called Adaptive Selling.
As explained by John Bradley Jackson, “Internal selling can be the hardest sell”, one need to explain the unique attributes of the new customer agreement and don’t expect people to seek out the details about the new agreement. The people within the organization should be specifically communicated about the importance of the deal. They should be involved to generate ideas about how to meet the demands. The four departments can be given the following four reasoning: •Marketing: As Christmas is coming and red is a popular colour in Australia, changing the lid colour from blue to red might become more beneficial for the company.
The department people might argue that changing the colour of the lid will confuse the end customers. The end customers can easily identify the colour blue with the Super-Ware brand name. This is part of their brand recall. And doing something which may affect the brand loyalty is a very risky decision. But the counter argument here can be that Australian Home and Super-Ware will engage in cooperative advertising which will feature both the companies. This adds will carry the message that Super-Ware has brought new Christmas special red lids exclusively for the Australian Home customers.
This will help to increase the brand loyalty rather than affecting it. Another argument from the department can be that there is no guarantee that customers will like these red colour lids and buy them. The reasoning here can be that Australian Home, being the biggest retailer has more knowledge about the customer preferences and they have the confidence that the red lids will attract more and more customers during this festive season. •Production: Australian Home wants the products to be delivered in pack of 20. The Production department will say that doing this will mean different packaging process for Australian Home.
Currently, the products are delivered in cases of 12 for all the other customers. Changing the packaging process only for one customer will result in more cost. Super-Ware might outsource the entire packaging process but that will mean losing the control over it. And if Super-Ware decides to standardize the process and package all products in cases of 20 for all customers, then the other customers might disagree to it. The sales representative can try to address these concerns by saying that packing in cases of 20 instead of 12 will save packaging material and thus save cost.
The other customers can be convinced to accept delivery in packs of 20 with the reasoning that this is an environment friendly manner of business. •Finance: The Finance and Sales teams are to be convinced that selling below the MSRP will be beneficial in long term. They might say that if Australian Home is sold at 2 cents below the MSRP, then the other customers will also demand the same. But the counter argument here can be that, Australian Home is one of the biggest retailer and they have the biggest customer base. Profit = quantity * price.
The reduction in price will result in more quantity being sold and thus more profit. If the other customers also demand same reduction in price, then Super-Ware can say that Australian Home gives the guarantee of more quantity, if they are also ready to buy more products and confident to sell them then they can also be given this privilege. Thus in long term, this will mean more Super-Ware products being sold and more profit for the company. •Supply Chain: Currently Super-Ware has the FOB shipping policy. The products are shipped from China and it is the responsibility of the buyer once the products are on board.
Australian Home is worried about this responsibility, they are not worried about the money i. e. they are ready to pay the shipping prices but do not want the hassle of customs and other responsibilities. The Supply Chain department may say that changing the policy will mean new agreements and more legal costs and moreover the other customers will also start demanding the same. But they can be convinced saying that Australian Home is a major key account and they mean more business for the company. And they are not concerned about the money. Super-Ware only has to arrange for the responsibilities.
All they have to do is to contact some outsourced expert shipping company for this. The expenses will be paid by Australian Home. If the other customers demand this, then they can be asked to enter into a long term business contract to avail this service. 2. 3 Network the Ideas: After talking to different departments, convincing them and asking them for suggestions, the ideas have to be communicated to all within the company to gain support from top management and others within the organization. The sales representative has to use his networking skills in this stage.
He has to understand that people have different ego states from which they can communicate. This is the transactional analysis proposed by E. Berne, 1986. There are three ego states: •Parent •Adult •Child And there are three types of transactions possible within people: •Reciprocal/Complementary •Crossed •Duplex/Covert While communicating with someone, one should try to analyse the ego state of that person and try to guess the type of transaction he is trying to do. Accordingly, the sales representative should behave with that person to perform a successful friendly communication.
Everyone in the organization should be convinced about the importance of the deal with Australian Home and the new ideas thought of to meet the demands of them. The sales representative can use his different powers, coercive, utility and honour, to influence and convince people. Influence is termed as the highest level of all human skills. The sales representative has to identify the most influential persons within the company or the opinion leaders. If these people are convinced, then they can motivate others to agree to the changes required to meet the demands of Australian Home.
The other people who should be targeted first are the people with knowledge, people who have good connections in the company and also who are trustworthy. These people might help to get support and cooperation from others. People do not like changes. They are resistant to changes. And the worst part is, if one process succeeds then people become more resistant to change it. Meeting the demands of Australian Home requires some serious changes in the company policy. So the sales representative has to be very careful to make sure everyone is convinced that these changes are good for the company in the long term.
Everyone should be involved in this process. People feel more obliged to agree to changes if they are engaged in and part of the process. The sales representative should keep in mind that there is the ladder of inference as proposed by Peter Senge. These are the stages that one goes through while inferring something. One decides what information to select from the pool of available information, and then he describes this information to himself and makes the interpretation. After that he evaluates it based on his views and opinions. Then finally he theorises it and concludes.
This is the complex procedure behind any inference. People do these steps in mind without knowing that he is doing these. So, it is important to know that everyone has their own different ladder of inference. To convince someone and sell some idea to him, the seller has to act in a friendly way so that the person infers the exact thing that the seller wants him to infer. The ideas generated by talking to the four departments should be networked within the company with these theories kept in mind to ensure effective communication and generating support. The sales epresentative has to use his powers and influence skills to successfully convince everyone in the company. He should use his four types of influence styles depending on the situation: •Involving: He should use this style with people who are friends and trustworthy. It should be used to build collaborations based on the same goals. They can form a team together and work towards motivating and convincing others in the company. •Inquiring: He should use this style of influence with people who have some other needs. He should talk to people and try to identify their objectives and goals.
Then he can try to convince them about his ideas and in turn he will help them to get success on their respective issues. •Leading: He should use this influence style to let everyone know the importance of this deal and the importance of Australian Home as a major long term key account customer. If the employees within the company are convinced about the importance of the issue then they will shed their resistance and come forward to make the deal a success. •Proposing: This style of influencing involves proposing various options and solutions with rationalizations.
It is a structured style. This style might be used with people within the four departments. The sales representative should try to get these people involved in the whole matter. He should ask for their suggestions and they should work together towards a win-win solution for both the companies. 2. 4 Close the Deal: This is the hardest of all the stages. Getting the commitment from the top management can be as hard as possible. They can be convinced still not committed. The sales representative might have to use different closing techniques depending on the situation and the persons involved.
While closing, the sales representative can use the concept of co-opetition, Brandenburger and barry, 1996. It is not necessary that one party has to be defeated for the win of the other party. It can be a win-win situation for both Australian Home and Super-Ware. The top management has to be convinced that. The solutions should be made in such a way so that they benefit both the companies. 2. 5 Implementation: This is the stage once commitment is gained from the top management. The ideas should be implemented. The sales representative should personally ensure that all the four departments can successfully implement all the olutions. He should be involved in the entire implementation process. He should also ask the Australian Home representatives for their feedbacks. He is the middle man between the two companies. He has the responsibility of maintaining the interests of both the companies and keeping both of them happy and thus helping to grow the inter-organizational relation. In this stage also he has to use his people skills to ensure that everything is going smooth. 2. 6 Sell the Results: This is the final stage of this six stage internal sell process.
The results of the deal, the final success story should be communicated to everyone. The sales figure of Australian Home, the growth in revenue and other financial figures should be communicated to everyone. He should also not forget to thank everyone and mention their contributions everywhere. This can be explained with the help of the Double Loop Learning concept as proposed by Argyris, 1976. Single loop learning is only problem solving and is a one way approach. This helps only in improving the system as it exists. But double loop learning is more than just solving the problems.
This involves questioning the underlying assumptions and beliefs behind the techniques in which we do something, goals and values. The final outcome is the result that we get. We should analyse this result and try to learn from it. This learning can help in building the underlying assumptions which explains why we do something. This will also help in the techniques, goals, values and strategies which explain what we do. The outcome of building a successful business relation with Australian Home should be considered as a learning experience for the company Super-Ware.
The results should be communicated to one and all within the company. This will help in internal sell process in future for other decisions in other situations. References: •John Bradley Jackson, “Internal Selling Can Be The Hardest Sale” •Rackham, 1987, SPIN Selling Technique •Spiro, & Weitz, 1990, Adaptive Selling •Jennifer McFarland, 2001, “The Inside Sales Job” •Friesen, M. E. , 1998, “The Internal Sell Process” •E. Berne, 1986, Transactional Analysis •Peter Senge, Ladder of Inference •Brandenburger and Barry, 1996, Co-opetition •Argyris, 1976, Double Loop Learning