Fall 2014 Draft Technology Sales & Sales Management. The company with the best sales force wins. Nothing happens until a sale is made

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1 Technology Sales & Sales Management Spring 2014 Instructors: Lou, Kirk & Dennis Class Dates: September 4 th -December 9th Class Time: T-Th 4:00-5:30 Room:E62 Overview Nothing happens until a sale is made Nothing happens until a sale is made. That simple point underlines the critical importance of sales to the entrepreneur. Almost every business plan assumes a certain amount of sales, but that assumption is the tipping point. Without sales, the entire business model is an exercise in frustration and futility. The purpose of this course is to demystify sales and help you understand how to sell and manage. If you are considering a startup after Sloan, this course is a must. At the end of this course you should be able to understand the role of sales in a company whether you join a startup or work for a large, established company. This course is geared towards the entrepreneur. We have recently added a new section to the course called startup sales toolkit. Should you be joining a startup this section will help you understand exactly what tools you need to hit the ground running. The entrepreneur must not only understand the sales process but also embrace that the ability to sell is the single most critical success factor of any new enterprise. This course does not approach sales from the vaunted perspective of strategy. It gets right into the very practical and tactical ins and outs of how to sell technical products to a sophisticated marketplace. Then it moves into the more complex subject of how to build and manage a sales force. The course covers subjects such as building compensation systems, assigning territories, resolving disputes, managing channel conflicts, opening sales offices and other complex sales and sales management situations. It also will provide a startup sales tool kit you will need if you a startup out of Sloan or move to one in your career. In a larger sense, the entrepreneur and the manager has to sell his or her vision to perspective employees, to angel and venture investors and to strategic partners. While all true and all necessary, this course focuses mainly on selling to customers, whether that is through a direct sales force, a channel sales force, or building an OEM relationship. A few cases focus on selling to investors and strategic partners. Sales is the one function that cannot hide behind the veil of corporate doubletalk; sales goals are either made or not made. Every entrepreneurial activity leverages off of that single fact. Markets are not totally rational organizations and the firms with the best sales teams will usually win. The company with the best sales force wins 1

2 One common misconception is that product innovation alone is a winning tactic. It is not. Often the critical success factor is exactly how a firm goes to market with its sales force. But the rules have changed innovations like freemium models and social networking are changing the status quo and forcing managers to consider new way to structure and incent sales teams. Instructors Lou Senior Lecturer MIT Sloan School of Management CEO Black Duck Software Loushipley426@gmail.com Kirk Lecturer, MIT Sloan School of Management CEO Data Intensity karnold@datintensity.com Dennis Lecturer, MIT Sloan School of Management Senior Vice President, Service Providers, EMC Corporation _Dennis@emc.com Teaching Assistants Zac Corker corker@gmail.com Ethan Bar-Yehuda ethanby@mit.edu Tasks Class Participation is a requirement. We will cold call students to open class. There will be several oral and written assignments. There will not be a final exam. Each class will be 80 minutes long and will be broken into three parts: a cold call opening in which a student presents his/her course of action as outlined in the case, class discussion of the case, and a presentation by the professor to emphasize the key learnings from the case. 2

3 Missing Class More than one unexcused absence will affect your final grade. Grading must be taken for a letter grade and cannot be taken Pass/D/Fail. Class Participation: 25% Take a Sales Manager and a Salesperson to Lunch 25% Video recording sessions/simulation Results: 25% Assignments: 25% 3

4 Assignments There are two main types of assignments: written assignments and video role play assignments. Written assignments consist of a) short, written case preparations for class and b) two 2-page papers based on interviews with sales professionals. Written Assignments Case Preparations Date due: see below schedule for details, submit through Stellar Every class is associated with a short assignment, posted on Stellar. All students are required to be ready to discuss these assignments. You are required to turn in 11 written assignments over the course of the class. Please see the schedule below for your assignments they are based on your last name. Assignments must be submitted through Stellar. Aside from explaining how you would go about solving the problems, assignments must illustrate which of the techniques learned in the class should be used to address the particular issue. Grades will be check, check plus or check minus. Independently of turning in the written assignment, you must always come to class prepared to discuss the assignment and case at issue. Take a Sales Person to Lunch Assignment - Date due: October in class. You are to identify, get an appointment and meet with an experienced salesperson about what it means to be an effective salesperson. Discuss the requirements to become a good salesperson, as well as other relevant matters (territory management, incentives, information systems, etc.). Write the insights that you learned in 2 pages max. Interview can be done with your partner but you must turn in separate assignments. Do not interview one of your classmates, but you may, of course, use your classmates for help in finding a salesperson to interview. You might want to consider interviewing a salesperson in the industry in which you hope to work upon graduation. Take a Sales Manager to Lunch Assignment - Date due:december in class. You are to identify, get an appointment and meet with an experienced sales manager about what it means to be an effective salesman and an effective sales manager. Discuss the differences between a good salesperson and a good sales manager, as well as other relevant matters (territory management, incentives, information systems, etc.). Write the insights that you learned in 2 pages max. Interview can be done with your partner but you must turn in separate assignments. Find a different company than the one you profiled in the previous interview. Again, no classmates. Mid-term Assignment: Team Sales Competition Teams of 4 have 2 minutes to pitch a technology product to a panel of customers. Every team member must participate! If you have questions about the written assignments, please contact the TAs. 4

5 Schedule of cases Video Role Play Assignments Video role play sessions Date see below for details You will have the opportunity to practice what you learned in front of a video camera, in order to appreciate the difference between theory and practice. There will be two recording sessions per team of two students. Each student will have a chance to both sell and buy for all four assignments. You should approach this as a normal sales call between you and a customer, where the object is to convince the customer to buy your product. Assignment Details: In each video recording session (10 min. total) you will play both the role of the salesman and that of the customer. That is to say, in each session, you will record two interviews that are five minutes each. It is very important that each role play should be only 5 minutes long. This will help you develop your effectiveness and efficiency as a salesperson. When you have completed your assignment, upload your video (e.g. YouTube, Vimeo) and share the link via Stellar (under Homework Videos). We will only accept videos through Stellar. We strongly suggest using the MIT Network to upload the videos to the various sites. If you mark the videos as private (which we suggest), please make sure to give the TAs access to them using their addresses. Please title the video with your full name and the name of the video, e.g. Michael Scott Delphi You are responsible for submitting the video on Stellar where you play the salesperson, i.e. the person doing the selling Each student must do four videos. You can choose which videos you do from each pair below. Schedule of Video Role Play Assignments All videos must be submitted before class on the due date. Video 1 Video 2 Delphi Software Grid Pro Carol Electronics Charles Matrix Video 3 Catherine A&B 2 Ava Mac Video 4 Morgan Care Mary Mahoney 5

6 In the above cases, sometimes you will be selling to your boss or recommending which candidate should be hired (GridPro) or which should be terminated (Mary Maloney) Grading: The expectation is that the videotaped presentation will be more thorough and practiced than those given in front of the class. You should rehearse prior to taping the video. Don t try and wing this assignment. REHEARSE, REHEARSE, REHEARSE. Make sure you draw on the readings This is worth 25% of your grade so make sure you spend enough time incorporating lecture material. You must incorporate class material such as the Approach, Solution Selling, Meeting Objections. We will be grading your performance based on both the sales side and on the buyer side. On the sales side you should demonstrate the skills covered in class to date and show that you are able to address the key needs and concerns of the customer. On the buyer side, ask thoughtful questions, raise reasonable objections and have a genuine willingness to get to a yes. Any creativity that you wish to bring to the assignment is a plus. Tips for Video Assignments: Greeting: Build up a rapport with your client or boss. Don t jump directly into the sale. Smiling: Relax and smile once in a while. Make sure the client would want to talk to you again. Closing: Don t leave things up in the air. What is the next step? What are each party s responsibilities? Make sure you have a clear understanding before leaving the meeting. Logistics: You can use your own video camera, smartphone camera, computer webcam, etc. Upload to Youtube and then submit the link via Stellar Make sure that your video is viewable and understandable. If not, re-record! Each seller should plan on a 5 minute exchange. Thus, the full taping should take no more than 10 minutes total. Points will be taken off for long sessions. Both of you should sit in a chair, just like the demonstrations in the class. This is a sales call not a sales presentation. There should be no notes and no visual aids. Make sure your video links are NOT marked private. We can t grade them if we can t see them! If you have questions about the Video Role Play Assignment, please contact your teaching assistant 6

7 Class Schedule Technology Sales & Sales Management Class Date Class Title Case & Assignments Writeup Last Name 1 9/4 Session 1:Making a sales call 2 9/9 Session 2: Making a sales call 3 9/11 Session 3: Sales Prospecting 4 9/16 Session 4:Product Knowledge Assignment 1A: Diver s Delight Assignment 2: Power Miser Assignment 3: Pill Caddy Assignment 4: Delphi Software Carly Fiorina Article, Fast Company No Writeup, please prepare to discuss Prof., and 7

8 5 6 9/18 Session 5:Designing Sales Territories 9/23 Session 6:Setting Sales Quotas & Compensation Assignment 5: Grid Pro DUE: Take a Sales Person to Lunch 2- page Written Report (everyone) Assignment 6: Charles Matrix Greylock 7 9/25 8 9/ /7 Session 7: Team Selling Session 8:Sales Training and Forecasting 10/2 BOLD SELL COMPETITION Channel Problems Life of a regional sales manager 11 10/9 Merger Problems: 12 10/14 Bay Networks A Bay Networks B Assignment 7: AVA MAC Assignment 8: Catherine A & B Teams of four submitted to Tas for team sell competition Assignment 9: Tom Thumb NetApp Assignment 11: Bay Networks A Managing international markets Bay Networks B Assignment 12: Australia 1, 2, 3, /16 Opening a subsidiary Sales Learning Curve; HBR Article Start of Sales Module Assignment 13: Abido HBS 8

9 14 10/28 Expanding to the US Assignment 14: CustomerGauge Teams of two submitted to TAs for videos 15 10/30 Sales force reorganization 16 11/4 Negotiating an OEM agreement Teams of two submitted to TAs for Videos Assignment 15: Veritas A, B, C Stanford GSB Assignment 16: Outerbay 17 11/6 Complex sales situations Assignment 17: 18 11/ / /20 Managing a sales person in a large company Evolution of a sales model Freemium business models Edge Analytics Assignment 18: Cabot Corporation HBS case Assignment 19: Jive Software Assignment 20: Dropbox 21 11/25 Selling in the age of social media Assignment 21: Lu Lu Instruments 22 12/2 Using customer relationship management software Readings DUE: Take a Sales Manager to Lunch 9

10 2-page Written Report (everyone)assignment 23 12/4 Using marketing automation software Readings Sales Learning Curve 24 12/9 Wrap Up None, & 10