Deck 3: Sales Opportunity Management

Question 1

In a consultative selling situation, cold canvassing often wastes a lot of the salesperson's time.

Answer 1

True

Question 2

The minimum size customer that a salesperson should call on is closely related to the cost of making a sales call.

Answer 2

True

Question 3

Break-even sales volume is the sales volume necessary to cover all direct selling expenses.

Answer 3

True

Question 4

In itself, breakeven analysis does not decide the optimal time allocation between prospecting and servicing accounts.

Question 5

Although important for evaluating current customers, calculating a breakeven sales volume is not necessary when prospecting for new customers.

Question 6

The easiest and most widely used model for allocating salespeople's time is the multiple factor model.

Question 7

Trade shows are generally not very effective in generating good sales leads.

Question 8

A customer far below the breakeven sales volume may be a good candidate for servicing via phone calls, rather than face-to-face sales calls.

Question 9

Sales force costs as a percent of sales are generally about the same across most industries.

Question 10

Corporate marketing executives are usually in the best position to determine the minimum size customer on which the sales force should be calling.

Question 11

The minimum size customer that a salesperson should call on is directly related to the number of employees the customer employs.

Question 12

It is not necessary to calculate the minimum account size when a sale is assured.

Question 13

Prospects are considered a qualified lead when it is established that they have both a need for the product and the authority to buy the product.

Question 14

The same sales effort and time should be given to each customer since each customer should be considered important.

Question 15

Research has shown that the number of calls required to close a sale is about the same regardless of the type of product or service being sold.

Question 16

Direct selling expenses are those associated with selling a product directly to the final user of the product.

Question 17

Cold canvassing is a common method of prospecting in consultative type of selling.

Question 18

A salesperson is well advised to provide the same level of service (e.g., number of sales calls) to all accounts in an effort to increase sales volume.

Question 19

Break-even sales volume analysis is as important when prospecting for new customers as it is when serving existing customers.

Question 20

Research has shown that direct selling costs as a percentage of sales remain fairly constant between industries.

Question 21

A sales response function generally indicates that a salesperson can always increase the sales volume of an account by calling on it more often.

Question 22

According to salespeople, telephone interruptions are considered to be the most common time waster.

Question 23

Customer Lifetime Value (CLV) is used by some companies to allocate their marketing and sales force resources.

Question 24

The integration of new technology, such as computers, into the sales force has actually decreased the amount of time salespeople have for selling.

Question 25

A sales response function shows the relationship between the number of sales calls on a customer and the resulting sales volume at each sales call level.

Question 26

The ABC account classification procedure typically considers multiple factors when determining customer value.

Question 27

Portfolio models evaluate account attractiveness based on both account opportunity and competitive position.

Question 28

Sales process models such as the Sales Funnel are best suited for salespeople selling big-ticket items (e.g., computers), where prospecting for new sales opportunities is important.

Question 29

Personal growth opportunities are frequently characterized as activities with high personal importance, but low apparent urgency.

Question 30

According to the Sales Funnel model, a salesperson should give first priority to identifying "unqualified opportunities."

Question 31

Customer Lifetime Value (CLV) is not a forward looking determining market performance.

Question 32

Paths for increasing the value of a firm's customer base include which of the following?

A) acquiring new customers
B) reducing the turnover of existing customers
C) charging higher prices
D) both a and b above are true
E) all the above are true.

Question 33

The biggest time wasters for most people are activities/events that have high apparent urgency, but are low in personal importance.

Question 34

According to survey results, most firms fail to offer their salespeople training in time management.

Question 35

Customer Lifetime Value (CLB) uses an estimate of a customer's future sales.

Question 36

According to the portfolio model of effort allocation, salespeople should spend most of their time calling on new prospects.

Question 37

Recent studies indicate that salespeople spend the majority of their time prospecting, selling to customers, and on customer service calls.

Question 38

A sales response function can only be derived from complex mathematical functions developed from customer surveys.

Question 39

According to the Sales Funnel model, salespeople should first concentrate on their "best few" opportunities, then the "qualified" opportunities, and lastly the "unqualified" opportunities.

Question 40

According to the Sales Funnel model, a "qualified" selling situation is one in which all the buying influences have been contacted.

Question 41

It is not at all unusual for a company to find there is between a ______________ difference in the profitability of customers who purchase a similar quantity of product.

A) 10-25%
B) 25-50%
C) 50-75%
D) 75-100%

Question 42

Given the following information:
Compensation - $90,000 Direct Communications - $5,000
Automobile - $7,000 Meals & entertainment - $6,000
Overhead - $12,000 Promotional materials - $10,000
Calls per day - 5 Profit margin - 10%
Net selling days - 200
Calculating cost-per-call is an important step in addressing the minimum customer size issue. Cost per call is a function of:

A) the number of calls made per day.
B) a salesperson's direct selling expenses.
C) gross margin.
D) both a and
E) all of the above.

Question 43

Given the following information:
Compensation - $55,000 Communications - $3,000
Automobile - $7,000 Meals & entertainment - $9,500
Overhead - $12,000 Promotional materials - $2,000
Calls per day - 3 Profit margin - 10%
Net selling days - 200
The average cost per call is:

A) $124.17
B) $127.50
C) $147.50
D) $114.75
E) $144.17

Question 44

Examples of demographics that might be used in building prospect profiles include all of the following except:

A) size of business.
B) type of equipment currently in use.
C) geographic distance from shipping point.
D) customer buying preferences.

Question 45

Which of the following is not considered when calculating the minimum sized customer on which to call:

A) direct selling costs.
B) the average number of sales calls required to close the sale.
C) the cost structure of the selling company.
D) the growth rate of the customer.

Question 46

A customer demographic that might be used in building a prospect profile might include:

A) geographic location
B) size of business
C) purchasing preference of customer
D) only a and b are correct
E) a, b, and c are all correct

Question 47

Which of the following are methods for determining time allocation?

A) single factor.
B) ABC approach.
C) portfolio.
D) sales funnel.
E) all are allocation methods.

Question 48

A sales response function depicts the relationship between the number of sales calls and which of the following?

A) sales volume
B) customer receptiveness
C) gross margin
D) the number of additional sales calls needed to close the sale
E) profitability

Question 49

Although portfolio models offer several benefits over single factor models, a problem that still remains is:

A) only one characteristic is used to classify accounts.
B) the lack of an optimal solution to the allocation of sales calls.
C) a lack of priorities for customer data collection and analysis.
D) it does not promote forward-focused thinking by the sales team.
E) none of the above.

Question 50

In order for a prospect to be a qualified lead a salesperson must gather information about whether the prospect has:

A) a genuine need for the product or service.
B) the buying authority to purchase the product or service.
C) the financial resources to purchase the product or service.
D) only a and b above are true.
E) a, b, and c above are all true.

Question 51

Given the following information:
Compensation - $90,000 Direct Communications - $5,000
Automobile - $7,000 Meals & entertainment - $6,000
Overhead - $12,000 Promotional materials - $10,000
Calls per day - 5 Profit margin - 10%
Net selling days - 200
The average cost per call is:

A) $111.00
B) $113.00
C) $118.00
D) $130.00
E) none of the above are correct.

Question 52

The first step in determining the minimum customer size on which the sales force should call is to calculate the:

A) cost per sales call.
B) the growth potential of the customer.
C) sales promotion budget needed.
D) cost of product development.
E) gather the customer's past sales record.

Question 53

Dramatic differences in the profitable of customers purchasing a similar dollar volume may be caused by:

A) the mix of products they purchase.
B) the price discounts taken.
C) "forward buying" by the customer.
D) both a and b above.
E) all of the above.

Question 54

A good example of a directory for business-to-business selling would be:

A) the Fortune 500 listing.
B) the Associated Almanac.
C) the Businessweek Industrial Index.
D) the Thomas Register of American Manufacturers.

Question 55

Methods of locating prospects include all of the following except:

A) searching on the internet.
B) using directories.
C) conducting logistic analysis.
D) trade shows.

Question 56

The ABC account classification system is:

A) an example of a single factor model.
B) an alphabetical portfolio method of time allocation.
C) a method to rank customers by their geographic location.
D) both a and c.
E) both b and c.

Question 57

If you are new to the territory and want to find out who are possible prospects for your line of latte machines, the best source with the most leads would be:

A) the Thomas Register of American Manufacturers.
B) the Yellow Pages.
C) the Survey of Industrial Purchasing Power.
D) the local newspaper.
E) all of the above.

Question 58

After reaching the optimal number of sales calls, the sales response function tends to illustrate which of the following sales response dynamics?

A) increasing marginal returns.
B) decreasing marginal returns.
C) increasing sales levels.
D) decreasing sales levels.
E) none of the above.

Question 59

The Sales Funnel model identifies the best few opportunities as those in which:

A) the financial buyer has given his/her approval to the project.
B) all the buying influences have been contacted and their needs identified.
C) the purchasing department has recommended the firm's selling proposal to the other buying influences.
D) all of the above.

Question 60

Portfolio models offer several benefits that single factor models do not. Which of the following is not one of those benefits?

A) the identification of important customer relationship issues
B) the isolation of information gaps
C) a lower cost method of analysis
D) setting priorities for customer data collection and analysis
E) both a and b above.

Question 61

According to recent surveys, the average salesperson spends approximately what amount of time waiting and traveling?

A) 10%
B) 20%
C) 30%
D) 50%

Question 62

A key aspect of managing time effectively is:

A) to increase effort in daily activities.
B) to switch often between several tasks.
C) not to limit what you can accomplish ("never say no").
D) to recognize and control time-wasters.
E) all of the above.

Question 63

As a performance metric Customer Lifetime Value (CLV) is:?

A) based on historical sales.
B) is consistent with a transactional sales perspective.
C) forward or future oriented.
D) is based on the next year's sales forecast.

Question 64

Which of the following is included when calculating Customer Lifetime Value?

A) a discount rate
B) future product purchases
C) the average contribution margin from purchases
D) none of the above
E) all of the above

Question 65

Which of the following is the greatest time waster according to salespeople?

A) unclear communication
B) meetings
C) telephone interruptions
D) procrastination