Selling Today Answer Key

Selling Today Developing and Qualifying Prospects and Accounts 9.1 True/False Questions 1) The goal of prospecting is to build a prospect base made up of current and potential customers. Answer: TRUE 2) The use of friends and acquaintances is not an acceptable way to build a prospect base. Answer: FALSE 3) When you build value into your sales process, you increase the odds that the customer will give you a referral. Answer: TRUE 4) The "endless chain" prospecting technique is easy to use because it fits naturally into most sales presentations. Answer: TRUE 5) It would be inappropriate to ask for the names of potential buyers immediately after closing the sale. Answer: FALSE 6) Using an existing customer as an intermediary (presentation of a letter or note) can reduce the amount of time spent on prospecting. Answer: TRUE 7) Cold calls should not be used to introduce a new product or service. Answer: FALSE 8) Joe Girard's "Ferris Wheel" concept illustrates how many calls it takes to close a sale. Answer: FALSE 9) CRM software cannot be used to track the likelihood that a sale will close. Answer: FALSE 10) Experts recommend conducting business in the process of networking to ensure that solid prospects are developed quickly and efficiently. Answer: FALSE 11) Qualifying is the process of identifying prospects who should be contacted. Answer: TRUE 12) In most selling situations, prospecting begins with a study of the market for your product or service. Answer: TRUE 13) Many banks, accounting firms, and consulting companies use seminars to generate new prospects. Answer: TRUE 14) In most cases, technicians, receptionists, bank tellers, and other non-sales personnel can do little to help with prospecting. Answer: FALSE 15) Networking is another word for prospecting. Answer: FALSE 9.2 Multiple-Choice Questions 1) Which of the following questions is most relevant to qualifying a prospect? A) How long has the prospect been interested in the product? B) Does the prospect know the firm's decision maker? C) Can the prospect make the buying decision? D) Can the prospect pay in cash for the purchase? E) Has the prospect purchased anything similar before? Answer: C 2) A typical company will lose approximately what percent of its customers every year? A) 5 to 10 B) 15 to 20 C) 25 to 30 D) 35 to 40 E) 45 to 50 Answer: B 3) Joe Girard's "Ferris Wheel" concept assumes which of the following? A) The optimal ratio of customers to prospects is 66 percent. B) If the customers are sold the correct product and given good service, a company will not lose customers. C) A certain number of customers will be lost every year by most companies. D) Departing customers must be replaced by new customers at an equal rate. E) Salespeople will do better prospecting when they think of the process as a roller coaster. Answer: C 4) When a salesperson asks a customer to prepare a note or letter of introduction that can be delivered to the potential customer, this person is using which prospecting method? A) networking B) mail inquiry C) cold canvass D) referral E) trade show Answer: D 5) A major barrier to prospecting is time. Therefore, salespeople should: A) try to avoid spending time available for actual selling on prospecting B) try to spend at least 50 percent of every week on prospecting C) get involved in prospecting only after completing all regular selling activities D) assign prospecting tasks to lower-level employees E) integrate prospecting activities with regular selling duties Answer: E 6) Which of the following efforts is used by progressive marketers to improve the quality of the prospecting process? A) Shorten the sales cycle by quickly determining which new prospects are qualified. B) Reduce the number of prospects who board the "Ferris wheel." C) Avoid the temptation of developing quality standards, which disrupts the prospect flow. D) Increase the use of telemarketing efforts to identify likely prospects. E) Make more cold calls to increase the volume and quality of prospects in the pipeline. Answer: A 7) Which one of the following is a guideline for effective networking? A) Limit the number of people you meet in a given setting. B) When you meet someone, tell the person what you do. C) Follow up on every contact you meet. D) Always conduct business while networking. E) Only offer a business card if the other person asks for it. Answer: B 8) Which publication would most likely provide a salesperson with detailed information on the citizens of a specific community? A) Middle Market Directory B) Thomas Register of American Manufacturers C) Polk City Directory D) Standard and Poor's Corporation Records Service E) Encyclopedia of Associations Answer: C 9) Which of the following is most likely a true statement regarding prospecting? A) Personal observation is an unlikely prospecting technique. B) Cold call prospecting is a systematic approach to identifying prospects. C) The response rate for e-mails is high, so they are a valid source of prospects. D) A salesperson cannot afford to spend time calling on persons who are not legitimate prospects. E) Networking should be avoided as a source of prospects because it is unprofessional to mix business and friendship. Answer: D 10) Networking, as it applies to the field of selling, is a method of prospecting that: A) utilizes the telephone and cold calling strategies B) remains popular only in the telecommunications field C) is seldom used today because of the rise of social media D) is considered unethical in most industries because of lawsuits E) relies on making contacts with people and profiting from the connections Answer: E 11) Which term refers to a salesperson's brief, cold call opener that summarizes the salesperson's product and company? A) elevator presentation B) sales dashboard C) pipeline speech D) qualifying remarks E) sales blog Answer: A 12) Which of the following is true regarding prospecting at trade shows? A) It is difficult to identify good prospects at trade shows. B) It is easier to identify good prospects and close sales at a trade show. C) Trade shows are too crowded to conduct presentations and close sales. D) It requires over five sales calls to close a sale from a trade show prospect. E) Trade show prospects are less motivated to buy than are other prospects. Answer: B 13) At-a-glance visualizations that define, monitor, and analyze the relationships existing in the pipeline or sales funnel are referred to as: A) sales forecasts B) pipeline analytics C) pipeline dashboards D) regression models E) commission reports Answer: C 14) Which of the following is true regarding doing business in Germany? A) Germany has been described as a "high context" culture. B) Dinner is the most common meal for business meetings. C) Flashy brochures have more impact than statistic-filled ones. D) There is a strong emphasis on punctuality in Germany. E) Non-verbal communication is more important than the words used to communicate. Answer: D 15) Which term best refers to a well-connected person who does not make the buying decision but has an impact on the person who does? A) gatekeeper B) referral C) prospect D) intermediary E) center of influence Answer: E 16) To increase the odds that customers will give referrals, a salesperson should most likely: A) build value into the sales process B) offer free products or discounts for referrals C) motivate buyers through time pressure D) provide a rational buying motive E) ask sales managers for permission to cut prices Answer: A 17) The portfolio model of classifying prospects involves: A) assigning each prospect a rating B) using multiple factors to classify prospects C) determining where a prospect is in the sales process D) using a sales forecast to predict which prospects will buy E) using external industry research to identify and qualify prospects Answer: B 18) The sales funnel model of classifying prospects involves: A) assigning each prospect a rating B) using multiple factors to classify prospects C) determining where a prospect is in the sales process D) counting all prospects equally E) asking directed questions to prospects Answer: C 19) Educational seminars are most likely a good source of prospects because: A) people who pay for a seminar will buy product B) salespeople need help conducting demonstrations C) most seminar attendees are referrals D) product benefits and features can be showcased E) salespeople can build a close into the keynote speech Answer: D 20) Which of the following would most likely be used by a sales manager to estimate the sales potential of a prospect? A) telemarketing B) qualifying C) trade show D) SWOT analysis E) account analysis Answer: E 21) The term social network most likely refers to a salesperson's: A) direct and indirect contacts B) co-workers and managers C) closest clients D) industry affiliation groups E) alumni organization Answer: A 22) A key concept in networking is to: A) follow up with every person you make contact with B) select who you will follow up with based on their usefulness C) send an email to every contact on a regular basis D) follow up on all emails with a phone call three days later E) offer a business card to select individuals Answer: B 23) Cold calling can be an effective technique for reaching: A) decision makers B) senior executives C) potential prospects D) buying centers E) qualified leads Answer: C 24) Salesforce.com is a leading provider of: A) industry research B) account metrics C) product development research D) CRM software E) payroll software Answer: D 25) The responsibility for entering customer information and contact records into the CRM database usually belongs to the: A) customer B) office manager C) data entry clerk D) sales manager E) salesperson Answer: E 26) CRM software is useful because customer information is most likely: A) shared with competitors B) available to many people in the company C) stored locally on the salesperson's computer D) updated automatically by the CRM provider E) changed only with the approval of a supervisor Answer: B 27) A salesperson with sales intelligence will most likely be able to create value for a prospect by having an understanding of the: A) software analytics of the firm B) product or service being sold C) culture and vision of the prospect's firm D) social and business background of the prospect E) special discounts available from the prospect's firm Answer: C 28) A downside to focusing too much effort on prospects with little potential is: A) the pipeline may become hard to keep track of with CRM software B) managers may assign some prospects to other salespeople C) too little resources are available to focus on prospects with high potential D) a salesperson may forget customers' names E) sales commissions may max out the compensation plan Answer: C 29) A prospect list from a CRM database is likely to include which kinds of information? A) amount, date, and likelihood that a sale will close B) salesperson bonus information on closed sales C) dates of sales competitors have made to the prospect D) salesperson's conclusions on any calls made to the prospect E) which salespeople earned the highest commissions, in descending order Answer: A 30) A balanced funnel involves: A) aggressively eliminating non-productive leads B) combining technical sales with product sales C) entering prospects from an even balance of industries D) entering the "Ferris wheel" simultaneously E) having prospects at different stages of the sales cycle Answer: E 9.3 Short Answer Questions 1) Joe Girard, popular sales trainer and consultant, used the "________" concept to illustrate the relationship between prospecting and the loss of customers due to attrition. Answer: Ferris Wheel 2) The practice of marketing goods and services through telephone contact is known as ________. Answer: telemarketing 3) An ________ outlines expected sales for a product or service to a specific target group over a specific period of time. Answer: sales forecast 4) The procedure used to obtain names of potential prospects from current prospects and customers is called ________. Answer: referrals 5) The process of identifying prospects that should be contacted is called ________. Answer: qualifying 9.4 Essay Questions 1) Describe the major benefits of using a computerized database as a source of prospects. Answer: 1. Can match product features with the needs of potential customers quickly and accurately. 2. Can accumulate a great deal of information about individual customers and use this information to personalize the selling process. 2) What is qualifying? What are the basic questions that a salesperson should ask in the qualifying process? Answer: Qualifying is the process of identifying prospects that appear to have a need for your product and should be contacted. The following questions should be addressed: * Does the prospect or account have a need for my product? * Does the prospect or account have the authority to buy my product? * Does the account or prospect have the financial resources to buy my product? * Does the prospect or account have the willingness to buy my product? 9.5 Applied Multiple Choice Questions Marco, a salesperson, prospects for new customers almost constantly but still has problems meeting his sales goals. Marco has consulted with his sales manager, who notices that once Marco has a meeting with a decision maker, Marco typically closes the sale. 1) What could Marco most likely focus on to better meet his goals? A) more prospecting to make sure he has a steady supply of potential new customers to present the product to B) qualifying prospects to make sure that they have the desire and decision-making authority to make a purchase C) presenting to the prospect using a stronger emotional appeal and less logic D) presenting benefits to the prospect instead of features, and making sure the benefits are as specific as possible E) working with a more seasoned salesperson from his company to learn techniques for finding more prospects in less time Answer: B 2) Marco asks his manager to listen in while he makes calls one day to help him figure out what he could be doing better. The manager concludes that Marco is doing an excellent job of building rapport but is not qualifying prospects as he talks to them. The manager suggests that Marco spend less time talking about the prospect's personal details and: A) more time talking about the features of the product B) focus on non-verbal ways to build rapport with the prospect, such as making active listening noises C) keep a list of qualifying questions in front of him so he makes sure to ask each one of them during the call D) practice his elevator pitch so he can help the prospect understand the product more quickly, since they do not have time on the phone to do a long pitch E) instead, talk about himself so the prospect will be able to trust him more easily Answer: C A sales representative has contacted all companies in his territory in the target industry and is concerned that the territory may be saturated. 3) What should the salesperson most likely do to identify new prospects in the same territory and industry? A) Contact people in different departments of current client companies. B) Use the firm's Website to develop a global contact network. C) Develop an elevator pitch for an educational seminar. D) Write an article for a national trade publication. E) Network with support staff at a competing firm. Answer: A 4) How could the sales representative use CRM technology to pinpoint companies that might have more untapped buyers? A) Compare the names of the contacts for each company in the CRM to the names on the invoices paid by the companies. B) Run a pipeline report to see how many potential sales could close within the next 60 days. C) Run a pipeline report for this year and then one for the same month a year ago to compare numbers of prospects at each stage in the pipeline. D) Look at the task list to see if there are prospects to be called that salespeople have missed. E) Analyze sales reports in terms of company populations to find sales that are too small to be the entire company and may just be one department. Answer: E Andrew McIlhern, a software sales representative, is not happy about giving up two days of making sales calls to work his company's booth in the exhibit hall of a major regional trade show. When Andrew consults with his company's exhibit manager, however, she urges him to use the time to prospect wisely. 5) How can Andrew use those two days in the exhibit hall to increase his pipeline? A) spend time studying product literature to increase his product knowledge B) present to unqualified visitors to the booth to improve his elevator pitch C) make calls to current customers during breaks to provide after-sale service D) ask co-workers to call some of his prospects to obtain potential referrals E) qualify prospects with a few questions when they first enter the booth Answer: E 6) From the base of prospects Andrew makes at the trade show, he closes twice as many sales as normal, and he cuts his sales cycle in half. What most likely explains this? A) The prospects at the trade show were both qualified and interested in the product. B) The prospects at the trade show had more money to spend than most customers. C) The prospects at the trade show developed a high degree of trust in Andrew and his firm. D) The trade show only attracted prospects that had been referred to Andrew and his firm. E) The trade show required exhibiting companies to offer discounts to all attendees. Answer: A Grackin Corporation is expanding into a new territory in which they are not as well-known as they are in their current territories. As part of this new push, the sales director decides to use a strategy that involves making aggressive cold-calls and hosting frequent educational seminars. 7) Because cold calling does not immediately result in a high level of closed sales, some companies feel that it is worthless. However, when done correctly—by researching the prospect and keeping the call bright and focused—it can be a(n): A) tool for making a quick transactional sale B) strategy for qualifying prospects with an elevator pitch C) way to introduce the prospect to the sales representative D) risk-free way to build rapport with a new prospect E) method of closing sales that have been pending Answer: C 8) How will the sales cycle in this new territory most likely compare in length to the cycle in the established territories of Grackin Corporation? A) It will be shorter, because the salespeople will be calling prospects to introduce the company. B) It will be shorter, because Grackin Corporation will not have to overcome false impressions. C) It will be longer, because the salespeople will have to introduce the company in cold calls instead of getting name recognition from prospects. D) It will be longer, because consumers in the new territory have not expressed a need for Grackin Corporation's products before. E) It will be the same, because sales presentations are independent of sales cycles. Answer: C 9) How does Grackin most likely benefit from hosting educational seminars? A) engaging in socially responsible activities in the community B) helping sales representatives with their presentation skills C) providing shareholders with many educational benefits D) highlighting product benefits to potential prospects E) generating extra revenue from attendees Answer: D 10) After an educational seminar, Grackin sales representatives are excited because they experience a major increase in the number of potential prospects. However, Anita, the Grackin sales manager, makes the following statement to the sales team: “The sheer number of prospects a sales representative cultivates does not necessarily indicate the quality of the sales representative's pipeline.” What does Anita most likely mean? A) A sales representative's pipeline is considered high quality when it contains prospects in multiple industries. B) Prospects are only valuable if they are qualified, so a few qualified prospects are better than many unqualified ones. C) Of all the prospects in a sales representative's pipeline, the only ones of value are the ones that make referrals to other buyers. D) Prospects are more valuable at different points in the pipeline, so it is impossible to determine the value of a sales representative's pipeline. E) A sales representative who works harder to convince prospects to buy will have a more valuable pipeline than one who simply tries to fill prospects' needs. Answer: B Charles Lin has just been hired by Frederick Company to replace a sales representative who is retiring after 40 years with the company. The older representative is training Charles on procedures and customers in his territory for three weeks before he retires, and Charles knows this is a huge opportunity to learn about the prospect base. When Charles asks which CRM system the company uses, the older representative says, "Everyone else here uses some computer program called Salesforce, but I won't touch it. I know my customers like the back of my hand! I never needed to write anything down." Charles is concerned. He used Salesforce in college and knows how vital it is to have customer information, sales records, preferences, and conversations recorded. He talks to the sales manager, who tells him the representative's sales were decent, and all his invoices came in, so they left him alone and never forced him to use the CRM system. 11) What should Charles most likely do? A) He should quit the job because he cannot succeed in a territory that is disorganized and about which he has little information. B) He should ask the manager for a list of orphaned customers and their contact information to develop potential referrals. C) He should start fresh by developing his own prospect base and forget about the retiring representative's customers. D) He should piece together his prospect base by asking the retiring representative for information and matching that information up with invoices from the billing department. E) He should ask the other sales representatives in the department to each give him three or four of their prospects so that he can start to put together a prospect base. Answer: D 12) What will be the most likely outcome for Charles due to the retiring representative's lack of record-keeping? A) Charles' sales will track way behind those of the retiring representative, and he will be docked pay and denied promotions. B) Since Charles is starting from almost scratch developing a prospect and customer base, he will lose some current customers because he does not know about them. C) Charles will be unlikely to develop sales presentation skills because of the time required to track referrals. D) Since Charles does not need any information from the retiring representative, he will conduct more cold calls and develop a larger base of qualified customers. E) Charles will continue maintaining the retiring representative's accounts as usual without any changes in strategy or implementation. Answer: B 13) How does the retiring representative's decision to not use a CRM system most likely affect Frederick Company? A) Customer knowledge is lost rather than passed on to the rest of the company. B) The sales representative's territory is not maximized because of poor strategy. C) The entire company's pipeline forecasts cannot be maintained or calculated. D) Organizational culture is damaged because of a lack of team spirit. E) Hiring practices are hindered because of poor mentoring methods. Answer: A A sales manager runs what she calls "an all-out blitz" with her department to focus on closing sales in the last month of the third quarter. Her department exceeded its quota by 20%. The strategy involved a focus on closing as many pending sales as possible and moving customers in the evaluation stage to the buying stage. During the fourth quarter, the team closed fewer sales than in the third quarter and only generated 50% of the amount that was made in the third quarter. 14) What is the most likely explanation for this difference? A) The prospects the team worked with in the fourth quarter had maximized their budgets. B) The manager didn't adequately train the team in how to conduct fourth-quarter sales. C) Pending sales are the only sales that were tallied in the final figures for each quarter. D) The team neglected the pipeline and prospect development. E) The team failed to align the selling and buying process. Answer: D 15) What critical error did the sales manager most likely make in the all-out blitz month? A) She focused on sales and forgot about modeling ethical behavior for her team. B) She pushed the product too strongly and lost focus on the customers' needs. C) She relied on the excitement of a sales promotion instead of focusing on personal selling. D) She incorrectly calculated commissions relative to sales for her team members. E) She failed to look at pipeline analytics and notice the lack of prospects in the pipeline. Answer: E