Challenges of a Senior Sales Executive

Major Report

Institution: University of Guelph-Humber

Course: Professional Selling, BADM 3080

Professor: Mr. Stoiko Mark

Author: Mr. Hoelzl Daniel (0991445)

Date: 11-11-2016

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Table of content

TABLE OF CONTENT .......................................................................................................................................... II

1. INTRODUCTION ............................................................................................................................................ 1

2. PRODUCT POSITIONING ............................................................................................................................... 1

2.1 BMW SANDTON DEALERSHIP ........................................................................................................................... 3

2.2 SALES KNOWLEDGE ......................................................................................................................................... 4

2.2.1 Sales knowledge acquisition process ............................................................................................. 4

2.2.3 Product knowledge ........................................................................................................................ 6

2.2.3 Customer knowledge ..................................................................................................................... 8

2.2.4 Competitor and market knowledge .............................................................................................. 9

3. PRODUCT DIFFERENTIATION ...................................................................................................................... 10

3.1 THE COMPANY AND BRAND AS A DIFFERENTIATOR ............................................................................................... 11

3.2 THE PRODUCTS AS A DIFFERENTIATOR ............................................................................................................... 11

4. FEATURES, ADVANTAGES AND BENEFITS ................................................................................................... 12

4.1 THE EXAMPLE OF CONNECTED DRIVE ................................................................................................................. 13

4.2 THE EXAMPLE OF A HIGH PRECISION INJECTION ENGINE ........................................................................................ 14

5. CUSTOMER OBJECTIONS AND CONCERNS .................................................................................................. 14

5.1 OBJECTIONS AND CONCERNS ........................................................................................................................... 15

5.2 THE PROCESS OF PERSUASION ......................................................................................................................... 16

6. SELLING STRATEGIES .................................................................................................................................. 17

6.1 THE SALES PROCESS ....................................................................................................................................... 17

6.1.1 Prospecting .................................................................................................................................. 18

6.1.2 Pre-approach ............................................................................................................................... 19

6.1.3 Approach ..................................................................................................................................... 20

6.1.4 Presentation ................................................................................................................................ 21

6.1.6 Objections and meet objections .................................................................................................. 22

6.1.7 Trial close and close .................................................................................................................... 22

6.1.8 Follow-up service ......................................................................................................................... 23

6.2 PRICING STRATEGIES ..................................................................................................................................... 25

6.3 THE INFLUENCE OF THE MARKETING MIX ............................................................................................................ 26

6.4 TECHNOLOGY AND PERSONAL PRODUCTIVITY ...................................................................................................... 26

7. CONCLUSION .............................................................................................................................................. 27

REFERENCES ................................................................................................................................................... 29

APPENDIX....................................................................................................................................................... 30

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1. Introduction

The objective of the present major report was to contact a senior sales executive for a con-

sumer or industrial goods or service company and to learn about the sales challenges they face

in marketing their products. The main topics that are covered in this paper are: Product posi-

tioning including company information and multiple types of sales knowledge, product differ-

entiation, the concept of features-advantages-benefits, customer objections and concerns, and

selling strategies including the sales process based on the book of Futrell and Valvasori

(2015).

Since the requirements the interviewee had to fulfill were demanding and the author

did not have an English-speaking senior sales executive in his network, the person the inter-

view has been conducted with was approached via LinkedIn. The interviewee, Lorraine Re-

lou, is currently employed by BMW Sandton, a BMW dealership in South Africa. She has

been working at BMW Sandton as a (senior) sales executive since 2009 and has gained three

further years of sales experience at Mercedes-Benz Bryanston before.

As a senior sales executive, Lorraine represents the role of an order getter and her

tasks and responsibilities include the following: Identification of business opportunities by

evaluating prospects, developing solutions based on an effective customer analysis, providing

customer support during and after the sale that goes beyond what the customer expects, and

reporting of market trends among others.

2. Product Positioning

The BMW Group was founded in 1916, is headquartered in Munich, Germany, and positions

itself as a premium automobile and motorcycle manufacturer. With the vision of: “We are

Number ONE. We inspire people on the move: We shape tomorrow’s individual premium

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mobility”, a strong focus on innovation and customization is identifiable (BMW Group Pro-

file, 2016).

Strategically, BMW Group is aware of the transformational process the automotive in-

dustry is currently facing and is eager to embrace the opportunity. By expanding their techno-

logical and digital capabilities to develop future oriented vehicles, the BMW Group aims to

set new industry standards and deliver unique customer experience. Lorraine, further men-

tioned that the organization puts strong emphasis on the continuous development and posi-

tioning of the brand in the society. The organization aims that BMW vehicles are perceived as

a symbol of elegance and success and owners are well appreciated and obtain recognition in

the society. This concept seems to be successful as the interview said “on a personal level I

am very proud of my product and that helps me tremendously during my selling process”.

As of December 2015, the BMW Group employed 122,244 employees by selling ve-

hicles in over 140 countries. The organization has three business segments: Firstly, their core

business, the automotive segment, where 91 percent of the employees are allocated. Secondly,

the financial services segment, which deals with the financing opportunities of their internally

produced vehicles only. Lastly, the motorcycle business, which accounts for only 2.5 percent

or 3021 employees (BMW Group Key Figures (2015), 2015). In the automobile segment

BMW Group is consisting of three brands: BMW, Mini, and Rolls Royce, offering 71 differ-

ent models in total. Among BMW cars, the group further differentiates among their core

products, their sport-brand, M-performance, and the newly introduced hybrid cars (Appendix

A).

In the fiscal year of 2015 the BMW Group sold more than two million automobiles

and around 137,000 motorcycles that generated 138 billion Canadian dollars of revenues. This

figure represents an increase in revenues of 13.05 percent against 2014 and reflects the ongo-

ing trend of growing on a low two digit basis over the last years (BMW Annual Report 2015,

2016). According to BMW’s “Strategy Number One” objectives, the organization is dedicated

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to achieve a two digit growth rate per year while ensuring an EBIT of over ten percent until

2020 (BMW Group, 2016).

As the BMW Group is an organization that operates on an international basis, 31 pro-

duction facilities are located in fourteen different countries. Their first wholly owned subsidi-

ary and production plant outside Germany was established in Rosslyn, South Africa (Mile-

stones, 2016).

2.1 BMW Sandton dealership

The BMW Group is present in South Africa with a production facility, a branch for BMW

automobiles and motorcycles, and an office for their financial services segment. Additionally,

BMW fully owns 59 dealerships across South Africa to promote sales and ensure a remarka-

ble customer experience (The BMW Group – A global company, 2016). The interviewee,

Lorraine, is employed as a senior sales executive in BMW Sandton, a fifteen minutes car

drive from Johannesburg. The dealership of Sandton provides jobs for 120 people and gener-

ated 1.5 million Canadian dollars of revenues in 2015. The showroom was renovated in 2009,

is equally equipped than BMW’s dealerships in Germany, and is considered as a pioneer in

South Africa (Appendix H). BMW Sandton offers new and used BMW cars including hybrids

as well as MINIs and motorcycles but have no license to distribute Rolls Royce.

Sales executives at BMW Sandton are allocated to customers according to brands.

Seven are employed for new BMW cars only, four employees are responsible for used vehi-

cles as well as motorcycles and two are serving MINI customers. Lorraine sells new BMW

cars only but is allowed to acquire and consult customers throughout South Africa. The ma-

jority of her customers are consumers; business to business sales are made rarely.

Based on those findings the following report focuses on new BMW vehicles and a

business to consumer relationship.

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2.2 Sales knowledge

From the early days on people start to gain knowledge and develop skills that might help them

to overcome obstacles and achieve their personal goals. This also holds true for sales execu-

tives. Futrell and Valvasori (2015) narrowed down the sources of sales knowledge acquisition

to two elements: On the one hand, companies increase the level of knowledge of sales execu-

tives by providing training programs. On the other hand, people learn best practices and gain

insights by being on the job and simply pacticing or doing. Lorraine, my interviewee, men-

tioned that BMW emphasizes on the former, internal training, as their product as well as the

brand stands for excellence and their ultimate goal is to provide remarkable customer experi-

ence. Additionally, each lead or prospect has significant value because of the high absolute

margin of a vehicle but relatively low products sold. Therefore, BMW thoroughly trains each

sales executive before being allowed to represent the BMW brand as a front office employee.

At BMW Sandton skills are differentiated from knowledge. Skills are more considered

as the soft aspects of the sales process. According to Lorraine, skills are primarily non-verbal

behaviors, the way of acting and the ability to make the prospect feeling welcomed. Emphasis

is put on those skills with regards to internal training; managers ensure a high and consistent

level of professionalism and front office experiences should only polish their style. This ex-

tensive focus on non-verbal communication is justified by Gschwandtner (1980) as he stated

that the highest impact of face to face communication is made through nonverbal communica-

tion, accounting for 55 percent, while only 7 percent is influenced through verbal communica-

tion.

2.2.1 Sales knowledge acquisition process

While the former paragraph outlined the importance and emphasis of BMW on the soft as-

pects during the interaction with prospects, a welcoming atmosphere is only considered as the

basis for a successful meeting. The acquisition and possession of various kinds of sales relat-

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ed knowledge is essential when persuading customers and increasing sales volume. Product

and customer knowledge among others contributes towards an increasing confidence level of

a sales person. This confident appearance enables the sales executive to establish trust, while

trust subsequently increases the likelihood of closing a deal (Futrell and Valvasori, 2015).

In the network of BMW including the Group as well as national branches and local

dealerships, four main types of knowledge are at sales executives’ disposal: Firstly, company

knowledge; secondly, product knowledge; thirdly, customer knowledge; lastly, knowledge

about competitors. As the profession of a sales executive involves higher potential financial

and non-financial rewards, a high rivalry among single employees could be assumed. In the

case of BMW, the exact opposite is holding true. Lorraine emphasised extensively on the rou-

tine of sharing new insights among her fellows. She referred to the concept of learning organ-

ization when she was asked about the practices of acquiring knowledge at BMW Sandton.

Peter Senge (1990) is the founder of this approach and put emphasis on each other’s

benefits when sharing ideas, insights or knowledge. In the ideal case, it facilitates learning in

terms of time required and relevancy. Firstly, individuals gain knowledge to later share and

discuss their insights among their peers. This approach is practiced at BMW South Africa but

especially at BMW Sandton among the sales department with regards to sales knowledge. For

instance, weekly discussions among managers are hold, an online database for knowledge

sharing is used, or monthly reports of latest knowledge updates are made available among

others.

2.2.2 Company knowledge

The degree of the exclusivity of a product goes hand in hand with the importance of the

brand. Low cost items are very likely to be purchased because of features, advantages and

benefits based on the product itself. However, in the luxury segment, the brand or company

behind the product is getting more attention. Lorraine, said that the brand itself is used as a

unique selling proposition and therefore company knowledge is of highest importance. The

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interviewee spends on average four hours a week on gaining and further improving her

knowledge base of her employer BMW (Appendix B). Although four hours seems to be rela-

tively little when taking the exclusivity of the brand into consideration, she argues that the

core information stays similar over time. The corporate’s history, vision and values are rela-

tively rigid; knowledge about growth and policies or procedures need only minor adaptions

over time.

Nonetheless, company data and knowledge plays a central role as many customers

perceive the brand as the reason to buy the product or see it as a differentiator against compe-

tition. Lorraine further mentioned that sales executives at BMW have to be familiar with the

major manufacturing process steps especially with regards to duration. This is important as

BMW offers cars with a high level of customization. Specific parts are produced just in time;

consequently the delivery of a new car could take as long as six months starting from the date

of purchase. My interviewee admitted that the waiting period causes occasionally an objec-

tion; therefore existing customers are approached earlier and are reminded of the time lag.

BMW Group as well as BMW South Africa provide substantial information about the

company via the intranet. Furthermore, a monthly report is distributed to sales executives

about the latest developments and changes in the organization. Sales executives have access

24 hours a day to current sales figures of any models regionally and globally. News and the

internet are used as sources, too, while most important changes are discussed in the weekly

meetings. However, fluctuations occur with regards to time spend on company knowledge as

changes occur relatively infrequent.

2.2.3 Product knowledge

Product knowledge enjoys highest importance at BMW, particularly as automobiles possess a

high degree of technology. Since the automotive industry is currently experiencing a revolu-

tion, the frequency of technology changes increase and product life cycles shorten. This repre-

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sents a tremendous challenge for sales executives, especially for those, whose company is

very customer focused (Futrell, & Valvasori, 2015).

For the purpose of providing an excellent customer service, BMW introduced the posi-

tion of product geniuses several years ago. The variety of tasks sales executives have to be

proficient at, and the substantial increase of the technology involved, made the introduction of

a product genius necessary, Lorraine said. As a result, the majority of product presentations

are made at the dealership’s place, where product geniuses assist the sales executive with

product expertise. A product genius is available anytime and can be booked in advance.

Nonetheless, sales executives devote on average twelve hours a week to update their product

knowledge, as seen in Appendix B, since one out seven presentations are made without the

assistance of a product genius.

Two full days a month, sales executives from various dealerships in South Africa are

gathered for training purposes with a very strong focus on technical knowledge. The under-

standing of the functioning and interrelationships of different parts of a vehicle is the basis;

elements contributing towards a unique selling proposition have to be understood in detail. On

the one hand, since knowledge conveys confidence and trust; on the other hand, customers are

more eager to understand the advantages the car offers over competitors. Additionally, a

weekly product knowledge session is held at the dealership; here the sharing and discussion of

new insights is on the agenda while using the concept of a learning organization. Lorraine

expects an increase in hours spend on product knowledge in the future because of the fact that

the company is consistently expanding its product range. Currently the BMW Group offers 71

models, while 56 of them are sold at the dealership of Sandton. An increase in product breath,

new X2 and X7-series and an expansion of the hybrid product portfolio, as well as in product

depth through an increase of customization, was already announced by the last shareholders

meeting (BMW Group, 2016) (Appendix C,D).

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Besides technical knowledge, expertise in the field of financing opportunities the or-

ganizations offers is important. As a car is a high involvement good and BMW offers premi-

um cars, a substantial capital investment is required. Leasing a car enjoys increased popularity

and represents a growing profitable business segment for the BMW Group (Futrell, & Val-

vasori, 2015; BMW Annual Report 2015, 2016).

2.2.3 Customer knowledge

My interviewee had difficulties to express the hours spend per week on improving her

knowledge base about customers. She said “this happens all the time, BMW aims for provid-

ing an excellent customer experience, therefore preparation and knowledge acquisition about

customers is pivotal, it is very hard to pin down my time spend on a single figure”. By all

means the majority of time spent is devoted to customers, she finally articulated 25 hours per

week as representative but emphasised on fluctuations (Appendix B).

The kind of knowledge that is searched for highly depends on the stage of the custom-

er in the customer life cycle. On the one hand, BMW treats leads, which are mostly only

known by name but their qualification for a sale is not determined yet, with a strong focus on

efficiency. Sales executives are advised to quickly determine the lead’s potential towards

closing a deal. Quality over quantity is preferred since the absolute margin per car is relatively

high and a qualitative, time consuming, and individual service is expected. On an objective

basis, one might draw the conclusion that the qualification criterion of money enjoys the

highest importance. Lorraine, however, ranks the desire to buy as number one, as their finan-

cial business segment provides opportunities to lease premium cars at affordable monthly

rates (Futrell, & Valvasori, 2015). On the other hand, once a lead is determined as a qualified

prospect, specific attention is devoted to the client as the pool of potential customers is rela-

tively low due to the premium price. Lorraine strongly focuses on retaining customers and

building long lasting relationships. The acquisition of new customers, however, is essential

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for the purpose of achieving the ambitious sales objectives since customers buy a car infre-

quently.

For each qualified prospect a customer profile is established in a centralized online da-

tabase. The information gathered ranges from personal data to the influencing factors on buy-

er behavior up to financing intentions. Special entries in the event of direct communication,

for instance calls, with the customer are attached and sometimes used as an opener at follow-

ing interactions. Sources of knowledge vary depending on the accessibility of information. As

the consciousness of personal data protection increased in the last years, sales executive at

BMW Sandton are advised to conduct online research first to obtain an overview of the cus-

tomer. Lorraine underlined LinkedIn besides social media as a very useful source for custom-

er knowledge as business people represent a primary target group of BMW.

Already existing customers are the third type of customers my interviewee is dealing

with. Here the focus lies on the maintenance of data and knowledge. Based on the acquired

knowledge of customer’s preferences, a relatively precise date for the purchase of a new vehi-

cle can be calculated. Taking the time delivery lag of up to six months into consideration,

current customers are actively approached approximately ten months before. Besides, the

sales executive offers full service for current customers and uses interactions to gain further

insights as well as to verify existing knowledge.

2.2.4 Competitor and market knowledge

A unique selling proposition provides an argument of why a potential customer benefits the

most from a specific product. It is based on the differentiation of the promoted product against

offerings of your competitors. Therefore, knowing your competitors is essential within the

persuading process (Futrell, & Valvasori, 2015).

Lorraine emphasised on an increased frequency of questions of new customers that are

eager to know why a specific feature of a BMW is superior over an almost equivalent one of

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their competitor. For the purpose of acquiring the required knowledge base of competitors’

products, BMW South Africa provides, on an occasional basis, real cars of competitors at the

centralized product sessions that are held for two full days a month. Additionally, BMW

South Africa provides monthly reports about competitor’s actions, for instance the launch of

new cars. She personally finds product reviews, car testing reports and blogs about competi-

tors’ products due to their compactness very useful. Lorraine also gathers helpful insights and

motives from new customers buying a BMW the first time coming from the competition. Cur-

rently the interviewee spends around four hours a week on collecting and updating infor-

mation; however she anticipates an increase in the future as the complexity and diversity of

knowledge increases.

In short, being a sales executive in the automotive industry requires a deep understanding of

diversified and complex knowledge fields. This is leveraged by BMW’s focus on the premi-

um segment, vision to be innovative and a technological leader as well as the current revolu-

tion in the industry. BMW recognized the overwhelming scope of necessary expertise and

introduced product geniuses to provide excellent product knowledge without sacrificing the

level of quality of other duties of sales executives.

3. Product differentiation

The BMW Group consists of three different brands: BMW, MINI and Rolls-Royce. Because

of the fact that my interviewee is selling BMW cars including M-performance cars and hybrid

cars, this chapter three focuses on BMW only.

The dealership Sandton offers 56 different BMW models including a price range from

35,000 CAD for a BMW 1-series to around 200,000 CAD for the 7-series. Consequently,

unique selling propositions vary among models. Nonetheless, Lorraine grouped distinctive

attributes against competitors into two categories: Firstly, unique selling propositions based

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on the company or brand; secondly, arguments for “why should I buy your product” based on

product attributes (Futrell, & Valvasori, 2015).

3.1 The Company and brand as a differentiator

Harald Krueger, chief executive officer of the BMW Group, said “brands are a company’s

biggest USP: They combine emotion, design, heritage with the promise of high quality”

(Brands & Services, 2016). Lorraine stated that BMW enjoys a very positive and distinctive

reputation in South Africa. BMW is appreciated for its leading technology, expertise and

strive for innovation. Compared to its main rivals of Mercedes Benz and Audi, which are

more conservative, BMW differentiates itself in being perceived as dynamic, ahead of time

and to a certain degree sporty. BMW customers are charged a premium price; however, the

vehicle provides a remarkable driving experience, recognition, prestige and the fulfillment of

self-actualization needs in return.

BMW stands for premium quality and demonstrates this in every touch point with its

customers. State of the art showrooms, high skilled sales executives, excellent customer ser-

vice; this consistency of premium quality over time developed the fact that driving a BMW

puts the driver in the upper class of the society.

3.2 The Products as a differentiator

The impression that the BMW brand is perceived as innovative and dynamic, stems from its

ahead of time products. Research and development has played an essential role in the history

of BMW. For instance, in 1972 BMW developed the anti-lock braking system, nowadays

considered as a standard function in the industry. In 1991, BMW presented the first fully-

fledged electric car (Brands & Services, 2016).

Throughout the previous paragraphs BMW’s main unique selling proposition was al-

ready stated several times, their innovativeness. Especially in an industry where technology is

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omnipresent, innovativeness is a driver for unique selling propositions (Appendix E). Lor-

raine, named multiple attributes that BMW is superior over competitors; many of them find

their origin in high end research in development. Firstly, their connected drive platform; it

stands for the interconnection of the driver, the car and external world. The mobility assistant

is synchronized with the driver’s mobile phone or diverse online accounts and facilitates the

fulfillment of the driver’s personal goals. Depending on the model, services are fully available

or accessible for a surcharge.

Secondly, the interviewee uses the efficiency of BMW cars as a further differentiator

against competitors. Under the name efficient dynamics, BMW offers specific models with

the promise of saving up to fifteen percent of gasoline compared to competitors. However,

Lorraine said that the understanding of the customer needs is decisive when using this unique

selling proposition. While price conscious customers are welcoming the cost savings, quality

conscious customers could associate the cost saving with the use of inferior materials.

Further unique selling propositions depend on the model the customer is showing

interest in. For instance, the twin power turbo motors or eight speed automatic gearboxes are

stated by Lorraine. However, the interviewee stated that she never uses unique selling propo-

sitions in a specific order to persuade the prospect; instead, the specific needs, preferences and

concerns of the customers decide the arguments used in the selling process.

4. Features, advantages and benefits

A successful sales presentation is often characterized by matching customer’s needs with the

benefits of the seller’s product. Effective sales executives differentiate themselves by select-

ing the appropriate benefits the customer is looking for. In general, not the unique selling

propositions are making a customer buying the product, but the presentation of benefits that

satisfy the customer’s primary needs. Therefore, benefits that are covering the individual’s

13

needs should be emphasized, while other features, advantages and benefits should be de-

emphasized (Futrell, & Valvasori, 2015).

Whereas book authors strongly recommend a specific sequence when applying the

selling technique, Lorraine argued that as experience is gained, guidelines are followed to a

lesser degree. At BMW a strong focus is put on benefits, since it directly affects the customer

and conveys the message of “what is in for me”. She observed that customers put only weight

on features if they possess a solid knowledge base in this field or are eager to compare per-

formance data among competitors. Similar observations were made with advantages. With

regards to different models and prices, no significant trend could be identified, however she

stated that the more weight the customer puts on the financial aspect, the higher the interests

in features and advantages but not at the benefits’ expenses. This is very likely based on the

classification of buying situations as high priced products normally entail a more deliberate

decision-making process than low involvement goods.

4.1 The example of connected drive

All models of BMW are equipped with the feature of connected drive (Appendix F). It is a

mobility assistant system, navigable via an up to fifteen inches display. While the feature

could be explained in more detail, the persuasion power would remain limited. However, the

likelihood of closing a sale will be increased by outlining the products advantages. In the case

of connected drive, advantages are the continuous reception of up-to-date information, the

bigger touchscreen size compared to a smartphone and the connectedness with third parties

while being on the road. The benefits of using connected drive are time savings, since traffic

jams could be avoided, free parking slots are indicated and planning of trips is automatically

done by the assistant.

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Summarized, the feature, benefit, advantage statement could sound as follows: Con-

nected drive provides you with up-to-date information and is navigable through a bigger

screen which saves you time and increases your convenience.

4.2 The example of a high precision injection engine

Another feature that BMW offers and entail benefits that might make a customer buy is the

high precision injection engine. It is one but the main element of the efficiency dynamics

package, a four-cylindric gasoline engine with a brake regeneration system. Lorraine specified

the main advantage as reduced fuel consumption and less refueling stops. However, in presen-

tations she rarely uses the advantages but comes up with model specific cost savings per gaso-

line tank. For instance, the high precision injection engine with its regeneration system ena-

bles you to save seven CAD per gasoline tank, which equals 210 CAD per year based on your

mileage of the last year. A complete feature advantage benefit sentence could be stated in the

following way: The high precision injection engine reduces the fuel consumption and requires

less refuelling stops which leads to a fifteen percent (210 CAD) saving in fuel costs and thirty

minute time saving per year.

A summary plus a third example can be found in Appendix G.

5. Customer objections and concerns

“Personal selling is the personal communication of information to persuade a prospective cus-

tomer to buy something” (Futrell, & Valvasori, 2015). This involves dealing with objections

and arguing why a specific product fulfills the needs of a customer better than other products

or why this product adds value when purchasing. Lorraine sees her biggest strength in her

sales job in the process of convincing customers. Besides her sales profession she completed

several courses in self-development, personal integration and non-verbal communication.

Reading a customer’s personality, understanding their needs and concerns is of highest im-

15

portance when dealing with objections. She is putting herself in the shoes of the customer and

tries to understand the causes the objection is based on by asking questions. Irrelevant of how

preposterous the reason for an objection might sound, each major objection has to be clarified

before a deal can be closed.

5.1 Objections and concerns

The customer’s raise of objections is not always a bad indication. It shows interest and is a

request for more information. Resistance can occur at any stages of the sales process, however

most frequently it occurs during the approach, the presentation or after a trial close (Futrell, &

Valvasori, 2015).

The interviewee said many objections she is confronted with are associated with

stalling or source objections. A common statement of customers she could immediately recall

was “Please, give me more time, I will sleep over it and come back to you soon”. However,

this comes as no surprise since a vehicle and a BMW in particular is a high involvement good

and very frequently entails an extensive decision making process. For source objections she

identified a relationship between the loyalty of the customer and the frequency of source ob-

jections. New potential customers, in particular when having driven a car from direct com-

petitors, tend to raise objections based on the company or brand. This is supported by the fact

that premium priced products represent a higher product differentiation and often a bond with

the brand will be established. Consequently, switching brands entails emotional barriers to

overcome and requires good persuasion skills of sales executives, Lorraine argued. She fur-

ther identified that peers are a common cause of a source objection because of the fact that a

car is a status symbol. Money objections almost only occur only in the early stages of the

sales process, since the society is aware of BMW’s premium prices and leads with low pur-

chasing power are not further pursued as they do not qualify as prospects.

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5.2 The process of persuasion

The effort devoted to persuade customers and make them buy a product depends on the cus-

tomer’s lifecycle stage. The method of cold calling to identify new potential customers is used

by the interviewee; however a strong focus lies on efficiency. The time spend on the identifi-

cation of the qualification of a lead is kept short, as the fraction of qualified leads to total cus-

tomer is rather low. In the event that the lead proved to have the money, the authority and

desire to purchase a BMW, efforts made to overcome objections and to persuade customers

rise exponentially. Existing or loyal customers are treated very favorably since selling a vehi-

cle to existing customer is cheaper in contrast to identify and persuade new ones.

Although I did not mention the four steps of handling objections effectively when ask-

ing the interviewee about how she deals with objections, in retrospect her elaborations are

akin to the before mentioned model. Lorraine said “each objection has to be accepted and

treated as important, irrelevant whether I perceive it as reasonable; it is the customer’s expres-

sion of their current thinking”. At this stage her experience as a personal counsellor provides

her with an advantage as she sees her strength in raising appropriate questions to elicit the

cause of the objection raised. However, her approach to overcome the concern depends on the

type of the customer’s objection. While product related instances of qualified prospects are

sometimes simply solved by offering a test drive, stalling objections, which occur most fre-

quent, are treated individually. Lorraine said that in such cases it is more important than any-

where else to raise appropriate questions. Stalling can have indefinite causes and frequently

overlaps with other kinds of objections. For example, the concern of having sufficient finan-

cial resources to buy a BMW is commonly classified under money objections; however, it

could cause a customer to stall and delay the decision making process. Once the objection is

identified and clarified Lorraine tries to meet the concern and primary needs of the customer

by mentioned the corresponding benefits. She observed that particular objections occur more

17

frequently and started to keep a book by recording the benefits used to overcome specific ob-

jections. Lorraine concluded this chapter by saying “never try to sell a car; always provide a

service, the sale will come naturally”.

6. Selling strategies

BMW is devoted to provide an excellent customer experience by placing the customer in the

centre of the organization and offer high quality service among others. The relationship sales

executives are having with their customers primarily depend on the type of customer. Having

a so called “partnering” relationship with consumers is difficult and not necessarily desirable

as their only intention is to enjoy the product to the most. Lorraine mentioned that customers

have high expectations with regards to the product and service as they are paying a premium

price. Nonetheless, clients are diverse and cases emerged where polite and honest service was

perceived as intrusive. Lorraine called her approach as an extended relationship selling meth-

od by providing product and personal related services; for instance, offering car software up-

dates, car certificate service or simply expressing birthday wishes, respectively.

6.1 The sales process

The sales process visualizes the totality of sequences when selling a product; it ranges from

identifying future customers to servicing customers after their point of purchase. While many

different models are circulating and different terms are used, major communalities are visible

in contemporarily used concepts. The major steps are: identification, preparation, presentation

including the persuasion and closing sub-processes complemented with the follow up ser-

vices.

The following steps are based on the book of Futrell and Valvasori (2015) and outline

the actions undertaken by Lorraine, sales executive at BMW Sandton, in order to successfully

sell a vehicle.

18

6.1.1 Prospecting

The prospecting stage is the process of the identification and qualification of new potential

customers. The overall objective of prospecting is to acquire new customers for the purpose

of increasing sales and replacing lost customers. Lorraine stated that the acquisition of new

customers is critical for her success as the frequency and quantity of single purchases of cur-

rent customers are very low compared to other consumer goods. Once the customer bought a

car, its needs and wants are satisfied for several years, no further revenues are generated, un-

der the assumption that the customer enjoys the product. With regards to BMW, the Ferris-

wheel concept has to be interpreted carefully, because although the Ferris-wheel might be full,

little revenue is generated since the purchase frequency is low. Consequently, BMW places

tremendous weight on prospecting and uses several tools to acquire and qualify new potential

customers.

Lorraine generates a pool of leads and potential prospects in two ways. Firstly, by un-

dertaking individual active actions; secondly, she gets assigned customers through the com-

pany. Individually, she makes daily use of the technique cold calling, on average 20 to 30

calls a day. Her expectations are rather low and time efficiency is key. Recommendations

from peers are known as one of the strongest and most effective marketing tools. Lorraine

makes use of this by asking customers for referrals. However, timing is really important when

asking for referrals, build trust first, never ask too early, she remarked. A third technique is to

reconnect with former customers, sometimes known as orphaned customers. Contact and

background information is easily accessible through internal databases with customer profiles

but regaining customers is one of the most difficult tasks as customers deliberately opted to

leave and objections are mostly deeply ingrained. Furthermore, LinkedIn is a valuable and

useful source to acquire new potential customers. On the other hand, the organization assigns

leads and potential prospects to sales executives who have been acquired through the website,

advertising or fairs among others.

19

Besides locating leads, the assessment of their buying intention complements the pro-

cess of prospecting. As the sales process at BMW is personalized, time-consuming and low

quantities are purchased, efficiency in the process of evaluating the likelihood of purchasing a

car of a customer enjoys priority. The desire to buy a product is considered as most important

for Lorraine since BMW offers several financing opportunities, and if a customer is willing to

buy a car, a solution will be found. The evaluation of the qualification to buy will be complet-

ed with the aspect of authority. Here, the interviewee tries to identify the role of the customer

and further influencing characters.

6.1.2 Pre-approach

The pre-approach is coined by planning and preparation. It might very well be that hours are

spent to prepare a presentation but only minutes to present. At this stage a lot of time is de-

voted to the identification of customer’s needs. While with regards to many products the pre-

approach stage is skipped as customers buy intuitively and without notice, BMW vehicles are

a high involvement good and frequently an extensive decision making process is gone

through.

Lorraine mainly distinguishes in the acquisition of customer knowledge between facts

and needs. After the customer has been determined as a prospect, gathering of personal data

and past facts comes first. Information about the current car, the mileage, the frequency of car

purchases, and finance methods are entered into her customer profile as she thinks that histor-

ical data is a good way to predict future actions. Particularly when it comes to psychological

needs this method of predicting works well. Deeply rooted assumptions, beliefs or attitudes

hardly change once a person reaches a certain degree of maturity.

The pre-approach is coined by raising questions; however, never give the customer the

feeling that you are going through a standardized questionnaire, she added. Integrate all ques-

tions into a smooth conversation and try grasping the implicit statements between the lines. A

20

special focus is given on the elicitation of buying motives. In the case of successfully identify-

ing the customer’s purchasing criteria with the offering of creative solutions, an agreement

might be reached and a deal closed.

6.1.3 Approach

The majority of the presentations are held at the dealer’s place because of the following three

reasons. Firstly, the product is pretty immobile, unless it is used; secondly, product geniuses

are situated at the dealership; thirdly and most important, BMW dealerships’ showrooms are

known for their design and welcoming atmosphere and are equipped with state of the art

technology that facilitates the presentation. Many first time visitors are impressed by the inte-

rior design and décor, which perfectly reinforces the positioning of the brand as well as the

quality of products (appendix).

Lorraine stated that earlier in her career she was preparing each step from the welcom-

ing till the farewell. As she gained more experience she acts situationally driven and stays

confident while being flexible and adapting to the customer’s wishes. Although the planning

of the sequences of actions diminished, the preparation with regards to the presentation’s con-

tent remained similar in terms of the time spent. She observed that first time visitors need

more time to settle down and therefore are approached differently. Loyal customers, however,

are personally known well and therefore occasionally a longer phase of pre-presentation oc-

curs since personal topics are discussed to rebuild trust. Basically the pre-presentation phase

is either gone through while walking around the showroom and referring to the history or

brand related topics, or a conversation at the desk is started with a drink offered. Lorraine

transitions into the presentation mostly through a personal question related to the model the

customer is interested in to demonstrate that she is well prepared for and to build trust.

21

6.1.4 Presentation

The presentation method is a face to face salesperson to buyer situation in the majority of the

cases. Although, the customer is accompanied by family members occasionally, as it is a high

involvement good and a car is purchased infrequently, the group represents in essence one

customer only. Lorraine stated that it is essential to define the roles of each individual and to

raise questions and state benefits accordingly.

Asking about whether she is speaking primarily or gives the word to the customer, she

replied “In general, I try to listen more than I speak”. Two factors are important, however:

Firstly, the stage of the customer in the customer life cycle; secondly, the progress made in

the presentation. In the case of serving a new customer, more focus is giving on the identifica-

tion of the needs and the word is mainly given to the customer. Towards closing the deal, she

actively tries to summarize all the benefits both parties agreed upon and leads the customer

towards closing. On the other hand, loyal customers, whose preferences and needs are well

known and only need to be verified, a more flexible presentation style is utilized. Summa-

rized, experience and the acquisition of knowledge gives her the confidence to use more flex-

ible and effective presentation styles; the interactive need satisfaction selling method or the

problem solution selling approach.

As mentioned before BMW tries to bring their customers to the dealership’s place

with regards to the presentation’s location, primarily due to the available equipment. Lorraine

said that the smell of new vehicles, the opportunity to touch and feel facilitates the decision

making process. During the presentation she uses a flat screen monitor, connected via Blue-

tooth with her computer and an i-pad to demonstrate certain features virtually and offer the

customer the opportunity to assemble their individual car. This also gives her further insights

into the customer’s needs in a relaxed situation as the person chooses certain elements and

discloses preferences.

22

With regards to competition the totality of focus is based on BMW vehicles and the

customer preferences. Sales executives possess advanced knowledge about competition; how-

ever it is not actively used unless the customer refers to. Sales executives at BMW Standton

are advised to emphasize the advantages of BMW instead of mentioning the disadvantages of

direct competitors.

Lorraine concluded the topic of presentation by mentioning that the perfect presenta-

tion style is not available in any book, the perfect presentation is delivered and contains the

content the specific customer is looking for. She continued “the customer’s needs are centered

in the presentation from offering the person the preferred drink to finally delivering the vehi-

cle at the preferred point in time and place.

6.1.6 Objections and meet objections

This part has already been elaborately discussed in chapter five. In short, Lorraine empha-

sized on the honest and sincere treatment of possible objections. No objection is right or

wrong, it is just the personal expression of the person’s current feelings. She tries to make use

of the insights the customer offers, by raising appropriate questions in order to identify the

cause of the objection. Objections can be met by offering product related benefits and a sales

presentation can only be continued if the objection is solved.

6.1.7 Trial close and close

In the event of meeting objectives of clients a trial close is a good way to obtain further feed-

back and to ensure that the problem is solved. As the presentation goes on and several agree-

ments have been achieved a sales person has multiple methods at her disposal to successfully

close a deal. Since BMW aims to provide an excellent customer experience throughout the

whole value chain, sales executive are strongly advised to not push the client towards closing

a deal, Lorraine said. Important is, however, to find a good balance between a sales person’s

own commitments, with the overall target of selling a product and the fact that time is limited,

23

and making the customer feeling appreciated and welcomed. Because of the fact that clients

are different and the duration of meetings have a high standard deviation, Lorraine is schedul-

ing her client’s appointments with a substantial time gap in between. To leave a client waiting

would reduce the likelihood of purchase dramatically; in contrast BMW tries to give each

customer the feeling as she is the only and most important client.

When it comes to closing a deal, no standardized closing method is applied by Lor-

raine. She stated that theoretical concepts provide a good guideline; however, customers are

different and possess a high degree of emotional behavior that listening and following her

instinct, works currently best for her. Experience and knowledge are the key drivers that give

her the confidence to stay flexible and use customized closing methods and concepts. In most

cases several aspects from various concepts are integrated, in many cases a summary of bene-

fits is applied among others. Lorraine perceive this style as persuading since the client gets

reminded and demonstrated how her personal needs have been met with the benefits the cars

offers. At BMW the unwritten rule of having rather one more meeting instead of closing the

deal too early and losing the customer is pursued, because of the fact that high absolute mar-

gins are achieved with selling one product and the number of potential customers is relatively

low.

6.1.8 Follow-up service

As shortly stated in chapter six selling strategies, the level of relationship marketing is akin to

an extended version of relationship selling. BMW is determined to provide excellent customer

experience throughout the entire value chain. The concept of partnering, however, is not fol-

lowed by Lorraine, as most customers are consumers. Extended relationship selling is ensured

by offering product and client services after the point of purchase; this is also expected by the

demanding customers of BMW because of the fact that a premium price is charged. Develop-

ing a strong bond with existing customers is important as the target group for a premium car

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is limited by nature due to its high price. The pool of prospects is limited; the importance of a

single client increases. On the other hand, infrequent revenues are generated as the purchase

frequency of cars is relatively low. Services and relationship reinforcing activities have to be

provided over a long period of time for the purpose of selling a further product, Lorraine said.

Nonetheless, existing customers are up to eight-times cheaper than new customers that have

to be acquired and lead through the whole sales process (Futrell, & Valvasori, 2015). A new

model introduced by Edelman and Singer (2015) confirms BMW’s endeavour of building

long lasting relationships with clients. They argue that once customers are convinced of a

product and the follow-up service lead to customer satisfaction, clients advocate for the prod-

uct, recommend it to peers and follow the loyal loop. It is a specific loop that keeps the client

from considering and evaluating competitive products, instead the client directly buys a prod-

uct from the same brand. Lorraine represents the middle man between BMW and the custom-

er and offers product and client related services for the purpose of encouraging customers to

follow the loyalty loop.

After the car has been purchased and delivered, a follow-up phone call is made and

customer satisfaction is ensured by offering services and solutions according to the customer

needs. As time continues the time gaps between phone calls get extended, however, depend-

ing on the loyalty and type of client, personal contact is ensured every six months. Mostly,

birthdays or car anniversaries are used as a reason to call and updates about customer needs

are entered in the customer profile. As the number of vehicles that are financed with BMW

financial services increases, Lorraine has detailed information when the client is planning to

screen the market for a new product. Prior to the event of the expiry of the financing contract,

clients are approached proactively and product offerings are introduced; complementarily, the

company sends brochures about latest vehicle releases and promotional offers.

25

The nature of the sales process is different depending on the product promoted. BMW offers

high involvement goods and charge premium prices; therefore, the decision making process is

extended and sales executives plays a central role. The likelihood of developing a long lasting

relationship with the customer is higher as the communication with regards to duration and

depth between the sales executive and the client is longer respectively deeper. This builds a

promising basis for establishing a large pool of loyal customers.

6.2 Pricing strategies

The bottom line of the great majority of organizations is to make profit. Profits are achieved if

revenue, the price, exceeds the costs associated with producing, selling and delivering the

product. As BMW offer a high quality and customized product with outstanding services,

costs as well as prices are relatively high. However, many customers are willing to pay a pre-

mium price, as the vehicle does not only meet basis needs but provide a remarkable driving

experience, recognition, prestige and the fulfillment of self-actualization needs in return.

Some indications are given that BMW prices their products according to the value-

based pricing method; the customer is centered and actions are undertaken to increase the

perceived value of customers. At BMW Sandton, sales executive’s decision power with re-

gards to pricing depends on the seniority. Lorraine said that she has built trust with her supe-

riors over the last decade and she has the authority to offer appropriate discounts. She knows

specific profit margins of frequently sold products by heart, others are easily accessible with

her login data.

With regards to competitor’s mark ups, no verified data is available and assumptions

have to be made. BMW is convinced, however, that their estimates are precise because of the

fact that direct competition, Mercedes-Benz and Audi, uses akin strategies and pricing tech-

niques.

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6.3 The influence of the marketing mix

Being directly employed as a sales executive for BMW entails the access to various facilitat-

ing selling tools; however, it also requires the adaptation towards corporate policies. Corpo-

rate marketing efforts influence the products sold, the type of customer and requires constant

refreshment of company related knowledge.

Corporate advertising campaigns incentivise potential prospects to actively approach

the dealership and therefore increase the pool of potential customers for Lorraine. This holds

true for company fairs as well as the online presence of BMW through their website as well as

social media accounts. While those efforts have not positive effects for sales executives only,

Lorraine pointed out that constant and diverse price promotions require additional work. In

the event of stagnating sales, price promotions are highly welcomed to make the product more

attractive and increasing the pool of prospects. On the other hand, if her schedule is already

tight, adaptions towards corporate policies have to be made at the expense of customer specif-

ic research.

6.4 Technology and personal productivity

In the last decade multiple technology gadgets and software were developed to increase the

effectiveness and efficiency of humans. Lorraine uses one centralized software that includes

various facilitating features. The core represents the database of customers and company re-

lated data. Each customer has a personalized profile where data is stored and easily accessi-

ble. Upcoming events can be manually recorded and pop up at the time due. Atomized re-

minders are recorded and appear at the corresponding time; for instance, one month after the

vehicle has been delivered the software automatically reminds Lorraine to make a follow-up

call. Routing software is incorporated in any BMW vehicle and therefore accessible at any

time. At the dealership a flat screen and an iPad are used to demonstrate and customize the

product, if the presentation is held at the customer’s place an iPad facilitates the presentation

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and visualizes the product. Besides, a smartphone is used by the sales executives, which pro-

vides immediate access to intranet, internet and the centralized software.

For informal internal communication, BMW sales executives are using a Whats app

group to inform themselves about latest updates and strengthening their relationship on a per-

sonal level as well.

7. Conclusion

Interpersonal skills are often the distinguishing factor between good and excellent sales exec-

utives. Lorraine’s background, with having developed expertise in consumer behavior and

non-verbal communication, gives her an advantage in the identification of customer’s needs

and persuasion process among others. The BMW group offers premium products with the

determination to provide excellent customer experience. Therefore, Lorraine spends the ma-

jority of her time on customer related activities, namely approximately 25 hours a week. Pri-

marily, time is spend on the acquisition of customer knowledge, the identification of their

needs, and the process of tailoring product benefits to customer preferences. Since BMW ve-

hicles are consisting of various technological parts, product geniuses have been introduced,

which assist sales executives with regards to product specific questions.

BMW vehicles offer several unique selling propositions, Lorraine however, empha-

sized on the concept of benefit selling. She said “it is not about highlighting benefits the com-

pany or product is unique in; it is about stating the benefits the customer appreciates and de-

rives value from”. With regards to features, advantages and benefits, she observed that cus-

tomers are more curious about features if they possess technical knowledge or want to com-

pare products with direct competitors.

The duration of the sales process highly depends on the type of product. High in-

volvement goods entail a longer decision making process and therefore customers are willing

to spend more time before buying the product of their choice. Sales executives at BMW are

28

strongly encouraged to put weight on efficiency in the screening process of customers with

regards to their qualification to buy a product. Mainly since only a small fraction of total leads

are qualified to buy the product; the evaluation criteria of desire is more important than mon-

ey because of BMW’s financial services business unit. Once a prospect is determined as a

qualified prospect, background research and the identification of needs and preferences is

focused on. Besides psychological needs and personal data, Lorraine observed that the identi-

fication of the decision maker and the role of the customer are decisive as solutions have to be

tailored to the decision maker’s needs and preferences. 80 percent of presentations are held at

the dealership’s place since the showroom is impressively designed and the equipment availa-

ble increases the effectiveness of the presentation. Lorraine’s interpersonal strengths are par-

ticularly helping her in the process of meeting customer’s objections. She emphasized that all

objections have to be treated sincerely and questions are key to identify the root cause. When

it comes to closing a deal, at BMW the unwritten rule of “rather another meeting than losing a

client” applies. Lorraine tries to give the customer the feeling that each person is the most

important customer and is allowed to take the time needed. Because of the fact that BMW

vehicles are high involvement goods, the sales process is extended over a longer period of

time. Lorraine tries to make use of it by developing trust with the overall goal of building a

long lasting customer relationship. After the deal has been closed follow-up product and cus-

tomer related services are offered to build a large loyal customer base.

29

References

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

BMW Group Key Figures (2015). (2016). Retrieved from

https://www.bmwgroup.com/en/company.html

BMW Group Profile. (2016). Retrieved from https://www.bmwgroup.com/content/bmw-

group-websites/bmwgroup_com/en/company/company-portrait.html

Edelman, D. C., & Singer, M. (2015). Competing on Customer Journeys. Harvard Business

Review, (11), 88-100.

Fascinating brands. (2016). Retrieved from https://www.bmwgroup.com/en/brands-and-

services.html

Futrell, C., & Valvasori, M. (2015). ABC's of Relationship Selling (6th ed). Texas: McGraw-

Hill Ryerson

Gschwandtner, G. (1980). Nonverbal Selling Power. Training and Development Hour-

nal, 34(11), 62.

Milestones. (2016). Retrieved from https://www.bmwgroup.com/content/bmw-group-

websites/bmwgroup_com/en/company/history.html

Senge, P. (1990). The fifth discipline: The art and science of the learning organization. New

York: Currency Doubleday

The BMW Group – A global company. (2016). Retrieved from

https://www.bmwgroup.com/en/company/locations.html

30

4

12

25

4

Company knowledge

Product knowledge

Customer knowledge

Competitor knowledge

0 5 10 15 20 25 30

Sales knowledge acquisition (h/week)

Appendix

Appendix A: Brands of BMW

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

Appendix B: Sales knowledge acquisition

31

Appendix C: Expansion of Product Portfolio I

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

Appendix D: Expansion of Product Portfolio II

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

32

Appendix E: Innovativeness of BMW

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

Appendix F: Connected Drive

BMW Group. (2016). Investor Presentation. Retrieved from

https://www.bmwgroup.com/content/bmw-group-websites/bmwgroup_com/en/investor-

relations.html

33

Feature Advantage Benefit

Connected drive

Access to up-to-date in-

formation

Synchronization and ac-

cess to personal data

Bigger screen

Time savings

Increased productivity

Convenience

High precision injection

engine

Lower fuel consumption

Less refueling stops

15 % cost savings

Time savings

8 speed automatic gearbox

Lower fuel consumption

Less manual effort

Quieter vehicle

Cost savings

Driving experience

Appendix G: FABs of BMW cars

Appendix H: Showroom BMW

Retrieved from http://www.kingsmen-int.com/project/bmw-showroom/

34

Appendix I: Customer decision journes

Edelman, D. C., & Singer, M. (2015). Competing on customer journeys. Harvard Business

Review, 11, 88-100.