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International Journal of Business and Social Science Vol. 4 No. 15 [Special Issue – November 2013]
Better Buy Case: Managing a Sales Process
Danilo Sirias
Professor of Management
College of Business and Management
Saginaw Valley State University
University Center, MI 48710, USA.
Stacie Krupp
Assistant Professor
College of Business and Management
University Center, MI 48710, USA
Megan Biskup
MBA Graduate
Saginaw Valley State University
University Center, MI 48710, USA
Case Description
The primary subject matter of this case is sales process management. Secondary issues examined include the improvement of sales processes, the discussion of the renting vs. owning dilemma as it relates to office space in a large metropolitan area, and the use of information technology to support functional goals. The case has a difficulty level appropriate for senior students or first year master students. The case is designed to be taught in one class of three hours and is expected to require two hours of outside preparation by students. Abstract Better Buy^1 is a real estate development firm that purchases prime real estate in large cities, upgrades and repositions those buildings, and then sells (not leases) spaces within the building to large, prestigious companies in the area. Even though Better Buy is growing, Roger, one of the commercial real estate developers, couldn’t help but wonder if there is a more effective way to manage their sales force. Currently, “managing” the sales process is done through a mixture of loose notes, spreadsheets and inefficient meetings. Roger is also concerned with the communication (or lack thereof) that is taking place between his sales team and the clients. His team should be staying on top of these types of things, shouldn’t they? After all, who knows how many customers have been neglected and lost? Finally, what about the lag time when a sales person is waiting to hear back from a client? Should that be managed differently? Something within this process needs to change quickly if Better Buy is to achieve its target sales. Roger believes he could develop a better way to manage their sales process, which would benefit not only the sales force but the customers as well. Better Buy has a pretty good sense of their sales process but no system to manage it or to evaluate its effectiveness. The problem is - where to begin.
Keywords : Sales process, sales process management, sales management, coordination theory, case study
1. Introduction
Roger Ramirez sat at his desk at 10:30am Wednesday morning, looking out his window at the San Diego^2 skyline. He was lost in thought when his phone rang. His senior sales manager was on the line, wanting to discuss the sales meeting they had had just an hour earlier; a meeting that Roger was still in disbelief over. Was this how his sales team had been working all along? At 9:00am that morning, Roger had entered the board room at Better Buy, the San Diego commercial real estate development business that he manages, to observe the weekly sales meetings of his three sales managers. (^1) Not the real name of the company (^2) Not the real location of the company
The Special Issue on Arts, Commerce and Social Science © Center for Promoting Ideas, USA www.ijbssnet.com He had spent the next hour sitting through a meeting that he would later refer to as a “glorified coffee break.” The conference table was filled with post-it notes, Excel spreadsheets and scrap paper with names and information of potential customers. Information was in no way organized or shared amongst the sales team. Each manager took turns discussing potential clients and leads that were nearly a month old, without any action being taken on them. “Sure, we contacted them,” one manager said, “but we are still waiting on them to get back with us.” His team had continued discussing potential customers, along with other non-work related conversation, and had ended the meeting with a pep talk from the senior sales manager. “Great job, everyone. We’ll meet again this time next week.” Roger knows that he has a smart and hard working sales team that is selling office space in San Diego to some very prestigious businesses, but he can’t help but wonder if there is a more effective way to do it. Is this how sales are supposed to be managed: A mixture of notes, leads and waiting by the phone for the client to call back? He is very familiar with sales processes as well as sales management and knows that there should be better ways to handle their leads. Roger is also concerned with the communication (or lack thereof) that is taking place between his sales team and the clients. His team should be staying on top of these types of things, shouldn’t they? Finally, what about the lag time when a sales person is waiting to hear back from a client? Also, it seems as though a lead shouldn’t be considered an opportunity until clients have seen the property and have expressed a serious interest in moving forward. Something within this process needs to change quickly. Roger believes he could develop a uniform system to manage the sales process that would benefit not only the sales managers but the customers as well.
2. Background
Roger Ramirez, a commercial real estate developer, has met with great success in Tampa, Florida, and is branching out to other large cities in the United States, such as San Diego and Los Angeles. In April 2003 , Better Buy expanded their operations to San Diego, where they acquired two properties: an 18 - story commercial office building built in 1968, and a 38 story commercial building, built in 194 0. The approach behind the business is simple: purchase prime real estate in large cities, upgrade and reposition those buildings and then sell (not lease) spaces within the building to large, prestigious companies in the area. The working assumption is that enough businesses would prefer owning their office space as opposed to leasing. Not only can they make the space their own (the offices are purchased before the building is remodeled completely, so that offices can be built according to the purchaser’s specifications), but possibly the most advantageous motive would be for a business to express to their customers that they are a financially sound company with strong roots in that particular city. In other words, “they aren’t going anywhere.” In addition to personalized office space, Better Buy’s office locations are loaded with amenities. For instance, facilities in San Diego include a prime location in the heart of the business district. With views of the San Diego skyline and the convenience of entertainment, restaurants, government and corporate offices, as well as courthouses and public transportation, a company could easily see how the benefits would outweigh the initial investment. Amenities at this location include indoor heated parking, full-service fitness facilities, a bank with an ATM, 24 hour manned security, high speed optical Internet access, as well as onsite building management. When an organization owns their office space, they are no longer susceptible to unpredictable rent increases or the ever possible eviction due to rezoning. The company has the opportunity to build its own equity and enjoy the space through ownership, not to mention benefits from possible tax advantages. The perks that come with owning their own office space include the opportunity to design a floor plan that best fits the business’s needs and offers better control over their work environment, a location in prime and prestigious areas within the city of San Diego, and luxurious amenities to ensure that companies are getting the most out their office ownership. Ownership versus leasing also may allow a business to better arrange a succession plan or organizational strategy for the business. Knowing that the office space that companies are moving into is dedicated to continuous improvement of the building is comforting in many ways. The office spaces not only meet the needs of clients, but also offer the most modern and up-to-date common spaces possible. While the owner of the office space is responsible for build-out expenses, companies will not have to be granted approval from a landlord to upgrade their office space.
The Special Issue on Arts, Commerce and Social Science © Center for Promoting Ideas, USA www.ijbssnet.com Better Buy Group uses the basics of this model along with a few extra steps that are needed in order to complete the necessary legalities involved with selling a piece of property (condominium space). The current specific sales process for Better Buy consists of the 9 steps included in Figure 1. Roger wonders how the sales process could be managed more effectively. This difficult task involves the constant loading of new contacts, the qualifying of contacts and their priorities, and troubleshooting any problems as they arise. The sales team has been trying to manage too much at once. They seem to be in need of additional support staff to assist them with duties, such as call backs and the sending of paperwork and other time-sensitive materials to their clients. In addition to assisting sales managers with these duties, support staff may also have the ability to track and record clients currently in the sales funnel. What type of system can Better Buy use to improve the management of its sales process? Roger is also concerned about the quality of their current sales process. Better Buy’s sales people are mixing their leads and opportunities with no real recognition of which one has priority over another. This has caused problems when time was an issue and the leads with priority could not be easily identified. In addition to priorities, the quality of the opportunities is not being controlled. In other words, companies that are not really interested are being pushed through the sales process – thus distorting sales figures until they are in the negotiating phase of the process. This leads to the question of whether or not the initial lead capture and property tour are a help or a hindrance. Does Better Buy need to change its sales process?
4. Questions
- What are the problems with how the current sales process at Better Buy is managed? What are some of the generic challenges of managing a sales process?
- What are the important elements needed to manage a successful sales process?
- What adjustments can be made to the steps of the sales process in order to make it more efficient? Create a new sales process(es) for Better Buy Group. Better Buy: Managing a Sales Process Danilo Sirias, Stacie Krupp, and Megan Biskup, Saginaw Valley State University
Case Description
The primary subject matter of this case is sales process management. Secondary issues examined include the improvement of sales processes, the discussion of the renting vs. owning dilemma as it relates to office space in a large metropolitan area, and the use of information technology to support functional goals. The case has a difficulty level appropriate for senior students or first year master students. The case is designed to be taught in one class of three hours and is expected to require two hours of outside preparation by students.
Case Synopsis
Better Buy is a real estate development firm that purchases prime real estate in large cities, upgrades and repositions those buildings, and then sells (not leases) spaces within the building to large, prestigious companies in the area. Even though Better Buy is growing, Roger, one of the commercial real estate developers, couldn’t help but wonder if there is a more effective way to manage their sales force. Currently, “managing” the sales process is done through a mixture of loose notes, spreadsheets and inefficient meetings. Roger is also concerned with the communication (or lack thereof) that is taking place between his sales team and the clients. His team should be staying on top of these types of things, shouldn’t they? After all, who knows how many customers have been neglected and lost? Finally, what about the lag time when a sales person is waiting to hear back from a client? Should that be managed differently? Something within this process needs to change quickly if Better Buy is to achieve its target sales. Roger believes he could develop a better way to manage their sales process, which would benefit not only the sales force but the customers as well. Better Buy has a pretty good sense of their sales process but no system to manage it or to evaluate its effectiveness. The problem is - where to begin.
5. Instructors’ Notes
The regional manager of Better Buy Group - San Diego believed that his sales team could be more organized and effective. He was unsure as to how he might make this happen but thought that perhaps a uniform process could be used to increase efficiency, and therefore increase sales.
