The document discusses the sales learning curve concept where a company needs time to learn how to effectively sell a new product as it did with manufacturing learning curves. The sales learning curve unfolds in three stages - initiation where sales reps learn about customers and marketing, transition where a repeatable sales model is developed and capacity is increased proportionately, and execution where sales reps can be hired rapidly within constraints. Allowing the strategies to adjust at each stage allows for more accurate planning, expectations, avoiding cash shortfalls, and reducing time and money to profitability.

1. A C A S E S T U D Y O N
SALES LEARNING
CURVE
B Y M A R K L E S L I E A N D C H A R L E S A .
H O L L O W A Y
P R E S E N T E D B Y:
R A H U L TA N W A R

2. When a company launches a new product into a new market, the
temptation is to immediately ramp up sales force capacity to gain
customers as quickly as possible.
But hiring a full sales force too early just causes the firm to burn
through cash and fail to meet revenue expectations.
Before it can sell an innovative product efficiently, the entire
organization needs to learn how customers will acquire and use
it, a process the authors call the sales learning curve.
What generally happens !!!

3. The concept of a learning curve is well understood in
manufacturing.
Employees transfer knowledge and experience back and forth
between the production line and purchasing, manufacturing,
engineering, planning, and operations.
The sales learning curve unfolds similarly through the give-and-
take between the company—marketing, sales, product support,
and product development—and its customers.
As customers adopt the product, the firm modifies both the offering
and the processes associated with making and selling it.
Manufacturing Learning Curve

4. S M A R T C O M P A N I E S
G I V E T H E M S E L V E S
T I M E E N O U G H T O
C L I M B T H E S A L E S
L E A R N I N G C U R V E
B E F O R E R A M P I N G U P
T H E S A L E S F O R C E

5. COMPARISON
MLC
■ measured by tracking
cost per unit
■ more a firm learns about
the manufacturing
process, the more
efficient it becomes, and
the lower the unit cost
goes
SLC
■ measured by tracking sales
yield over time
■ more a company learns
about the sales process, the
more efficient it becomes at
selling, and the higher the
sales yield

6. S A L E S Y I E L D F O R A
N E W P R O D U C T
S T A R T S O U T S L O W L Y ,
A C C E L E R A T E S F O R A
W H I L E , A N D T H E N
F L A T T E N S O U T A S T H E
P R O D U C T M A T U R E S ,
I N A C L A S S I C S -
S H A P E C U R V E .

7. Initiation Stage:
Encouraging SRs to learn about customers, product marketing &
marketing communication.
Transition stage:
Sales management should focus on developing a repeatable sales
model, refining market positioning, and adding sales capacity at a
rate commensurate with the rise in the slope of the curve.
Execution Stage:
SRs can be hired as rapidly as the company’s management and
financial constraints will allow.
Strategies Followed At Each Stage

8. BENEFITS OF
SALES
LEARNING
CURVE
 As the sales yield increases, the sales learning
process unfolds in three distinct phases-
1) initiation,
2) transition,
3) execution.
 Each phase requires a different size and kind of
sales force and represents a different stage in a
company’s production, marketing, and sales
strategies.
 Adjusting those strategies as the firm progresses
along the sales learning curve allows managers-
I. to plan resource allocation more accurately,
II. set appropriate expectations,
III. avoid disastrous cash shortfalls,
IV. and reduce both the time and money
required to turn a profit.

9. THANK YOU
.