Competition Pays Off

At a sales competition organized and hosted by MIT, top students from MBA programs around the world found out that selling is not a game for the theoretical or the faint of heart.

Entry into the Club

“Most MBAs think that if you do the spreadsheets right the revenues will come in,” says Larry Singer, Hewlett-Packard vice president for government, education, and public health. “These people understand how to turn an idea into a product and a product into revenue.”

The people who so impressed Singer were entrants in the first International MBA Sales Competition, hosted by the Sloan Sales Club at MIT’s Sloan School of Management on October 18, 2008. The competition was an unprecedented event that changed Singer’s opinion about several competitors’ perceptions of sales and how high-value sales reps might be educated, and it stirred interest in setting up sales clubs at some other notable business schools.   

From September 15 to October 3, 80 students at top MBA programs around the world competed in a telephone sales call to qualify for the competition. This was a five-minute call, based on a real wealth-management case, dubbed “the $500 million account telephone pitch” by contest sponsors. Competitors called in from MIT, Boston University, Dartmouth, Kellogg, Wharton, Babson, UC Berkeley, Stanford, Harvard, Columbia, and London Business School.

Three students from each of these 11 schools were selected to gather in Cambridge, MA, for two on-site presentations: a one-on-one sales pitch and a group presentation. VIP judges from Google, Microsoft, American Express, Hewlett-Packard, and Novell were “prospects” and judged the presentations. More than honor and references were at stake: A total of $6,000 in prize money was offered.

The Contest

Felipe Castro, president of MIT’s Sales Club, explains that a local competition was held in 2007. But the 2008 competition saw a major expansion of the program and drew 85 people, including contestants and judges, and the Sales Club paid for airfare and hotel stays to make it truly global.

The Sales Club, with 220 members, is the biggest club at MIT outside of the Finance Club and the only such club at a top business school. MIT has one class in professional sales, and the Sales Club holds its own sessions on Monday nights, during which members practice sales techniques taught by software entrepreneur Jeff Hoffman.

The sales contest’s one-on-one presentation was a 15-minute simulated call by an American Express national director of sales on a furniture retailer that had never accepted credit cards before. The firm is nationally known and is one of the nation’s largest retailers, run by its founding family, father and son. It sells very large ticket items, with sales of $10,000 to $25,000 not uncommon, and it recently began accepting debit cards. Estimates from competing firms that accept AmEx indicate that average sales of more than $4,000 would be just as profitable at this furniture retailer if the purchaser used AmEx as they would be if the purchaser used a debit card.

Contestants were given information packages outlining this background well beforehand. They were also given additional information just before the call began, and they were then given 15 minutes to make their pitch. The judge, acting as the company’s CFO, gave each contestant five minutes of direct feedback, then went to the judges’ room to enter a score and provide more feedback online.

The Sales

The second sale was a 30-minute group call to Google by three students from each school, with three judges acting as the Google CFO, chief technology officer, and country head. The students represented a start-up company, Basho Technologies, which was trying to sell Google its sales-process optimization software.

The judges were given 10 criteria for evaluating the selling team’s efforts, which included determining how persuasive the team’s value proposition was, how well the team understood Google’s challenges and dealt with pressure in price negotiations, and how confidently the team demonstrated its skill.

After both morning and afternoon sessions were completed and judgments rendered, Bob Metcalfe, author of Zen and the Art of Selling, gave a keynote speech. Awards were presented, and the long day ended with cocktails and networking.

The MIT Sales Club’s approach differs from undergraduate sales contests that are becoming more common today. “They are huge,” Castro says. “We want to keep it small but have quality MBA cases.”

The quality of the event impressed a lot of people. A post-award survey of student participants found that 94 percent rated the competition good or excellent, and the same proportion would recommend their classmates enter next year’s contest.

The Winner

Competition winner Dutta Satadip was among those impressed. Satadip received his MBA from Berkeley’s Haas School of Business in 2008. He attended Haas on weekends and evenings while working as the senior product manager for three lines of software at Hewlett-Packard. With a background in high-tech, Satadip has frequently supported HP reps with demos and discussions of product benefits, but he has never actually sold to a client.

Satadip attended a seminar conducted by Steve Martin, author of Heavy Hitter Selling: How Successful People Use Language and Intuition to Persuade Customers to Buy (Sand Hill Publishing, 2004), as well as a full class on sales strategy and management. “I took the class because it does not matter if you are a rep or not, you are always selling your ideas,” he explains. “In a knowledge-based economy you must be able to communicate your ideas and get people to follow your thought processes to be a leader.”

When Satadip heard about the MIT competition, he knew he was already doing sales role-plays. “I thought I should take my skills out for a spin in a semireal-world situation.”

Satadip opened his morning call by doing “a brief spiel” on AmEx’s value proposition for the furniture executive. “Then I opened the conversation up by asking what has changed that [the executive was now] considering this and willing to have me in this meeting.”

He believes this approach worked because it got all possible objections on the table. “I learned what I needed to talk about, rather than beating about the bush with a lot of useless information. And in asking questions you can create rapport quickly.”

The Judges

The judges who played the Google team in the afternoon competition were tough. “They did not accept answers. They said Google is a large company, and it will take a while to get my solution to work. Meanwhile, they said they could get it free.” But the Berkeley team was quick at both thinking on its feet and responding effectively.

The competition champion praises event organizers for executing the contest well. “Getting 33 contestants and 25 judges at the right places at just the right times is no mean feat.” Satadip says the judges, who were senior-level execs at such companies as  AmEx, Google, and HP, were well-coached to simulate decision makers. “They were not always convinced by a good presentation, so there were elements of a real-life situation.”

One consequence of Satadip’s experience at Sloan is that his Haas School peers are now organizing their own sales club. He explains, “We are in discussions with sponsors and will leverage MIT’s experience in best practices.”

And Satadip is considering a career in sales. “MBAs have a lot of knowledge in their minds, but getting it out quickly, concisely, and at the right time is a challenge. So I would like to take that to the next level.”

The Runner-Up

Second-place finisher Genevieve Lydstone worked in investment banking on mergers and acquisitions before attending the Sloan School. She got involved with the Sales Club because it was recommended to her as a good club. She attends weekly meetings and sales training sessions for about a month in the fall and spring.

Lydstone admits she was somewhat nervous when she confronted the first competition challenge, the qualifying telephone contact. “It was my first cold call; my heart was about to jump out of my chest.”

For the morning call in which they represented AmEx, contestants were given the basic information about four days in advance and then some biographical information on the prospect at the last minute. The judge who played the prospect was an actual AmEx executive.

“My approach was to let her do more of the talking,” Lydstone explains. “However, I knew we were being graded on certain things, so I would have to do more talking than I was comfortable with.”

Lydstone focused on the company’s past refusal to accept credit cards. “I used the financials they provided us with to prove that it was a sound financial decision, not an emotional one,” she says.

She credits the MIT team’s success in the Google presentation to thorough preparation. “We spent hours on our presentation and responses to questions,” she remembers.

Lydstone, who will get her MBA in 2009, has not decided on a career path yet. “But I came out of the sales competition thinking this is something I could do, so I am giving sales a little more consideration.”

New Thinking

Other minds were changed, as well. “It was extraordinary, a huge upside surprise for me,” says HP’s Singer. “These were the best schools in the world, and the candidates did not disappoint.”

Singer previously advised any sales rep who was considering getting an MBA not to waste his or her time. He thought reps would do better by simply getting more sales experience. But after what he saw at MIT, he is reconsidering that advice.

“These candidates did an excellent job of applying their financial analysis to pricing and margins and their marketing expertise to competitive analysis much better than I would have expected,” Singer asserts. “They were a crackerjack group.”

Singer credits Sloan with raising the prestige of sales to a level similar to that of its other programs, which is one reason Sloan students finished second and third in the competition. “You could tell most of the other candidates came due to their own motivation, rather than due to the support of their schools.” That motivation came from a lot of sources, including ambition: “Most of these people want to run their own companies or be general managers of large companies. But they also understand the role of revenue creation.”