Sales management

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Sales management

• The only business function that generates revenue.

2
sales management

• Planning, direction and control of personal
  selling including recruiting, selecting,
  training, equipping, assigning, supervising,
  compensating and motivating as these tasks apply
  to the personal sales force.

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Sales management

• Management of the personal selling task.
• Is there anything like impersonal selling or
  non-personal selling?
• Selling is an exchange transaction. Exchange of
  Product or service for money
• Money is the revenue or the earnings of an
  enterprise often called turnover or top line
• Sales therefore is the only revenue generating
  function in an enterprise.

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Objectives of sales management

• 3 general underlying objectives
• SALES VOLUME
• PROFITS
• GROWTH
• Sales cost of sales gross margin.
• Gross margin expenses net profit.

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Sales management evolution

• Industrial Revolution 1760
• Small home industries Large scale manufacturing
  marketing sales and sales support
• Concept of hunters and farmers
• The modern day sales manager is both an
  administrator in-charge of personal selling
  activity and a member of the group that makes
  marketing decisions of all types.

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The salesman

• ..they make more noise and more mistakes, create
  more cheer, correct more errors, adjust more
  differences, spread more gossip, hear more
  grievances, pacify more belligerence and waste
  more time under pressure, all without loosing
  their temper, than any other class of
  professionals including politicians.

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The salesman

• they live in hotels, cabs and tents on trains,
  buses, eat all kinds of food, drink all kinds of
  liquids good and bad- sleep before, during and
  after business, with no sympathy from the office.
• They draw and spend more money with less effort,
  they come at the most inopportune time, under the
  slightest pretext, ask more personal questions.
• Yet they are a power in society

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The salesman

• With all their faults, they keep the wheels of
  commerce turning, and the currents of human
  emotions running. More cannot be said any man. Be
  careful whom you call a salesman, lest you
  flatter him.
• -Donald Benenson in Ziglar on Selling

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Sales Management
QUALITIES THAT LEAD TO EFFECTIVE SALES
MANAGEMENT ARE OFTEN OPPOSITE THE ATTRIBUTES OF
A SUCCESSFUL SALES PERSON
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Sales organization

• With various tasks required to be performed the
  enterprise had to create a structure to ensure
  that work is done. (the Sears story)
• Principles of structure authority,
  responsibility, performance, support/co-ordinate.

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Sales organization

• Concept of organization Group of individuals
  working jointly to achieve a defined goal and
  bearing formal and informal relations with one
  another. An organization is oriented towards and
  a co-operative endeavor and a structure of human
  relationships.

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Purpose of organization

• Eliminate waste of effort
• Minimize friction
• Maximize co-operation
• Permit development of specialists
• Ensure that all activities get done
• Achieve co-ordination/balance
• Define authority
• Fix responsibility

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Types of organization structures

• Line organization line managers perform sales
  and sales management activities.
• Line and staff organization Staff managers have
  advisory or support responsibility. e.g.Market
  research manager, Training manager.They are not
  directly responsible for achieving sales targets.

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Organization structures

• Functional organization focus is on the
  principle of specialization. Each specialist has
  a functional responsibility and are permitted to
  direct and control the salesperson thru their
  immediate superior.

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Organization structure

• Horizontal structure.
• Specialised structure
• Geographical
• Product
• Market or customer
• Combination of specialised structures.

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Line Sales Organization structure

• Clear authority Responsibility
• Quick response Decision, Low Cost
• Weak on marketing inputs
• Sales manager controlled

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Functional Sales Organization

• Administrative Simplicity
• Access to Specialists
• Multiple reporting
• HOD is Pressures to co-ordinate

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Research Design team Customer Research Product
/ Service design
Operations team Production QA Engineering Systems
Planning Team Strategy Finance HR C O O
Customer Support team Service Training Information
Customer Satisfaction teams Sales
Marketing Pricing Promotion Channels Logistics
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Sales relation with marketing activities

• Sales Advertising both stimulate demand. They
  need to be blended. Salespersons can improve
  advertising effectiveness. Advertising needs to
  support sales where and when they need it most.
• Sales Marketing information data is needed for
  analysis of sales problems, for determining sales
  potential. Raw data is collected by sales people.

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relationships

• Sales and service contributes to strategy
  success.
• Sales and distribution minimizes stock out
  situation improves inventory control helps
  sales to focus on demand generation.
• Sales Production
• Sales and RD
• Sales Finance

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SALES PLANNINGa managerial function

• EXISTING BUSINESS

LONG RANGE PLAN 3 TO
5 YEAR PROJECTIONS ANNUAL OPERATING PLAN
REVISED YEAR TO YEAR SEGMENTWISE PLAN
PAST TREND GEOGRAPHICAL
PLAN PREVIOUS YEAR
SALES CUSTOMERWISE PLAN
CURRENT YEAR ACHIEVEMENT PLAN BY VALUE
NEXT YEAR PLANS PLAN BY
VOLUME ASSUMPTIONS
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PLANNING FOCUS AREAS

• PROFITABILITY IMPROVEMENT
• A REGION OR TERRITORY CEASES TO CONTRIBUTE
• DISCONTINUATION OF SALES TO AN ACCOUNT
• DE-EMPHASISING PRODUCTS
• ACCEPTING A PRIVATE BRAND ORDER
• VARIANCE BETWEEN BUDGET AND ACTUAL SALES

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SALES PLANNING

• NEW BUSINESS
• VISION MISSION GOALS
• STRATEGY
• ACTION PLANS

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Key Deliverables of the Sales function

• Planning
• Organizing
• Training
• Motivating
• Controlling
• Leading

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Sales planning

• Forecasting a key planning tool
• PRODUCT LEVEL
• total sales -
• industry sales
• company sales
• product line sales
• product variant sales

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Time period forecast

• Long Range
• Medium range
• Short term (range)

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Planning process

• Sales plan
• Capacity plan
• Production plan
• Cash flow plan
• Procurement plan

Human resource plan
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Sales forecast

• Why forecast?
• One of the keys to success in sales is knowing
  where customers are located and being able to
  predict how much they will buy.

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Sales forecasting Industry estimates

• Objective definition
• Identifying critical factors (assumptions)
• Selecting method of forecasting
• Collecting, analysing, interpreting data.
• Concluding predictions.

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Geographic Area forecast

• Nation
• Region ( REGION OR ZONE )
• Territory ( BRANCH / DISTRICT )
• Customer

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Forecasting Approaches

• Top - down / Break down approach
• An SBU level forecast broken down to region,
  district, territory, salesperson and individual
  customer sales quotas
• Bottom up / Build up approach
• Individual customer to branch to zone to company
  level forecast

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Methods of sales forecast

• Qualitative methods
• Executive opinion
• Delphi method prediction by a panel
• Sales force composite grass roots approach.
• Test marketing controlled or simulated

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Sales forecast methods

• Quantitative methods
• Moving averages
• Exponential smoothing
• Regression analysis
• Econometric analysis

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Selling situations

• Customers intention and expectation are
  specific. (insurance, mobile service)
• Customer is contacted over phone
• Customer is an organizational buyer
• Customer seeking service or solution
• Customer in a retail store
• Cold calling situation
• Pharmaceutical selling
• Creative selling ( ad.campaign)

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The sales budget

• To the sales department, the budget is a blue
  print for making sales. It involves money
  invested in distribution facilities, promotion
  efforts, and sales personnel. It is the
  foundation on which to plan sales objectives and
  the means of achieving them during the coming
  year.

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Sales budget

• A budget is a quantitative expression of plans.
  Most well managed enterprises use a budget which
  is a comprehensive and coordinated plan for the
  operations and resources of the enterprise.
• It is a formal and intricate process
• Approaches are either incremental or zero based.
• In a volatile economic climate organizations
  estimate optimistic, realistic and pessimistic
  scenarios.

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Sales budget

• Critical factors considered
• past trends
• Sales force estimates
• Trade prospects
• Present scenario
• Customers existing and potential
• Government policies
• Industry environment

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Number of sales people

• Decision on the size of the sales force is very
  complicated because structure of the customers
  vary in each territory, the level of competition
  varies across territories, the connectivity for
  travel varies etc.
• There are 3 generally accepted approaches
  affordability, incremental and workload methods.

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Sales territories

• Definition A sales territory consists of
  existing and potential customers assigned to a
  sales person. The territory may or may not have
  geographic boundaries.

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Reasons for territories

• Increase / improve customer coverage
• Control selling expenses
• Effective evaluation of salesmans performance.
• improve customer relations

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Territory design

• Main procedural steps
• Selection of a basic geographical control unit
• Determination of sales potential present in each
  unit
• Combining the basic units into tentative
  territories
• Adjust for differences in coverage difficulty and
  readjust the tentative territories ( build up /
  break down method )

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Territory design

• Build up method
  Decide call frequency
  Calculate total no of calls in the unit
  Estimate workload capacity of salesman Make
  tentative territories
  Develop final territories

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Territory design

• Break down method
  Estimate company sales potential for total
  market.
  Forecast sales potential for each control unit.
  
  Estimate sales expected from each salesman.
  Make
  tentative territories.
  Develop final territories.

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Routing Scheduling and control

• Reasons / advantages
• Maintain lines of communication
• Improve territory coverage
• Minimize wasted time
• Closer scrutiny of sales force movement
• Journey plans for improving customer satisfaction
  

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Quotas

• Quotas are quantitative goals assigned to
  individual sales persons for a specified period
  of time.
• One of the most widely used tools in sales
  management.
• Should not be confused with sales potential or
  sales forecast.
• Quotas may be set equal to ,above or below the
  sales forecast.

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Why Quotas ?

• To help management motivate sales people.
• To direct sales people where to put there
  efforts.
• To provide standards of performance evaluation

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Types of Quotas

• Sales volume Quotas Rupee volume / Unit volume
• Profit based Quotas contribution / gross margin
• Activity Quotas calls per day sales meetings
  product demos ( efforts results.)
• Expense Quotas

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QUOTA SETTING MECHANISM

• S-specific
• M-measurable
• A-achievable
• R-realistic
• T-time bound

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• What is Motivation??
• Drive to initiate an action.
• The intensity of effort in an action
• The persistence of effort over

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Why motivation

• Frequent rejection
• Physical separation from company support
• Direct influence on quality of sales presentation
• Indirect influence on performance

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Sales force motivation

• the desire to make an effort to fulfill a need
  is motivation
• Motivation includes three dimensions Direction,
  Intensity and persistence.
• Motivation may also be Intrinsic or extrinsic
• Maslows hierarchy of needs

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Maslows theory
Self Actualisation
Esteem needs
Social needs
Safety needs
Physiological needs Food, clothing, shelter,
health care
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MASLOWS HIERARCHY OF NEEDS
Intense job challenge, full potential, full
expression, creative expansion. Achievement,
respect, recognition, responsi- bility, prestige,
independence, attention, importance,
appreciation. Belonging, acceptance, love,
affection, family and group acceptance,
friendships. Security, stability, dependency,
protection, need for structure, order, law,
tenure, pension, insurance. Hunger, thirst,
reproduction, shelter, clothing, air, rest.

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Frederick Herzberg theory

• Two factor theory of motivation
• Hygiene ,maintenance, or job context factors.(
  dis satisfiers )
• Achievement, challenge, advancement, growth in
  the job. (satisfiers )

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SELLING
THE WORD SELL IS DERIVED FROM A Norwegian WORD
SELJE WHICH MEANS TO SERVE TO SERVE YOUR
PROSPECTS YOU MUST UNDERSTAND THEIR NEEDS. PEOPLE
INVARIABLY BUY WHAT THEY WANT, EVEN ABOVE WHAT
THEY NEED
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The sales process

• Process a sequential series of decisions and or
  actions.

BUYING PROCESS
SELLING PROCESS NEED
PREPARE SEARCH

FOCUS IDENTIFY
DEFINE ISOLATE

PROPOSE/PRESENT

SELECT
HANDLE OBJECTIONS BUY

CLOSE THE SALE CONSUME
FOLLOW UP
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The sales process

1. Prospecting Qualifying
2. Pre approach (pre call planning )
3. Approach
4. Presentation Demonstration
5. Overcoming Objections
6. Trial close / Closing the sale
7. Follow up and Service.

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SELLING PROCESSthe Ziglar method

• Focus on Prospects NEEDS and WANTS.
• Sell by design, not by chance.
• Follow a proven 4 step formula
• NEED ANALYSIS
• NEED AWARENESS
• NEED SOLUTION
• NEED SATISFACTION

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Prospecting

• Process of identifying potential buyers.
• A prospect has a reasonable probability of buying
  ,has sufficient need to justify a profitable sale
  ,has financial resources to buy and can be
  classified as eligible to buy
• MONEY? AUTHORITY? DESIRE?

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Locating prospects

• Lead generation a three step process.
• Defining the target market what it wants what
  it buys where and when it buys what it buys
  how it buys
• Using communication tools to gather leads
  Advertising, Direct mail, Telemarketing, Trade
  shows, buying data
• Qualifying the Leads.

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Selling first time to Prospects(pre sale
planning)

• Adequate knowledge of the product to be sold,
  company being represented, the market competition
  ,category or segment of customers and selling
  techniques.
• Product knowledge Evolution-Features-Benefits-Uni
  queness-Price
• Company knowledge History-Values-Achievements-Man
  agement-Policies

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Pre sale plan

• Competitors knowledge structure-share-strategy-sy
  stems.
• Customer knowledge attitudes-preferences-
  behavioural habits
• Selling techniques

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Pre approach planning

• Focus on understanding customer needs and
  characteristics and preparing a proposal on how
  the product or service offered can satisfy the
  need.
• Steps involved are
• Determining call objectives.
• Development of customer profile.
• Determine customer benefits.
• Determine the flow and content of the
  presentation.

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Understanding buyers needs

• Situational questions questions about prospects
  current situation. (who will decide? is it the
  first time ? Changing source ?
• Problem identification question Questions to
  uncover problems, difficulties or needs (
  problems on quality, delivery ?)
• Problem impact questions questions to make the
  buyer realise the impact of the problem and the
  need to solve it.( what will be the impact on
  costs , on customer satisfaction ?)

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• Solution value questions questions to help the
  buyer asses the value or usefulness of the
  solution ( for x benefit how much would you save
  ?
• Confirmation questions (how would an error free
  system help?)

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Need awareness

• At this stage you need to THINK
• Prospect and Salesperson should both be aware of
  the need. (remove blind spots)

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Need solution

• Present your product
• Time to stop asking questions and start providing
  solutions.
• People dont buy products, they buy what the
  product does for them.

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Questions are the answer

• Thinking vs. feeling questions.
• When you learn how the customer feels you are
  more likely to find out what the person thinks.(
  the seat belt case)
• Tying emotion to logic.

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The questioning process

• Three basic types of questions enable us to
  discover the needs of our potential customers.
• 1st The Open Door Questions.-allows the prospect
  the freedom to go where ever they like. the who,
  what where ,when, how and why questions

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Questioning

• The closed door question would you tell me
  more what do you mean byAnswers to these give
  you information to helping the prospect and
  building trust.

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Questioning

• yes or no questions demand a direct response.
  do you agree.. would my proposal.. are we in
  agreement..
• They allow you to check on your progress on the
  sales process. trial close

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Presentation methods

• Stimulus response method also called a canned
  approach, a memorised sales presentation .It
  assumes that if a right stimuli is made it will
  get a favourable response.
• Formula method the AIDA process.
• Need-satisfaction method an interactive sales
  presentation. The most challenging and creative
  method. The FAB way.
• Features, Advantages, Benefits.

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The presentation

• Attracting Attention
• Creating Interest
• Building Desire and conviction
• Initiate Action to buy.

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Presentation methods

• Team selling method a multi person sales team
  deals with a multi person buying centre (or
  buying committees)
• Sales team consists of Account executive,
  technical support engineer, logistics expert, IT
  or systems executive and Finance executive.
• Buying committee consists of materials exec.
  manufacturing/operations exec. supply chain exec.
  Materials manager and Finance exec.

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Presentation methods

• Consultative selling method problem-solution
  method.
• Requirements are
• Knowledge of the industry, clients company,
  awareness of key members needs,

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Objections

• Objections , opposition , resistance to the
  presentation typically happens during the
  presentation or while asking for the order.
• Objections should be welcomed.
• Objections indicate that the prospect is involved
  and not indifferent.
• Objections reflect the prospects view.

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Objections

1. Psychological ( hidden ) includes
   pre-determined ideas or beliefs, preference for
   established brands, dislike of making decisions ,
   anxiety or resistance to spend money , suspect
   about quality etc.
2. Logical or practical or real delivery schedule,
   high price , product availibility,

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Handling objections

• Listen
• Understand
• Negotiate

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Methods of handling objections

• Ask questions listen, rephrase, reconfirm the
  objection and explain.
• Turn objection into a benefit and trial close.
• Deny objections tactfully. (arrogance and sarcasm
  to be strictly avoided)
• Testimonials, referals
• Compensation for valid objections.

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Negotiation

• Plan pre determine firm and flexible
  factors define limits.
• Ensure an atmosphere of trust , understanding and
  respect.
• Define purpose and objective.

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Negotiation styles

• Win loose
• Win Win
• Loose - Loose

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Closing the sale

• Summarize
• Advantage and disadvantage comparison
• Opportunity benefit
• Emotional appeal
• Direct closure
• A.A.F.T.OAlways Ask For The Order