Sales management

The only business function that generates revenue.

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.

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:
1. SALES VOLUME 2. PROFITS

3. 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

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

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/coordinate.

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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

Head Marketing

Sales Manager

Area Sales Mgr

Area Sales Mgr

Area Sales Mgr

Area Sales Mgr

Sales Force

Sales Force

Sales Force

Sales Force

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

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Functional Sales Organization

Head -Marketing

Marketing Services

Sales
Area Sales Managers

Promotion Brand

Market Research

Sales Force

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 COO

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 R&D Sales &Finance
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SALES PLANNING a managerial function

EXISTING BUSINESS
LONG RANGE PLAN ANNUAL OPERATING PLAN 3 TO 5 YEAR PROJECTIONS REVISED YEAR TO YEAR

SEGMENTWISE PLAN
GEOGRAPHICAL PLAN CUSTOMERWISE PLAN PLAN BY VALUE PLAN BY VOLUME

PAST TREND
PREVIOUS YEAR SALES CURRENT YEAR ACHIEVEMENT NEXT YEAR PLANS 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 STRATEGY

MISSION

GOALS

*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: 1. past trends 2. Sales force estimates 3. Trade prospects 4. Present scenario 5. Customers: existing and potential 6. Government policies 7. 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:

1. Selection of a basic geographical control

unit 2. Determination of sales potential present in each unit 3. Combining the basic units into tentative territories 4. 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, responsibility, 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
NEED SEARCH IDENTIFY ISOLATE SELECT BUY CONSUME

SELLING PROCESS
PREPARE FOCUS DEFINE PROPOSE/PRESENT HANDLE OBJECTIONS CLOSE THE SALE FOLLOW UP

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The sales process

1.
2. 3.

4.
5. 6.

7.

Prospecting & Qualifying Pre approach (pre call planning ) Approach Presentation & Demonstration Overcoming Objections Trial close / Closing the sale Follow up and Service.
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SELLING PROCESS the 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. 1. Defining the target market :what it wants; what it buys; where and when it buys; what it buys; how it buys; 2. Using communication tools to gather leads Advertising, Direct mail, Telemarketing, Trade shows, buying data 3. 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-BenefitsUniqueness-Price Company knowledge: History-Values-AchievementsManagement-Policies

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Pre sale plan

Competitors knowledge :structure-share-

strategy-systems. Customer knowledge :attitudespreferences- 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.

2.

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. 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.O=Always Ask For The Order

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