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Sales management

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Title: Sales management


1
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.

3
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.

4
Objectives of sales management
  • 3 general underlying objectives
  • SALES VOLUME
  • PROFITS
  • GROWTH
  • Sales cost of sales gross margin.
  • Gross margin expenses net profit.

5
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.

6
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.

7
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

8
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

9
Sales Management
QUALITIES THAT LEAD TO EFFECTIVE SALES
MANAGEMENT ARE OFTEN OPPOSITE THE ATTRIBUTES OF
A SUCCESSFUL SALES PERSON
10
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.

11
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.

12
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

13
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.

14
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.

15
Organization structure
  • Horizontal structure.
  • Specialised structure
  • Geographical
  • Product
  • Market or customer
  • Combination of specialised structures.

16
Line Sales Organization structure
  • Clear authority Responsibility
  • Quick response Decision, Low Cost
  • Weak on marketing inputs
  • Sales manager controlled

17
Functional Sales Organization
  • Administrative Simplicity
  • Access to Specialists
  • Multiple reporting
  • HOD is Pressures to co-ordinate

18
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
19
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.

20
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

21
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
22
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

23
SALES PLANNING
  • NEW BUSINESS
  • VISION MISSION GOALS
  • STRATEGY
  • ACTION PLANS

24
Key Deliverables of the Sales function
  • Planning
  • Organizing
  • Training
  • Motivating
  • Controlling
  • Leading

25
Sales planning
  • Forecasting a key planning tool
  • PRODUCT LEVEL
  • total sales -
  • industry sales
  • company sales
  • product line sales
  • product variant sales

26
Time period forecast
  • Long Range
  • Medium range
  • Short term (range)

27
Planning process
  • Sales plan
  • Capacity plan
  • Production plan
  • Cash flow plan
  • Procurement plan

Human resource plan
28
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.

29
Sales forecasting Industry estimates
  • Objective definition
  • Identifying critical factors (assumptions)
  • Selecting method of forecasting
  • Collecting, analysing, interpreting data.
  • Concluding predictions.

30
Geographic Area forecast
  • Nation
  • Region ( REGION OR ZONE )
  • Territory ( BRANCH / DISTRICT )
  • Customer

31
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

32
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

33
Sales forecast methods
  • Quantitative methods
  • Moving averages
  • Exponential smoothing
  • Regression analysis
  • Econometric analysis

34
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)

35
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.

36
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.

37
Sales budget
  • Critical factors considered
  • past trends
  • Sales force estimates
  • Trade prospects
  • Present scenario
  • Customers existing and potential
  • Government policies
  • Industry environment

38
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.

39
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.

40
Reasons for territories
  • Increase / improve customer coverage
  • Control selling expenses
  • Effective evaluation of salesmans performance.
  • improve customer relations

41
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 )

42
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

43
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.

44
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

45
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.

46
Why Quotas ?
  • To help management motivate sales people.
  • To direct sales people where to put there
    efforts.
  • To provide standards of performance evaluation

47
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

48
QUOTA SETTING MECHANISM
  • S-specific
  • M-measurable
  • A-achievable
  • R-realistic
  • T-time bound

49
  • What is Motivation??
  • Drive to initiate an action.
  • The intensity of effort in an action
  • The persistence of effort over

50
Why motivation
  • Frequent rejection
  • Physical separation from company support
  • Direct influence on quality of sales presentation
  • Indirect influence on performance

51
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

52
Maslows theory
Self Actualisation
Esteem needs
Social needs
Safety needs
Physiological needs Food, clothing, shelter,
health care
53
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.

54
Frederick Herzberg theory
  • Two factor theory of motivation
  • Hygiene ,maintenance, or job context factors.(
    dis satisfiers )
  • Achievement, challenge, advancement, growth in
    the job. (satisfiers )

55
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
56
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
57
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.

58
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

59
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?

60
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.

61
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

62
Pre sale plan
  • Competitors knowledge structure-share-strategy-sy
    stems.
  • Customer knowledge attitudes-preferences-
    behavioural habits
  • Selling techniques

63
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.

64
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 ?)

65
  • 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?)

66
Need awareness
  • At this stage you need to THINK
  • Prospect and Salesperson should both be aware of
    the need. (remove blind spots)

67
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.

68
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.

69
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

70
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.

71
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

72
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.

73
The presentation
  • Attracting Attention
  • Creating Interest
  • Building Desire and conviction
  • Initiate Action to buy.

74
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.

75
Presentation methods
  • Consultative selling method problem-solution
    method.
  • Requirements are
  • Knowledge of the industry, clients company,
    awareness of key members needs,

76
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.

77
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,

78
Handling objections
  • Listen
  • Understand
  • Negotiate

79
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.

80
Negotiation
  • Plan pre determine firm and flexible
    factors define limits.
  • Ensure an atmosphere of trust , understanding and
    respect.
  • Define purpose and objective.

81
Negotiation styles
  • Win loose
  • Win Win
  • Loose - Loose

82
Closing the sale
  • Summarize
  • Advantage and disadvantage comparison
  • Opportunity benefit
  • Emotional appeal
  • Direct closure
  • A.A.F.T.OAlways Ask For The Order
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