Title: Sales management
1Sales management
- The only business function that generates revenue.
2sales 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.
3Sales 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.
4Objectives of sales management
- 3 general underlying objectives
- SALES VOLUME
- PROFITS
- GROWTH
- Sales cost of sales gross margin.
- Gross margin expenses net profit.
5Sales 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.
6The 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.
7The 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
8The 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
10Sales 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.
11Sales 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.
12Purpose 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
13Types 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.
14Organization 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.
15Organization structure
- Horizontal structure.
- Specialised structure
- Geographical
- Product
- Market or customer
- Combination of specialised structures.
16Line Sales Organization structure
- Clear authority Responsibility
- Quick response Decision, Low Cost
- Weak on marketing inputs
- Sales manager controlled
17Functional Sales Organization
- Administrative Simplicity
- Access to Specialists
- Multiple reporting
- HOD is Pressures to co-ordinate
18Research 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
19Sales 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.
20relationships
- 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
21SALES PLANNINGa managerial function
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
22PLANNING 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
24Key Deliverables of the Sales function
- Planning
- Organizing
- Training
- Motivating
- Controlling
- Leading
25Sales planning
- Forecasting a key planning tool
- PRODUCT LEVEL
- total sales -
- industry sales
- company sales
- product line sales
- product variant sales
26Time period forecast
- Long Range
- Medium range
- Short term (range)
27Planning process
- Sales plan
- Capacity plan
- Production plan
- Cash flow plan
- Procurement plan
Human resource plan
28Sales 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.
29Sales forecasting Industry estimates
- Objective definition
- Identifying critical factors (assumptions)
- Selecting method of forecasting
- Collecting, analysing, interpreting data.
- Concluding predictions.
30Geographic Area forecast
- Nation
- Region ( REGION OR ZONE )
- Territory ( BRANCH / DISTRICT )
- Customer
31Forecasting 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
32Methods of sales forecast
- Qualitative methods
- Executive opinion
- Delphi method prediction by a panel
- Sales force composite grass roots approach.
- Test marketing controlled or simulated
33Sales forecast methods
- Quantitative methods
- Moving averages
- Exponential smoothing
- Regression analysis
- Econometric analysis
34Selling 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)
35The 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.
36Sales 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.
37Sales budget
- Critical factors considered
- past trends
- Sales force estimates
- Trade prospects
- Present scenario
- Customers existing and potential
- Government policies
- Industry environment
38Number 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.
39Sales 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.
40Reasons for territories
- Increase / improve customer coverage
- Control selling expenses
- Effective evaluation of salesmans performance.
- improve customer relations
41Territory 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 )
42Territory 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
43Territory 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.
44Routing 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
45Quotas
- 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.
46Why Quotas ?
- To help management motivate sales people.
- To direct sales people where to put there
efforts. - To provide standards of performance evaluation
47Types 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
48QUOTA 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
50Why motivation
- Frequent rejection
- Physical separation from company support
- Direct influence on quality of sales presentation
- Indirect influence on performance
51Sales 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
52Maslows theory
Self Actualisation
Esteem needs
Social needs
Safety needs
Physiological needs Food, clothing, shelter,
health care
53MASLOWS 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.
54Frederick Herzberg theory
- Two factor theory of motivation
- Hygiene ,maintenance, or job context factors.(
dis satisfiers ) - Achievement, challenge, advancement, growth in
the job. (satisfiers )
55SELLING
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
56The 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
57The sales process
- Prospecting Qualifying
- Pre approach (pre call planning )
- Approach
- Presentation Demonstration
- Overcoming Objections
- Trial close / Closing the sale
- Follow up and Service.
58SELLING 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
59Prospecting
- 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?
60Locating 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.
61Selling 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
62Pre sale plan
- Competitors knowledge structure-share-strategy-sy
stems. - Customer knowledge attitudes-preferences-
behavioural habits - Selling techniques
63Pre 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.
64Understanding 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?)
66Need awareness
- At this stage you need to THINK
- Prospect and Salesperson should both be aware of
the need. (remove blind spots)
67Need 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.
68Questions 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.
69The 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
70Questioning
- 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.
71Questioning
- 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
72Presentation 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.
73The presentation
- Attracting Attention
- Creating Interest
- Building Desire and conviction
- Initiate Action to buy.
74Presentation 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.
75Presentation methods
- Consultative selling method problem-solution
method. - Requirements are
- Knowledge of the industry, clients company,
awareness of key members needs,
76Objections
- 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.
77Objections
- 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,
78Handling objections
- Listen
- Understand
- Negotiate
79Methods 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.
80Negotiation
- Plan pre determine firm and flexible
factors define limits. - Ensure an atmosphere of trust , understanding and
respect. - Define purpose and objective.
81Negotiation styles
- Win loose
- Win Win
- Loose - Loose
82Closing the sale
- Summarize
- Advantage and disadvantage comparison
- Opportunity benefit
- Emotional appeal
- Direct closure
- A.A.F.T.OAlways Ask For The Order