Download Sales Management

Dr. Shilpa Sindhu
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AMA’s definition
Planning, direction and control of personal selling,
including recruiting, selecting, equipping, assigning,
routing, supervising, paying and motivating as the tasks
apply to the personal sales force
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Modern sales managers
broader responsibilities
have
considerably
They are responsible for: ◦ Organizing sales effort within and outside organization
◦ Soliciting & preparing marketing information
◦ Participating in marketing decisions
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2.
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Before Industrial Revolution
Small scale enterprises dominated markets…dealt with nearby
customers
only…orders
procured
before
goods
were
produced…single individual supervised manufacturing and
selling…Sales considered as PART TIME function
Beginning of Industrial Revolution
Newly built factories produced large quantities…need to expand
market…selling still remained secondary; more important
business
problems

finding
labor,
acquiring
resources…separate functional departments owing to large scale
production…sales department were set up only after activation
of manufacturing & financial departments
Communicating with customers was still required
Wholesalers and retailers identified…separated company from
customers
Marketing activities of sales department gained importance
New departments organized for carrying out specialized
marketing functions
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Toward Top Management
◦ Obtaining sales volume
◦ Providing profit contributions
◦ Continuing business growth
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Toward Customers
◦ Easy supply products
◦ Support activities
◦ Assurance that products are wise investments
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Toward Society
◦ Assured supply of products to buyers at prices that they
are ready to pay
◦ Products having minimal potential to damage
environment
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Sales Volume
Profits
Growth
Sales – Cost of Sales = Gross Margin
Gross Margin – Expenses = Net Profit
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Coordinating with the following functions: ◦
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Organization
Planning
Elements of Marketing Program
Distributive Network
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Gaining product distribution
Obtaining dealer identification
Reconciling business goals
Sharing promotional risks
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Sizing up the situation
Setting quantitative performance standards
Gathering and processing data on actual
performance
Evaluating performance
Action to correct controllable variation
Adjusting for uncontrollable variation
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Inter-related
Salesmanship – a skill used in personal selling
◦ The art of successfully persuading prospects or
customers to buy products or services from which
they can derive suitable benefits, thereby increasing
their total satisfaction
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Emphasis of selling has been changed to
‘CONSULTATIVE SELLING’
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Service Selling
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Inside order taker
Delivery Salesperson
Route/Merchandising Salesperson
Missionary
Technical Salesperson
Developmental Selling
• Creative Salesperson – Tangibles
• Creative Salesperson - Intangibles
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Developmental Selling Unusual Creativity
• Political/Indirect/Back-Door Salespersons
• Salesperson Engaged in Multiple Sales
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AIDAS Theory
Right set of circumstances Theory
Buying Formula Theory
Behavioral Equation Theory
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Notion – A prospect goes through five mental
states consciously and hence the sales
presentation must lead the prospect through
them in the right sequence if the sale is to
result 5 states: 1.
2.
3.
4.
5.
Securing Attention
Gaining Interest
Kindling Desire
Inducing Actions
Building Satisfaction
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Situation – Response Theory
‘Everything was right for the sale’
Desired outcome of sale is a result of
circumstances created and/or managed right
by the salesperson
Set of circumstances includes factors external
and internal to the prospect.
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Salesperson’s role is to help buyers find
solutions to their needs and problems
Need  Solution  Purchase
Need  Solution  Purchase  Satisfaction
Need  Product & Brand Name  Purchase 
Satisfaction
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Explains buying behavior in terms of purchasing decision
process, viewed as phases of the learning process
Learning process elements: -
1.
2.
3.
4.
Drive (Innate & Learned)
Cue (Weak stimuli –Triggering & Non-triggering (product &
information) + Specific product and information cues)
Response – what buyer does
Reinforcement – any event that strengthens buyer’s tendency to
make a particular response
◦ Where: -
B=PxDxKxV
B = Response / Internal response Tendency (act of buying a brand or
patronizing a supplier)
P = force of habit (predisposition or inward response tendency)
D = Drive level (amount of motivation)
K = ‘Incentive potential’ i.e., value of the product or its potential
satisfaction to the buyer
V = Cues’ intensity (triggering, product or informational)
Prospecting &
Qualifying
Preapproach /
Precall planning
Approach
Presentation &
Demonstration
Follow-up &
Service
Trail close /
Closing the sale
Overcoming
Objections
As a part of selling activities, if salespeople follow the
steps or phases shown above, their chances of
success are far better.
Prospecting
It is identifying or finding prospects i.e. prospective or
potential customers.
• Methods of prospecting or sales lead generation are: (1)
referrals from existing customers, (2) company sources
(website, ads., tradeshow, teleprospecting), (3) external
sources (suppliers, intermediaries, trade associations), (4)
salespersons’ networking, (5) industrial directories, (6)
cold canvassing
•
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Qualifying
Companies qualify sales leads by contacting them by mail
or phone to find their interests (or needs) and financial
capacity.
• Leads are categorized as: Hot, Warm, and Cool
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Information gathering about the prospect.
Sources of information: the Internet,
industrial
directories,
government
publications, intermediaries, etc.
Precall planning
• Setting call objectives
• Tentative planning of sales strategy: which
products, features and benefits may meet the
customer needs
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•
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Make an appointment to meet the prospect
Make favourable first impression
Select an approach technique:
• Introductory
• Customer benefit – Insurance policy conversion
• Product – new & unique product
• Question
• Praise
• The approach takes a few minutes of a call, but it
can make or break a sale
There are four components:
a.
b.
c.
d.
Understanding the buyer’s needs
Knowing sales presentation methods /
strategies
Developing an effective presentation
Using demonstration as a tool for selling
Firms and consumers buy products/services
to satisfy needs
 To understand buyer’s needs, ask questions
and listen
 In
business
situations,
problem
identification and impact questions are
important
Example:
 Have you experienced any problems on
quality and delivery from the existing
supplies?
 What
impact the quality and delivery
problems will have on your costs and
customer satisfaction?
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Firms have developed different methods / styles / strategies
of sales presentation
 Stimulus response method / canned approach.
• It is a memorised sales talk or a prepared sales
presentation.
• The sales person talks without knowing the prospect’s
needs. Ex: Used by tele-marketing people
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Formula method / formulated approach.
• It is also based on stimulus response thinking that all
prospects are similar.
• The salesperson uses a standard formula – AIDA
(attention, interest, desire, and action).
• It is used if time is short and prospects are similar.
• Shortcomings are: prospects’ needs are not uncovered
and uses same standard formula for different prospects.
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Need – satisfaction method
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Consultative selling
solving approach
• Interactive sales presentation
• Most challenging & creative form of selling
• First find prospect’s needs, by asking questions and
listening
• Use FAB approach: Features, Advantages, Benefits
• Effective method, as it focuses on customers
method
/
• Salespeople use cross-functional expertise
• Firms adopt team selling approach
• It is used by software / consulting firms
Problem-
Plan the sales call
Some of the guidelines are:
 Adopt presentation to the situation and
person
 Communicate the benefits of the purchase
 Present relevant and limited information at
a time
 Use the prospect’s language
 Make the presentation convincing – give
evidence
 Use
technology
like
multi-media
presentation
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Sales presentation can be improved by
demonstration
Demonstration is one of the important
selling tools Ex: Test drive of cars;
demonstration of industrial products in use
Benefits of using demonstration for selling
are:
• Buyers’ objections are cleared
• Improves the buyer’s purchasing interest
• Helps to find specific benefits of the prospect
• The prospect can experience the benefit
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Objections take place during presentations
/ when the order is asked
Two types of sales objections:
• Psychological / hidden
• Logical (real or practical)
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Methods for handling and overcoming
objections: (a) ask questions, (b) turn an
objection into a benefit, (c) deny objections
tactfully, (d) third-party certificate, (e)
compensation
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Trial close checks the attitude or opinion of
the prospect, before closing the sale (or
asking for the order)
If the response to trial close question is
favorable, then the salesperson should
close the sale
Some of the techniques used for closing the
sale are: (a) alternative-choice, (b) minor
points, (c) assumptive, (d) summary-ofbenefits, (e) T-account, (f) special-offer, (g)
probability, and (h) negotiation
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Necessary for customer satisfaction
Successful salespeople follow-up in
different ways: For example,
• Check order details
• Follow through delivery schedule
• Visit when the product is delivered
• Build long-term relationship
• Arrange warranty service
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Qualitative
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Selling job
Service existing accounts
Obtain new accounts
Secure and maintain customers’ cooperation in
stocking and promoting product
Inform customers about changes
Advise
Training middleman’s salesperson
Solicit and manage marketing information
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Quantitative
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Market share
Sales volume
New accounts
Manage selling expenses
Secure targeted percentages
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Figure below shows how sales strategy is developed from
marketing strategy
Sales
Product /
service
strategy
Target
market
strategy
(Longterm)
promotion
strategy
Advertising
strategy
Promotion /
IMC* strategy
Marketing
Strategy
Personal selling /
sales strategy
Marketing
mix
strategy
(Shortterm)
Price
strategy
Public relations &
Publicity strategy
Distribution
strategy
Direct marketing
strategy
* IMC: Integrated Marketing Communication
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Influence
sales
executive’s
job
and
effectiveness
Provide guidance in drafting plans for
achieving organization’s personal selling
objectives
Salespersons influence policies
Salespersons bear ultimate responsibilities
for policy implementation
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Product Policies – What to Sell
◦ Relation to Product Objectives
◦ Product Line Policy
 Changes in product offerings
 Reappraising product line for line
simplification/diversification
 Ideas for new products
 Appraisal of proposed new products
◦ Product Design Policy
◦ Product Quality and Service Policy
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Distribution Policies – Who to Sell
◦ Policies on marketing channels
 Take into consideration:  Sales Volume Potential
 Comparative Distribution Costs
 Net Profit Possibilities
◦ Policies on distribution intensity
 Mass distribution
 Selective distribution
 Exclusive agency distribution
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Pricing Policies
◦ Relative to Competition
 Meeting competition
 Above competition
 Below competition
◦ Relative to Costs
 Full cost pricing
 Promotion pricing – consumer non durables
◦ Policy on uniformity of price
◦ Policy on discounts