Sales Management

Sales Management
Setting objectives

Planning

Organizing Organizing activities

Motivate, evaluate, & control

Controlling

Directing

Recruit, select, train, develop, manage, & motivate

Sales Management
Sales means transfer of goods & services for money Management of sales is concerned with the selling function The planning, direction and control of personal selling including recruitment, selecting, equipping, assigning, routing, supervising, paying & motivating, these tasks apply to personal sales force

Objective of Sales management

Increase Sales Volume Profit Maximization Growth

Function of Sales management

Sales Planning Sales Forecasting Organizing Co-ordination Staffing Controlling Directing Budgeting Decision making

What is Selling?
Process of contacting potential customers, presenting & demonstrating the product or service, taking orders, delivery of goods & collection of payment In Modern Marketing, Selling is a means of promotion i.e. persuasive communication. It persuade a prospective buyer to buy goods & converts a prospect into a customer.

What is Personal Selling?

Involves Two-Way, Personal Communication Between Salespeople and Individual Customers either:
   

face to face, by telephone, through video conferencing, or by other means.

Nature of Personal Selling

Most salespeople are well-educated, welltrained professionals who work to build and maintain long-term relationships with customers. The term salesperson covers a wide spectrum of positions from:
Order taker (department store salesperson) Order getter (someone engaged in creative selling) Missionary salesperson (building goodwill or educating buyers)

Characteristics of Personal Selling

Flexibility Identify best prospects Adapt to situations Engage in communication Builds Relationships Long term approach Assure buyers that they will receive appropriate services Solves customers problems

Personal Selling Limitations

Can not reach mass audience Expensive per contact Labour intensive Numerous calls needed to generate sale

The Role of the Sales Force

Represent the Company to Customers to Produce Company Profit Sales Force Serves as a Critical Link Between a Company and its Customers Since They:

Represent Customers to the Company to Produce Customer Satisfaction

Some Traits of Good Salespeople

Attitude

Salesmanship
Art of selling goods & services to the buyer Personal linkage to customer Power or ability to influence People to buy or turn a prospect into a buyer. Process to convert a suspect into prospect then into buyer An ability to remove ignorance, doubt, suspicion, emotional objection, concerning the usefulness of a product

Features of Salesmanship
Ability to persuade Benefits both buyer & seller Commercial honesty Winning Societys confidence Education process Build a chain of satisfied customers

Qualities of a Good Sales Manager

Sound health

Physical
Hardworking Leadership Personal Magnetism

Mental
Honesty

Forcefulness Tact

Character

Humanity Self Discipline Mental Sound Judgment Receptiveness Ability to reach

Intellectual

Duties & Responsibility of Sales manager

Planning sales Advising management Selection & Appointment Co-ordination & Directing Training the Sales Force Compensating the Sales Personal Maintaining the sales office Controlling the sales activity Study market condition Allocation of sales Territory & sales Quota Managing Sales promotion & advertisement

Theories of Selling
AIDAS
Action Interest Attention Desire Satisfaction

a) b) c) d)

Stimulus Response Theory

Self Price Concession Announcement of Price changes Preferential treatment to important buyers

a)
b)

Buying Formula Theory

It seeks answer to why, what. It takes into account the internal factors and less importance to external factors

Personal Selling

It is oral presentation in a conversation with one or more prospective purchasers for the purpose of making SALES - AMA

Functions of Personal Selling

To make Sales Service to Customers Keeping Sales Record To Develop good relation with the client To develop goodwill of the company To achieve sales target

Process/Steps in the Selling Process

Step 1. Prospecting and Qualifying
Identifying and Screening For Qualified Potential Customers. Learning As Much As Possible About a Prospective Customer Before Making a Sales Call. Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Telling the Product Story to the Buyer, and Showing the Product Benefits.

Step 2. Pre-approach

Step 3. Approach

Step 4. Presentation/ Demonstration

Process/Steps in the Selling Process

Step 5. Handling Objections
Seeking Out, Clarifying, and Overcoming Customer Objections to Buying.

Step 6. Closing

Asking the Customer for the Order.

Step 7. Follow-Up

Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Alternative Steps
Find em
Grab em Show em Answer em

Sell em Keep em

Creative Selling Process

Identify and Qualifying Prospects Prospecting: Identifying likely new customers
Leads

Qualifying: Evaluating a prospects potential

Characteristics of Good Prospect

Need to buy Ability to buy Authority to buy Accessibility

Methods of Prospecting
Acquaintances references Cold Calling Center of influence method Personal Observation method Direct mail or telephone method Companys record Newspaper Retailers Other Methods

Creative Selling Process

Pre-Approaching the Prospect Learn about the industry Competitors analysis Knowledge about prospect

Sources of Information
Newspapers Companys Record Customers Special Investigation Fellow Salesman Retailers Directories Other Sources

Creative Selling Process

Approaching the Prospect Contact Rapport Only one chance to make a first impression

Methods to Approach
Personal call without introduction Personal call with introduction Sending the business card Writing for an appointment Appointment over telephone Use of sales proposal letter Sending the Company Brochure

Creative Selling Process

Sales Presentation Persuasive communication Attention Interest Desire Tell the products story Create Need

Essential features of a Presentation

Arousing Interest Promptness in presentation Clarity in presentation Showing proper quantity & quality Demonstration & dramatization Appealing to the senses Suggests Test Handling the Goods

Creative Selling Process

Handling Objections
Questions Reservations

Understand Concern Counterarguments Acknowledge concern Clues to process

Objection
It is the expression of disapproval of the action taken by the salesman. They are the feelings of disapproval & usually raised by the prospects

Procedure for handling Objection

Listen attentively Anticipating objection Admitting valid objection Preventing objection

Some Common Objection

Price Offer substitute Justify the price Offer discount Offer installment payment Price factor can be avoided Payment objection Service Objections Time to buy

Methods of Handling Objection

Superior feature method Yesbut method Reverse English method Indirect denial method Comparison method Another angle method Testimonial method Question or why method

Creative Selling Process

Closing the Sale Closing signals Trial close Ask for the sale

Closing
Closing is the process of helping people makes a beneficial decision. It may be positive or negative as well

Reason for Unsuccessful Closing

Wrong Attitude Inadequate presentation Wrong interpretation Interruption A trial close

Methods of Closing a Sale

Affirmative close Erecting barriers Narrowing the choice Offering inducements Assumption close Pros n Cons method Summarization of Sales points Implying that a sale is made

Creative Selling Process

Following Up Commitments met
Shipment Performance

Reinforce / Strengthen relationship Satisfied customers rebuy & recommend

Objective of Personal Selling

To understand Selling Job Search for new customers Maintain regular contact with customers To obtain the desired market information To increase overall volume of sales To serve & retain market share To remove the doubts from the customer's mind To keep the selling expenses within limits To provide technical assistance to customer wherever necessary To convince the customers about the quality of product & increase the credibility of company To keep customers informed regarding changes in the product line & other related aspects To give feedback to the company about its product & service in the market

Advantages of Personal Selling

Allowing for 2-way communication Tailoring of the message Lack of distraction Involvement in the decision process. Source of research information

Disadvantages of Personal Selling

Inconsistent Messages Sales force/Management Conflict High Cost Poor Reach to Market Potential ethical problems

Approach to be adopted by Retail Sales Man

Attract the hesitant customer Welcome the customer Greet the customer Offer seat Opening Sentences Willingness to serve Right Attitude Avoid too many question Tell important selling points Welcome objection, questions, etc Deal with lookers properly

Goal Setting
It involves establishing specific measurable & time targeted objectives

Goal Setting Process

Reflection (definition of goal) Focus Plan (How to go about it) Enlist support along with time Revisit the goals after implementation

Sales Forecasting
It is an estimate in monetary terms (sales), or physical units for a specified future period under a proposed marketing plan or program and under an assumed set of economic and other forces outside the unit for which the forecast is made. The forecast may be for a specified item or for an entire line or for a market or for a specified geographical area. It includes consideration of outside uncontrollable forces as well as internal proposed change in marketing strategy

Objectives of Sales Forecasting

A. Short Term
      Formulation of suitable production policy Provision of raw materials Appropriate pricing policy Regular availability of labour Forecasting of short term financial requirements Setting of sales target

B. Long Term
      Estimating cash inflows Determining dividend policy Man-power planning Planning of plant capacity Budgetary control over expenses Forecasting of long term financial requirement

Techniques of Sales Forecasting

1. Judgemental Method:
 Executive Opinion Method Establish a jury, panel or committee of certain high ranking executives, which is charged with the development of a sales forecast. They can be from different fields such as Sales, Marketing Research, Finance, Production etc. Advantages
Easy & simple Based on experience hence elaborative statistics is not required Economical

 Sales Force Composite Method It is aggregate of individual sales personnel's forecast. It is then scrutinized & discussed at each successive executive level & if necessary modification are made. Advantages
Result are nearly accurate as result producer are responsible for it. Utilization of specialized knowledge of sales personnel. Imposes greater confidence in sales Personnel

 Survey of Buyers Interaction Actual users of the companys product are contacted and are asked to submit the estimated quantities to purchase the product, they expect to buy in a given future period. Total sales is then made after the compilation of data. Advantages
Quite expensive Easy to estimate as actual buyer is involved It is one of the finest method for test marketing as well as product for limited territory. Suitable for short run forecasting.

 Expert Opinion Opinions are collected from the outsider specialists in the field. Opinions appeared in newspaper, journals, seminars, workshops etc may form the basis of sales. By analysis forecasting can be done Advantages
Forecasting can be done easily & rapidly Opinions of experts makes it nearly accurate Suitable for launch of new product or where past sales record is not available. Much economical due to no spending on surveys

 Market Test Method Introduce the product in a part of targeted market & analyze the future sales.

2. Statistical Methods
 Trend Method
o Time Series Analysis o Exponential Smoothing o Continuity Extrapolation  Regression Techniques Here an attempt is made to estimate a statistical series of dependable variables through fitted relationship by using independent variables, to which the first is related instead of using regularly spaced time intervals. Steps involved: o Determine the factors that affect the sales o Measure the degree of relationships b/w sales & other variables o Forecast the dependent variables from the independent variables

 Advantage of Statistical Method

 They help describe in measurable objective terms, the factors & their relationship with the sales  The degree of reliability is indicated  These methods force the forecaster to quantity assumption underlying his estimates & thus unable checking of result by the management  All major factors are taken into account which influence sales.

Disadvantages of Statistical Method

 Does not rely on personnel skills & experience  Involve complicated statistical method  Requires considerable technical skill & experience for it to be effective

Sales Budget
It is a detailed statement of estimates of sales volume in terms of quantities & revenue & also the estimated sales expense during a given period.

Procedure
Situation Analysis Identification of problem & opportunity Development of sales forecast Formulation of Sales Objectives Determination of sales tasks Specification of resource requirement Finalization of projection Presentation & review Revision of sales Budget Approval of Budget

Types of Sales Budget

Selling Budget
Compensation Travel n Entertainment Prospect Seminar Discount & Allowances

Servicing
Distributor & Customer traveling Technical Counseling

Support
Recruitment & Selection  T &D Sales Meetings Customer Services Warehousing

Advertising & Promotion Budget

Media Catalogues Fairs n Exhibition Samples, Models, Displays Selling aids Contest & Deals

Fulfillment
Packing & Shipping Billing Credit Warranty Returns

Administration
Office Expense Telephone & Postage

Sales Territory
A Sales Territory is a grouping of customers & prospects assigned to an individual Salesperson

Why Sales Territory

Providing proper market coverage Controlling selling expense Evaluating Sales Personnel Contributing to sales force morale Co-Ordination of personal selling & advertising efforts Planning & Control at lowest organizational level Meeting the competition more effectively

Basis for establishing Sales Territory

Geographic divisions Customer types Product lines

Geographic Division
Vice-President Marketing

Regional Sales Manager

Regional Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

Sales Rep
East Region

Sales Rep
West Region

Sales Rep
South Region

Sales Rep
North Region

Customer Type
Vice-President Sales

New Accounts Manager

Existing Accounts Manager

New Account #1

New Account #2

Existing Account #1

Existing Account #2

Product Line
Vice-President Sales

Snack Foods Sales Manager

Beverages Sales Manager

Sales Rep Sales Rep Eastern Region West Region

Sales rep Sales Rep Eastern Region West Region

Sales Quota
Quantitative objectives assigned to specific sales organization unit or marketing unit. A marketing unit can be a salesperson or a sales territory, such as Sales Distributor or Sales region. It provide standards for evaluating the performance of marketing units either in physical terms or in rupee terms. A sales quota is a part of a companys total estimated sales assigned to a salesman / territory / branch / distributor /dealer or to some other selling unit, as a goal to be attained in designated future period of time.

Objective behind Sales Quota

To provide quantitative performance standards To obtain tighter sales & expense control To motivate desired performance Sales Contests Others:
 To obtain more effective budgetary control.  To ensure systematic individual sales achievement to cope with the sales forecast  To maximize sales in physical & in monetary terms  To ensure a systematic & rational physical distribution of goods

Advantage of Sales Quota

Evaluation of Sales performance Controlling Selling Expenses Source of motivation Maximization of Sales & Profit

Disadvantage of Sales Quota

Low Quota Fixation Less Personnel contact with customers if target is achieved Wastages of Resources if under-utilized May incur loss Not based on statistical methods, hence may be vague.

Sales Organization
S.O. is the learning, directing & controlling of sales person including recruitment, selection, training, equipping, assigning, routing, supervising, paying, motivating, as these tasks apply to the personal force.

-AMA

Importance of Sales Organization

Increase managerial efficiency & specialization Better co-ordination & control Advantage of large scale production-profitability Creates demand of goods Reconciliation of complaints

Function of Sales Organization

Planning Function
 Sales Forecasting  Sales Budgeting  Selling Policy

Administrative Function
    Selecting Salesman Training Salesman Controlling Salesman Remuneration of Salesman

Executive Function
 Sales Promotion  Selling Routine

Various deptt of Sales Organization

Sales Deptt. Advertising Deptt. Sales Promotion Deptt. Credit & Collection Deptt. Personal Deptt. Market Research Deptt. Public Relation Deptt.

Directing the Sales Force

Recruiting and selecting Motivating Training & develop Compensating

Recruitment of Sales Person

Process
Job Analysis Determination of the characteristics & qualities to be processed by the salesperson Tapping the various sources of recruitment Carefully selection of the candidates Appointment Letter o Internal Recruitment Promotion, Transfer, Re-Employment o External Recruitment Advertisement, Employment Exchange, Recommendation, Colleges & Education Institutions, Competing Firms, Whole seller & Retailers

Motivation of Sales Person

It is the process of Stimulating people to perform in order to accomplish desired goals (William G. Scott) It is a force that directs our Behaviour

Importance of Motivation
Improve Performance Relax Tension Make Sales force happy

Motivation Satisfaction

Effort

Performance Reward

Factors Motivating Sales Person

Work Culture Adequate & fair earnings Appreciation, Recognition & respect Spirit of Competition Opportunity for growth Killers Instinct Future Security

Sales Managers tool for Motivation

Remuneration Plan Promotion Personal Contact & Counseling Correspondence Training Participation Positive Feedback Job Clarity Sales Contest Publications- Bulletins, Magazines, Journals etc Honours & Awards

Training the Sales Force

Sales Training is the international & sound application of ordinary human sense to the problem of helping the sales personnel to make the most of its talents.

Importance of Training
Improve Sales performance Influence prospects in a better way Provides experts knowledge Reduces Wastages Reduces control & supervision Develops high morale Low turnover of Sales Force

Content of Training
About Company About Product/Services Target on after sales Services Business Ethics Selling Skills Reporting Systems Sales Policy Customers Market & Competition Channel of Distribution

Compensating the Sales Force

It refers to the monetary & Non-Monetary expenses incurred by the sales organization, for paying the services rendered by the sales force. It is, thus, the total [payment including monetary (Salary & Wages) & Non-Monetary (Welfare Expense)

Importance of Compensation
Attract efficient & desirable Sales People Keep sales force satisfied Retain Sales Force Maintain good relation b/w employer & employee Correlating Sales Costs & Sales Results

Compensation Methods

Straight salary or wage Salary plus commission Straight commission

Quota-bonus Quotaplan

Commission with draw

Characteristics of Sound Compensation

Simplicity Fairness Incentives Flexibility Control Guaranteed Income Economical to administer Help to attain objective Competitiveness

Performance Evaluation
It is done to assess the weakness & strength of the sales personnel & also the companys policies, objectives & methods employed by the top management

Management Cycle or steps of evl

Establishing performance Standards Recording actual performance Evaluating actual against standards Taking appropriate action

Evaluation and Control

Required reports Measurement against plan or sales standards Expense control Productivity New account development