Sales Management

Sales Management

Setting Organizing
objectives Planning Organizing activities

Recruit,
Motivate, select,
evaluate, train,
& control develop,
Controlling Directing
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, well-

trained 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 • Builds Relationships

• Identify best • Long term approach

prospects
• Assure buyers that
they will receive
• Adapt to situations appropriate services

• Engage in • Solves customer’s

communication 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 Society’s confidence

• Education process

• Build a chain of satisfied customers

Qualities of a Good Sales Manager
Sound health

Physical
Hardworking
Leadership
Personal Magnetism
Mental Forcefulness
Tact
Honesty
Character Humanity
Self Discipline
Mental
Sound Judgment
Intellectual Receptiveness
Ability to reach
 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 Satisfaction
Action
Desire
Interest

Attention

• Stimulus Response Theory

a) Self
b) Price Concession
c) Announcement of Price changes
d) Preferential treatment to important buyers

• Buying Formula Theory

a) It seeks answer to – why, what….
b) 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
Process/Steps in
in the
the Selling
Selling Process
Process
Step
Step1.1. Prospecting
Prospectingand
and Identifying and Screening For
Qualifying
Qualifying Qualified Potential Customers.

Learning
LearningAsAsMuch
MuchAsAsPossible
Possible
Step
Step 2.
2. Pre-approach
Pre-approach About
AboutaaProspective
ProspectiveCustomer
Customer
Before
BeforeMaking
MakingaaSales
SalesCall.
Call.

Knowing
KnowingHowHowtotoMeet
Meetthe
theBuyer
Buyer
Step
Step3.
3. Approach
Approach to
toGet
Getthe
theRelationship
RelationshipOff
Off
to
toaaGood
GoodStart.
Start.

Step Telling
Tellingthe
theProduct
Product“Story”
“Story”
Step4.
4.Presentation/
Presentation/ to
Demonstration tothe
theBuyer,
Buyer,and
andShowing
Showingthe
the
Demonstration Product
ProductBenefits.
Benefits.
Process/Steps
Process/Steps in
in the
the Selling
Selling Process
Process
Seeking Out, Clarifying,
Step
Step5.
5. Handling
HandlingObjections
Objections and Overcoming
Customer Objections to
Buying.

Step Asking the Customer

Step 6.
6. Closing
Closing
for the Order.

Step Following Up After the Sale to

Step7.
7. Follow-Up
Follow-Up
Ensure Customer Satisfaction
and Repeat Business.
 Alternative Steps

Find ’em
Find ’em
Grab ‘em
Grab ‘em

Show ‘em
Show ‘em

Answer ‘em
Answer ‘em

Sell ‘em
Sell ‘em
Keep ‘em
Keep ‘em
 Creative Selling Process

Identify
Identify and
and Qualifying
Qualifying
Prospects
Prospects
•• Prospecting:
Prospecting: Identifying
Identifying
likely
likely new
new customers
customers
–– Leads
Leads
•• Qualifying:
Qualifying: Evaluating
Evaluating aa
prospect’s
prospect’s potential
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
• Company’s record
• Newspaper
• Retailers
• Other Methods
Creative Selling Process

Pre-Approaching
Pre-Approaching the
the
Prospect
Prospect

•• Learn
Learn about
about the
the industry
industry
•• Competitor’s
Competitor’s analysis
analysis
•• Knowledge
Knowledge about
about
prospect
prospect
 Sources of Information

• Newspapers
• Company’s Record
• Customers
• Special Investigation
• Fellow Salesman
• Retailers
• Directories
• Other Sources
Creative Selling Process

Approaching
Approaching the
the Prospect
Prospect
•• Contact
Contact

•• Rapport
Rapport

•• “Only
“Only one
one chance
chance to
to
make
make aa first
first impression”
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
Sales Presentation
Presentation
•• Persuasive
Persuasive communication
communication
•• Attention
Attention
•• Interest
Interest
•• Desire
Desire
•• “Tell
“Tell the
the product’s
product’s
story”
story”
•• Create
Create Need
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
Handling Objections
Objections
–– Questions
Questions
–– Reservations
Reservations
•• Understand
Understand Concern
Concern
•• Counterarguments
Counterarguments
•• Acknowledge
Acknowledge concern
concern
•• Clues
Clues to
to process
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

• “Yes…but” method
• Reverse English method
• Indirect denial method
• Comparison method
• Another angle method
• Testimonial method
• Question or why method
Creative Selling Process

Closing
Closing the
the Sale
Sale

•• Closing
Closing signals
signals

•• Trial
Trial close
close

•• Ask
Ask for
for the
the sale
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
Following Up
Up
•• Commitments
Commitments met
met
–– Shipment
Shipment
–– Performance
Performance
•• Reinforce
Reinforce // Strengthen
Strengthen
relationship
relationship
•• Satisfied
Satisfied customers
customers
rebuy
rebuy && recommend
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 Buyer’s Interaction
Actual users of the company’s 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 • Servicing
Compensation Distributor & Customer traveling
Travel n Entertainment Technical Counseling
Prospect Seminar
Discount & Allowances • Support
Recruitment & Selection
• Advertising & Promotion Budget T&D
Media Sales Meetings
Catalogues Customer Services
Fairs n Exhibition Warehousing
Samples, Models, Displays
Selling aids • Fulfillment
Contest & Deals Packing & Shipping
Billing
• Administration Credit
Office Expense Warranty
Telephone & Postage Returns
 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
Geographic divisions
divisions
•• Customer
Customer types
types
•• Product
Product lines
lines
 Geographic Division

Vice-President
Marketing

Regional Sales Regional Sales

Manager Manager

District Sales District Sales District Sales District Sales

Manager Manager Manager Manager

Sales Rep Sales Rep Sales Rep Sales Rep

East Region West Region South Region North Region
 Customer Type

Vice-President
Sales

New Accounts Existing Accounts

Manager Manager

New Account New Account Existing Existing

#1 #2 Account #1 Account #2
 Product Line

Vice-President
Sales

Snack Foods Beverages

Sales Manager Sales Manager

Sales Rep Sales Rep Sales rep Sales Rep

Eastern Region West Region 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 company’s 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 Effort Performance

Satisfaction Reward
 Factors Motivating Sales Person

• Work Culture
• Adequate & fair earnings
• Appreciation, Recognition & respect
• Spirit of Competition
• Opportunity for growth
• Killer’s Instinct
• Future Security
Sales Manager’s 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
Compensation Methods
Methods

Straight
Straight
salary
salaryor
or
wage
wage
Salary
Salaryplus
plus Straight
Straight
commission
commission commission
commission

Quota-bonus
Quota-bonus Commission
Commission
plan
plan with
withdraw
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
company’s policies, objectives & methods
employed by the top management

n
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