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Service Selling:
Inside order taker Delivery Sales Person Missionary Field Sales Person Technical Sale Person
A Securing Attention I Gaining Interest D Kindling Desire A Inducing Action S Building Satisfaction
Sales Management
Supervising
Sales Managers
Motivating
Planning
Recruiting
Training
Managing
a sales force involves recruiting, hiring, training, supervising, compensating salespeople, motivating them to become problem solvers, and providing the proper planning and backup support so they can perform their jobs properly.
Planning
Organizing
Customer Needs/wants
Evaluate & control Motivate Training & Development
Controlling
Directing
Compensation
Identifying Needs
Preapproach/ Planning Approach Presentation Handling Objections Closing the Sale Follow up
What makes for a good sales presentation? Built on a strategy The sales person s mental preparation Overall presentation
Strategy
A good sales presentation contains objectives as well as explicit plans of action Good sales strategies should be built from strong selling theory
S-A-L-E-S
S for Self-Confidence A for Appearance L for Listening E for Enthusiasm S for Service
People buy benefits not features The better the salesperson understands the buyers needs, the easier it will be to relate benefits to the prospect Words- use words meaningful to the prospect Showmanship-success stories, demonstrate the product, always handle the merchandise in a way that conveys respect, get the prospects involved, must be tailored to each prospect and salesperson Feedback- After presenting benefits, obtain feedback from the prospects
Approach The general problem The specific problem The companys product or service as the preferred solution The close
Physical appearance Ability to ask questions Willingness to be a good listener Skill in getting the prospects to talk about themselves or something of interest to them Offering a compliment on something the prospect has done
Needs Assessment
Ask questions and listen The cost of buying, maintaining, and driving an automobile today has become prohibitively expensive Most people I talk to about
I would like to share an idea that has been valuable to other dealers here.
The broad problem is to moved to a specific problem The stronger the prospect needs, the more the prospects will want a solution
Believe in your product Believe in yourself Work on your timing Develop a sense of humor Realize that your customer isn t necessarily telling you 100% of what they want Good Manners
High energy & Stamina Verbal Skills (Persuasiveness) Knowledge of Customer Needs Empathy
Sales organisation as a unit must ensure that the production of the organisation must reach the end consumer. Revenues that are generated from customers move back to the organisation.
TO Define Authority: A sales person gets directions from various sources Attempt should be made to define authorities Line Authority: Authority flows from top to bottom and reporting is upward Functional Authority: Specialist from different functional areas give required instructions To Economise on executive time:
Setting up of sales organisation It is required from time to time to make necessary Changes due to Expansion of New Markets Extension of New Product Line Change in Management Diversification
Steps that are involved while setting up a sales department 1. Defining Objectives: There could be general objectives like; Qualitative objectives Industry Leadership Becoming Customer Oriented Company Establishing an image of public responsibility Offering quality product
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2. Determining activities and setting up targets and performance standards Many necessary or similar activities can be grouped together These activities can differ from organisation to organisation 3. Setting up and assigning responsibilities and translating them into Jobs or positions. Each position should contain required activities and Variations It can vary according to size of the organisation
4. Assigning Personnel to Position: Special Individual for the tasks or experienced individual 5. Provision for co-ordination and control Executive who has others reporting to him (line authority) would Require means to control his subordinates. This executive should not be over burdened with details and un-delegated responsibilities. Must not be over burdened with too many subordinates Reporting him; weakens the quality of control.
Measures for Control and Coordination Formal Job Description Reporting relationships Job Objective Duties Responsibilities Performance measurements Organisational Chart Organisational Manual it contains write ups for job Description, specifications, objectives and policies Lead by example Informal Good Leadership Qualities Team Building
Authority Based: Line, Line and Staff, Functional Product or Division Based Geographical
Needs to have right balance He has insufficient time Managerial effectiveness becomes impaired
Line and Staff Sales Organisation Found in Large and Medium size companies Employing substantial numbers of sales personnel Selling diversified Product lines Spread over wide geographical areas. Top sales executives are facilitated with a group of specialists / Experts in: Dealer and Distribution relations Sales Analysis / Planning / Promotions / Training
The control of the market is still handled through Line System of Control. Sales Executives report in the line authority but would get necessary support from other functional authorities in his territory.
Merits:
Specialisation Line Executives are eased out of the pressures Outsourcing costs are reduced Immediate corrective measures can be taken Top line managers get more time to attend Human aspects: Team Building, Motivation, Training
Demerits
Costs are high More co-ordination is required Possibility of evading responsibility; avoidance of handling Unwanted responsibilities Time between problem recognition and corrective Measures may widen
Need for Fragmentation of sales organisation arises due to: To convert the volume of business into manageable units More Concentration on each product line / geographic area is desirous To ensure less conflicts among different executives Fragmentation could be done mainly in line authority
The fragmentation could be done on the basis of Product Division / Customer Type / Geographic Area
Reason for fragmentation could be : Expansion of the market / product line / customer type Local Problems could be handled effectively and faster by decentralisation Characteristics of customers vary Products or services could be altered according to preferences Local competitors could be countered more effectively
Vice-President Sales
Vice-President Sales
New Account #1
New Account #2
Existing Account #1
Existing Account #2
Vice-President Marketing
Sales Rep
Sales Rep
Sales Rep
Sales Rep
Lucknow Allahabad
Mumbai
Indore
Wrong recruitment may lead to problems like: Loss of sales Tarnished image of the company High attrition rate and economic loss
Customer Perspective Information Solution for Problems After Sales Services Facilitating
Organisation Perspective Spokes Person Inventory Maintenance Revenue Generation Building Relationship
To decide what type of applicant is needed, the Manager should first outline the duties the person will Perform. The sales manager must have a clear picture of the job Requirements before beginning the recruitment. Job may involve: Hunting Prospects; locating intermediaries, prospective customers Obtaining and disseminating information Selling the Product / Services; maintaining profitability Inventory turnover
Profit Built Up; revenue generation, ensuring entire Product line / mix are sold, receivables are managed within a time limit.
Minimizing operational expenses; covering territory in Cost effective way. Information Flow; SWOT, Trends, Feedback, Complaints, Forecasts Execution of Organisation Policies; discount, distribution, Pricing, promotions
Recruitment Process
After understanding the requirements of a sales job Analysis and assessment of all activities JOB ANALYSIS should be done In order to find out facts like; 1. What a sales person is supposed to do specifically 2. What system he follows: Sell across the counter Mode to reach customers Demonstrate Order Taking only Developing new territory or assume established one
3. His work place, working hours, day to day activities 4. Kind of people he would be associated and do Business with JOB DESCRIPTION: Organized Factual statement that Covers a. Job Title b. Job Objective c. Position and authority of the job d. Accountability and responsibility in terms of reporting relationship like Accountable to ASM and responsible for Sales in given Territory Handling dealers network Collections
e. Working hours fixed / flexible f. Mode of traveling (local / upcountry) g. Pay package, perks and incentives h. Performance standards JOB SPECIFICATION: specific qualifications and Characteristics required in the sales person to perform The job. Example: Job of Training Dealers
A Sales Person s Job Specification could include: 1. Academic Qualifications / Technical Qualification 2. Social Characteristics Age, Family Background, Marital Status, Region he belongs to 3. Experience, Positions handled, Staff / Team Handled 4. Personality Traits- Assertive, outgoing, friendly The company should look at internal as well as external Sources for recruiting a person.
Various sources for searching applicants 1. Candidates within the company 2. Competitor s Staff; fully trained staff It is attractive they may look for promotion higher salary or conducive work culture Carry a database of their own customers 3. Campus Selections 4. Release of an Advertisements Must be specific Avoid attracting unwanted applications 5. Self Approaches; should be kept in databank and referred at the time of recruitment
6. Placement Agencies They maintain a database of people with different Qualifications, experiences and traits Agencies work mainly on commission basis in varied forms They may undertake the primary work of Issuing / releasing advertisement Screening applications Holding preliminary round of interviews The process saves time and effort.
Compensation Plans
Sensitive decision to take
Manager has to strike a balance between Adequate payment to match the performance; Sales person is not de-motivated AND Keep expenses within specified budget Profits of the company are kept to the maximum
What is Compensation Plan Monetary as well as non-monetary expenses incurred Monetary like Salary and Wages; contractual Non-monetary like welfare expenses; non-contractual Sales Manager has to plan the levels of compensation for each position in consultation with the HR department
Compensation has Motivational Roles Providing payments for acceptable standard of living Co-relating performance and rewards to keep productivity high and consistent It could be an aid to effective motivation but not the entire motivational program. Motivation has other components also like; Work Culture Policies Working Conditions Growth prospects
Objectives of an effective Compensation Plan from A Sales Manager s Perspective 1. Attracting best talents and retaining them 2. Within cost and budget 3. Utilisation of team at optimum cost 4. Accounting for individual differences, attitudes and capacities 5. Considering size and working conditions of each Sales Territory 6. Keeping pace with industry norms Considering salaries of other departments
What a Sales person should look for in a compensation Plan; 1. Meet acceptable living standard 2. Consistency in the income 3. Performance linked incentives 4. Simple and Comprehensive Plan; take home, Deductions, calculations of incentives 5. Timely Payments 6. Scope for future growth
Preparing a Compensation Plan Things to be kept in mind 1. Simplicity; easily understood 2. Adequacy; to maintain a decent standard of living 3. Flexibility; to cater to different market conditions, territories & competition 4. Fairness; no bias, 5. Maintain Economy 6. Helpful in attaining organisational and individual goals
Preparing a Compensation Plan 1. Define Sales Job; Job Description 2. Consider Companies General Compensation Structure; Job Evaluation: orderly approach to judge relative importance of the job. Focus is on the activities involved in the job, without Considering the ability or personality Purpose is to arrive at fair compensation relationships among jobs
Methods of Job Evaluation a. Simple ranking based on job description and their worth Worth: total expense to be incurred for hiring or appointing the person and the revenues that an individual can generate b. Classification of Grading; individual jobs are compared with the help of assigning grades Jobs are segregated into different classes according to Job responsibilities, skills required, duties, reporting Relationships, working conditions
All jobs within a grade are treated alike with respect to base compensation c. Point System: Involves defining and combining Factors common to most jobs and points are given. Mental & Physical Skills, minimum level of education, Supervision, personality traits etc 3. Consider Compensation standards in the Industry 4. Provide for various compensation elements
6. Consult The present sales force 7. Bring out tentative plan in writing 8. Revise the plan 9. Implement the Plan
Types of Compensation Plan Straight Salary Plan Assumption is; the executive will achieve the expected Volumes of sales within the specified period. Specified period could be different for different products. The executive is paid irrespective of sales volume he achieves The plan could include the Basic Salary, HRA, TA/DA, Conveyance etc. in addition to statutory Payments
Merits: A. Strong Financial Control: Field work & Selling activities can be flexibly Adjusted without affecting the sales personnel s Monetary gains B. Security to Sales Personnel: Safety against uncertainties like, Seasonal Fluctuations in sales Change in demand & Supply equations Other measures like; Advertising drive, events, change in price
C. Simple to administer Used for industrial sales personnel, those working in Distribution network, as delivery personnel. Demerits A. Lack of incentives; leads to general performance B. Common yardstick is used for compensating all; no considerations for different situations C. May lead to under or over compensation D. Inflexible to adjust to changing conditions
Sales personnel get paid for the sales volume that he achieves Different organisations use different types of commission Plans like; Per unit, As a percentage to sales, Differential Rates progressive or regressive changes in commission
Merits: A. Performance oriented; payments made only if sales are generated Low performers are not over compensated. B. Incentives and Motivation are in built; C. Means of Cost Control; Liability of paying occurs only if sales are generated Direct selling expenses fluctuate with sales volume. D. Freedom of Operations; sales person is not subjected to any extra pressure of annual increments and reviews. Sales personnel can decide his own salary
Demerits: A. Uncertainty; B. Lack of Control over operations for a company Sales person is his own boss & not liable to fall in the System of reporting; submitting reports; time frames. Difficult for Sales Manager to control and manage. C. Market prices can be dropped to sell higher quantities. D. Difficult to fix up the commissions; Differences in potential markets, brand acceptance, Selling efforts
E. Rate of attrition may be high Loyalty of sales person remains only till he gets lucrative business F. Easy to sell products may be pushed other could be neglected G. Sales person may use pressure tactics to sell; leads to lost goodwill H. Sales Person s efficiency may drop due to uncertainty of income.
Determining Commission Base Selection of the base could be done keeping in mind Selling Policies; Needs & Problems of the company like Obtaining sales volume is main concern Collection on sales Excess of cancellations; commission could be fixed on payments billing or shipments.
Combination Plan Objective is to employ a team that is secures as well As satisfied The incentives may start from unit ONE or from a cut off Point Merits: A. Security and Motivation for sales personnel B. Management has better control on sales activities C. More loyal and dedicated sales executives Demerit: Administrative costs increase
BONUS These are different from commissions Could be of two types: Statutory; On sales Plan; Paid for accomplishing a specific sales task; a fixed amount of % A Sales Quota Performing certain promotional activities Successfully carrying out assigned tasks
Sales Bonuses are not used alone; a part of main compensation plan Bonus conditions could be made clear at the time of fixing up the compensation plan FRINGE BENEFITS These Benrfits do not have any direct relationship to the job performance Some of the benefits are statutory Pension Plans, Fund Deductions, Medical Benefits Accident Covers
Companies also provide these benefits for; Being competitive in the industry To retain talent Basically provide to fulfill safety and security needs Help to prevent job-dissatisfaction Different Fringe Benefits based on Time; Holidays, Vacations, Leaves Insurances Laundry, Lunch, Education for kids, Training etc.
Basic Responsibility High productivity of sales force does not come naturally; very few are self motivated. Normally each individual is motivated at a given point; this should be recognised by the sales manager. Identifying motivating factors which act as a catalyst to act, is crucial.
Isolating the factors that are exclusive for each individual as well as the group
Inherent Nature of the Job: Sales job involves UPS and DOWNS & series of experiences that lead to EXHILARATION or DEPRESSION long working hours, interaction with different types of customers , turn down, being away from home
Role Conflict: Sales Executive has interaction with Sales Management, Distribution Network, Customers, Peers Each Group has separate set of expectations While satisfying these an individual faces role conflicts like Conflict of Identification: arises out of being members of Multiple groups. Advocacy Conflict: customer s position as well that of organisation
Tendency towards apathy : Monotonous job leads to lost interest & enthusiasm
Gradually sale calls are degenerated into routine order taking In order to find out what dissatisfies or to identify motivating factors a sales manager can take the help of Various Motivation Theories
MASLOW S THEORY OF NEED HIERARCHY Humans are wanting beings. Their needs are unlimited as soon as one set of needs are satisfied Another set appears. A satisfied need is no more a motivator, and looses its Strength or power as a motivator. A manager can harmonise the individual goals with that of the organisation.
Factors that lead to motivation and job satisfaction are not The same as those leading to apathy and job dissatisfaction Job satisfaction is not opposite to job dissatisfaction Two separate groups of needs are related to Job satisfaction Avoiding job dissatisfaction
Hygiene Factors Interpersonal relationships Work conditions Company policies Job security Salary Personal life
Absence
Job Dissatisfaction
Presence
Motivation, Opportunity
Motivating Factors Achievement Work itself Recognition Growth Potential Responsibility Promotions
Motivation
Job Satisfaction
ACHIEVEMENT MOTIVATION THEORY All individuals are self motivated but extent of Need achievement feeling varies If a person spends considerable time thinking about doing His job better, he would have need for achievement Individuals with high need for achievement possess certain Traits: They like problem solving Take personal responsibility for finding solutions Want continuous feedback on how they are doing
EXPECTANCY MODEL
Extent to which an individual will act in a certain way depends upon the strength of an expectation that The act will give desired outcome
Directly proportionate
Individual needs
Individual Efforts
Performance Perceived Reward- Punishment Organisational Rewards/ Punishments A sales person needs counseling to view their own Competencies realistically.
Sales Manager s Tools for Motivation Sales Manager can use many systems and methods To motivate his field staff He can use financial as well as non-financial tools to Keep motivation high. He can motivate his team at individual as well as group level Individual Level Motivation Personal Counseling Correspondence: congratulatory letters, mementoes Personal Rewards: monetary
Sales Territories
Taking the cues from need for fragmentation
Total market place is divided into smaller manageable And commercially viable units. A sales territory is comparatively homogeneous in a heterogeneous market. A sales territory may represent: Geographical area Customer Type Industry Type
Companies normally emphasise on geographical division as it is easy to divide and administer, no overlapping
Companies that may ignore geographical division could be From: Highly technical products; require specialised persons New or innovative products Sales territories are set up mainly to facilitate planning & Control of sales operations
Need for dividing territories 1. Break up of companies objectives Budget, Activities, Full focus and due attention 2. Efficient Market Coverage All perspective areas, Sufficient Time, Effort & attention. Allocation of required adequate selling effort 3. Cost Effectiveness While assigning a territory, service requirement and cost of providing the service should match profitably
A good territory design combined with careful assignment of salesperson will lead to low selling expense and high volume of sales. Too large territory: High expense, high time spent on road. 4. Helpful in Evaluating Sales Personnel: Volumes of sales and problems vary largely in different Market areas Management can evaluate each individual s performance against sales and cost responsibility 5. Sales Force Morale:
Well designed territory would be; a. Conveniently covered by sales person b. He would have reasonable workload c. Less conflict on duplicity of calls d. Sense of ownership 6. Better customer relationship A sales person can meet the customer at regular interval For orders To disseminate policies, information Handle complaints faster and solve them
Procedure for setting up a sales territory 1. Selecting the basis for territory Geographic: Region, zone, cities, districts etc. Industry: for office supplies, maintenance etc. Customer: Institutional, Consumer 2. Determining Sales Potential: Maximum possible sales opportunities open to a specific company during stated future period. Combine geographical unit with potentials to justify a particular territory
3. Shaping up a tentative territories: Assuming that all sales persons are of average ability; number of territories are decided. How the territory could be covered during a given Time period.
Each territory though may be similar in potential would require different selling effort. Adjustments could be made in size of the territory & number of sales force assigned. Things to be kept in mind for adjustments Number and location of customers & prospects Estimated average time required for each sales call Time required in traveling from one customer to another; density Call frequency Number of calls possible during a day, in a week or A month.
9) Differences in negotiation styles 10) Differences in decision making 11) Status and Protocol 12) Social aspects of international negotiations 13) Perceptions of time 14) Personal Relationships
Japan
Mexico
No. Authoritarian style reflects mgrs individualism; subordinate development is not mgrs function No. May indicate to subordinates that mgr is unsure of own job; maintaining social distance is important Low. Plans appear to restrict mgrs personal expression
Middle East
No. Authority rests at the top; delegation depends on personal relationship
Importance of Planning
Yes. Subordinate development is primary mgt. Function; worker suggest-ions are sought and accepted Yes. Subordinates Yes. Subordinates contribute to decisions; participate in and believed to improve initiate decisions; motivation and per consensus of all employees is sought High. Problem solving High. Planning is is valued, planning is a valued, more emphasis tool for decision on long-term planning making emphasis on short-term planning Direct and frank Polite, respectful; patience in difficult topics Doing well for the firm is an essential component of career success
Maintenance of pleasant relationships; avoidance of difficult issues Firms and mgrs goals Career success is are one and the same; based on personal mgr identifies with relations with firm superiors
Tone depends on position, power, or family influence Success dependent on contacts and being of the right social position
Selling in France
Dress conservatively, except in the south where more casual clothes are worn. Do not refer to people by their first names; the French are formal with strangers.
Selling in Germany
Be especially punctual. An American businessperson invited to someone s home should present flowers, preferably unwrapped, to the hostess. During introductions, greet women first and wait until they extend their hands before extending yours.
Selling in Italy
Whether you dress conservatively or go native in a Giogio Armani suit, keep in mind that Italian businesspeople are style conscious. Make appointments well in advance. Prepare for and be patient with Italian bureaucracies.
Toasts are often given at formal dinners. Business entertaining is done more often at lunch than at breakfast or dinner.
An American women should wait for a man to extend his hand before offering hers. When a Saudi offers refreshment, accept; declining it is an insult.
Selling in Japan
Don t imitate Japanese bowing customs unless you understand them thoroughly--who bows to whom, how many times, and when. It s a complicated ritual. Carry many business cards, present them with both hands so your name can be easily read, and hand them to others in descending rank. Examine and acknowledge Japanese business cards handed to you. Expect Japanese business executives to take time making decisions and to work through all the details before making a commitment.
THANK YOU VERY MUCH FOR PATIENTLY CARRYING THROUGH THE ENTIRE SEMESTER ALL THE BEST
Selling Theories
Stimulus-Response Theory Mental States Theory Need Satisfaction Theory Problem-Solution Theory
Stimulus-Response Theory
States: When a subject is exposed to a given stimulus, he or she will respond in a certain manner When reinforced by multiple exposures, the response becomes virtually automatic Good for canned presentations Best used in simple or straightforward situations Low priced items Limited time Unsophisticated salespeople
Stimulus-Response Theory
Assumes the prospects needs can be stimulated by exposure to the product The salesperson does not know what the prospects needs are All aspects of the product are covered and then the prospect is asked to buy Everyone is told the same thing Problems with this method:
1) Talks about features and not benefits 2) Uses the same pitch or canned presentation 3) Assumes the salesperson is in total control 4) Limited prospect participation
A prospects mind goes through a logical sequence of states in any buying situation
Good for canned presentations Allows for a logical sequence of events (know when to move from one stage to the next)
A (Attention) and I (Interest)- Can the presentation to get quick attention and interest so the prospect will listen D (Desire)- Translates features into benefits A (Action)- used to make the sale
People buy products and services to solve problems/meet needs Typically has three parts
Determining the prospects needs Getting the prospects agreement on the need Offering a solution to that need
Allows the prospect to be more involved in the presentation Focuses on the needs of the prospect Two-way communication Need experienced salespeople for this approach
What are you looking for? What type of computing needs does you company have?
Listen to the prospect then show how the product or service will satisfy the prospects needs. Salesperson may feel less control using this method More challenging and more experience is needed
Problem-Solution Theory
Combination of need satisfaction theory and the scientific approach to problem solving
1) Helps the prospect identify the problem or needs 2) Help suggest possible alternative solutions 3) Explores the advantages and disadvantages of each alternative 4) Identifies the best solution
Customer oriented Helps build strong and close professional relationships with the prospects Time and talent intensive
Sales Techniques
Product Knowledge
Operational Knowledge
Customer Service
Sales Techniques
Are you using the right presentation style? Product Knowledge Did you built trust? Did your sales technique built value for the customer?
Operational Knowledge
Customer Service
Operational Knowledge
Customer Service
Sales Techniques
Product Knowledge
Do you know how to complete the sale from an operational view? Paperwork Delivery Legalities
Operational Knowledge
Customer Service
Sales Techniques
Did you treat the customer in a way that would gain their respect? Product Knowledge Did you provide the level of service needed?
Operational Knowledge
Customer Service