Sales Management

PlanningPlanning OrganizingOrganizing

DirectingDirectingControllingControlling

Settingobjectives

Organizingactivities

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

Motivate,evaluate, & control

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

Sales Management

• Increase Sales Volume

• Profit Maximization

• Growth

Objective of Sales management

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

Function of Sales management

• 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 Selling?

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

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

What is Personal Selling?

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)

• Flexibility

• Identify best prospects

• Adapt to situations

• Engage in communication

• Builds Relationships

• Long term approach

• Assure buyers that they will receive appropriate services

• Solves customer’s problems

Characteristics of Personal Selling

• Can not reach mass audience

• Expensive per contact

• Labour intensive

• Numerous calls needed to generate sale

Personal Selling Limitations

The Role of the Sales Force

Sales Force Serves as a Critical Link

Between a Company and its Customers Since They:

Represent Customers to

the Company to Produce Customer

Satisfaction

Represent the Company to

Customers to Produce Company Profit

Some Traits of Good Salespeople

Attitude

• 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

Salesmanship

• Ability to persuade

• Benefits both buyer & seller

• Commercial honesty

• Winning Society’s confidence

• Education process

• Build a chain of satisfied customers

Features of Salesmanship

Qualities of a Good Sales ManagerSound health

HardworkingPhysical

Mental

Leadership

Personal Magnetism

Forcefulness

Tact

Character

Intellectual

Honesty

Humanity

Self Discipline

Sound Judgment

Receptiveness

Ability to reach

Mental

• 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

Duties & Responsibility of Sales manager

• AIDAS

• Stimulus Response Theorya) Self

b) Price Concession

c) Announcement of Price changes

d) Preferential treatment to important buyers

• Buying Formula Theorya) It seeks answer to – why, what….

b) It takes into account the internal factors and less importance to external factors

Theories of Selling

Attention

InterestDesire

Action

Satisfaction

“ It is oral presentation in a conversation with one or more prospective purchasers for

the purpose of making SALES”

- AMA

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

Functions of Personal Selling

Step 1. Prospecting and Qualifying

Step 1. Prospecting and Qualifying

Identifying and Screening For Qualified Potential Customers.

Process/Steps in the Selling ProcessProcess/Steps in the Selling Process

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.Step 2. Pre-approachStep 2. Pre-approach

Step 3. ApproachStep 3. ApproachKnowing How to Meet the Buyer

to Get the Relationship Off to a Good Start.

Knowing How to Meet the Buyerto Get the Relationship Off

to a Good Start.

Step 4. Presentation/ Demonstration

Step 4. Presentation/ Demonstration

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Step 5. Handling Objections Step 5. Handling Objections

Step 6. Closing Step 6. Closing

Step 7. Follow-Up Step 7. Follow-Up

Seeking Out, Clarifying, and Overcoming

Customer Objections to Buying.

Asking the Customerfor the Order.

Following Up After the Sale toEnsure Customer Satisfaction

and Repeat Business.

Process/Steps in the Selling ProcessProcess/Steps in the Selling Process

Alternative Steps

Find ’emFind ’em

Grab ‘emGrab ‘em

Show ‘emShow ‘em

Answer ‘emAnswer ‘em

Sell ‘emSell ‘em

Keep ‘emKeep ‘em

Identify and Qualifying Prospects

• Prospecting: Identifying likely new customers– Leads

• Qualifying: Evaluating a prospect’s potential

Identify and Qualifying Prospects

• Prospecting: Identifying likely new customers– Leads

• Qualifying: Evaluating a prospect’s potential

Creative Selling Process

• Need to buy

• Ability to buy

• Authority to buy

• Accessibility

Characteristics of Good Prospect

• Acquaintances references• Cold Calling• Center of influence method• Personal Observation method• Direct mail or telephone method• Company’s record• Newspaper• Retailers• Other Methods

Methods of Prospecting

Pre-Approaching the Prospect

• Learn about the industry • Competitor’s analysis • Knowledge about

prospect

Pre-Approaching the Prospect

• Learn about the industry • Competitor’s analysis • Knowledge about

prospect

Creative Selling Process

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

Sources of Information

Creative Selling Process

Approaching the Prospect

• Contact

• Rapport

• “Only one chance to make a first impression”

Approaching the Prospect

• Contact

• Rapport

• “Only one chance to make a first impression”

• 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

Methods to Approach

Sales Presentation• Persuasive communication• Attention• Interest• Desire• “Tell the product’s

story”• Create Need

Sales Presentation• Persuasive communication• Attention• Interest• Desire• “Tell the product’s

story”• Create Need

Creative Selling Process

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

Essential features of a Presentation

Handling Objections– Questions– Reservations

• Understand Concern

• Counterarguments

• Acknowledge concern

• Clues to process

Handling Objections– Questions– Reservations

• Understand Concern

• Counterarguments

• Acknowledge concern

• Clues to process

Creative Selling Process

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

Objection

Procedure for handling Objection

• Listen attentively

• Anticipating objection

• Admitting valid objection

• Preventing objection

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

Some Common Objection

• Superior feature method• “Yes…but” method• Reverse English method• Indirect denial method• Comparison method• Another angle method• Testimonial method• Question or why method

Methods of Handling Objection

Closing the Sale

• Closing signals

• Trial close

• Ask for the sale

Closing the Sale

• Closing signals

• Trial close

• Ask for the sale

Creative Selling Process

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

Closing

Reason for Unsuccessful Closing

• Wrong Attitude

• Inadequate presentation

• Wrong interpretation

• Interruption

• A trial close

• 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

Methods of Closing a Sale

Following Up

• Commitments met– Shipment– Performance

• Reinforce / Strengthen relationship

• Satisfied customers rebuy & recommend

Following Up

• Commitments met– Shipment– Performance

• Reinforce / Strengthen relationship

• Satisfied customers rebuy & recommend

Creative Selling Process

• 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

Objective of Personal Selling

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

Advantages of Personal Selling

Disadvantages of Personal Selling• Inconsistent Messages• Sales force/Management Conflict• High Cost• Poor Reach to Market• Potential ethical problems

• 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

Approach to be adopted by Retail Sales Man

It involves establishing specific measurable & time targeted objectives

Goal Setting

Goal Setting Process

• Reflection (definition of goal)

• Focus

• Plan (How to go about it)

• Enlist support along with time

• Revisit the goals after implementation

“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

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

Objectives 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

Techniques of Sales Forecasting

Survey of Buyer’s InteractionActual 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 OpinionOpinions 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 Analysiso Exponential Smoothingo 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 saleso Measure the degree of relationships b/w sales & other variableso 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

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

Sales Budget

Types of Sales Budget

• Selling BudgetCompensationTravel n EntertainmentProspect SeminarDiscount & Allowances

• Advertising & Promotion BudgetMediaCataloguesFairs n ExhibitionSamples, Models, DisplaysSelling aidsContest & Deals

• AdministrationOffice ExpenseTelephone & Postage

• ServicingDistributor & Customer travelingTechnical Counseling

• SupportRecruitment & SelectionT&DSales MeetingsCustomer ServicesWarehousing

• FulfillmentPacking & ShippingBillingCreditWarrantyReturns

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

individual Salesperson

Sales Territory

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

• Geographic divisions

• Customer types

• Product lines

• Geographic divisions

• Customer types

• Product lines

Basis for establishing Sales Territory

Geographic DivisionGeographic Division

Sales RepEast Region

Sales RepWest Region

Sales RepSouth Region

Sales RepNorth Region

District SalesManager

District SalesManager

District SalesManager

District SalesManager

Regional SalesManager

Regional SalesManager

Vice-PresidentMarketing

Customer TypeCustomer Type

New Account#1

New Account#2

ExistingAccount #1

ExistingAccount #2

New AccountsManager

Existing AccountsManager

Vice-PresidentSales

Product LineProduct Line

Sales RepEastern Region

Sales RepWest Region

Sales repEastern Region

Sales RepWest Region

Snack FoodsSales Manager

BeveragesSales Manager

Vice-PresidentSales

• 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.

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

Objective behind Sales Quota

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

Advantage of Sales Quota

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.

“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

Sales Organization

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

• 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

Function of Sales Organization

• Sales Deptt.

• Advertising Deptt.

• Sales Promotion Deptt.

• Credit & Collection Deptt.

• Personal Deptt.

• Market Research Deptt.

• Public Relation Deptt.

Various deptt of Sales Organization

Directing the Sales Force

• Recruiting and selecting

• Motivating

• Training & develop

• Compensating

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-Employmento External Recruitment – Advertisement, Employment Exchange,

Recommendation, Colleges & Education Institutions, Competing Firms, Whole seller & Retailers

Recruitment 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

Motivation of Sales Person

Importance of Motivation• Improve Performance• Relax Tension• Make Sales force happy

Motivation Effort Performance

Satisfaction Reward

• Work Culture

• Adequate & fair earnings

• Appreciation, Recognition & respect

• Spirit of Competition

• Opportunity for growth

• Killer’s Instinct

• Future Security

Factors Motivating Sales Person

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

Sales Manager’s tool for Motivation

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

Training the Sales Force

• 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

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

Content of Training

• 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)

Compensating the Sales Force

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 MethodsCompensation Methods

Straight Straight salary orsalary or

wagewage

Straight Straight salary orsalary or

wagewage

Salary plusSalary pluscommissioncommission

Salary plusSalary pluscommissioncommission

StraightStraightcommissioncommission

StraightStraightcommissioncommission

CommissionCommissionwith drawwith draw

CommissionCommissionwith drawwith draw

Quota-bonusQuota-bonusplanplan

Quota-bonusQuota-bonusplanplan

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

Characteristics of Sound Compensation

It is done to assess the weakness & strength of the sales personnel & also the

company’s policies, objectives & methods employed by the top management

Performance Evaluation

Management Cycle or steps of evl n

• 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