Sales management

SALES MANAGEMENT
The only business function that generates
revenue.

sales management
2



Planning, direction and control of personal
selling including recruiting, selecting,
training, equipping, assigning, supervising,
compensating and motivating as these
tasks apply to the personal sales force.

shoebrhman@gmail.com

Sales management
3

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Management of the personal selling task.
Is there anything like ‘impersonal selling’ or
‘non-personal’ selling?
Selling is an exchange transaction. Exchange of
Product or service for money
Money is the revenue or the earnings of an
enterprise often called ‘turnover’ or ‘top line’
Sales therefore is the only revenue generating
function in an enterprise.

4

Objectives of sales
management
3 general underlying objectives:
1.
SALES VOLUME
2.
PROFITS
3.
GROWTH
Sales – cost of sales = gross margin.


Gross margin – expenses =net profit.


Sales management: evolution
5

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Industrial Revolution – 1760
Small home industries – Large scale
manufacturing –marketing – sales and
sales support
Concept of hunters and farmers
The modern day sales manager is both
an administrator in-charge of personal
selling activity and a member of the
group that makes marketing decisions
of all types.

The salesman
6

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…..they make more noise and more mistakes,
create more cheer, correct more errors, adjust
more differences, spread more gossip, hear
more grievances, pacify more belligerence
and waste more time under pressure, all
without loosing their temper, than any other
class of professionals –including politicians.


The salesman
7

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…they live in hotels, cabs and tents on trains,
buses, eat all kinds of food, drink all kinds of
liquids –good and bad- sleep before, during
and after business, with no sympathy from the
office.
They draw and spend more money with less
effort, they come at the most inopportune time,
under the slightest pretext, ask more personal
questions.
Yet they are a power in society…

The salesman
8

With all their faults, they keep the wheels of
commerce turning, and the currents of human
emotions running. More cannot be said any
man. Be careful whom you call a salesman,
lest you flatter him.
-Donald Benenson in Ziglar on Selling



Sales Management
9

“QUALITIES THAT LEAD TO EFFECTIVE SALES MANAGEMENT
ARE OFTEN OPPOSITE THE ATTRIBUTES OF A SUCCESSFUL
SALES PERSON”


Sales organization
10

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With various tasks required to be performed
the enterprise had to create a structure to
ensure that work is done. (the Sears story)
Principles of structure: authority, responsibility,
performance, support/co-ordinate.


Sales organization
11



Concept of organization: Group of individuals
working jointly to achieve a defined goal and
bearing formal and informal relations with one
another. An organization is oriented towards
and a co-operative endeavor and a structure
of human relationships.


Purpose of organization
12

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Eliminate waste of effort
Minimize friction
Maximize co-operation
Permit development of specialists
Ensure that all activities get done
Achieve co-ordination/balance
Define authority
Fix responsibility

Types of organization structures
13

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Line organization: line managers perform
sales and sales management activities.
Line and staff organization: Staff managers
have advisory or support responsibility.
e.g.Market research manager, Training
manager.They are not directly responsible for
achieving sales targets.


Organization structures
14

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Functional organization: focus is on the
principle of specialization. Each specialist has
a functional responsibility and are permitted to
direct and control the salesperson thru their
immediate superior.


Organization structure
15

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Horizontal structure.
Specialised structure:
Geographical;
Product;
Market or customer;
Combination of specialised structures.


Line Sales Organization structure
Head –Marketing

Sales Manager

Area Sales
Mgr

Area Sales
Mgr

Area Sales
Mgr

Sales Force

16

Area Sales Mgr

Sales Force

Sales Force

Sales Force

Clear authority & Responsibility
Quick response & Decision, Low Cost
Weak on marketing inputs
Sales manager controlled

Functional Sales Organization

Administrative Simplicity
Access to Specialists
Multiple reporting
HOD is Pressures to co-ordinate
17


Operations team
Operations team
Production
Production
QA
QA
Engineering Systems
Engineering Systems

Research & Design team
Research & Design team
Customer Research
Customer Research
Product / /Service design
Product Service design

Planning Team
Planning Team
Strategy
Strategy
Finance
Finance
HR
HR
COO
COO

Customer Support team
Customer Support team
Service
Service
Training
Training
Information
Information
18

Customer Satisfaction teams
Customer Satisfaction teams
Sales & Marketing
Sales & Marketing
Pricing & Promotion
Pricing & Promotion
Channels
Channels
Logistics
Logistics

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Sales relation with marketing
activities
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Sales &Advertising: both stimulate
demand. They need to be blended.
Salespersons can improve advertising
effectiveness. Advertising needs to
support sales where and when they
need it most.
Sales & Marketing information: data is
needed for analysis of sales problems,
for determining sales potential. Raw
data is collected by sales people.

relationships
20

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Sales and service: contributes to strategy
success.
Sales and distribution: minimizes stock out
situation; improves inventory control; helps
sales to focus on demand generation.
Sales & Production:
Sales and R&D
Sales &Finance


SALES PLANNING
a managerial function

21



EXISTING BUSINESS
LONG RANGE PLAN

3 TO 5 YEAR PROJECTIONS

ANNUAL OPERATING PLAN

REVISED YEAR TO YEAR

SEGMENTWISE PLAN

PAST TREND

GEOGRAPHICAL PLAN

PREVIOUS YEAR SALES

CUSTOMERWISE PLAN

CURRENT YEAR ACHIEVEMENT

PLAN BY VALUE

NEXT YEAR PLANS

PLAN BY VOLUME

ASSUMPTIONS

PLANNING FOCUS AREAS:
22
•

PROFITABILITY IMPROVEMENT

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A REGION OR TERRITORY CEASES TO CONTRIBUTE

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DISCONTINUATION OF SALES TO AN ACCOUNT

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DE-EMPHASISING PRODUCTS

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ACCEPTING A PRIVATE BRAND ORDER

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VARIANCE BETW
EEN BUDGET AND ACTUAL SALES

23

SALES PLANNING
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NE B INE S
W US S

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VIS
ION

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STRA
TEG Y

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*A O N PLA S
CTI
N

M S
IS ION

GOAL
S


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Key Deliverables of the Sales
function
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Planning
Organizing
Training
Motivating
Controlling
Leading


Sales planning
25

Forecasting a key planning tool
PRODUCT LEVEL –
total sales industry sales
company sales
product line sales
product variant sales
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Time period forecast
26

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Long Range
Medium range
Short term (range)


Planning process
27

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Sales plan

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Capacity plan

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Production plan

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Cash flow plan

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Procurement plan

Human resource plan

Sales forecast
28

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Why forecast?
One of the keys to success in sales is knowing
where customers are located and being able
to predict how much they will buy.


29

Sales forecasting;
Industry estimates
•

Objective definition

•

Identifying critical factors (assumptions)

•

Selecting method of forecasting

•

Collecting, analysing, interpreting data.

•

Concluding predictions.

Geographic Area forecast
30

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Nation
Region ( REGION OR ZONE )
Territory ( BRANCH / DISTRICT )
Customer


Forecasting Approaches
31

Top - down /Break –down approach
An SBU level forecast broken down to region,
district, territory, salesperson and individual
customer sales quotas
 Bottom –up /Build – up approach
Individual customer to branch to zone to
company level forecast



Methods of sales forecast
32

Qualitative methods:
Executive opinion
Delphi method – prediction by a panel
Sales force composite – ‘grass roots’ approach.
Test marketing –controlled or simulated
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Sales forecast methods
33

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Quantitative methods:
Moving averages
Exponential smoothing
Regression analysis
Econometric analysis


Selling situations
34

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Customer’s intention and expectation are specific.
(insurance, mobile service)
Customer is contacted over phone
Customer is an organizational buyer
Customer seeking service or solution
Customer in a retail store
Cold calling situation
Pharmaceutical selling
Creative selling ( ad.campaign)


The sales budget
35



To the sales department, the budget is a blue
print for making sales. It involves money
invested in distribution facilities, promotion
efforts, and sales personnel. It is the
foundation on which to plan sales objectives
and the means of achieving them during the
coming year.


Sales budget
36

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A budget is a quantitative expression of plans. Most
well managed enterprises use a budget which is a
comprehensive and coordinated plan for the
operations and resources of the enterprise.
It is a formal and intricate process
Approaches are either incremental or zero based.
In a volatile economic climate organizations
estimate optimistic, realistic and pessimistic
scenarios.


Sales budget
37

Critical factors considered:
1.
past trends
2.
Sales force estimates
3.
Trade prospects
4.
Present scenario
5.
Customers: existing and potential
6.
Government policies
7.
Industry environment

Number of sales people
38

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Decision on the size of the sales force is very
complicated because structure of the
customers vary in each territory, the level of
competition varies across territories, the
connectivity for travel varies etc.
There are 3 generally accepted approaches:
affordability, incremental and workload
methods.


Sales territories
39

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Definition : A sales territory consists of existing
and potential customers assigned to a sales
person. The territory may or may not have
geographic boundaries.


Reasons for territories
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Increase / improve customer coverage
Control selling expenses
Effective evaluation of salesman’s
performance.
improve customer relations


Territory design
41

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1.

2.

3.

4.

Main procedural steps:
Selection of a basic geographical control
unit
Determination of sales potential present
in each unit
Combining the basic units into tentative
territories
Adjust for differences in coverage
difficulty and readjust the tentative
territories ( build up / break down method
)

Territory design
42

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Build up method:
Decide call frequency
Calculate total no of calls in the unit
Estimate workload capacity of salesman Make
tentative territories
Develop final
territories


Territory design
43

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Break down method:
Estimate company sales potential for total
market.
Forecast
sales potential for each control unit.
Estimate sales expected
from each salesman.
Make tentative territories.
Develop final territories.


Routing Scheduling and control
44

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Reasons /advantages:
Maintain lines of communication
Improve territory coverage
Minimize wasted time
Closer scrutiny of sales force movement
Journey plans for improving customer
satisfaction


Quotas
45

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Quotas are quantitative goals assigned to
individual sales persons for a specified period
of time.
One of the most widely used tools in sales
management.
Should not be confused with sales potential or
sales forecast.
Quotas may be set equal to ,above or below
the sales forecast.

Why Quotas ?
46

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To help management motivate sales people.
To direct sales people where to put there
efforts.
To provide standards of performance
evaluation


Types of Quotas
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Sales volume Quotas : Rupee volume / Unit
volume-how much for what period.
Profit based Quotas: contribution / gross
margin
Activity Quotas: calls per day; sales meetings;
product demos; ( efforts = results.)
Expense Quotas


48

QUOTA SETTING
MECHANISM
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S-specific
M-measurable
A-achievable
R-realistic
T-time bound


49

Procedure for setting sales volume
quotas
Sales volume quotas derived from
territorial sales potentials
Total market estimate
Executive judgment alone
Sales person set own
Past sales experience alone


50

What is Motivation??
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Drive to initiate an action.

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The intensity of effort in an action

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The persistence of effort over


Why motivation
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Frequent rejection
Physical separation from company
support
Direct influence on quality of sales
presentation
Indirect influence on performance

Sales force motivation
52

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“the desire to make an effort to fulfill a need is
motivation”
Motivation includes three dimensions:
Direction, Intensity and persistence.
Motivation may also be Intrinsic or extrinsic
Maslow’s hierarchy of needs:


Maslow’s theory
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Self
Actualisation
Esteem needs
Social needs
Safety needs
Physiological needs
Food, clothing, shelter, health
care

MASLOW HIERARCHY OF NEEDS
’S
54

Intense job challenge, full potential, full
expression, creative expansion.
Achievement, respect, recognition,
responsibility, prestige, independence, attention,
importance, appreciation.
Belonging, acceptance, love, affection,
family
and group acceptance, friendships.
Security, stability, dependency, protection,
need for structure, order, law, tenure,
pension,
insurance.
Hunger, thirst, reproduction, shelter,
clothing,
air, rest.

Frederick Herzberg theory
55

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“Two factor theory” of motivation
Hygiene ,maintenance, or job context factors.(
dis satisfiers )
Achievement, challenge, advancement,
growth in the job. (satisfiers )


SELLING
56

THE WORD SELL IS DERIVED FROM A Norwegian WORD SELJE
WHICH MEANS TO SERVE
TO SERVE YOUR PROSPECTS YOU MUST UNDERSTAND THEIR
NEEDS.
PEOPLE INVARIABLY BUY WHAT THEY WANT, EVEN ABOVE
WHAT THEY NEED


The sales process
57

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Process: a sequential series of decisions and
or actions.
BUYING PROCESS

SELLING PROCESS

NEED
SEARCH
IDENTIFY
ISOLATE

PREPARE
FOCUS
DEFINE
PROPOSE/PRESENT

SELECT
BUY
CONSUME

HANDLE OBJECTIONS
CLOSE THE SALE
FOLLOW UP


The sales process
58

1.
2.
3.
4.
5.
6.
7.

Prospecting & Qualifying
Pre approach (pre call planning )
Approach
Presentation & Demonstration
Overcoming Objections
Trial close / Closing the sale
Follow –up and Service.


SELLING PROCESS
the Ziglar method
59

Focus on Prospects NEEDS and WANTS.
 Sell by design, not by chance.
Follow a proven 4 step formula:
NEED ANALYSIS
NEED AWARENESS
NEED SOLUTION
NEED SATISFACTION



Prospecting
60

Process of identifying potential buyers.
 A prospect has a reasonable probability of
buying ,has sufficient need to justify a
profitable sale ,has financial resources to buy
and can be classified as ‘eligible to buy’
MONEY? AUTHORITY? DESIRE?



Locating prospects
61

Lead generation – a three step process.
1.
Defining the target market :what it wants;
what it buys; where and when it buys; what it
buys; how it buys;
2.
Using communication tools to gather leads –
Advertising, Direct mail, Telemarketing,
Trade shows, buying data
3.
Qualifying the Leads.


62

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Selling first time to Prospects
(pre sale planning)
Adequate knowledge of the product to be sold,
company being represented, the market competition
,category or segment of customers and selling
techniques.
Product knowledge: Evolution-Features-BenefitsUniqueness-Price
Company knowledge: History-Values-AchievementsManagement-Policies

Pre sale plan
63

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Competitors knowledge :structure-sharestrategy-systems.
Customer knowledge :attitudes-preferencesbehavioural habits
Selling techniques :


Pre approach planning
64

Focus on understanding customer needs and
characteristics and preparing a proposal on how the
product or service offered can satisfy the need.
 Steps involved are:
Determining call objectives.
Development of customer profile.
Determine customer benefits.
Determine the flow and content of the presentation.



Understanding buyer’s needs
65

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Situational questions: questions about prospect’s
current situation. (who will decide? is it the first time ?
Changing source ?
Problem identification question: Questions to uncover
problems, difficulties or needs ( problems on quality,
delivery ?)
Problem impact questions: questions to make the buyer
realise the impact of the problem and the need to solve
it.( what will be the impact on costs , on customer
satisfaction ?)


66

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Solution value questions :questions to help
the buyer asses the value or usefulness of the
solution ( for x benefit how much would you
save ?
Confirmation questions: (how would an error
free system help?)


Need awareness
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At this stage you need to THINK
Prospect and Salesperson should both be
aware of the need. (remove blind spots)


Need solution
68

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Present your product
Time to stop asking questions and start
providing solutions.
People don’t buy products, they buy what the
product does for them.


Questions are the answer
69

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Thinking vs. feeling questions.
When you learn how the customer feels you
are more likely to find out what the person
thinks.( the seat belt case)
Tying emotion to logic.


The questioning process
70

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Three basic types of questions enable us to
discover the needs of our potential customers.
1st The Open Door Questions.-allows the
prospect the freedom to go where ever they
like. the “who, what where ,when, how and
why” questions


Questioning …
71

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The closed door question: “would you tell me
more”; “what do you mean by…Answers to
these give you information to helping the
prospect and building trust.


Questioning…
72

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“yes or no” questions demand a direct
response. “do you agree..” “would my
proposal..” “are we in agreement..”
They allow you to check on your progress on
the sales process. “trial close”


Presentation methods
73

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Stimulus response method: also called a ‘canned
approach’, a memorised sales presentation .It assumes
that if a right stimuli is made it will get a favourable
response.
Formula method: the AIDA process.
Need-satisfaction method: an interactive sales
presentation. The most challenging and creative
method. The FAB way.
Features, Advantages, Benefits.


The presentation
74

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Attracting Attention
Creating Interest
Building Desire and conviction
Initiate Action to buy.


75

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Team selling method: a multi person sales team deals
with a multi person buying centre (or buying
committees)
Sales team consists of Account executive, technical
support engineer, logistics expert, IT or systems
executive and Finance executive.
Buying committee consists of materials exec.
manufacturing/operations exec. supply chain exec.
Materials manager and Finance exec.


76

Consultative selling method: problem-solution
method.
Requirements are:
Knowledge of the industry, clients company,
awareness of key members needs,



Objections
77

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Objections , opposition , resistance to the
presentation typically happens during the
presentation or while asking for the order.
Objections should be welcomed.
Objections indicate that the prospect is
involved and not indifferent.
Objections reflect the prospect’s view.


Objections
78

1.

2.

Psychological ( hidden ) – includes predetermined ideas or beliefs, preference for
established brands, dislike of making
decisions , anxiety or resistance to spend
money , suspect about quality etc.
Logical or practical or real –delivery
schedule, high price , product availibility,


Handling objections
79

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Listen



Understand

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Negotiate


Methods of handling objections
80

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Ask questions: listen, rephrase, reconfirm the
objection and explain.
Turn objection into a benefit and trial close.
Deny objections tactfully. (arrogance and
sarcasm to be strictly avoided)
Testimonials, referals
Compensation for valid objections.


Negotiation
81

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Plan – pre determine ‘firm’ and ‘flexible’
factors; define limits.
Ensure an atmosphere of trust , understanding
and respect.
Define purpose and objective.


Negotiation styles
82

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Win – loose

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Win – Win

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Loose - Loose


Closing the sale
83

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Summarize
Advantage and disadvantage comparison
Opportunity benefit
Emotional appeal
Direct closure
A.A.F.T.O=Always Ask For The Order


Sales management

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