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Managing the Sales Force

Recruitment and
selection
Training
Sales Budgeting/
Sales Quota
Supervising and
Managing
Moti vating
Evaluating
Compensating and
rewarding
Steps in Sales Force Management
Development of the Marketing Concept
Production
Concept
Selling Concept
Product Concept
Marketing /
Customer Orientation
Key Players in Business
Customers
Competition
Company
4Ps/4 Cs/4As in Marketing Mix
Robert Lauterborn suggested that the sellers four Ps correspond to
the customers four Cs.
4 Ps 4 Cs 4 As
Product Customer Solution Acceptability
Price Customer Cost Affordability
Place Convenience Availability
Promotion Communication Awareness
Market Vs Product Strategy Mix-
Anshoffs Model
Diversification
Market
Development/
Segmentation
New
Markets
Product
Development
Market
Penetration
Present
Markets
Market
Dimension
New
Products
Present
Products
Product Dimension
Source: Ansoff
Types of sales
Types of selling
1. Product selling (eg: Copier machines, printers, Mobile Phones, credit card)
2. Services selling
3. Consulting selling ( KPMG, Mckinsey)
4. Solution selling/ systems sales ( eg-IT Solutions companies like Infosys, Wipro)
5. Project sales ( L&T, Siemens)
6. Sell through Vs sell to
7. B2 B Sales Vs B 2 C Vs B 2 G
Cold Lead
Vs
Warm lead
vs
Hot lead
Funnel?
6 Areas of focus
1. Business Knowledge
2. Industry Knowledge
3. Company Knowledge
4. Product Knowledge
5. Sales Knowledge
6. Soft skills
ASKS of a Sales Manager
A : Attitude
S : Skills ( soft skills and hard skills)-Negotiation Skills,
Relationship Skills, Communication/Presentation Skills
K : Knowledge
S: Speed ( quick in responseetc)
No skill?(Level Zero).then Acquire?then master?
Negotiation
Negotiation is the process of trying to find an agreement
between two or more parties with differing views on, and
expectations of, a certain issue.
Some people dread negotiating because they associate it with
conflict, bad feelings, and having to make sacrifices.
However, good negotiations find a balance between each
partys objectives to create a win-win outcome.
Competiti ve negotiations
Competitive negotiations often
have an unfriendly atmosphere
and each party is clearly out to
get the very best deal for
themselvesthe other partys
objectives tend not to come
into the equation.
Co-operati ve negotiations
In co-operative negotiation,
conflict is minimised and the
whole idea is to reach a solution
where everyone benefits.
This approach tends to produce
the best results, mainly because
there is much better
communication between the
parties.
1.BATNA
BATNA, a concept developed by Roger Fisher and
William Ury.
is the acronym for Best Al ternati ve To a Negotiated
Agreement.
It is ones preferred course of action in the absence
of a deal.
Knowing your BATNA means knowing what you will
do or what will happen if you fail to reach agreement
in the negotiation at hand.
2.Reservation Price
The reservation price (also referred to as the walk-
away) is the threshold point at which one will accept
a deal.
Theres a subtle difference between your BATNA and
your reservation price.
3.ZOPA
The ZOPA, or zone of possible agreement, is a third
key concept in negotiation.
ZOPA is the area or range in which a deal that
satisfies both parties can take place.
Each partys reservation price determines one end of
the ZOPA.
4.Value Creation
Another fundamental concept of negotiation is value
creation . trades.
This concept tells us that negotiating parties can
improve their positions by trading the values at their
disposal.
4.Value Creation Through Trades
For a supplier, that greater value might take the form of an
extended delivery period.
For a customer, greater value at low cost might take the form of
three years of free repair services / warranty.
For an employee, the opportunity to work from a home office
two days each week may produce great satisfaction while
costing the employer nothing.
Just be sure that if you give something of value, then you ask
for something in trade.
Sources of Value Creation
Evidence -References, research, reports etc. People tend to accept the
written word.
Competitive edge -Is there anything you can offer that your competitors
cannot?
Competence -Clearly being skilful and having done your homework gives
you confidence and power
Commitment -Being passionate about your case is powerful and impresses
the other party.
Risk-taking -Being prepared to take a reasonable risk gives an impression
of power and confidence
Money -The fact that your organisation has financial strength is a source of
power.
Personal warmth -People do deals with people they like: good
relationships bring power.
4 Key Concepts of Negotiation- Summary
BATNA is the best alternative to a negotiated agreement. It is
ones preferred course of action in the absence of a deal.
Knowing your BATNA means knowing what you will do or what
will happen if you fail to reach agreement. Dont enter a
negotiation without knowing your BATNA.
Reservation price is the price at which the rational negotiator
will walk away. Dont enter a negotiation without a clear
reservation price.
ZOPA is the zone of possible agreement. It is the area in which
a deal will satisfy all parties. This area exists when the parties
have different reservation prices, as when a home buyer is
willing to pay up to Rs.75,00,000 and the home seller is willing
to take an offer that is at least Rs. 50,00,000.
Value creation can help you gain premium.
Key Concepts in Negotiation
1. The alternative to negotiation BATNA
2. The minimum threshold for a negotiated deal- Reservation Price
3. How flexible a party is willing to be, and what trade-offs it is willing to make
ZOPA
4. Value creation
Other 2 concepts:
1. MESO
Multiple Equivalent Simultaneous Offers
2. Anchoring
Sales Strategy
What i s the total market?/ What is the total addressable market?
TRAI/SIAM/RBI/CMIE/RAI
Gartner, McKinsey. Forrester, Neilson, IDC, Accenture, Annual Reports
Market/ Industry growth ( per capita i ncome/ di sposable i ncome/SEC-A/B/C?)-short term vs
long term
How much market share you want to gai n ?
Which segment /market of customers you want to address?
Who will be your target customer group?
What will be your positioning Vs Competition?
Feet on street/ channel strategy
After Service network
Services revenue projections
What will be your route to market in each of the customer group / territory?
Revenue budget/ Sel ling cost budget- Sales Compensati on
Producti vi ty per sales person
Customers: Their Relationship with Sales Customers: Their Relationship with Sales
Strategies Strategies
Key Issues Key Issues
in in
Business Business- -level level
Strategy Strategy
Who will be Who will be
served? served?
What needs will What needs will
be satisfied? be satisfied?
How will those How will those
needs be satisfied? needs be satisfied?
Sales Organization
Sales Team structure
1. Territory based sales team
2. Product based sales team
3. Market oriented sales team: along the industry verticals or
customer lines Key Account Managers
4. Complex sales teams
5. Direct Sales team vs Channel sales team
Digital Commerce/ Telesales & Web sales
Designing the sales force
Sales force is companys personal link to the customers.
Carefully need to consider the following issues in sales force
design
1. development of sales force objectives,
2. structure,
3. size and
4. compensation.
Basic Sales knowledge
Lead
Suspect/prospect
Cold/Warm/Hot prospect
Geographical team: Territory/Area/Branch offices/
regional/National/APAC/Global
Vertical Sales team- BFSI ,Manufacturing, Government ,IT/ITES, SMB,
Telecom, Retail, Hospitality, Health care M&E verticals
Channel partners Distributor/Dealer/Retailer/Stockist
Key Account Management
Sales Vs Presales Team ( Domain Consultants/ Technical Consultants)
Types of sales
Types of selling
1. Product selling (eg: Copier machines, printers, Mobile Phones, credit card)
2. Services selling
3. Consulting selling ( KPMG, Mckinsey)
4. Solution selling/ systems sales ( eg-IT Solutions companies like Infosys, Wipro)
5. Project sales ( L&T, Siemens)
6. Sell through Vs sell to
7. B2 B Sales Vs B 2 C Vs B 2 G
Various principles of selling
SPANCO
SPIN
AIDA
FABV
Solution sales/consultative selling
Key Account Management/Target Account Selling
Sales concept :SPANCO
S : Suspecting
P :Prospecting
A : Analyse
N :Negotiate
C : Close
O : Order
Suspect/Prospect
Most companies leave this to sales person.
But now companies are taking this separately ( Business
Development vs sales /Telemarketing ) and leaving
salespersons to spend their expensive time selling
Companies generate leads/prospects through
1. Examining data sources like newspapers in search of
names
2. Putting up booths at trade shows to encourage drop bys
3. current customers to drop names of prospective buyers
4. Cultivating referral sources
5. Contacting organizations and associations to which
prospects belong
6. Dropping in unannounced on various offices (Cold
calling)
Sales Concept :SPIN
Neil Rackham s SPIN selling.
He recommends that salesperson should probe 4 types of
questions with a prospect
S- Situation: ask about the buyers present situation
P- Problem questions: deal with problems /difficulties and
dissatisfaction that the buyer is facing
I- Implication questions; the consequences or effects of a
buyers problems difficulties
N- Need Payoff Questions: value or usefulness of a proposed
solution.
Sales Concept :AIDA
The salesperson follows a logical steps in selling using AIDA
methodology
A : getting attention,
I :holding interest, ( want?)
D : desire ( need?) and
A : obtaining action.(buy/order?)
Sales Concept :FABV
selling using FABV approach .
F : Features: basic characteristics( What is it?)
A: Advantage: why features are advantageous ( how is
better?)
B: Benefits: economic technical etc advantage ( how will it
help you do better?)
V: Value: ( TCO/ Uniqueness/USP- Combined derived gain from
buy)
Designing the sales force
Sales force is companys personal link to the customers.
Carefully need to consider the following issues in sales force
design
1. development of sales force objectives,
2. structure,
3. size and
4. compensation.
Sales Team structure
1. Territory based sales team
2. Product based sales team
3. Market oriented sales team: along the industry verticals or
customer lines Key Account Managers
4. Complex sales teams
5. Direct Sales team vs Channel sales team
Digital Commerce/ Telesales & Web sales
1.Territory based sales team
Sales team is formed based on exclusive geographical
territories.
Advantages of this
Increased incentive to cultivate local business and
personal ties
Lesser travel expenses
Territory size designed to provide proportionate sales
potential or work load.
Can vary widely in size as the customer density varies with
territory.
Sales Team structure
2. Product based team :
Why?
Companies tend to increase product width and breadth
Sales teams are formed along product lines.
Sales reps should know their product/product specialists.
Products may be technically complex, highly unrelated .
1. New products vs old products
2. High value vs low value products
3. High profit with low volume vs Low profit with High volume
Sales Team structure
3. Market oriented team: along the industry verticals
Advantage is that each sales force becomes knowledgeable
about specific Industry needs.
Need Domain specialists
Disadvantage is need for extensive travel as customers are
spread throughout the country.
Sales Team structure
4.Complex Structure/Matrix Structure:
Combination of wide variety of products, many types of
customers, broad geographical area.
Combined specialized structure
Why Matrix structure in Large
Organizations?
Multi products/multi solution company needs to monitor
performance of
1. Individual Product Performance
2. Industry vertical performance
3. Individual geo regional performance
Because :
1. New products Vs existing products
2. High Profitable products Vs low Profitability products
3. High Volume products vs low volume products
4. Not all regions will do well all the time
5. Not all products will do all the time
6. Not all products will be profitable all the time
7. Competition varies from time to time. region to region, product to
product
RFI/EOI / RFP / RFQ&
Tender
RFI/EOI
Pre-RFP stage
To limit number of participating vendors
To shortlist-quality players
RFP
A Request for Proposal (referred to as RFP) is an invitation for suppliers,
through a Bidding process, to submit a proposal on a specific product or
service.
RFP process is one of the best methods for leveraging a company's
negotiating ability and purchasing power with suppliers.
The Request process brings structure to the procurement decision and allows
the risks and benefits to be identified clearl y upfront.
Al though the Request purchase process can be time-consuming, its many
advantages outweigh any disadvantages and delays caused.
RFP
The added benefit of responses from a broad spectrum of functional
experts/vendors ensures that the solution chosen will suit the companies
requirements.
Key Objectives of the process:
1)To protect the companies brand
2)Providing correct information to enable sound business decisions
3)Making the correct strategic procurement decision
4)Leveraging the companies purchasing power to obtain the most favourable
deal
Major deciding factors in Vendor Selection
Technical Solution and technical compliance
Eligibility criteria-experience/references/company
background/financial strength
Commercial terms/commercial compliance
Project Management capabilities/support capabilities
Major Steps in Vendor Selection
1. RFI-EOI
2. RFP-Tender
3. Queries on the RFP-Prebid meeti ngs
4. Issue of Amendments to RFP
5. Proposal submi ssi on
6. Techno-commercial evaluation/ Eval uati on Cri teria ( T1/L1)
7. LOI/Award of contract/PO
8. Deli very, Instal lati on ,Acceptance Testing ( Taki ng over certificate)
9. Warranty
10. AMC
11. Upgrade/Update/expand/Refresh
12. Payment & billi ng mi lestones agai nst all the above steps
Government Procurement- Tender Process
2 types of tenders
" Open tenders" , in other words open calls for tenders, also call ed
advertised tenders, are open to all vendors or contractors.
" Restricted tenders" /Limited tenders, in other words restricted calls
for tenders, also called invited tenders, pre-qualified, short-listed, or
selective tenders, are onl y open to selected pre-qualified vendors or
contractors. .
Locating tenders
1. A number of companies provide subscription alert services which
send notification of relevant tender documents to the subscriber.
2. Every Public Sector organisation is legall y obliged to release tenders
for works and services above set thresholds. In the majority of cases
these are listed on their websites
Tender-Various steps( 2 part bid)
EOI notice
EOI response
EOI selection
Issue of Tenders-Tender fee
Tender queries
Pre-Bid meeting
Tender response submission ( Technical and commercial
proposal )along with-EMD/Bid Security
Technical Bid opening with authorization letter to attend
Technical bid evaluation
Technical qualification/short listing
Price bid opening( some times there might be Reverse Auction)
LOI/LOA/Award of contract-Security deposit
Final Project delivery/Acceptance testing-Performance Security
Payment release and invoicing depending on various
milestones as agreed/defined.
Tender Opening
Closed room tender opening by the committee
Tender opening in the presence of the bidders
Bidders needs to come with authorization
Number of bidders reps will be specified
T & Cs
EMD / Bid Security
BG
Validity
Risk Purchase
Short Closure
PBG
LOL
Arbitration
Infringement
Indemnification
Termination
Force Majeure
Gross Negligence and Willful Misconduct
Key Account Management
in Sales
What is Account Management ( KAM /
Strategic Accounts Mgmt)
What is a Key Account?
Is a popular terminology used by Sales Organizations for a
large Customer who might have a need to interact repeatedly
for multiple products/services requirements.
These are vital customers whose business means success or
failure to your business.
These are the customers which require management attention.
Account Managers in Sales Organizations
Account Manager for set of few accounts
Also called Strategic Account Managers or Key Account
Managers ( KAM)
Account managers handling one account- global/ Indian
account
Will have dedicated team members from other functions such
as- presales/domain/technical, customer service, project
manager, HR, Finance etc
Account Managers in Sales Organizations
Number of high potential large clients are limited and known
They have Huge Capex and Opex spending
They are large with presence in multi -country/multi locations with
multiple divisions/business units/large no. of branches/large number
of employees.
Decision makers/Influencers could be spread in multi -
locations/globall y
Multiple domains of product or services requirements
Account management team would comprise of multiple sellers at
multiple locations and they need to align as One team to the
customer
Need for Integrated Account planning
Account Management
Account Managers mandate in
Sales
Mind Share
Wallet Share
Account Plan
Account Management-
It is all about Wallet Share
Account Managers mandate in Sales
Increase Wallet Share ( Core Accounts/Base Accounts)
Acquire Competitor's accounts ( Competitive Accounts)
Invest in Green Field (New Accounts )( Invest Accounts)
Various steps in Solution Selling
Open
Understand
Consult/explore/question
Propose
Objection handling
Close
Value
What is Value
Price vs Value
Value is the perceived benefit of the solution/product/services
as seen by the client
Best strategy to beat the pricing issues
Consultative selling/Solution sales
How is it different?
Top-Down Vs Bottoms-up approach
Long salescycle Can be 3 months to one year
engagement time
Multiple people will get invol ved at both sell and buy
side
Might invol ve multi locations
Multi phase ( technical/commercial)
Might sometimes encompass all the major
divisions/functions of the organization.
Eg: ERP / SCM / CRM / Core Banking-Any time any
where banking / e-commerce solutions etc
How do you create Value ?
Relationship ( Knowledge of the account, Past experience, Knowledge
of the account manager/sales manager)
Project Quality (Project mgmt excellence ,one vendor team, clear/rapid
issue resolution)
Delivery ( flexibility to handle last minute/emergency changes/on time
delivery)
Offering capability (innovative products/best in class products and
services/trusted brand)
Pricing Models / Commercial Construct- outcome based/ opex vs
capex
ROI /TCO / Business Case
How to increase your win rate in solution
selling?
1. Compelling reason to act now?( sales time & resources very
expensive)
2. Be early in the stage..
3. Be proactive rather than reactive
4. Value based selling rather than price based selling
5. Create solution with uniqueness-Value proposition
6. Relationship strategy
Summary : Consultative selling
You need to focus/strategise your entire sales effort into:
Aligning yourself with the customer buying cycles/buyi ng stages
Be Earl y and be Proactive
Identify Compelling Reasons to Act Now
Establish your Unique Value-USP
Identify the Buying Decision makers/Difference makers and
negotiate access to the Key Decision Leader
Identify key information required to build the value proposition
Some keys to Succeed in Sales
Do your homework
Know your client better
Ask more questions
Answer questions
Communicate clearly
Be willing to say No
Be willing to say Yes
Be a problem solver
Keep your word
Show initiative
Have a clear contract
Stay focused
Be a learner
Have a positive attitude
Work at it
Technology as
Business Enabler in
Sales Management
Definition
CRM is the
alignment of
business processes
and technology
around the customer
lifecycle
Customer Relationship
Management
Customer
Lifecycle
Attract
Sell Servi ce
Technol ogy
Environment
Measurement
Transacti ons
Anal ytics
Business
Processes
Service Marketing
Sales
CRM Building Blocks
Prospect
Get a Lead
Sell
Over the Web
On the Phone
Face to Face
Support Customers
In same way you sell
Marketing
Service
Sales
Sales Modules of
CRM
-Lead Management Module of CRM