Sales management

The only business function that

generates revenue.

sales management
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.

Sales management
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.
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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.
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Sales management: evolution

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.
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The salesman
..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.
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The salesman
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
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The salesman
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
QUALITIES THAT LEAD TO EFFECTIVE SALES MANAGEMENT
ARE OFTEN OPPOSITE THE ATTRIBUTES OF A SUCCESSFUL
SALES PERSON

Sales organization
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/coordinate.

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Sales organization
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.

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Purpose of organization
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
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Types of organization
structures
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.
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Organization structures
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.

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Organization structure
Horizontal structure.
Specialised structure:

Geographical;
Product;
Market or customer;
Combination of specialised structures.

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Line Sales Organization structure

Head Marketing

Sales Manager

Area Sales
Mgr

Area Sales
Mgr

Area Sales
Mgr

Area Sales
Mgr

Sales Force

Sales Force

Sales Force

Sales Force

Clear authority & Responsibility

Quick response & Decision, Low Cost
Weak on marketing inputs
Sales manager controlled 16

Functional Sales Organization

Administrative Simplicity
Access to Specialists
Multiple reporting
HOD is Pressures to co-ordi
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Research & Design

team
Customer Research
Product / Service
design

Operations team
Production
QA
Engineering Systems

Planning Team
Strategy
Finance
HR
COO

Customer Support team

Service
Training
Information

Customer Satisfaction
teams
Sales & Marketing
Pricing & Promotion
Channels
Logistics
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Sales relation with marketing

activities
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.
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relationships
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
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SALES PLANNING
a managerial function
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
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PLANNING FOCUS AREAS:

PROFITABILITY IMPROVEMENT

A REGION OR TERRITORY CEASES TO

CONTRIBUTE

DISCONTINUATION OF SALES TO AN ACCOUNT

DE-EMPHASISING PRODUCTS
ACCEPTING A PRIVATE BRAND ORDER

VARIANCE BETWEEN BUDGET AND ACTUAL

SALES

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SALES PLANNING
NEW BUSINESS
VISION

MISSION

GOALS

STRATEGY
*ACTION PLANS

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Key Deliverables of the Sales

function
Planning
Organizing
Training
Motivating
Controlling
Leading

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Sales planning
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

Long Range
Medium range
Short term (range)

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Planning process
Sales plan
Capacity plan
Production plan
Cash flow plan
Procurement plan

Human resource plan

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Sales forecast
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.

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Sales forecasting;
Industry estimates

Objective definition

Identifying critical factors (assumptions)

Selecting method of forecasting

Collecting, analysing, interpreting data.

Concluding predictions.
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Geographic Area forecast

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

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Forecasting Approaches
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

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Methods of sales forecast

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

Quantitative methods:

Moving averages
Exponential smoothing
Regression analysis
Econometric analysis

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Selling situations
Customers 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)
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The sales budget

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.

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Sales budget
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.

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Sales budget
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
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Number of sales people

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.
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Sales territories
Definition : A sales territory consists of

existing and potential customers

assigned to a sales person. The territory
may or may not have geographic
boundaries.

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Reasons for territories

Increase / improve customer coverage
Control selling expenses
Effective evaluation of salesmans

performance.
improve customer relations

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Territory design
Main procedural steps:
1. Selection of a basic geographical control

unit
2. Determination of sales potential present in
each unit
3. Combining the basic units into tentative
territories
4. Adjust for differences in coverage difficulty
and readjust the tentative territories ( build
up / break down method )
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Territory design
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

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Territory design
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.
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Routing Scheduling and

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

satisfaction
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Quotas
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.
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Why Quotas ?
To help management motivate sales

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

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Types of Quotas
Sales volume Quotas : Rupee volume /

Unit volume
Profit based Quotas: contribution / gross
margin
Activity Quotas: calls per day; sales
meetings; product demos; ( efforts =
results.)
Expense Quotas
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QUOTA SETTING
MECHANISM
S-specific
M-measurable
A-achievable
R-realistic
T-time bound

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What is Motivation??
Drive to initiate an action.
The intensity of effort in an action
The persistence of effort over
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Why motivation
Frequent rejection
Physical separation from company

support
Direct influence on quality of sales

presentation
Indirect influence on performance
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Sales force motivation

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
Maslows hierarchy of needs:

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Maslows theory
Self
Actualisation
Esteem needs
Social needs
Safety needs
Physiological needs
Food, clothing, shelter, health
care
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MASLOWS HIERARCHY OF NEEDS

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,
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air, rest.

Frederick Herzberg theory

Two factor theory of motivation
Hygiene ,maintenance, or job context

factors.( dis satisfiers )

Achievement, challenge, advancement,
growth in the job. (satisfiers )

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SELLING
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

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The sales process

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

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The sales process

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.
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SELLING PROCESS
the Ziglar method
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
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Prospecting
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?

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Locating prospects
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.
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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

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Pre sale plan

Competitors knowledge :structure-share-

strategy-systems.
Customer knowledge :attitudespreferences- behavioural habits
Selling techniques :

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Pre approach planning

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.
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Understanding buyers needs

Situational questions: questions about

prospects 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 ?)

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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?)

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Need awareness
At this stage you need to THINK
Prospect and Salesperson should both

be aware of the need. (remove blind

spots)

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Need solution
Present your product
Time to stop asking questions and start

providing solutions.
People dont buy products, they buy
what the product does for them.

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Questions are the answer

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.

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The questioning process

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

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Questioning
The closed door question: would you

tell me more; what do you mean

byAnswers to these give you
information to helping the prospect
and building trust.

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Questioning
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

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Presentation methods
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.
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The presentation
Attracting Attention
Creating Interest
Building Desire and conviction
Initiate Action to buy.

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Presentation methods
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.

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Presentation methods
Consultative selling method: problem-

solution method.
Requirements are:
Knowledge of the industry, clients
company, awareness of key members
needs,

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Objections
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 prospects view.
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Objections
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,
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Handling objections
Listen
Understand
Negotiate

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Methods of handling
objections
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.
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Negotiation
Plan pre determine firm and flexible

factors; define limits.

Ensure an atmosphere of trust ,

understanding and respect.

Define purpose and objective.

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Negotiation styles
Win loose
Win Win
Loose - Loose

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Closing the sale

Summarize
Advantage and disadvantage

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