Sales

1,929
-1

Published on

Sales

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,929
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
194
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Sales

  1. 1. Sales A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity. The quot;deal is closedquot;, means the customer has consented to the proposed product or service by making full or partial payment (as in case of instalments) to the seller. A sale is completed by the seller, the owner of the goods. It starts with consent (or agreement) to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership, being a price the seller is happy to part with ownership of or any claim upon the item. The purchaser, though a party to the sale does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price the sale is still valid and gives rise to an obligation to pay. Contents 1 Sales techniques • 2 Sales agents • 3 The sales and marketing relationship • o 3.1 Marketing potentially negates need for sales 4 Sales and marketing alignment and integration • 5 See also • 6 Notes and references • 7 External links • Sales techniques The sale can be made through: Direct sales, involving person to person contact • o Buying Facilitation Method Pro forma sales • Agency-based • o Sales agents (real estate, manufacturing) o Sales outsourcing through direct branded representation o Transaction sales o Consultative sales o Complex sales o Consignment o Telemarketing or telesales o Retail or consumer Door-to-door or travelling salesperson •
  2. 2. Request for proposal – An invitation for suppliers, through a bidding process, to submit • a proposal on a specific product or service. An RFP is usually part of a complex sales process, also known as enterprise sales. Business-to-business – Business-to-business sales are much more relationship based • owing to the lack of emotional attachment to the products in question. Industrial/Professional Sales is selling from one business to another Electronic • o Web – Business-to-business and business-to-consumer o Electronic Data Interchange (EDI) – A set of standard for structuring information to be electronically exchanged between and within businesses Indirect, human-mediated but with indirect contact • o Mail-order Sales Methods: • o Selling technique o SPIN Selling o Consultative selling o Solution selling o Strategic Selling o Sales Negotiation o Reverse Selling o Paint-the-Picture™ Sales agents Agents in the sales process can be defined as representing either side of the sales process for example: Sales broker or Seller agency or seller agent This is a traditional role where the salesperson represents a person or company on the selling end of the deal. Buyer’s broker or Buyer brokerage This is where the salesperson represents the consumer making the purchase. This is most often applied in large transactions. Disclosed dual agent This is where the salesperson represents both parties in the sale and acts as a mediator for the transaction. The role of the salesperson here is to oversee that both parties receive an honest and fair deal, and is responsible to both. Transaction broker This is where the salesperson doesn't represent either party, but handles the transaction only. This is where the seller owes no responsibility to either party getting a fair or honest deal, just that all of the papers are handled properly. Sales Outsourcing This is direct branded representation where the sales reps are recruited, hired, and managed by an external entity but hold quotas, represent themselves as the brand of the client, and report all activities (through their own sales management channels) back to the client. It is akin to a virtual extension of a sales force. (see Sales Outsourcing entry) Sales Managers It is the goal of a qualified and talented sales manager to implement various sales strategies and management techniques in order to facilitate improved profits and
  3. 3. increased sales volume. They are also responsible for coordinating the sales and marketing department as well as oversight concerning the fair and honest execution of the sales process by his agents. Salespersons The primary function of professional sales is to generate and close leads, educate prospects, fill needs and satisfy wants of consumers appropriately, and therefore turn prospective customers into actual ones. The successful questioning to understand a customer's goal and requirements relevant to the product, the further creation of a valuable solution by communicating the necessary information that encourages a buyer to achieve their goal at an economic cost is the responsibility of the salesperson or the sales engine (e.g. internet, vending machine etc). A good sales person should never miss sell or over evaluate the customer’s requirements. The sales and marketing relationship Marketing and sales are very different, but have the same goal. Marketing improves the selling environment and plays a very important role in sales. If the marketing department generates a potential customers list, it can be beneficial for sales. The marketing department's goal is increase the number of interactions between potential customers and the sales team using promotional techniques such as advertising, sales promotion, publicity, and public relations, creating new sales channels, or creating new products (new product development), among other things. In most large corporations, the marketing department is structured in a similar fashion to the sales department and the managers of these teams must coordinate efforts in order to drive profits and business success. For example, an quot;inboundquot; focused campaign seeks to drive more customers quot;through the doorquot; giving the sales department a better chance of selling their product to the consumer. A good marketing program would address any potential downsides as well. The Sales department's goal would be to improve the interaction between the customer and the sales facility or mechanism (example, web site) and/or salesperson. Sales management would break down the selling process and then increase the effectiveness of the discreet processes as well as the interaction between processes. For example, in many out-bound sales environments, the typical process is out bound calling, the sales pitch, handling objections, opportunity identification, and the close. Each step of the process has sales-related issues, skills, and training needs as well as marketing solutions to improve each discrete step, as well as the whole process. One further common complication of marketing involves the inability to measure results for a great deal of marketing initiatives. In essence, many marketing and advertising executives often lose sight of the objective of sales/revenue/profit, as they focus on establishing a creative/innovative program, without concern for the top or bottom lines. Such is a fundamental pitfall of marketing for marketing's sake. Marketing potentially negates need for sales Some sales authors and consultants contend that an expertly planned and executed marketing strategy may negate the need for outside sales entirely. They suggest that by effectively bringing more customers quot;through the doorquot; and enticing them to contact you, sales organizations can dramatically improve their results, efficiency, profitability, and allow salespeople to provide a drastically higher level of customer service and satisfaction, instead of spending the majority of their working hours searching for someone to sell to.
  4. 4. While this theory is present in a few marketing consulting companies the practical and realistic application of this principle has not been widely proven in the market and sales forces worldwide continue to be responsible for developing business as well as closing it. Some marketing consulting firms postulate that each selling opportunity at each enterprise lies on a continuum of numbers of people involved, necessary degree of face-to-face interaction, overhead, and through-put time, to name a few dimensions. The number of people involved in actual face-to-face selling at, say, a clothing store is probably vastly different than at an on-line book-seller. Sales and marketing alignment and integration Another key area of conversation that has arisen is the need for alignment and integration between corporate sales and marketing functions. According to a report from the Chief Marketing Officer (CMO) Council, only 40 percent of companies have formal programs, systems or processes in place to align and integration between the two critical functions. Traditionally, these two functions, as referenced above, has been largely segmented and left in soloed areas of tactical responsibility. In Glen Petersen’s book, “The Profit Maximization Paradox,” the changes in the competitive landscape between the 1950s and today are so dramatic that the complexity of choice, price and opportunities for the customer forced this seemingly simple and integrated relationship between sales and marketing to change forever. Petersen goes on to highlight that salespeople are spending approximately 40 percent of their time preparing customer-facing deliverables while leveraging less than 50 percent of the materials created by marketing, adding to the perception that marketing is out of touch with the customer, and sales is resistant to messaging and strategy. Organizations like The Coalition to Leverage and Optimize Sales Effectiveness (CLOSE) quot;CLOSEquot;. Have emerged as a facilitator to mend the relationship between sales and marketing. Marketing vs. Sales: What is the Difference? What is the difference between marketing and sales? Let's think about this question for a moment. Without marketing you would not have prospects or leads to follow up with, but yet without a good sales technique and strategy your closing rate may depress you. Marketing is everything that you do to reach and persuade prospects. The sales process is everything that you do to close the sale and get a signed agreement or contract. Both are necessities to the success of a business. You cannot do without either process. By strategically combining both efforts you will experience a successful amount of business growth. However, by the same token if the efforts are unbalanced it candetour your growth. Your marketing will consist of the measures you use to reach and persuade your prospects that you are the company for them. It's the message that prepares the prospect for the sales. It consists of advertising, public relations, brand marketing, viral marketing, and direct mail.
  5. 5. The sales process consists of interpersonal interaction. It is often done by a one-on-one meeting, cold calls, and networking. It's anything that engages you with the prospect or customer on a personal level rather than at a distance. Your marketing efforts begin the process of the eight contacts that studies show it takes to move a prospect or potential client to the close of the sale. If marketing is done effectively you can begin to move that prospect from a cold to a warm lead. When the prospect hits thequot; warmquot; level it's much easier for the sales professional to close the sale. Do you see the cycle? As you see in my explanation above it takes multiple contacts using both sales and marketing to move the prospect from one level to the next. That is why it is import that you develop a process that combines both sales and marketing. This will enable you to reach prospects at all three levels; cold, warm, and hot. It's all about balance. Are you unsure of how to integrate your marketing and sales? Try this. Take a few moments and divide your prospect lists and database into categories of cold, warm, and hot leads. Then sit down and identify a strategy on how to proceed with each individual group. For example you could try the following methods of contact: Cold Lead Strategy - Send out a direct mailing or offer them a special promotion • Warm Lead Strategy - Try a follow-up call, send out a sales letter, or schedule a special • seminar or training session to get all of your warm leads together. Once you've moved your prospect to the quot;warmquot; level it's time to proceed in closing the sale. This will be easier to do if you somehow engage the prospect. You can do this by conducting a one-on-one call, make a presentation, or present a proposal, estimate, or contract. What if you are uncomfortable with the sales or marketing process? An alternative that often proves successful is to partner with someone that possess the talents that you feel you lack in. You can do this by creating a partnership, subcontracting, or hiring in that talent. Sales cycle - The sales cycle is the sequence of phases that a typical customer goes through when deciding to buy something. As a rule, the sales cycle is described from the customer's perspective. The first phase of the sales cycle may be either the customer's perception of a product, or a perception of a need that the product might satisfy. The following steps include research and evaluation; the last step is the customer's decision to purchase the product.
  6. 6. Sales Promotion In a time when customers are exposed daily to a nearly infinite amount of promotional messages, many marketers are discovering that advertising alone is not enough to move members of a target market to take action, such as getting them to try a new product. Instead, marketers have learned that to meet their goals they must use additional promotional methods in conjunction with advertising. Other marketers have found that certain characteristics of their target market (e.g., small but geographically dispersed) or characteristics of their product (e.g., highly complex) make advertising a less attractive option. For these marketers better results may be obtained using other promotional approaches and may lead to directing all their promotional spending to non- advertising promotions. Finally, the high cost of advertising may drive many to seek alternative, lower cost promotional techniques to meet their promotion goals. In this section of our detailed Principles of Marketing Tutorials we continue our discussion of promotion decisions by looking at a second promotion mix item: sales promotion. Sales promotions are used widely in many industries and especially by marketers selling to consumers. We will see that the objectives of sales promotion are quite different than advertising and are specifically designed to encourage customer response. What is Sales Promotion? Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase price, money back) or the inclusion of additional value-added material (e.g., something more for the same price). Sales promotions are often confused with advertising. For instance, a television advertisement mentioning a contest awarding winners with a free trip to a Caribbean island may give the contest the appearance of advertising. While the delivery of the marketer’s message through television media is certainly labelled as advertising, what is contained in the message, namely the contest, is considered a sales promotion. The factors that distinguish between the two promotional approaches are: 1. Whether the promotion involves a short-term value proposition (e.g., the contest is only offered for a limited period of time), and 2. The customer must perform some activity in order to be eligible to receive the value proposition (e.g., customer must enter contest). The inclusion of a timing constraint and an activity requirement are hallmarks of sales promotion.
  7. 7. Sales promotions are used by a wide range of organizations in both the consumer and business markets, though the frequency and spending levels are much greater for consumer products marketers. One estimate by the Promotion Marketing Association suggests that in the US alone spending on sales promotion exceeds that of advertising. Objectives of Sales Promotion Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions Tutorial: Building Product Awareness – Several sales promotion techniques are highly effective in • exposing customers to products for the first time and can serve as key promotional components in the early stages of new product introduction. Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion. In this way sales promotion can act as an effective customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-up marketing efforts. Creating Interest – Marketers find that sales promotions are very effective in creating interest • in a product. In fact, creating interest is often considered the most important use of sales promotion. In the retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets. Internet marketers can use similar approaches to bolster the number of website visitors. Another important way to create interest is to move customers to experience a product. Several sales promotion techniques offer the opportunity for customers to try products for free or at low cost. Providing Information – Generally sales promotion techniques are designed to move • customers to some action and are rarely simply informational in nature. However, some sales promotions do offer customers access to product information. For instance, a promotion may allow customers to try a fee-based online service for free for several days. This free access may include receiving product information via email. Stimulating Demand – Next to building initial product awareness, the most important use of • sales promotion is to build demand by convincing customers to make a purchase. Special promotions, especially those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate sales. Reinforcing the Brand – Once customers have made a purchase sales promotion can be used • to both encourage additional purchasing and also as a reward for purchase loyalty (see loyalty programs below). Many companies, including airlines and retail stores, reward good or “preferred” customers with special promotions, such as email “special deals” and surprise price reductions at the cash register. Types of Sales Promotion Sales promotion can be classified based on the primary target audience to whom the promotion is directed. These include: Consumer Market Directed - Possibly the most well-known methods of sales promotion • are those intended to appeal to the final consumer. Consumers are exposed to sales promotions nearly every day, and as discussed later, many buyers are conditioned to look for sales promotions prior to making purchase decisions. Trade Market Directed – Marketers use sales promotions to target all customers • including partners within their channel of distribution. Trade promotions are initially
  8. 8. used to entice channel members to carry a marketer’s products and, once products are stocked, marketers utilize promotions to strengthen the channel relationship. Business-to-Business Market Directed – A small, but important, sub-set of sales • promotions are targeted to the business-to-business market. While these promotions may not carry the glamour associated with consumer or trade promotions, B-to-B promotions are used in many industries. In the next few sections we discuss each category in more detail. Next we discuss the following 11 types of consumer sales promotions: 1. Coupons 2. Rebates 3. Promotional Pricing 4. Trade-In 5. Loyalty Programs 6. Sampling and Free Trials 7. Free Product 8. Premiums 9. Contests and Sweepstakes 10. Demonstrations 11. Personal Appearances Business-to-Business Sales Promotions The use of sales promotion is not limited to consumer products marketing. In business-to- business markets sales promotions are also used as a means of moving customers to action. However, the promotional choices available to the B-to-B marketer are not as extensive as those found in the consumer or trade markets. For example, most B-to-B marketers do not use coupons as a vehicle for sales promotion with the exception of companies that sell to both consumer and business customers (e.g., products sold through office supply retailers). Rather, the techniques more likely to be utilized include: price-reductions • free product • trade-in • promotional products • trade shows • Of the promotions listed, trade shows are by far the mostly widely used sales promotion for B- to-B marketers.

×