SALES AND RETAIL MANAGEMENT PART – A SALES MANAGEMENTMODULE - 1Introduction to sales management:Meaning, Evaluation, Importance, Personal Selling, EmergingTrends in Sales Management, elementary study of salesorganizations, qualities and responsibilities of sales manager.Types of sales organisations. Faculty: Krupa Joshi
BOOKS: SalesManagement by Charlesm. Futrell, 6/e, 2003, Thomson South Western Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev, 6/e, Oxford University Press
INTRODUCTION Any organisations large or small are into selling something or the other for their survival and growth. It may be a product, service, idea, concept, destination or person. Robert Louis Stevenson said ‘everybody is surviving on selling something to someone’. Sales management is attainment of an organizations sales goals in an effective & efficient manner through planning, staffing, training, leading & controlling organizational resources. Revenue, sales, and sources of funds fuel organizations and the management of that process is the most important function.
MEANING Sales Management’ originally referred exclusively to the direction of sales force personnel. American Marketing Association – “Sales Management is the planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, p aying and motivating as these tasks apply to the personal sales force. Charles M. Futurell – “Sales Management is the attainment of sales force goals in an effective and efficient manner through planning, staffing, training, leading, and controlling organizational resources.
A SALES PERSON’S POSITION A sales person’s job is predominantly to deliver a product A salesperson is predominantly an internal order taker A salesperson is also predominantly an order taker but works in the field A salesperson is not expected or permitted to take an order but is called only to build goodwill or to educate an potential or actual user Positions where the emphasis is placed on technical knowledge Positions which demand the creative sale of tangible products Positions which requiring the creative sales of intangible products/services
SMALL IMPROVEMENTS IN YOUR TEAM’S SKILLS AND PROCESSES Best Case Neutral Case Worst Case Your sales team isn’t Your sales team is a strong. They may not have revenue machine. They There are strong and weak a dedicated sales manager have the right skills and players on the sales team. to help improve experience; they’re Some require a lot more performance. They may not motivated to come in each hand-holding than you’d have enough experience,day and close business. You like; there isn’t always time especially if you’re a small coach them regularly to to give them the help they company that can’t yetimprove their performance. need. As a result, their close afford the big hitters. You When problems arise, ratios are much lower. have a pipeline but don’t they’re dealt with swiftly. They’re probably not know what’s happeningThe sales team does a great hitting their quotas, but with prospects; it takes job delivering the they’re not a major liability longer than it should to company’s value to the company. close deals. You suspectproposition, brand strategy your need an entirely new and messages. sales operation.
EVOLUTION OF SALES MANAGEMENT There were fewer than 1,000 travelling sales people before 1860 in the US who were basically credit investigators and took orders for goods The techniques of modern sales management and selling techniques were refined by John Henry Patterson, widely known as the father of modern sales management Mr. Patterson assigned to his salesperson’s exclusive territories and sales quotas in order to stretch their efforts. He asked his best salespeople to demonstrate their sales techniques to other sales people. Thomas J. Watson was trained by Mr. Patterson who later founded the IBM. Today the process of sales management has undergone numerous changes in terms of strategy, practice, and technological adoption to achieve the desired sales goal.
SALES MANAGEMENT PROCESSFORMULATION OF A STRATEGIC SALESMANAGEMENT PROGRAMME:The strategic sales programme should consider theenvironmental issues affecting the business. It shouldorganize and plan the companys overall personal sellingefforts and integrate these with the other elements of thefirms marketing strategy. IMPLEMENTATION OF A STRATEGIC SALES MANAGEMENT PROGRAMME: It involves selecting appropriate sales personnel, training them leading them and motivating them, designing and implementing of policies and procedures that will direct the efforts of the sales people towards achieving corporate objectives. EVALUATION AND CONTROL OF SALES FORCE PERFORMANCE: It involves developing methods and practice for monitoring and evaluating the individual and group sales force performance. this entails taking corrective steps either in formulation or in implementation programs to achieve the desired corporate goal.
FORMULATION OF STRATEGIC SALES PROGRAMME THE ENVIRONMENT The External Environment The Internal Environment Potential Customers Objectives and MissionsCompetition, Legal and Political Environment Human Resources, Financial Resources Technological Environment Capacity Utilization and Production Natural Resource Processes , Innovation cycles and research Social and Cultural Environment and development activities Marketing Strategy Product and Product Lines Pricing Policy, Distribution Strategy Promotion Policy, Advertising and Sales Promotion Sales Management Functions Sales Force Account Sales Planning, Sales Force Deployment, Territory Management Forecasting and Organization Design, and route Policy quota setting Planning
IMPLEMENTATION OF THE STRATEGIC SALES PROGRAMME Determination of the sales people’s Performance Sales Management Outcomes Functions Sales person’s view of job requirements, role Supervision perceptionEnvironmental Variable Performance Sales Volume Quota Allocation Selection and Recruitment of Selling Expenses Sales Personnel Aptitude Profitability of Customer Level of Customer Sales Training Service Skills Sales Reports Motivating the Sales Ethical Practices Force Compensation Motivation System Reward System Level
EVALUATION AND CONTROL OF SALES FORCE PERFORMANCE
SALES MANAGEMENT FUNCTIONS Planning : Building a profitable customer oriented sales team Staffing : Hiring the right people to sell and lead Training : Educating sales personnel to satisfy customer Leading : Guiding average people to perform at above average levels Controlling : Evaluating the past to guide the future
FUNCTIONS OF SELLING Order Taker Inside Order Taker Delivery Salespeople Outside Order Taker Order Creator Missionary Salespeople Order Getters Front Line Salespeople New Business Salespeople Organizational Salespeople Consumer Salespeople Sales Support Salespeople Technical Support Salespeople Merchandisers
IMPORTANCE OF SALES MANAGEMENT Sales force advantage Personal selling as promotion method Customization of product, service, concept, idea, person Customer satisfaction level Direct indirect marketing communication
THE NATURE AND ROLE OF SALES MANAGEMENT Determining Sales force objectives and goals Finalizing sales force organization, size, territory, and quota Forecasting and budgeting sales Selecting, recruiting, and training to the sales force Motivating and leading the sales force Designing compensation plan and control systems Designing career growth plans and building relationship strategies with key customers
PERSONAL SELLING Personal selling can be broadly classified into industrial, retail, and service selling. The approaches that a sales person takes in each of these categories vary despite similarities in the sales function. The selling approaches are bound to be different in each of the buying situations. Personal selling involves selling a product or service on a one to one basis. This can either be done face to face or over the phone
TYPES OF PERSONAL SELLING Auctions Sealed bid sales Spot bids Contract sales and service contracts Negotiated sales Fixed-price sales Industrial Selling Retail Selling Service Selling
PERSONAL SELLING AS A PART OF THE PROMOTIONAL PROGRAM Personal selling refers to the presentation of goods and services before the customers and convincing or persuading them to buy the products or services. Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and techniques for building personal relationships with another party (e.g., those involved in a purchase decision) that results in both parties obtaining value
PERSONAL SELLING CONSISTS OF THE FOLLOWINGELEMENTS: Face-to-Face interaction Persuasion Flexibility Promotion of sales Supply of Information Mutual Benefit
DIFFERENCE BETWEEN SELLING AND MARKETING SELLING MARKETING Emphasis on Product Emphasis on consumer needs and wants Company Manufactures the Product first Company first determines customers needs and then decides to sell it and wants and then decides on how to deliver a product to satisfy these wants Management is sales volume oriented Management is profit oriented Planning is short term oriented, in terms of Planning is long term oriented, in terms of today’s products and markets new products tomorrows markets, and future growth Stresses needs of a seller Stresses needs and wants of buyers Views business as a goods producing Views business as a consumer satisfying process process Emphasis on staying with existing Emphasis on innovation in every sphere, technology and reducing costs on providing better value to the customers by adopting a superior technology Different departments work as highly All departments of a business operate in an separate watertight compartments integrated manner, the sole purpose being generation of consumer satisfaction Selling views customers as the last link in After sales services are part of marketing business activities
ELEMENTARY STUDY OF SALES ORGANIZATIONS The sales organization represents the selling unit in the legal sense. Sales organizations are structural entities, which execute a combined sales plan and are designed to carry out mutually agreed business goals with clear structures, roles and responsibilities for each person, group, and department A typical sales organization consists of a structural framework specifying the formal authority and responsibility of various employees working in the organization. A sales organization defines the duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective executions of the sales functions.
PURPOSES OF SALES ORGANIZATION: To permit the development of specialists To assure that all necessary activities are performed To achieve coordination or balance To define authority To economize on execution time
SETTING UP A SALES ORGANIZATION: Defining Objectives Determination of Activities and their Volume of Performance Grouping activities into positions Assignment of Personnel to positions Provisions
THE SYSTEM VIEW OF AN ORGANIZATION: (DIMENSIONS OS SUCCESSFUL SALES ORGANIZATION) Company Results: Salespeople: Activities: Sales Effectiveness Drivers: Customer Results:
STRUCTURAL CHANGES IN SALES ORGANIZATIONFrom Top Down Command and To Horizontal and customer-driven control-driven Information Processing Knowledge creation Compartmentalized Knowledge Shared Knowledge Functions Retail power Core process team has the power Functions own skills Core competencies supply skills Dominant function leads Leader represents team Narrow result focus (sub- Broad process focus optimization) (optimization) Rewards are within chimneys Rewards are based on the overall (functions) performance of the organization Slow/bureaucratic Quick/empowered
FUNDAMENTALS OF ORGANIZATIONAL PRINCIPLES Fundamental of Organizational Principles1. Span of Control 1. The number of people directly reporting to the sales manager2. Unity of Command 2. Each person should report to one boss only3. Hierarchy of Authority 3. A clear and unbroken chain of command should link every person4. Stability and Continuity 4. Jobs should not be assigned without due regard for the talents and preferences of current employees5. Coordination and Integration 5. The job of sales people should be integrated with customer needs, and coordinated with the jobs of other employees and departments in the organization1. Homogeneity 6. Formal authority and responsibility must be co- terminus and co-equal2. Objectivity 7. Each division and sub division of the organization should be the expression of a definite purpose and be in harmony with the objective of the organization3. Specialization 8. The work of every individual in the organization should be confined as far as possible to the performance of a single leading function
TYPES OF SALES ORGANIZATIONS Line Organization Horizontal Organization Vertical Organization Organizational Design by territory (geographical) Organizational Design by management functions Organizational Design by Product Organizational Design by Customer Combined organizational structure
LINE ORGANIZATION:• Vertical Organization: PRESIDENT/OWNER VICE PRESIDENT SALES FIVE SLES PEOPLE• Horizontal Organization: PRESIDENT/ VICE FIVE PRESIDENT OWNER SALESPOEPLE SALES
ORGANIZATIONAL DESIGN BY TERRITORY (GEOGRAPHICAL):
ORGANIZATIONAL DESIGN BY MANAGEMENT FUNCTIONS:
QUALITIES AND RESPONSIBILITIES OF SALES MANAGER Salesperson’s Views Sales Manager’s Views Quick thinking Positive and sincere attitudeQualities Of Foresight PatienceA Successful Hardworking DiligenceSalesperson Determination Good presentation skills Responsibility ForesightQualities Of Patience PatienceA Successful Firmness Strong sense of responsibility Sale Manager Good Ability to forecast and handle communication challenges skills
FUNCTIONS OF SALES MANAGER Salesperson’s Views Sales Manager’s Views Prospect new Prospect new customers customers Make sales presentations Make salesFunctions Of A presentations Close sales Salesperson Collect payment Close sales Collect payment Collecting information Motivating salespeople Product updating lines Negotiating prices with suppliers Coordination Making product ordersFunctions Of ASuccessful Sale Recruitment Making sure salespeople adhere to company policies and rules Manager Training Handling customer feedback Sales Forecasting sales figures Setting sales target Working with other departments Sourcing for new products
SALES MANAGER RESPONSIBILITIES Sales Resource Management: Sales Training to Subordinates: Managing Sales Executives: Preparing Sales Policies and Marketing Strategies: Handling Important Sales Deals: Team Management:
10 ATTRIBUTES OF A GREAT SALES MANAGER:1) Passion.2) Integrity3) Positive attitude4) Coaching.5) Leadership6) Loyalty7) Availability8) Motivation9) Continuous learning10) Listening and communication
14 THINGS SALES PEOPLE SHOULDNEVER STOP DOING Prospect Ask awesome questions Improve your skill Deliver great presentations Listen more than you talk Adapt your approach Establish clear call objectives Set high goals Create plans (yearly, quarterly, monthly and weekly) Be persistent Study your products Forge relationships Network Show respect