Session 2

•Sales person’s role-revisited•Theories of selling

•Diversity of selling situations

Sales Manager’s Role in a Company

Theories of selling from Response Hierarchy Models

The Sales Process – Theories of selling

• AIDA – the sequence is Attention, Interest, Desire, Action

The sales person has to carry the customer along this sequence.

Attention – First impressionsInterest – Is it relevant for us?Desire – Does it match closely to our need / aspiration?Action – Are we stimulated to overcome our natural

caution?

Modifications to AIDA

• AIDCA – C for commitment. Commitment here means that a prospective customer is more likely to progress to the Action stage if his commitment to the proposition can first be established.

• AIDAS – S for Satisfaction. Sales persons have to look after post sales satisfaction also to develop relationships.

Theories of selling (contd.)

• Buying Formula Theory: Need-Solution-Purchase-Satisfaction

• This theory tries to explain the buying process. Example- REED from NIS.

New approaches - Consultative selling

• Consultative selling involves deeper questioning of the prospect, about organizational and operational issues that can extend beyond the product itself.

• Leads to greater understanding of the prospect's wider needs, (particularly those affected by the product),

• and the questioning process itself also results in a greater trust, rapport, and empathy between sales-person and buyer.

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Consultative Selling – SPIN selling approach (Investigating)

SPIN sequence of questions:SPIN sequence of questions:1)1) Situation QuestionsSituation Questions -- data gathering questions about -- data gathering questions about

facts and background.facts and background.2) 2) Problem QuestionsProblem Questions -- explore problems, difficulties, -- explore problems, difficulties,

and dissatisfaction areas which may be exploited.and dissatisfaction areas which may be exploited.3)3) Implication QuestionsImplication Questions -- examine the consequences -- examine the consequences

of customer problems.of customer problems.4) 4) Need-Payoff QuestionsNeed-Payoff Questions -- get the customer to tell -- get the customer to tell

youyou the benefits your product could offer. the benefits your product could offer. The purpose of questions in the larger sale is to uncover The purpose of questions in the larger sale is to uncover Implied Needs Implied Needs and and

to develop them into to develop them into Explicit NeedsExplicit Needs..

(Rackham 1988)(Rackham 1988)

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Types of Sales CommitmentsTypes of Sales Commitments::1) 1) OrdersOrders -- Where the customer makes a firm -- Where the customer makes a firm

commitment to buycommitment to buy2) 2) AdvancesAdvances -- Where an event takes place, either in -- Where an event takes place, either in

the call or after it, that moves the sale forward the call or after it, that moves the sale forward toward a decisiontoward a decision

3) 3) ContinuationsContinuations -- Where the sale will continue but -- Where the sale will continue but where no specific action has been agreed upon by where no specific action has been agreed upon by the customer to move it forwardthe customer to move it forward

4) 4) No-SalesNo-Sales -- Where the customer actively refuses a -- Where the customer actively refuses a commitmentcommitment

Consultative SellingObtaining Commitment

(Rackham 1988)(Rackham 1988)

Another Consultative Selling Needs-creation theory

• In 'needs-creation' selling, the sales-person seeks to identify and then 'enlarge' a particular need, problem, challenge or issue that a potential customer faces.

• Obviously the sales-person would must have a reasonable confidence that the supplier organization is able to offer a suitably matched remedy or solution (product and/or service proposition) once the 'need', with all of its attached considerable and negative strategic and financial implications, are firmly established in the buyer's mind.

• Example – Investments / Insurance selling

Changing role of sales persons

• For the organizations - The transformation from a sales manager to a business manager. More qualified and skilled sales personnel available and the expectations are rising. Also as the resources become costlier, their accountability & responsibilities are increasing.

• For the customers – salesmen becoming consultants, experts, service-providers, their voice in the organizations.

Diversity of selling situations

• The complexity growing in the nature of products, services and the customers.

• Lots of different selling situations have come up apart from the traditional distributor-dealer selling & direct selling.

Types of selling functions• Order Takers – Inside order taker, delivery cum

sales persons

• Order Getters – Retail sales team, Institutional team

• Order Creators - Missionary Salesperson

• Sales support team - Technical Specialist, Telemarketing executives, After-sales support

• Business Development Managers

• Key Account Managers

• Varying Sales Responsibilities / Positions / Jobs

Sales Position Brief Description Examples

• Delivery salesperson • Delivery of products to business customers or households.• Also takes orders.

• Milk, newspapers to households

• Soft drinks, bread to retail stores.

• Order taker (Response selling) • Inside order taker

• Telemarketing salesperson takes orders over telephone• Outside order taker. Also performs other tasks

• Behind counter in a garment shop• Pharma products’ orders from nursing homes • Food, clothing products’ orders from retailers

• Sales support• Missionary selling• Technical selling

• Provide information, build goodwill, introduce new products• Technical information, assistance

• Medical reps. in pharma industry

• Steel, Chemical industries

• Order-getter (Creative, Problem-solving, Consultative selling)

• Getting orders from existing and new household consumers• Getting orders from business customers, by solving their business and technology problems

• Automobiles, refrigerators, insurance policies • Software and business solutions

Selling to overseas customers

• Homework – Knowledge of culture, rules & regulations, language, regional business policies etc.

• Opportunity – India is becoming the global sourcing hub for certain products and commodities

B2C vs. B2B

• Most salespeople are involved in retail selling (B2C)

• Larger volume of sales accounted for by industrial selling (B2B)– Sales to resellers / institutional suppliers– Sales to business users– Sales to institutions

B2B Sales• Most of the companies buy products as inputs for their

products – raw materials, components etc.• Many institutions purchase products not for own

consumption but for using them as tools for sales development or image building

• Pharma, FMCG, Durables, Magazine, IT sector – all require various items for sales promotion.

• Gifts and complimentary use at festivals.• Retailing companies buy products for reselling. • Catalog selling, on-line selling companies for trading

purposes.• Organized retail chains behave as institutional

customers.

• Consumer vs.organizational buyerbehavior

Institutional Selling and Key Account Management

• Selling to Institutions – The selling process is followed in a more defined way.

• Suspecting through various sources, prospecting, identifying the MAN, presentation, negotiation, closing, follow up.

• Less number of customers, more business per customer, long-term relation – every customer is an account.

Institutional Selling and Key Account Management (contd.)

• Account mapping / scanning – Customer Information Reports , knowledge of the MAN, potential, purchase process, competitors, critical success factors etc.

• Account Planning – How to attack each account as per potential, when to hit it, time required to be given as per the success feasibility etc.

Missionary Sales• Sales Presentation not to a customer

directly but to an expert decision influencer.

• No direct monitory targets.• Examples – Pharma, Building Construction

Material, Interior Décor items

Attractiveness of Sales Careers

• Autonomy and opportunities for personal initiatives• Variety of challenging activities• Financial rewards• Favorable working conditions• Excellent opportunities for development and advancement

Types of Sales Managers / Levels of Sales Management Positions

CEO /President

V. P. Sales /V. P. Marketing

National Sales Manager

Regional / Zonal / Divisional Sales Managers

District / Branch / Area Sales Managers

Sales Trainee / Sales Person / Sales Representative

First / Lower Level Sales Managers

Middle-Level Sales Managers

Top-Level Sales Managers / Leaders

• Possible career tracks for salespeople

Source: Adapted from William C. Moncrief III, “Selling Activity and Sales Position Taxonomies for Industrial Salesforces,” Journal of Marketing Research 23 (August 1986), pp. 266–71.

Distribution

Traveling

Entertaining

Training and Recruiting

Attending Conferences and

Meetings

Servicing the Account

Managing Information

Servicing the Product

Working with Others

Selling

Selling Job Factors

•Sales job factors

PROMOTION FROM SALESPERSON TO SALES

MANAGER

Changes that occur when a person becomes a new manager:

1. Perspectives change

2. Goals change

3. Responsibilities change

4. Satisfaction changes

5. Job skill requirements change

6. Relationships change

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Transition From Salesperson to Sales Manager, cont…

• Problems experienced by new managers– Lack of preparation for the job

• The key to making a successful transition– Learning attitude– Realistic expectations– Learning new job responsibilities– Need to make the initial adjustments

SALES MANAGEMENT SKILLS

1. CONCEPTUAL AND DECISION SKILLS

Refer to the cognitive ability to see the organization as a whole and the relationships among its parts.

2. PEOPLE SKILLS

Involve the ability to work with and through other people and to work effectively as a group member.

3. TECHNICAL SKILLS

The ability to perform a specialized task that involves a certain method or process.

RELATIONSHIP OF CONCEPTUAL AND DECISION, PEOPLE, AND TECHNICAL SKILLS TO SALES LEADER LEVEL

T o p Sales L ead ers

M id d le Sales L ead ers

F irst- L in e Sales L ead ers

N o n m an agerial Salesp eo p le

C o n cep tu al an d D ecisio n Sk ills

P eo p le Sk ills T ech n ical Sk ills

Sales Objectives, Strategies and TacticsThe main components of planning in a company are objectives, strategies and tactics. Their relationship is shown below

Decide / Set Objectives

Develop StrategiesEvolve Tactics /

Action Plans

E.G. A company wants to increase sales of electric motors by 15 percent, as one of the sales objectives.

To illustrate the relationship between sales objectives, strategies and tactics, consider:

Sales Goals /Objectives

MarketingStrategy

Sales and Distribution Strategy Tactics / Action plans

Increase sales volume by 15 percent

Enter export markets

Identify the countries

Decide distribution channels

Marketing / sales head to get relevant information

Negotiate and sign agreements in 3-5 months with intermediaries

Penetrate existing domestic markets

Review and improve salesforce training, motivation and compensation

Use effective and efficient channels

Add channels and members Train salespeople in

deficient areas Train field salesmanagers in

effective supervision Link sales volume quotas to

the incentive scheme of the compensation plan