sales management Efforts put forth to attain a companys sales objectives.

Sales management can involve any of the following activities: (1) formulation of sales strategy through development of account management policies, sales force compensation policies, sales revenue forecasts, and sales plan, (2) implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets, and (3) sales force management through development and implementation of sales performance, monitoring, and evaluationmethods, and analysis of associated behavioral patterns and costs.

Read more: http://www.businessdictionary.com/definition/sales-management.html#ixzz2Vt2EeB8f "The planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personal sales force." "The planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personal sales force." PERSONAL SELLING Delivery of a specially designed message to a prospect by a seller, usually in the form of face-to-face communication, personal correspondence, or a personal telephone conversation. Unlike advertising, a personal sales message can be more specifically targeted to individual prospects and easily altered if the desired behavior does not occur. Personal selling, however, is far more costly than advertising and is generally used only when its high expenditure can be justified. For example, the marketing of a sophisticated computer system may require the use of personal selling, while the introduction of a new product to millions of consumers would not. Two other forms of personal selling that are not used with high-end products are door-to-door selling and home demonstration parties. These two personal selling methods are primarily used for personal care products, cosmetics, cookware, encyclopedias, books, toys, food, and other items of special interest to homemakers. Ideally, personal selling should be supported by advertising to strengthen its impact Personal selling is the process of communicating with a potential buyer (or buyers) face-to-face with the purpose of selling a product or service. The main thing that sets personal selling apart from other methods of selling is that the salesperson conducts business with the customer in person. Though personal selling is more likely to be effective with certain types of products or services, it has important applications for nearly all kinds of small businesses. In fact, most of history's successful entrepreneurs have been skilled salespeople, able to represent and promote their companies and products in the marketplace. Personal selling is one part of a company's promotion mix, along with advertising, sales promotion, and public relations. Advertising is any form of paid sales presentation that is not done face-to-face. Television and radio commercials, newspaper and magazine advertisements, and direct mail inserts are well-known forms of advertising. Sales promotion is the use of incentivessuch as coupons, discounts, rebates, contests, or special displaysto entice a customer to buy a product or service. Public relations is the act of building up a company's image in the eyes of the community in the hopes of translating the feelings of goodwill into sales. An example of public relations might include a company sponsoring a charity event. Personal selling offers entrepreneurs both advantages and disadvantages in comparison with the other elements of the promotion mix. On the positive side, personal selling allows the salesperson to target the message specifically to the audience and receive immediate feedback. In this way, it is more precise than other forms of

promotion and often has a greater persuasive impact. Conversely, personal selling cannot reach as many potential customers as advertising, plus the cost of each contact is much higher. Another advantage is that personal selling can be an important source of marketing information. Salespeople may learn about competitors' products, for example, or about emerging customer needs that may lead to the development of a new product. If the sales force is well trainedacting as problem solvers and advisors for customers rather than using hard-sell tacticspersonal selling may help a small business build loyal, long-term relationships with customers. A small business may choose to use any or all of the promotion mix elements in selling its products. Deciding how to allocate resources for each component involves a number of factors. Some of the things entrepreneurs should consider when deciding on the ideal promotion mix include the type of product or service, the value of the product or service, and the budget allotted for marketing. When to Use Personal Selling In general, if a product has a high unit value and requires a demonstration of its benefits, it is well suited for personal sales. For example, an encyclopedia is a high-priced item and most people do not feel they need one. After a demonstration, however, most people agree it would be a useful item to have. Therefore, encyclopedias are well suited to a promotion mix that emphasizes personal selling. Highly technical products, such as computers and copiers, are also primarily sold through personal sales methods. Products that involve a trade-in, like automobiles, are usually handled through personal selling to help facilitate the trade-in process. Finally, a company that cannot afford a mass-advertising campaign might consider personal selling as an alternative to advertising. Since sales force compensation is largely based on actual sales, personal selling may require less money up front than other parts of the promotion mix. Sellers' Agents One method that many small manufacturers and wholesalers use to reduce the costs of personal sellingwhich can be the most critical aspect of the promotion mix for these types of businessesis to hire an experienced selling agent. Selling agents are independent salespeople who work under contract with one or more companies and are usually paid a straight commission on sales. Hiring a selling agent allows a small business to save the time and money it would have to invest in recruiting and training an in-house sales force. In addition, an agent with experience in selling similar products may provide readymade customers and quick entry into a sales territory. Selling agents are particularly helpful for businesses whose products experience seasonal or fluctuating sales, since they are only paid for the sales they make. The main disadvantages of selling agents are that they usually work for several different firms, so they are unable to devote 100 percent of their attention to any one client, and that it may be difficult to retain the customers gained in this way once the relationship with the agent is severed. It is also difficult to control the selling methods used by agents, and they may not be able to provide the service that some customers require. Types of Sales Positions There are many different types of personal sales jobs. A driver-salesperson merely delivers the product and has few selling responsibilities. An inside order takersuch as a sales clerk in a retail store or a telephone representative with a catalog sales companytakes orders from within a selling environment and requires some selling skills. In contrast, an outside order taker goes to the customer's place of business to take orders. Some selling skills are required in this position, especially to establish new accounts. A missionary sales person, rather than selling an actual product or service, instead tries to make a customer feel good about the company and products he or she represents. The pharmaceutical and liquor industries frequently employ missionary salespeople.

A sales engineer might be found in technical industries such as computers and copiers. Sales engineers provide technical support, explain the product, and help adapt the product to the customer's needs. Finally, a creative salesperson may attempt to sell goods (such as vacuum cleaners or encyclopedias), but more often represents ideas, such as services (insurance) or causes (charities). These salespeople usually deal with customers who are unaware of their need for the service or product, so they must possess the most developed selling skills of all the types of salespeople. Steps in Completing a Sale The many different types of salespeople all go through the same basic steps when making a sale: prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objections, closing, and follow-up. Although training for personal sales forces may vary from one organization to another, the majority of the training will include some version of these steps. Prospecting and qualifying involve locating potential customers and finding out if they are in a position to buy. Prospecting, or lead-generation, can be as simple as asking current customers for names of acquaintances who may also be interested, or as sophisticated as using a database or mailing list. Often the company provides leads, but a truly successful salesperson will also be able to generate his or her own leads. Prospecting usually involves an element of cold-callingthat is, calling an unknown potential customer and introducing oneself and the product. After possible customers have been located through prospecting, a salesperson must qualify them. This entails assessing their readiness and ability to buy. Personal selling almost always requires a salesperson to contact many prospects before completing a sale. The preapproach step involves researching the prospective customeroften another company. The salesperson may read up on the company, talk to other vendors, or study the overall industry. At this stage, the salesperson will also try to determine the best time to make the sales call and establish sales call objectives. During the next step, the approach, it is crucial for a salesperson to make a positive first impression while introducing himself or herself, the company represented, and the product or service being offered. It is also important that the salesperson listen carefully to the prospect and respond appropriately. Once the approach has been made, the salesperson should be ready to launch into the demonstration or presentation. Depending on the company and the product or service, there are generally three types of presentations. The prepared or "canned" approach involves a tightly scripted talk that is either memorized or read. The formula approach is less rigid. Depending on the buyer's response to some carefully asked questions, the seller will go to a formula presentation that he or she hopes will meet the customer's needs. The third presentation style is the need-satisfaction approach, in which the seller tries to uncover the customer's needs, mostly by listening. Presentations and demonstrations may involve any number of visual aids, such as flipcharts, or samples of the products themselves. One of the keys to a successful presentation is product knowledge. The more the salesperson knows about the product or service, the more relaxed he or she will be, and the more able to answer questions, shape his or her presentation to address customer concerns and desires, and handle objections. Handling objections is the next phase of selling. Almost every customer will present objections to making a purchase. A good salesperson is not flustered by these objections and handles them in a positive, confident manner. One approach to handling objections, used frequently with canned presentations, is simply to acknowledge the objection then continue with the presentation. The next step in the process of completing a saleclosing, or asking the buyer to make a purchaseis often identified by novice salespeople as the toughest step. In fact, some new salespeople are so reluctant to be perceived as aggressive that they never try to close the sale. Consequently, the customer may become annoyed and decide not to purchase just for that reason. Customers must be given the opportunity to purchase.

Salespeople need to learn to look for signals that a closing is appropriate. Common signals that customers give include asking questions, making comments, leaning forward or nodding, or asking about price or terms. The last step in completing a salefollowing upis often neglected, but is important for many reasons. The follow-up, which can be done in person or by telephone, gives the customer the chance to ask questions and reinforce his or her buying decision. The salesperson can review how to use the product, go over instructions and payment arrangements, and make sure the product has arrived in proper working order. This step ensures repeat business, is a good opportunity to obtain referrals, and increases the chances that subsequent payments will be made. Improving the Reputation of Personal Selling Personal selling involves specific steps, requires training and experience, and employs some highly talented people. Unfortunately, personal selling is also commonly perceived as being a less than reputable field of work. Unethical salespeople, aggressive or hard sell tactics, and misleading sales pitches have made many buyers wary of personal sellers. Fortunately, much has been done to address this issue. Selling associations such as the Direct Selling Association have adopted codes of ethics that dictate standards of behavior that all members are to follow. Most organizations with personal sales forces also adopt their own codes of ethics that provide guidelines regarding the type of sales pitch that can be made, and the hours during which a sales call may be made. Many companies also prohibit the use of misleading information or pressure tactics to make a sale.

Personal Selling and Sales Management

Scope and Importance of Personal Selling Nature of Personal Selling Types of Sales People Elements of the Personal Selling Process Prospecting and Evaluating Preapproach Approaching the Customer Making the Presentation Closing the Sale Following Up Management of the Salesforce Establishing Salesforce Objectives Organizing the Salesforce Recruiting and Selecting the Salesforce Training the Salesforce Compensating Sales People Motivating Sales People

Scope and Importance of Personal Selling

In the US, 14 million people are employed in sales positions, according to the department of labor. Sales personnel include stockbrokers, manufacturing sales representatives, real estate brokers etc. Most students in this class will have been employed as a sales person. Return to Contents

Nature of Personal Selling

Gives marketers:

The greatest freedom to adjust a message to satisfy customers informational needs, dynamic. Most precision, enabling marketers to focus on most promising leads. vs. advertising, publicity and sales promotion Give more information

Two way flow of information, interactivity. Discover the strengths and weaknesses of new products and pass this information on to the marketing department. Highest cost. Businesses spend more on personal selling than on any other form of promotional mix. Goals range from o finding prospects o convincing prospects to buy o keeping customers satisfied--help them pass the word along.

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Types of Sales Persons

Order Takers
Seek repeat sales, make certain that customers have sufficient product quantities where and when they need it. Do not require extensive sales effort. Arrange displays, restocks them, answer phone calls. Low compensation, little training required. High turnover of personnel. 2 types:
o o

Inside Order Takers receive orders by mail/phone, sales person in a retail store. Field Order Takers travel to customers. Use laptop computers to improve tracking of inventory and orders etc.

Order Getters
Sell to new customers and increase sales to present customers, sometimes called creative selling. Generate customer leads, provide information, persuading customers and closing sales. Required for high priced, complex and/or new products. High pressure, requires expensive, time consuming training.

Support Personnel
Facilitate the selling function. Primarily business to business products.
o

Missionary Salespeople Distribute information regarding new goods or services, describes attributes and leaves materials, does not close sales. Assist producers' customers in selling to their own customers. IE call on retailers and persuade them to carry the product. Pharmaceuticals may go to doctors offices and persuade them to carry their products. Trade Salespeople May perform order taking function as well. Spend much time helping customers, especially retail stores, to promote the product. Restock the shelves, set up displays. Technical Salespersons Offer technical assistance to current customers. Usually trained engineers etc. Service Salespeople interacts with customers after sale is complete.

Team selling...entire team of selling professionals in selling to and servicing major customers, especially when specialized knowledge is needed to satisfy different interests in customers' buying centers. Return to Contents

Elements of the Personal Selling Process

No 2 salespersons use exactly the same sales method, but it is generally a seven step process:

1. Prospecting and Evaluating

Seek names of prospects through sales records, referrals etc., also responses to advertisements. Need to evaluate if the person is able (Undergraduate degree to attend a graduate program), willing and authorized to buy. Blind prospecting-rely on phone directory etc. Return to Contents

2. Preapproach (Preparing)
Review key decision makers esp. for business to business, but also family
o o o

assess credit histories prepare sales presentations identify product needs.

Helps present the presentation to meet the prospects needs.

3. Approaching the Customer

Manner in which the sales person contacts the potential customer. First impression of the sales person is Lasting and therefore important. Strive to develop a relationship rather than just push the product. Can be based on referrals, cold calling or repeat contact. Return to Contents

4. Making the Presentation

Need to attract and hold the prospects Attention to stimulate Interest and stir up Desire in the product so the potential customer takes the appropriate Action. AIDA Try to get the prospect to touch, hold or try the product. Must be able to change the presentation to meet the prospect needs. Three types of presentations:
o o

Stimulus Response Format: Appropriate stimulus will initiate a buy decision, use one appeal after another hoping to hit the right button...Counter Clerk @ McDonald's "Would you like fries with your burger?" Formula Selling Format: (Canned Sales Presentation) memorized, repetitive, given to all customers interested in a specific product. Good for inexperienced sales people. Better with heavily advertised items that are presold. Telemarketing a credit card!! Need Satisfaction Format: Based on the principal that each customer has a different set of needs/desires., therefore the sales presentation should be adapted to the individual customer's needs, this is a key advantage of personal selling vs. advertising. Sales person asks questions first, then makes the presentation accordingly. Need to do homework, listen well and allow customers to talk etc. Must answer two types of questions: for more information overcome objections.

Overcoming Objections

Seek out objections and address them. Anticipate and counter them before the prospect can raise them. Try to avoid bringing up objections that the prospect would not have raised.

Price objection is the most common Need to provide customers with reasons for the $s, build up the value before price is mentioned Must be convinced of price in own mind before you can sell to customer. Get budget info. on buyer before you try to sell, and must know what they want, must sell service on top of product augmented product--to create value!! Must know value of product, provide warranties etc.!! Return to Contents

5. Closing
Ask prospect to buy product/products. Use trial closes, IE ask about financial terms, preferred method of delivery. 20% sales people generally close 80% sales., Avon, over 1/2 US $1.4 bn business from 17% of 415,000 SRs. Need to be prepared to close at any time. The following are popular closing techniques:
o o o o

Trial Close (Minor decision close) Assumptive close (Implied consent close) Urgency close Ask for the sale close

If prospect says no, they may just need more reasons to buy!! Return to Contents

6. Following Up
Must follow up sale, determine if the order was delivered on time, installation OK etc. Also helps determine the prospects future needs. Accomplishes four objectives:
o o o o

customer gain short term satisfaction referrals are stimulated in the long run, repurchase prevent cognitive dissonance

Old school, sell and leave!!--Quickly before customer changes her mind!! Now:
o o

Stay a few minutes after sale--reinforce, make them feel good, made wise choice, leave small gift (with co. name on it!!), call office at any time etc!! Follow up, reinforce, know birthdays, new year etc, friendly correspondence...relationship building!!

Handout...Toyota Calling In Japan's Car Market

Half of cars are sold door-to-door. This is shrinking due to environmental changes. Toyota has more than 100,000 door-to-door sales people. Developing Long-term relationships is key, Keiretsu, do business with only those you know and trust. Face-toface meetings before business to establish trust, the approach stage. Follow up is key to relationship: After sales:
o o o

call inquiring on car's immediate performance hand written greeting cards written invitations for low cost oil changes

Prospecting includes:
o o o

Driving schools for people to obtain licenses = prospects Also referrals from existing customers is very important Curtesy calls to clients who referred new customers.

Timing of presentation:
o o

To housewife in the middle of the day Just before 3 year "Shaken", following 2 years

"At first I had no intention of buying a new car, but Mr. Saito is very good at proposing reasons why I should change" = $1,600 shaken. Return to Contents

Management of Salesforce
Sales force is directly responsible for generating sales revenue. Eight general management areas:

15.

Establish Salesforce objectives

Similar to other promotional objectives Demand oriented or image oriented. Major objective is persuasion, converting consumer interest into sales. Sales objectives; expected to accomplish within a certain period of time. Give direction and purpose and act as a standard for evaluation. Set for total salesforce and each individual salesperson. Can be $s, units sold, market share to achieve, for individual salespersons, also include ave. order size, ave. # of sales/time period, and ratio orders/calls. Return to Contents

16.

Organizing the Salesforce

In-house vs. independent agents (manufacturer's sales agents). Organize by: Geography (simplest, but not suitable if product(s) are complex or customers require specialized knowledge) Customer: Different buyers have different needs Product: Specific knowledge re: products is needed Size. Marginal analysis, or determine how many sales calls/year are needed for an organization to effectively serve its customers and divide this total by the average # of sales calls that a person makes annually. Also use subjective judgement. MBNA estimates how many calls to expect, one year in advance, and then determines the size of the salesforce at any given time.

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17.

Recruiting and Selecting Salespeople

Need to establish a set of required qualifications before beginning to recruit. Prepare a job description that lists specific tasks the salesperson should perform and analyze traits of the successful salespeople within

the organization. May use assessment centers--intense training environment that places candidates in realistic problem settings in which they give priorities to their activities, make and act on decisions. Recruitment should be a continual activity aimed at reaching the best applicants. Applicants that most match the demographics of the target market. Changing demographics, may be wise to hire hispanic sales people if your territory is in Florida!! Return to Contents

18.

Training Sales Personnel

Use formal programs, or Informal on-the-job training. Can be complex or simple. Training should focus on:

the company products selling techniques.

Aimed at new hires and experienced personnel. Can be held in the field, educational institutions or company facilities. Oldsmobile spent $25 million last year to teach its dealers how to better treat its customers. Return to Contents

19.

Compensating Sales People

To attract, motivate and retain sales people, that facilitate and encourage good treatment of the customers. Need to understand personalities of sales people. Strive for proper balance of freedom, income and incentives. Need to determine the best level of compensation required, and the best method of calculating it.

Straight salary straight commission (selling insurance)--single percentage of sales or sliding rate Combination plan

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20.

Motivating Sales People

Need a systematic approach, must also satisfy non-financial needs:

Job security Working Conditions Opportunities to succeed

Sales contests increase sales. Symbolic awards--plaques, rings etc. Can also use negative motivational methods for under performers. Due to burn out--even the best need motivating!! Ongoing process...keep reps. hungry Need a motivational program. Spend time with reps, personal attention!! Take interest in them and the sales goals

4. 5. 6. 7. 8. 9. 10. 11.

Compensation packet that rewards quality salesmanship and extra effort Recognition of extra effort of sales force Make sure SR feel important Keep SR informed of company activities Make certain reps. believe in the company Goals must be realistic and achievable and changeable Determine what they want and give it to them Controlling and Evaluating Salesforce performance

Rely on information from call reports, customer feedback and invoices. Performance is determined by objectives. May compare with predetermined performance standards or with other sales people working under similar conditions.

Handout Avon....
$4 billion business, relied solely on personal selling until recently, environmental changes have changed this...no longer is the wife expected to be at home...model is dual income earning parents with children in day care. Need to develop more efficient ways to reach customers. Salespeople earn pure commission, 10%...50% for top sellers (over $32,750) Strategies tried:

Avon Select. Direct mail catalog and toll free number, attract those that didn't know an "Avon Lady", or didn't want to deal with one. Also used national TV and print campaign in conjunction. Problems = Salesperson creates confidence in the brand, delivering much more than advertising is able to do. When you take away the selling relationship, you're left with a brand that's relatively naked. Key is not to undercut the field salesforce, similar to dual distribution creating channel conflict. Mary Kay Corp has also tried this strategy but differently and more successfully:

Catalogs carry different merchandise Forward commission to sales rep. in customer's area "Never have a grey area regarding competing with sales force."

Other demotivational concerns: Restructured commissions Dropped awards, trips and other incentives Leadership Program. A Multi-level marketing (MLM) concept. Rewarded for products sold as well as people you recruit as a sales rep....by getting some of their commission and a portion of the commission of reps. they recruit etc. Created a hard sell environment and was consequently scrapped.

To remotivate: New CEO

Reinstate Birthday presents Anniversary plates Annual Pins Phone Blitzs to indicate appreciation

"Gifts [and recognition] are part of the magic"