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 impressions Interest – 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.

8-8 Consultative Selling – SPIN selling approach (Investigating) SPIN sequence of questions: 1) Situation Questions -- data gathering questions about facts and background. 2) Problem Questions -- explore problems, difficulties, and dissatisfaction areas which may be exploited. 3) Implication Questions -- examine the consequences of customer problems. 4) Need-Payoff Questions -- get the customer to tell you the benefits your product could offer. The purpose of questions in the larger sale is to uncover Implied Needs and to develop them into Explicit Needs. The purpose of questions in the larger sale is to uncover Implied Needs and to develop them into Explicit Needs. (Rackham 1988)

8-9 Types of Sales Commitments: 1) Orders -- Where the customer makes a firm commitment to buy 2) Advances -- Where an event takes place, either in the call or after it, that moves the sale forward toward a decision 3) Continuations -- Where the sale will continue but where no specific action has been agreed upon by the customer to move it forward 4) No-Sales -- Where the customer actively refuses a commitment Consultative Selling Obtaining Commitment (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 PositionBrief DescriptionExamples 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 buyer behavior

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. Selling Job Factors Selling Working with Others Servicing the Product Managing Information Servicing the Account Attending Conferences and Meetings Training and Recruiting EntertainingTravelingDistribution Sales job factors

P ROMOTION F ROM S ALESPERSON TO S ALES M ANAGER 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

16-27 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

S ALES M ANAGEMENT S KILLS 1. C ONCEPTUAL AND D ECISION S KILLS Refer to the cognitive ability to see the organization as a whole and the relationships among its parts. 2. P EOPLE S KILLS Involve the ability to work with and through other people and to work effectively as a group member. 3. T ECHNICAL S KILLS 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

Sales Objectives, Strategies and Tactics The main components of planning in a company are objectives, strategies and tactics. Their relationship is shown below Decide / Set Objectives Develop Strategies Evolve 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 Marketing Strategy Sales and Distribution StrategyTactics / 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