Sales Notes 175

Sales management notes:
ESHWARI.S---LORAA BUSINESS ACADEMY
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Introduction to Sales Management :
MEANING: Sales Management- is the attainment of sales force goals in an effective and efficient manner through planning, staffing, training, leading, and controlling organizational resources (Futrell1998) Managing a sales force involves recruiting, hiring, training, supervising, compensating salespeople, motivating them to become problem solvers, and providing the proper planning and backup support so they can perform their jobs properly. Definition: Systematic process involving: (1) formulation of sales strategy through development of account managementpolicies, 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 evaluation methods, and analysis of associated behavioral patterns and costs. Sales is one of the most crucial functions of an organization. It is the principal, and often, the only revenue generating function in the organization. Sales has formed an important part of business throughout history and will continue to do so. A constant evolution has been witnessed in the sales function from the early Stone Age, through the Iron ages and the Middle Ages to sales in the twenty-first century. The evolution of the sales concept can also be studied in terms of seven generations. In addition to helping an organization achieve its business goals, the selling function performs various other roles such as enhancing knowledge pertaining to the internal and external environments, developing positive relationships with customers, suppliers and distributors, and negotiating with customers to sell the company's products profitably. Despite the crucial role the selling function plays in the growth of an organization, sales has a rather negative image associated with it. This can be attributed more to the misconceptions in the minds of the people rather than actual knowledge of the profession. The major objectives of a sales organization are to increase sales volume, contribute to profits, and attain long-term growth. For an organization to be successful, it is essential to integrate the sales and marketing functions so that coordination of activities can be achieved.
ESHWARI.S---LORAA BUSINESS ACADEMY Page 2
Over the years, substantial changes have taken place in the selling environment, sparking a change in the sales function too. The various trends that have shaped the sales function include shorter product life cycle, longer, more complex sales cycle, reduced customer loyalty, intense competition among manufacturing firms, rising customer expectations, increasing buyer expertise, electronic revolution in communications, and the entry of women into the sales force. http://www.icmrindia.org/courseware/Sales%20and%20Distribution%20Management1/SDMC0 3.htm EVALUATION OF SALES MANAGEMENT:
Importance of Sales Management

Sales management is one of the key components that every business which relies on sales must practice. Sales management is the training and management of a sales staff, and the tracking and reporting of the company's sales. It is important to a business because if the principles of sales management are practiced correctly, it can increase your company's sales.
1. Goal Setting
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To achieve sales goals, your company needs to set sales numbers or goals for the staff. One way for a company to achieve and maintain growth is to increase its sales numbers. Sales managers can set sales goals that will promote growth and are attainable by the sales staff. Many sales managers use cash bonuses or other incentives to motivate staff to achieve the goals. Sales goals for staff can also be set to match the strengths of each staff member.
Tracking
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Sales management enables management to track the overall sales of the company as well as the individual sales of each employee. Using sales tracking, management is able to tell if the company is on track to meet its goals or if individual members of the sales team are not producing enough sales. By keeping the sales force constantly up to date on the status of their sales, you can help them to adjust their sales techniques and productivity to achieve the company's sales goals.
Reporting
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Using sales management, a company can produce sales reports that can be used to track the performance of its sales force over different periods. For example, you can use sales reports to compare the sales of the company on different years over the same period. The sales reports can determine the direction your company must take based on the results. For example, if the sales reports determine that your company is experiencing substantial growth year after year, it may indicate that expansion is a possible direction for the company.
Sales System
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As a company grows, it can become more difficult to track and manage the sales process without a system in place. Sales management provides companies with a system to train and manage employees while streamlining the sales process from the individual sales employee to the customer. This is beneficial because if there is a problem at any point of the sales process that may affect the company's bottom line, it can be quickly identified and corrected.
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FUNCTIONS OF SALES MANAGEMENT:

Sales management is the attainment of sales force goals in an effective and efficient manner through: Planning Staffing Training Leading Controlling organizational resources
PLANNING: The conscious, systemic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future and the use of resources needed to attain them.
STAFFING:
Activities undertaken to attract, develop, and maintain effective sales personnel within an organization.
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SALES TRAINING: The effort put forth by an employer to provide the salesperson job-related culture, skills, knowledge, and attitudes that result in improved performance in the selling environment. LEADING: The ability to influence other people toward the attainment of objectives. CONTROLLING: y Monitoring sales personnel s activities y Determining whether the organization is on target toward its goals y Making corrections as necessary.
TRENDS IN MODREN SALES MANAGEMENT:
Emerging Sales Trends in the New Economy

By Drew Stevens, PhD
There is a plethora of available data on emerging trends. From the global economy to technology, individuals and organizations are mindful of them. Surprisingly, there is very little written of emerging trends in the sales profession. We believe that selling is a profession, possibly an industrynothing happens in any business without a sale! During our twenty-seven-year experience with professional selling, a number of advancements have helped sales professionals. Professional sales training is now required, as is the need for useful technology that creates efficiency with customer relationships. However, the worlds challenges are changing the manner of selling. New issues await todays professional. These trends require flexibility, tenacity, and the opportunity to educate ourselves in a variety of disciplines. Global Clients Selling professionals are experiencing a cultural shift in their respective account bases. For almost three decades Stevens Consulting Group has seen the dramatic shift from domestic client bases to a multinational client base. It is vital for all selling professionals to think globally and act locally. The current economy is morphing faster than in the days of both immigration and the Industrial Revolution. We now do business with communities and nations that we had never heard of ten years ago. Selling representatives must be cautious about words, dress, linguistics, and even electronic communication. Anything said or written can be misinterpreted. The 500 most commonly used words in the English language have over 14,000 definitions.
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Tomorrows selling professionals must begin the study of international cultures and languages. The acquired knowledge assists professionals to communicate articulately with global clients, which provides better relationships. Gaining a better understanding of business etiquette, linguistics, mannerisms, and culture enables selling professionals to diminish barriers and gain better insight into client issues. Moreover, the ability to engage cross-culturally enables selling professionals to competition-proof their capabilities. Knowledge Management: Many years ago computers were bulky, rare, and performed minimal functions. Then as now, computer operation required data. However, as computer software developed, spreadsheets enabled end users to take data and gain useful information such as buying patterns and favored products. Yet, with the emergence of smarter technology, usefulness of the Internet, and spontaneity of access, stored information morphs into knowledge. In todays selling world content is king. Selling professionals require a wealth of knowledge to remain competitive. Tomorrows selling professional requires better insight into the customers world. Professionals must study competitors, the industry, and the client to help determine future needs. Using knowledge to help the customer remain competitive and offer provocative insights provides value and partnership. Customers engage with those they trust. DRM Direct Relationship Management: For years customer relationship management was paramount to organizational success. Customer relationship management is an information industry term for software, and usually Internet capabilities, that selling professionals and their organizations use to manage customer relationships. Databases, Windows-based software, and Internet applications all assist with maintaining client contact. However, while development has created wealth for software applications, it has done little for client relationships. Selling is a relationship business. Individuals want to conduct business with those they trust. Picking up the phone is more meaningful than sending an email and the more direct contact the betterpeople are not that busy. In an increasingly competitive market, having direct contact will actually deflect competitive forces. Strategic Methods: In a recent research survey of over 400 sales managers, 87% admitted their professionals were too tactical. Selling professionals by nature are tactical. Yet, tactics are not the best use of time and resources. The new era requires that selling professionals become more strategic in their account management and account planning. The research professional of tomorrow requires a tenacious desire for research. Sellers will require comprehension of competitive forces, industry demographics, and changing political and economic areas as well as technological changes. Rather than simply selling vertical products and services, future account management requires applying (?) the value proposition to the enterprise. Driving Force: A prevalent component of any business is strategy. Many organizations do not implement strategy correctly; leaders either look too far into the future or they fail to see into the current organizational culture. Strategy is needed for any business, from the smallest to the largest. However, important as strategy is, it cannot exist without having driving force. Ultimately, this boils down to selecting products (or services) to offer and the markets in which to offer them. Tregoe and Zimmerman urge executives to base these decisions on a single "driving force" of the business. While Tregoe suggests nine sources, ultimately one alone drives the business. Every selling organization will need to strategize and determine their driving force. Clients require new methods of service and support. Moreover, the need for proximity and speed of service will require
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representatives to be more responsive. More important, managing account in silos and placing numerous impediments that create intra-selling competition hurts client relationships and destroys margins. Talent:The diminishing labor pool and the constant drive for profits disables organizations capability to acquire the best talent. The largest asset of any organization is talent, especially sales talent. Nothing happens in an organization without someones selling something. The desire to invest in assets is daunting. According to CSO Insights, in their 2009 Annual Sales Effectiveness Report: y y y The percentage of salespeople failing to hit their sales quota rose from 38.8% to 41.2% Overall revenue plan attainment dropped from 88.2% to 85.9% 70% of firms report that ramp-up time for new salespeople is seven months or greater
Simply put, talent management and sales effectiveness needs to be at the top of every managers list. The report shows that many sales leaders think they can cut their way to sales effectiveness by spending less on sales training, getting by with fewer sales support staff, and avoiding investment in technologies to enable sales. But CSO Insight argues that these companies will see revenues and margins fall as well. (Kadient 2009) With the need for selling in every business, there are fewer than a few dozen of the more than 4000 colleges and universities in the United States with an established a formal sales program. In the United States, there are only fourteen universities with professional selling programs. Of the 1.2 million sales positions available in US-based businesses, research illustrates that up to 92% of sales employees have no formal selling education. Future sales leaders will require education acquisition. Simply put, selling is a profession and must be treated as such. Future leaders must engage in the proper education to increase proficiency and effectiveness. However, training must not be event-based. The purpose for training is to decease ineffective tendencies and provide strengths. New habits manifest over months, not hours in a classroom. Customer Service: Peter Drucker once stated that an organization exists for one reason: the customer. Unfortunately, the wrestlers of Wall Street persuade many firms to focus on irrelevant profits. Future organizations require more suitable strategic methods and driving force. Fortifying organizational strategy requires sagacious attention to customers. Similar to sales, customers are the lifeblood of every organization. Competitive differentiation stems from the perceived customer value. Customers desire to be with those they trust; this is the key differentiator in a marketplace cluttered with vendors. Appreciation from your greatest asset takes no time and little investment, and pays a huge return. Customer service extends internally and externally and relies on people, processes, and physical evidence. Selling professionals and peers will need to employ a true customer orientation, from answering telephones to returning phone calls. Procrastination and avoidance will be grounds for termination as organizations attempt closeness with customers. Also, processes must be efficient and client-friendly. Lengthy forms and waiting times only add frustration. Tomorrows leaders will constantly walk the process to eliminate tardiness and frustration. Finally, customer service requires a clean act. Selling professionals will dress differently, act differently, and speak differently. Clients make decisions within the first twelve seconds. Ask what clients believe about the firm and its employees.
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While change is good, it requires adjustment. The future of selling requires changes to keep pace with generational and cultural shifts that create behavioral changes in decisions. The selling representative of tomorrow must work efficiently and quickly to maintain the pace. Failure of change leads to competitive elimination. These trends require you to not sit on your past but to begin creating a new future.
Trends in sales management: 1) CREATING PREDICTABLE REVENUE Rather than just "more revenue", now CEOs and sales executives want to figure out how to predictably generate revenue and growth. The bottleneck here in the past has always been lead generation - if you have a predictable supply of qualified leads, it's easy to create predictable sales and revenue. Because lead generation and marketing tools have evolved so much in the past decade (like Marketo and Salesforce.com), executives are getting savvier at taking the guesswork out of sales because they can. 2) SPECIALIZATION OF SALES ROLES The old way of generating predictable revenue of just adding sales reps ("let's double this year by hiring twice as many salespeople") isn't working - at least for tech companies. Sales executives are getting smart about how their entire leadgen and sales systems are working. They are specializing their sales teams - such as having a dedicated team just doing outbound prospecting, and another doing inbound lead qualifying, and neither doing closing - rather than having sales reps who juggle everything - qualifying, prospecting, closing and account management - and thus do nothing well.
SPIN Selling:
What is SPIN Selling British research psychologist Neal Rackham, whose company, Huthwaite Inc., has taught it to hundreds of corporations worldwide, developed the SPIN selling system. At the heart of the system, as it is explained in Rackham's book SPIN Selling, is a precisely defined sequence of four question types that enables the salesperson to move the conversation logically from exploring the customers' needs to designing solutions, or to in Rackham's terms, to uncover Implied Needs and develop them into Explicit Needs that you, the salesperson, can resolve. Here are the four types of questions: Situation Questions. Example: "Would you describe your current account documentation system?" Every good seller begins the sales call by assessing the terrain, by asking questions to clarify the customer's current situation. So Situation Questions are essential, but here's the surprise. Huthwaite's research found that, as valuable as they are, Situation Questions also can be overused, and often are by inexperienced salespeople. In fact, one characteristic of unsuccessful sales calls, they found, is that they contain a higher than average number of Situation Questions.
Their advice: Do ask Situation Questions, but be sure they're necessary ones. Don't ask a question to elicit information that you easily could have obtained before beginning the call. And know that, when overused, these questions bore the customer. Problem Questions. Example: "So you're having trouble retrieving account-sensitive data on a timely basis?" Questions that are designed to identify a customer's problem are more often asked -- and asked more often -- by experienced salespersons. The reason seems obvious enough. Inexperienced reps hope to "sail through" the call; they are tempted to see the customer's problems as a distraction or threat. The more experienced you become, the more you want to uncover difficulties: The more you realize that customer difficulties present you with an opportunity to be of service. One caveat, though: Huthwaite's research suggests that the effectiveness of these questions is inversely proportional to the size of the sale under consideration. They are most effective in smaller-ticket transactions. Implication Questions. Example: "What kind of closing opportunities do you think your people have missed because of the data-retrieval problem?" These are questions about the "effects, consequences, or implications of the customer's problems." They are strongly linked to success in larger-ticket sales, and yet they're more difficult to phrase than either Situation Questions or Problem Questions. But they are essential to moving larger sales forward, because they help to make the customer (and the seller) conscious of hitherto hidden complications or of potential difficulties that may arise if steps are not taken to remedy the immediate problem. The virtue of this question is therefore also the risk: They make the problem seem more acute to the buyer. Need-Payoff Questions. Example: "If you could get quicker, more reliable retrieval, what overall gain in revenues might you realize?" Like Problem Questions, which they naturally follow, Need-Payoff Questions are linked to success in more complex sales. They can be especially useful when you're talking to top decision makers (or those who will influence them), and they increase the likelihood that your solution, if accepted, will provide the payoff that answers the need. These questions focus the customer's attention on the solution rather than the problem, and they encourage him or her (with your assistance) to outline the benefits that your solution will provide his or her company. Thus a good Need-Payoff Question both pre-empts objections and enlists customer buy-in. Putting these four questions together in an orderly sequence, Rackham gives the following thumbnail definition of the SPIN Selling model: The seller uses Situation Questions to establish a context leading to Problem Questions so that the buyer reveals Implied Needs which are developed by Implication Questions which make the buyer feel the problem more clearly and acutely leading to Need-Payoff Questions so that the buyer states Explicit Needs allowing the seller to state Benefits which are strongly related to sales success. As long-winded as that summation may be, the logic of the process is common sense. As Rackham acknowledges, the SPIN model isn't a revolutionary discovery. It's simply "the way most successful people sell on a good day when the call is going well."
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SPIN Selling:
Stop Fumbling & Start Making Sales SPIN Selling, a great model, was the brainchild of Neil Rackham who authored a book of the same name in 1988. SPIN Selling is based on extensive research by Rackham and his company, Huthwaite. They examined large, complicated sales scenarios. After analysing more than 35,000 sales calls they were able to put to rest a variety of traditional myths about closing sales. The book has been very successful selling over 150,000 copies. The original survey showed that in successful sales calls it's the buyer who does most of the talking, which means that the salespeople are asking questions. Asking questions means that the salesperson is building Rapport with the buyer, building sales rapport with the buyer allows the buyer to feel more comfortable talking. SPIN Selling proposes there are four types of questions, thus SPIN stands for :
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Situation ( questions ) Problem ( questions ) Implication ( questions ) Need-payoff ( questions )
Situation Questions deal with the facts about the buyers existing situation. Problem Questions ask about the buyer's pain and focus the buyer on this pain while clarifying the problem, before asking implication questions. . These give Implied Needs. Implication Questions discuss the effects of the problem, before talking about solutions, and develop the seriousness of the problem to increase the buyer's motivation to change. Need-Payoff Questions get the buyer to tell you about their Explicit Needs and the benefits your solutions offers, rather than forcing you to explain the benefits to the buyer. Getting the buyer to state the benefits has greater impact while sounding a lot less pushy. What these questions do is probe for explicit needs.
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PERSONAL SELLING:
What is Personal Selling?

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. In most cases the "value" for the salesperson is realized through the financial rewards of the sale while the customers "value" is realized from the benefits obtained by consuming the product. However, getting a customer to purchase a product is not always the objective of personal selling. For instance, selling may be used for the purpose of simply delivering information. Because selling involves personal contact, this promotional method often occurs through face-toface meetings or via a telephone conversation, though newer technologies allow contact to take place over the Internet including using video conferencing or text messaging (e.g., online chat). A Five Stage Personal Selling Process. Stage One - Prospecting. Prospecting is all about finding prospects, or potential new customers. Prospects should be 'qualified,' which means that they need to be assessed to see if there is business potential, otherwise you could be wasting your time. In order to qualify your prospects, one needs to:
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Plan a sales approach focused upon the needs of the customer. Determine which products or services best meet their needs. In order to save time, rank the prospects and leave out those that are least likely to buy. Stage Two - Making First Contact. This is the preparation that a salesperson goes through before they meet with the client, for example via e-mail, telephone or letter. Preparation will make a call more focused.
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Make sure that you are on time. Before meeting with the client, set some objectives for the sales call. What is the purpose of the call? What outcome is desirable before you leave? Make sure that you've done some homework before meeting your prospect. This will show that you are committed in the eyes of your customer. To save time, send some information before you visit. This will wet the prospect's appetite. Keep a set of samples at hand, and make sure that they are in very good condition. Within the first minute or two, state the purpose of your call so that time with the client is maximised, and also to demonstrate to the client that your are not wasting his or her time. Humour is fine, but try to be sincere and friendly.
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Stage Three - The Sales Call (or Sales Presentation). It is best to be enthusiastic about your product or service. If you are not excited about it, don't expect your prospect to be excited. Focus on the real benefits of the product or service to the specific needs of your client, rather than listing endless lists of features. Try to be relaxed during the call, and put your client at ease. Let the client do at least 80% of the talking. This will give you invaluable information on your client's needs. Remember to ask plenty of questions. Use open questions, e.g. TED's, and closed questions i.e. questions that will only give the answer 'yes' or the answer 'no.' This way you can dictate the direction of the conversation. Never be too afraid to ask for the business straight off. Stage Four - Objection Handling. Objection handling is the way in which salespeople tackle obstacles put in their way by clients. Some objections may prove too difficult to handle, and sometimes the client may just take a dislike to you (aka the hidden objection). Here are some approaches for overcoming objections:
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Firstly, try to anticipate them before they arise. 'Yes but' technique allows you to accept the objection and then to divert it. For example, a client may say that they do not like a particular colour, to which the salesperson counters 'Yes but X is also available in many other colours.' Ask 'why' the client feels the way that they do. 'Restate' the objection, and put it back into the client's lap. For example, the client may say, 'I don't like the taste of X,' to which the salesperson responds, 'You don't like the taste of X,' generating the response 'since I do not like garlic' from the client. The salesperson could suggest that X is no longer made with garlic to meet the client's needs. The sales person could also tactfully and respectfully contradict the client. Stage Five - Closing the Sale. This is a very important stage. Often salespeople will leave without ever successfully closing a deal. Therefore it is vital to learn the skills of closing.
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Just ask for the business! - 'Please may I take an order?' This really works well. Look for buying signals (i.e. body language or comments made by the client that they want to place an order). For example, asking about availability, asking for details such as discounts, or asking for you to go over something again to clarify. Just stop talking, and let the client say 'yes.' Again, this really works.
The 'summary close' allows the salesperson to summarise everything that the client needs, based upon the discussions during the call. For example, 'You need product X in blue, by Friday, packaged accordingly, and delivered to your wife's office.' Then ask for the order.
The 'alternative close' does not give the client the opportunity to say no, but forces them towards a yes. For example 'Do you want product X in blue or red?' Cheeky, but effective.
Advantages of Personal Selling

One key advantage personal selling has over other promotional methods is that it is a two-way form of communication. In selling situations the message sender (e.g., salesperson) can adjust the message as they gain feedback from message receivers (e.g., customer). So if a customer does not understand the initial message (e.g., doesnt fully understand how the product works) the salesperson can make adjustments to address questions or concerns. Many non-personal forms of promotion, such as a radio advertisement, are inflexible, at least in the short-term, and cannot be easily adjusted to address audience questions. The interactive nature of personal selling also makes it the most effective promotional method for building relationships with customers, particularly in the business-to-business market. This is especially important for companies that either sell expensive products or sell lower cost but high volume products (i.e., buyer must purchase in large quantities) that rely heavily on customers making repeat purchases. Because such purchases may take a considerable amount of time to complete and may involve the input of many people at the purchasing company (i.e., buying center), sales success often requires the marketer develop and maintain strong relationships with members of the purchasing company. Finally, personal selling is the most practical promotional option for reaching customers who are not easily reached through other methods. The best example is in selling to the business market where, compared to the consumer market, advertising, public relations and sales promotions are often not well received
Disadvantages of Personal Selling:

Possibly the biggest disadvantage of selling is the degree to which this promotional method is misunderstood. Most people have had some bad experiences with salespeople who they perceived were overly aggressive or even downright annoying. While there are certainly many salespeople who fall into this category, the truth is salespeople are most successful when they focus their efforts on satisfying customers over the long term and not focusing own their own selfish interests. A second disadvantage of personal selling is the high cost in maintaining this type of promotional effort. Costs incurred in personal selling include:
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High cost-per-action (CPA) As noted in the Promotion Decisions tutorial, CPA can be an important measure of the success of promotion spending. Since personal selling involves person-to-person contact, the money spent to support a sales staff (i.e., sales force) can be steep. For instance, in some industries it costs well over (US) $300 each time a salesperson contacts a potential customer. This cost is incurred whether a sale is made or not! These costs include compensation (e.g., salary, commission, bonus), providing sales support materials, allowances for entertainment spending, office supplies, telecommunication and much more. With such high cost for maintaining a sales force, selling is often not a practical option for selling products that do not generate a large amount of revenue. Training Costs Most forms of personal selling require the sales staff be extensively trained on product knowledge, industry information and selling skills. For companies that require their salespeople attend formal training programs, the cost of training can be quite high and include such expenses as travel, hotel, meals, and training equipment while also paying the trainees salaries while they attend.
A third disadvantage is that personal selling is not for everyone. Job turnover in sales is often much higher than other marketing positions. For companies that assign salespeople to handle certain customer groups (e.g., geographic territory), turnover may leave a company without representation in a customer group for an extended period of time while the company recruits and trains a replacement.
Objectives of Personal Selling

Personal selling is used to meet the five objectives of promotion in the following ways:
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Building Product Awareness A common task of salespeople, especially when selling in business markets, is to educate customers on new product offerings. In fact, salespeople serve a major role at industry trades shows (see the Sales Promotion tutorial) where they discuss products with show attendees. But building awareness using personal selling is also important in consumer markets. As we will discuss, the advent of controlled word-ofmouth marketing is leading to personal selling becoming a useful mechanism for introducing consumers to new products. Creating Interest The fact that personal selling involves person-to-person communication makes it a natural method for getting customers to experience a product for the first time. In fact, creating interest goes hand-in-hand with building product awareness as sales professionals can often accomplish both objectives during the first encounter with a potential customer.
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Providing Information When salespeople engage customers a large part of the conversation focuses on product information. Marketing organizations provide their sales staff with large amounts of sales support including brochures, research reports, computer programs and many other forms of informational material. Stimulating Demand By far, the most important objective of personal selling is to convince customers to make a purchase. In The Selling Process tutorial we will see how salespeople accomplish this when we offer detailed coverage of the selling process used to gain customer orders. Reinforcing the Brand Most personal selling is intended to build long-term relationships with customers. A strong relationship can only be built over time and requires regular communication with a customer. Meeting with customers on a regular basis allows salespeople to repeatedly discuss their companys products and by doing so helps strengthen customers knowledge of what the company has to offer.
Types of Selling Roles

As we noted above, worldwide millions of people have careers that fit in the personal selling category. However, the actual functions carried out by someone in sales may be quite different. In general there are four major types of selling roles: Order Getters y Order Takers y Order Influencers y Sales Support The objectives of each role are often very different and within each role there are serveral subclassifications. A detailed discussion of each role can be found in the Types of Selling Roles tutorial.
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Trends in Selling
While the basic premise of personal selling, building relationships, has not changed much in the last 50 years, there are a number of developments that are impacting this method of promotion including:
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Controlled Word of Mouth Customer Information Sharing Mobile and Web Computing Electronic Sales Presentations Electronic Sales Training Use of Customer Teams
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Personal Selling consists of the following steps.

1. Pre-sale preparation: The first step in personal selling is the selection, training and motivation of salespersons. The salespersons must be fully familiar with the product, the firm, the market and the selling techniques. They should be well-informed about the competitors products and the degree of competition. They should also be acquainted with the motives and behavior of prospective buyers. 2. Prospecting : It refers to locating or searching out prospective buyers who have the need for the product and the ability to buy it. Potential customers may be spotted through observation, enquiry and analysis of records of existing customers. Social contacts, business associations and dealers can be helpful in the identification of potential buyers. 3. Approaching : Before calling on the prospects, the salesperson should fully learn their number, needs, habits, spending capacity, motives, etc. Such knowledge helps in selecting the right sales appeal. After such learning, the salesperson should approach the customer in a polite and dignified way. He should introduce himself and his product to the customer. He should greet the customer with a smile and make him feel at home. He should introduce himself and his product to the customer. In case he is busy with some other customer, he should assure the new customer that he would be attended very soon. The salesperson has to be very careful in his approach as the first impression is the last impression. 4. Presentation : For this purpose, the salesperson has to present the product and describe its features in brief. The presentation should be matched with the attitude of the prospect so that the salesman can continuously hold his attention and create interest in the product. 5. Demonstration: In order to maintain customers interest and to arouse his desire, the salesperson must display and demonstrate the product. He has to explain the utility and distinctive qualities of the product so that the prospect realizes the need for the product to satisfy his wants. He should not be in a hurry to impress the customer and should avoid controversy. He may suggest uses of the product and may create an impulsive urge to possess the article by appealing to human instincts. 6. Handling objections: A sale cannot be achieved simply by creating interest and desire. Every customer wants to make the best bargain for the money he is spending. Presentation and demonstration of the product are likely to create doubts and questions in his mind. The salesman
should clear all doubts and objections without entering into a controversy and without losing his temper. Testimonials, money-back guarantee, tact and patience are popular means of winning over s hesitant buyers. The salesman should convince the customer that he is making the best use of his money by purchasing the product. For this purpose, the salesman should prove the superiority of his product over the competitive products. He should not lose patience if the customer puts too many queries and takes time in arriving at any decision. If the customer does not buy even after meeting rejections, the salesman should let him go without showing temper. He must believe in the universal rule that the customer is always right. 7. Closing the sale: This is the climax or critical point in the personal selling process. Completing the sale seems to be an easy task but inappropriate handling of the customer can result in loss of sale. The salesman should not force the deal but let the customer feel that he has made the final decision. He should guide the customer in making the choice without imposing his own view. Some adjustment in price or other concession may sometimes be necessary for a successful closing. The salesman should show the same interest in the customer which he exhibited during approach stage. Sales should be closed in a cordial manner so that the customer feels inclined to visit the shop again. In closing the sale, the article should be packed properly and handed over to the customer with speed and accuracy. Once the customer has purchased the article, the salesman should show and suggest an allied product. For instance, he may suggest socks, ties, handkerchiefs, vests, etc., to a customer purchasing a shirt. This is known as additional sales and requires great skill and tact. 8. Post-sale follow-up : It refers to the activities undertaken to ensure that the customer is satisfied with the article and the firm. These activities include installation of the products, checking and ensuring its smooth performance, maintenance and after-sale service. It helps to secure repeat sales identify additional prospects and to evaluate salesmans effectiveness.
Personal selling strategies:

Personal selling strategies should be derived from the marketing strategy and should be consistent with other elements of marketing mix. The following variables should be considered while formulating sales strategy. Call rates: If the intensity of competitive rivalry is high in the industry, salespersons should be calling on their customers more frequently. If the rate of technological changes in the industry is high, the customer is more likely to change equipments frequently and may require the services
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of the sales team more often to evaluate options. Also when the buyer is expanding his facilities or is venturing into new business, salespersons should be calling on the buyer more often. Percentage of calls on existing and potential accounts: a salesperson has to divide his time between existing and potential customers in a way that maximizes sales. Some salespeople fix some formula for themselves so that they do not spend excess time with either type of the customers, i.e. he will spend 40 pc of his time with existing customers and rest with prospective customers. But this may not be a good strategy all the time. Division of time between the existing and potential accounts should depend upon the type of industry and the state of business in the industry. Discount policy: Salespeople are prone to announcing discounts at every hurdle in the selling process. It is important to provide flexibility in prices that salesperson can offer to customers because many deals can be clinched by offering small discounts. Many a time discounts have to given to demonstrate to customers that they are important. But there should be guidelines prescribing the amount of discounts that can be offered to customers under exceptional circumstances. When discounts become pervasive, customers start expecting discounts as routine part of their buying process and the list price loses its sanctity. The company should reduce its list price under such circumstances to restore the sanctity of its list price. The company will be a better position to know the realized price. Salespeople should be able to sell on the merits of the product and on the strength of the relationship that they have with the customers. Discounts should be provided in exceptional circumstances.
Determining the sales force profile:
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Salesforce Staffing: How to Forecast a Sales Force Size

Sales Team The ability to forecast a sales force is dependent on a few different factors. The idea is to construct your team with the right balance of people. If you have too many or too few it can be a hindrance to a company's efficiency. In a changing marketplace, it is necessary to be aware of certain items that will have a direct impact on the future productivity of your company. 1.
o
Past Sales Results Look at past results: This encompasses both gross and net sales figures to cover the previous 12 months of actual sales results. Gross sales are necessary because even though all this business did not close, an initial order was still received and paperwork was processed, which requires people power to make these items happen. You don't want to have the opportunity to make sales, then have nothing in place to make it all happen. Net sales are important because this was your true indicator of cash flow. You learn and plan with the aid of gross sales numbers, but you really set your business focus based on the net numbers, as this is an accurate description of your market. o 2
The Market View current market conditions: The market is a live and dynamic place. It doesn't exist in a static environment, so it is crucial to be aware of the current state. Are things still plugging along or have they slowed or increased? Look at sales reports for the past 12 months, then break them down into smaller data samples. Are things expanding or contracting? For current market conditions, focus only on the last six months, with more of an emphasis on the most current information. Where is your industry heading? Be cognizant of media reporting and the influence it can have on consumer purchasing.
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Planned Growth
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Consider planned growth projections: This is both internal and external. Each company has a break-even profit margin and a goal profit margin. When forecasting a sales force, it is important to have both these numbers in mind. Do you want to staff up for the break-even number or for the goal profit margin? This is an internal decision to make. The external aspect of planning growth projections is dependent on market influencers. Market influencers are media outlets, new competition coming into the marketplace, a previous competitor exiting the marketplace or a new technology development.
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Sales Team Ability Assess your current sales team's ability: This will involve obtaining an accurate evaluation of each member on your current sale team. On any given sales team, you have your top 10 percent of producers and the bottom 90 percent. Do not make a forecast under the assumption that each team member will perform the same. Each person has a different set of skills and overall capability. Good salespeople are worth their weight in gold. Sales is often referred to as a numbers game, but that isn't necessarily the case when you have a top-flight salesperson who can turn nothing into something over and over again. Be acutely aware of who these people are on your team. The bar for these folks is higher. Conversely, be aware of how the other members of your current team have performed. Don't overestimate because you think someone is about to step it up. Results don't lie and talk is cheap. Salespeople tend to overstretch their future results based on a money goal they desire, so these projections need to be taken with that understanding. Optimism is fantastic, but when designing an accurate sales force projection, proven facts are the best indicator. It's easier to respond to market demand by hiring additional people as they become necessary than it is to over-hire, increase your overhead, then have to terminate people.
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Market Influencer Know where your future business will come from: Be aware of this at all times but especially when compiling the right data mix to staff your company accurately. Depending on the scope of business you are in, the main three elements of where business comes from is existing customers, prospective customers and the current market. Having already discussed the current market, the focus here is on existing and prospective customers. What percentage of business do you want to gain from your current base of customers and prospective customers? Where do you want to shift your marketing focus? Referral-based business is the easiest type to duplicate. It involves less investment and less time. Working with current prospects that have not purchased yet and those that don't know about you is a different dynamic. This involves time, monetary marketing investment and good salespeople. When you define where you want your customers to come from, you will get a clearer vision of people forecasting.
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CUSTOMER ORIENTED SELLING STRATEGIES:

Four Phases of Customer-Oriented Sales Strategy The customer-oriented sales strategy is about selling to the customer's individual needs. What is Customer-Oriented Selling? Customer-Oriented Selling is the most comprehensive and flexible sales training program available in the marketplace today. Your sales force will learn how to build successful business relationships by helping customers achieve both their business and personal objectives. The customer-oriented sales strategy uses a logical approach to building longterm relationships with customers. This approach is designed to identify and sell to customers who will benefit from the relationship rather than attempting to sell to potential customers who may or may not have a need for your particular product. The customer-oriented sales strategy helps customers achieve their personal and business goals by helping you discover what they actually want and need and selling them what they're looking for. Follow four essential phases when implementing a customer-oriented sales strategy. 1. Customer Analysis
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To identify the right customers at which to direct your sales strategy, perform a market analysis. The market analysis is commonly used to identify the correct customers to target when marketing a particular product or service. Understanding aspects such as demographics, geographic location and individual needs of customers helps determine the appropriate sales approach for the particular market. By defining the specific market, you can develop a sales strategy designed to sell your products to specific businesses and individuals for whom the product will fill a need.
2. Opening Statement
You must hook the potential customer immediately. After you have determined the particular customers to whom you should market your products and services, you are ready to implement phase two of the customer-oriented sales strategy. When calling potential customers, you have about eight seconds to capture their attention after they answer the phone. It's essential to hook the customer in those first eight seconds by immediately offering information that will let this individual know that you are selling something that might actually be of interest to her.
3. Recommendations
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A common approach to phase three of the customer-oriented sales strategy is the objectivebenefit-feature concept. This involves asking questions about the specific customer's objectives. In other words, find out what this customer needs and wants. You must then describe the benefits to the customer of using your particular product or service. Finally, explain the features of your product which make it better than your competitors' and present the customer with a
recommendation, telling him which of your products or services you believe would provide the greatest benefit to the individual. 4. Customer Commitment
Focusing on customer needs will help you close the sale. Getting the customer to commit to purchasing a product or service is the final phase of the customer-oriented sales strategy. Obtaining buyer commitment consists of closing, or asking the customer for her order and confirming, or reassuring the customer that she has made the right decision in purchasing from your company. Closing the sales call should be relatively simple when implementing a customer-oriented sales strategy. Read more: Four Phases of Customer-Oriented Sales Strategy | eHow.com http://www.ehow.com/info_7851632_four-phases-customeroriented-salesstrategy.html#ixzz1Lu4A553F
Emerging trends in sales management:

Global perspective Revolution in technology Customer relationship management (CRM) Salesforce diversity Team selling approach Managing multi-channels Ethical and social issues Sales professionalism
Trends in Selling
While the basic premise of personal selling, building relationships, has not changed much in the last 50 years, there are a number of developments that are impacting this method of promotion including: Controlled Word of Mouth Customer Information Sharing Mobile and Web Computing
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Electronic Sales Presentations Electronic Sales Training Use of Customer Teams
Elementary study of sales organizations:

Sales organization:
An organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling A sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function.
Factors influencing structure:

Product and service related factors Organization related factors Marketing mix related factors External factors: the speed of market change reduction in the number of vendors per buyer closer to customer relationships changes in regulations and international practices
Concepts of Sales Organisation:

A sales organisation assists the sales manager to carry out needed tasks efficiently and effectively to achieve results The basic concepts of the sales organisation are: Degree of centralisation Degree of specialisation Line or staff positions
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Market orientation Effective co-ordination
Centralization vs Decentralization
Centralization
the degree to which decision making is concentrated at a single point in the organization top-level managers make decisions with little input from subordinates in a centralized organization Decentralization
the degree to which decisions are made by lower level employees distinct trend toward decentralized decision making
Tall & Flat Organization Structures:

Flat structures Reduces the levels of management. Widens span of control of management at various levels of organisation. More decentralized with regard to decision-making
Span of Control vs. Management Levels:
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Tall & Flat Organization Structures:

Tall structures Have many levels of authority relative to the organizations size. As levels in the hierarchy increase, communication gets difficult. The extra levels result in more time being taken to implement decisions. Narrow span of control More centralized decision making
Basic Types of Sales Organisation Structure :

The grouping of activities into positions and the charting of relationships of positions causes the organization to take on structural form. The most common structures are line & line and staff. Functional organizational structures are rare. Most sales department have hybrid organizational structures, with variations to adjust for personalities and to fit specific operating conditions.
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Line organization:
Head Marketing Sales Manager Area Sales Manager1 Area Sales Manager2 Area Sales Manager3 Area Sales Manager4
salespeople salespeople salespeople salespeople
Characteristics: All managers have line authority to direct and control subordinates. Used in small firms / departments Advantages: Simple organisation, clear authority, quick decisions, low cost Disadvantages: No support to line managers from subordinates who have specialised knowledge / skills. Less time for planning / analysis
Line and staff organization:
HeadMarketing
Marketing Research Manager
Sales Manager
Promotional Manager
Customer Service Manager
Area Sales Manager-1
Salespeople
Salespeople
Salespeople
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Characteristics: Specialist staff managers are available for senior marketing / sales managers. Staff managers role is to assist / advise line managers. Used in medium and large size organisations Advantages: Better marketing decisions, superior sales performance Disadvantages: High cost and coordination, slower decision making, conflict may arise if staff managers role is not clear
Functional organization:
Head-Marketing
Sales Manager
Promotional Manager
Area Sales Manager #4
Salespeople
Characteristics: Each functional specialist has line responsibility over salespeople. Used by a large firm with many products / market segments, minimising line authority to functional managers Advantages: Qualified specialists guide salesforce, simple to administer Disadvantage: confusion due to more managers giving orders to salesforce
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Horizontal organization :
Characteristics: Removes management levels & departmental boundaries. Except planning team, all others are members of cross-functional teams. Used by firms having partnering relationships with customers. Advantages: Reduction in supervision, unnecessary tasks, & cost; Improved efficiency and customer responses.
Specialisation within Sales Organisation:

Needed to increase effectiveness of salesforce Done by expanding basic sales organisation Basis of specialisation Geography Type of product Market Combination of above
Criteria for selection (1) nature of product, (2) salesforce abilities, (3) demands of selling job, (4) customer and market facts
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Geographic Specialisation:
Head-Marketing
General Sales Manage Promotion Manager
Branch Sales Manager-1
Salespeople
Salespeople
Salespeople
Salespeople
Characteristics: salespeople, assigned geographic areas, are responsible for all selling activities to all customers within assigned areas. Branch sales managers adjust marketing plan to local needs Advantages: Better market coverage and customer service, more control over salesforce, quick response to local conditions & competition Disadvantages: Limited specialisation of marketing tasks. Hence, it is combined with product / market sales organisation
Product Specialisation:
Used when the company has many products and / or brands Two types of product specialisation
(x). Sales organisation with product specialised salesforce (y). Sales organisation with product managers as staff specialists
HeadMarketing
General Sales Manager
Promotion Manager
Sales Training Manager
Area Sales Managers Product Group A
Area Sales Managers Product Group B
Salespeople Product Gr. A
Salespeople Product Gr. B
Fig. x Sales Organisation with product specialised salesforce

Head-Marketing
Product Specialisation (Continued)

Promotion Manager General Sales Manager Product Manager Product Gr. A Product Manager Product Gr. B
Area Sales Managers
Salespeople
Fig. y Sales Organisation with Product Managers as Staff Specialists
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In fig. x: Characteristics: Salespeople in each product group sell only the products in that group Advantage: Each product gets specialised attention from the salesforce Disadvantage: Sometimes, more salespeople contact the same customer, resulting in customer dissatisfaction and higher cost In fig. y: Characteristics: Each product manager plans and implements marketing plan, for a product group Advantage: Corrects the problem of duplication calls on a customer by salespeople Disadvantage: Lack of product specialisation by salespeople
market specialization:
General Sales Manager
Sales ManagerInternationalMarkets
Sales ManagerCommercial
Sales ManagerGovernment
Sales ManagerConsumer Markets
Area Sales Mgrs International
Area Sales ManagerCommercial
Area Sales ManagerGovernment
Area Sales MgrsConsumer Markets
Sales Executives
Salespeople
Salespeople
Salespeople
Characteristics: Desirable when customers are classified by type, user industry, or channel. Salespeople carry out all activities for all products only for specific customer groups Advantages: Meets needs of specific customer groups, implements customer-centred philosophy of the company Disadvantages: Geographic duplication, high cost
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Combination sales organization:
Director Sales & Marketing
General Manager Sales - North
General Manager Sales - East
General Manager Sales - West
General Manager Sales - South
Regional Sales Mgr. Govt.
Regional Sales Mgr. Commercial
Regional Sales Mgr. - Dealers
Salespeople
Salespeople
Salespeople
Characteristics: Many firms use some combination of specialisation organisations, called hybrid or combination sales organisation, with a view to minimise disadvantages and maximise advantages of specialisation organisations Figure above shows combination of geographic and market specialisations
Alternatives for Major Accounts:

Major accounts / customers are called by various names like key accounts, corporate accounts, house accounts They make up a large share of a firms sales volume and profits Firms use the following alternative approaches to deal effectively with them Create a position of major / national account manager Use existing territory sales managers Create a separate division, Create a separate salesforce
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Qualities and responsibilities of sales manager:

Here are 10 attributes of a great sales manager: 1) Passion. This is also one of the top qualities of a master closer and the only one that cant be taught. Without a passion for the home building industry, its impossible to lead and inspire a team, Tarullo says. 2) Integrity. Combined with passion, these are the two most important qualities for a sales manager. They need that core, Tarullo says. If they dont have those, they shouldnt be in sales management. 3) Positive attitude. Its up to a builders leadership to put smiles on the faces of the sales team and set the tone for the company. 4) Coaching. Seventy percent of a sales managers time should be spent coaching, either in groups or one on one, Tarullo says. Any sales manager who says the workload doesnt allow that kind of time with the staff needs to examine how the day is being spent and ditch or delegate any activity that doesnt affect lead generation or conversion. 5) Leadership by example. The sales manager should be out on the sales floor with his people, says Jim Capaldi, director of sales for the Ventura division of Standard Pacific Homes and author of The Ultimate New Home Sales Success Manual. Thats where youre most productive. Lead by example, make them accountable, push them, and get them out of their comfort zone. 6) Loyalty. Sales managers need to go to bat for their sales team members, says Debbie Dompke, sales manager for Chicago-based Lexington Homes. Let them know youre on their side, she says. When they know youre sincere, its amazing the work ethic youll get in return. 7) Availability. Dallas-based sales trainer Bob Hafer says paperwork has to be done, but it cant be used as an excuse to not do the tough stuff. Its easier than dealing with people, to be sure, he says, adding, Administrative tasks never talk back to you. When he was a sales manager, he got to work at 7 a.m. and spent two hours on paperwork before the phone started ringing. Then, when the sales centers opened, he was available to work with his sales teams in the field. 8) Motivation. This includes encouragement and recognition. Dompke says she does this in so many wayscontests, games, dancing, singing, dressing up. You laugh together and play together. 9) Continuous learning. Doctors, accountants, attorneys, and other professionals keep learning their whole lives in order to keep their skills up to date. Sales managers need to do likewise. When you dont grow, Capaldi says, you leave the door open for someone else. 10) Listening and communication. This is an underpinning for most of the other qualities. You cant be a good coach or motivator if youre not a good communicator; and you cant continuously learn, lead by example, or demonstrate loyalty without being a good listener.
QUALITIES OF A SALES MANAGER:

y y y y physical qualities mental qualities social qualities character related qualities
Physical Qualities: y y y y Health Posture Voice Appearance
Mental Qualities: y y y y y y y y Alertness Imagination Self-Confidence Initiative Memory Observation Resourcefulness Cheerfulness
Social Qualities: y y y y y y y y Ability and Eagerness to Meet People Effective Speech Courtesy Tact Co-operation Good Manners Patience Tolerance
Character Related Qualities: y y y y Honesty Courage Sincerity Loyalty, Determination

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y y
Sales Manager Responsibilities: The responsibilities of sales managers are mostly set according to the employment setting. However, there are some generic sales manager responsibilities that are to be carried out, no matter what the type of company or employment setting is. Sales Resource Management: One important responsibility of a sales manager is to recruit well-qualified resources for contributing to the company's sales development. He has to work with the human resource manager and arrange for interviews, conduct interviews of eligible candidates, and recruit efficient sales workforce. Sales Training To Subordinates:
y y
After the recruitment is done, he has to again work with the human resource department of the company to conduct training sessions for the newly recruited sales executives. The sales manager job description includes imparting sales training sessions to sales professionals regarding how the company business can be improved. Managing Sales Executives:
A sales manager has to analyze the strengths and weaknesses of his team members for the purpose of assigning tasks to sales and marketing executives. He has to handle all administrative issues of his team members. A sales manager is also supposed to keep a record of the employee productivity of his team members. Preparing Sales Policies and Marketing Strategies:
He has to consult with the top management of the company and the sales director, and draft sales policies and marketing strategies for approval from the management. After the strategies have been finalized, he has to explain them to the team members. Guiding sales executives and planning ways to go according to the sales strategies is also a very important responsibility of a sales manager. Handling Important Sales Deals:
If there are deals which can get the company a substantial amount of business and profits; the company may require the sales manager to travel places, discuss with such clients, and attract more business. In such situations, the sales manager has to show off his full potential for finalizing the contract with the client. He also manages crucial aspects of the advertising and marketing processes.
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Team Management: y Maintaining a good teamwork spirit in the sales team is also a crucial part of the sales manager job description. A sales manager has to motivate the team to give their best and be true resources for the company. He has to address the difficulties that are faced by the executives in achieving their targets. Following is some information on the sales manager salary.
The Role of the Sales Manager:

The two primary responsibilities of the sales managers are to achieve the companys goals and to develop the people reporting to them. Many sales managers operate without a sales management process. On this one day Sales Managers Masterclass the sales manager will learn how to put in place a sales management process where he can clearly define the activities and responsibilities of the sales force and construct a formal organisation of the sales operation. The sales manager will learn how to lead and motive his sales team for success.
Regional Sales Manager Responsibilities

By Dan Pham, eHow Contributor
Most products on today's market are not vastly superior to their competitors. Due to a high degree of competition, many companies succeed by having a stronger sales force than their opposition. As market share increases, a company may choose to expand into predetermined territories with sales potential, called "regions". Regional Sales Managers (RSM) facilitate these efforts.
Regional Sales Manager Responsibilities

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Regional sales managers' primary responsibilities include but are not limited to: planning a company's sales campaigns, developing the skills of the sales team, smoothly implementing technological changes, consulting and collaborating with company executives, and proactively reviewing the outcomes of the company's sales efforts.
Planning a Company's Sales Campaigns

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Regional sales managers are responsible for the development of an operating plan for establishing sales traction in a region suitable for the company's product. This can include conducting market analysis on the region, coordinating with marketing efforts in the area, and getting access to resources in the process. Regional sales managers create plans to maximize the efficiency of their sales force.
Developing the Skills of the Sales Team

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Many regional sales managers come from successful sales backgrounds but typically do very little actual selling. Instead, they develop and implement the training programs and incentives that will motivate their sales force to do well. Additionally, regional sales managers outline the department goals and collect forecasted goals for all of the salespeople in the region. They also hold their salespeople accountable for their projected sales forecasts.
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Facilitating Training for Salespeople

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Regional sales managers' individual training varies depending on the experience of the sales force; however, usually they will mentor new salespeople and offer advice and/or resources to senior salespeople. In some situations, regional sales managers will assist in the "closing" of a sales deal.
Smoothly Implementing Technological Changes

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Another responsibility of Regional Sales Managers is the successful incorporation of new technologies smoothly all across their sales force. According to Dave Roberts, Manager Partner at Siebel MultiChannel Services, "Proven, reliable processes and enabling technology exist to create more efficient, predictable sales forces, but implementing these initiatives has proven to be a problem."
Consulting and Collaborating with Company Executives

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Regional Sales Managers are responsible for effectively communicating the goals of the company executives to the salespeople. They communicate the needs of the sales force to the executives as well. Regional Sales Managers report a variety of things, including: new projects, progress towards goal achievement, sales forecasts, sales revenue, new projects, and various other business-related requests.
Proactively Reviewing the Outcomes of the Company's Sales Efforts

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Regional sales managers must always look for ways to improve on the sales process for their company to continue to grow and capture market share. As a result, they must constantly evaluate each and every sales campaign to see what new opportunities are available in the region, seek referrals from happy customers, and foresee what can be done better for the next time.
Regional Sales Managers In Large Multiproduct Firms

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According to the Bureau of Labor Statistics, depending on the size of the company, regional sales managers may also oversee regional and local sales managers and their staffs. Additionally, sales managers may be the direct-point-of-contact with dealers and distributors, monitoring inventory requirements. According to the BLS, "Such information is vital in the development of products and the maximization of profits."
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Unit: 2
Sales Organization Concepts:
Specialization:
The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization.
Centralization:
The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.
Sales Force Specialization Continuum:
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Go through slides:31
SALES STRUCTURE:
Organizational Structure for Sales Management The sales team is at the heart of every company. San Diego State University states that roughly 16 million people in the United States work in sales positions, and almost 20 percent of chief executive officers in the top United States corporations have a sales background. Many large sales forces have layers of management designed to facilitate communication between all parties, keep the team motivated and ensure that the team meets or exceeds the company's goals. Significance Although all of a company's functions and departments affect a company's success, sales plays a direct role and is a pivotal part of whether a company achieves its goals. The sales force is the conduit from the company to the customer, and gives customers the opportunity to put a face to the company. Structure The structure of a sales organization varies depending on the size and type of company. Generally, an executive or senior vice president oversees the entire sales organization. He reports directly to the company president, has a role on the senior management team and oversees the entire field sales organization as well as any supporting corporate groups like business development or business analysis. A vice president of sales oversees each geographic region, and divides that region into several districts headed up by a district manager. Depending on the size and type of district, a district manager may have several area or territory managers that report to her. Areas managers oversee sales representatives who may in turn oversee merchandisers. There can be any number of variations to a typical sales structure, usually driven by the density and types of customers in a given area, the product or service being sold and the goals the company is seeking to achieve. Types A structure can be centralized or decentralized. In a centralized structure, the field sales force is autonomous and geographically focused. Corporate managers in finance, category management or business analysis report to the executive who heads up their team yet services the field sales force as a whole. In a decentralized structure, cohesive teams that include sales, marketing, category management, trade marketing, public relations, finance, customer service, operations, information technology and human resources work together to support individual regions. In 1998, adult beverage industry giant Diageo PLC moved from a centralized sales structure to a decentralized structure. It created five in-market companies (IMCs) focused on the southeast, northeast, central, west and southwest regions. Each IMC had its own president who reported
directly to the CEO. The IMCs contained a full sales force focused on that region, as well as representatives from each pertinent department in the company. Although the IMC structure proved successful, Diageo moved back to a more centralized structure in 2002, due to a series of mergers, acquisitions and changes in the industry. Function Senior sales management plays a role in an organization's strategic planning process where goals, forecasts and key performance indicators (KPIs) are set. Senior sales managers use plans to create a flexible organization prepared to achieve the set goals and KPIs. The remaining members of a sales group's management from the vice president down to the area or territory manager provide their team with leadership, communication and mentoring. They ensure that their team achieves their goals and provide feedback in the form of performance measurement and appraisals. The managers act as a liaison between their team and corporate functions like marketing, and they act as a direct conduit to the operations group to ensure there is enough supply to meet customers' demands. Considerations Depending on the size and geographic focus of a company, the sales department may include a national accounts and key accounts team. These teams act independently of the field sales team, and are usually led by a senior vice president who may report directly to the executive vice president of sales, the company president or chief executive officer. The national account teams work with customers who bridge geographic regions, like WalMart or CostCo. The key accounts team is responsible for large clients who may or may not cross geographic boundaries.
List of Different Kinds of Sales Jobs:

Sales jobs are diverse and rewarding. They allow individuals to use their excellent communication skills to help people, but are highly competitive with little guarantee of job security. However, according to the U.S. Bureau of Labor Statistics (BLS), an individual may work more than 40 hours a week to make sales goals. An individual may work as a sales engineer, advertising sales agent, insurance sales agent or many other kinds of sales jobs.
1. Sales Engineer
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A sales engineer, also called a technical sales support worker, advises customers and decides the designs and modifications of services and products. The sales engineer explains the benefits of technical or scientific products and services to customers by showing how the products work and why they're better than competitors' brands. The engineer persuades customers to buy products, negotiates sell price and accepts payments. Then the sales engineer sets up or modifies products to suit customers' desires. The engineer may work with customers after the sale by fixing any problems with the service or selling additional products to them. The sales engineer must have detailed knowledge of products' functions and parts. According to the BLS, working in the sales engineering field requires a bachelor's in engineering or previous sales or technical experience or training. In 2008, according to the BLS, the sales engineer made a median income $83,100 a year.
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2. Advertising Sales Agent

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An advertising sales agent, also called advertising account executive, acquires new clients, works with existing clients and sells advertising space to clients. Typically, an advertising sales agent contacts potential clients through cold-calling techniques or by calling or going to companies without an appointment. The agent talks to individuals about promoting their businesses in print publications, websites, direct mail or radio advertisements. If the potential client wants to proceed, the advertising sales agent provides a formal proposal that includes details such as cost, sample advertisements, and how long the advertisement will run in the particular media. The agent also works with existing clients to sell more advertising space and answers any questions or concerns. An individual only needs a bachelor's degree to enter the field, according to Careers State University. In 2008, the median wage for an advertising sales agent, according to the BLS, was $43,480 a year.
3. Insurance Sales Agent

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An insurance sales agent seeks new clients, sells insurance products and offers advice to clients on insurance needs. The sales agent sells different types of policies such as life, disability, health or automobile insurance. Typically, the agent contacts prospective clients--whether individuals or businesses with employees--about their needs. These needs may be protecting employees' health, providing retirement money or covering property loss. The insurance sales agent also writes reports and keeps records about clients and their policies. Employers prefer applicants with a college degree. The agent must be licensed to practice. According to the BLS, in 2008 the median income for an insurance sales agent was $45,430 a year.
Sales management positions:

JOB AND EMPLOYMENT OPPORTUNITIES Many positions in sales management can be obtained through companies ranging from the for profit to not-for-profit organizations as well as service oriented institutions like those involved in financial services, insurance, consulting, and government. For instance, one type of sales is commercial banking. Positions in industrial and commercial sales and sales management provide rewards and challengers through opportunities including systems selling and the need for broad management as well as technical training in some scenarios. Since there are so many different kinds of product and market opportunities, and sales personnel are constantly facing new interpersonal situations, it is important to match sales personnel with positions that fit their background, interests, technical skills and academic training. Sales and sales management training programs can vary in length and format, lasting as little as a few weeks or taking up to two years. Every organization offers a different career path in sales, and thus each career path within in a particular organization should be examined. ENTRY LEVEL SALES MANAGEMENT POSITIONS
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Trade Sales: Such positions involve representatives of products produced by manufacturers or wholesalers and sold to wholesalers or retailers. Goods can vary from grocery items to office goods to clothing apparel. Firms that use these types of sales reps are Proctor & Gamble, Kimberly-Clark, and Levi-Strauss etc. Sales reps typically are assigned a specific geographic location with a designated number of accounts for which they are responsible. Their duties involve visiting the wholesaler or retailer, providing information on the latest products, closing all sales, expediting orders, and mediating complaints. y Missionary Sales: These are representatives of the manufacturing companies who contact retailers and decision makers of companies in order to convince them that their product should be utilized. In a sense missionary salespeople preach the gospel of their goods, although they dont actually close any sales. For example, a drug pharmaceutical representative contacts doctors to convince them to use the companys brand when prescribing select drugs. Another common example is grocery product producers will send missionary salespeople to retail establishments to talk to retailers about the products, help them position displays, stock the shelves with goods, etc. These representatives also have a designated amount of accounts located in a designated geographic area for which they are responsible. Work as a missionary sales representative is a great method for preparing personnel to take on actual sales work later on as it does not require the representative to sale the product or close the deal. y Technical Selling: Technical sales reps also have designated accounts in assigned geographic locations for which they are responsible. The salesperson represents the product and works to sell it to the businesses on their account. The main difference between technical selling and trades sells is the nature of the product. Products that employ technical selling are often more technical in nature. Thus salespeople must have the necessary technical background and understanding to appropriately represent the product. Various examples of technical products might consist of electronic equipment, bulk chemicals, building materials, and capital equipment like machine tools. Firms that commonly hire such salespeople are IBM, Monsanto, and Warner-Swasey etc. y New Business Selling: In this form of selling the representative is not assigned an account nor designated to a certain geographic area. They are in charge of obtaining new business relationships. This includes selling of real estate, automobiles, life insurance, stocks and bonds, etc. Firms that hire these kind of salespeople are Caldwell Banker, automotive dealers such as Chevrolet and Nissan, and Aetna and Bankers Life insurance companies. Other kinds of sales jobs include retail sales, delivery routes (bread or beer etc.) as well as phone sales. For the most part theses sales positions are not held by graduates of college.
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POSITIONS IN SALES MANAGEMENT FOR GRADUATE DEGREE HOLDERS
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The majority of college graduates, especially MBAs, are not hopeful of obtaining positions in sales. Rather they prefer to become product or brand managers, advertising account executives, corporate planners, or marketing researchers. However, by passing up sales positions they might be foregoing a great chance to become a member of a firm and obtain helpful experience related to the position they hope to obtain. Work in sales can help MBAs obtain a broad perspective of how a firms products, competitors and the economic conditions interact. Work in sales also grants MBAs the prospect of doing the job well and being noticed by corporate management. Sales work relies largely on an individuals motivation and dedication to the job. Many MBAs are able to develop a strong performance record in a just a year or two that affords them the opportunity to move up in the company. Many realize that climbing the ladder in sales management is a bigger challenge and offers more rewards than they had previously thought. CAREER TRAINING AND JOB QUALIFICATIONS As defined, personal selling consists of persuasive two-way communication with potential and future purchasers. Obviously it is necessary to relate well to others and enjoy their company in order to perform well in sales work, although more is required to be successful. Salespeople have an expansive knowledge of the products they represent as well as those they are competing against. Basically, when it comes to sales, a salesperson must realize what needs and desires the consumer has and match those needs and desires with the companys appropriate product. Maybe the biggest factor in selling a product is an individual belief by the sales rep that the product being represented can indeed help the buyer. If the sales rep does not believe in the product it will be difficult to sell it. Other important factors in sales are motivation and organization since sales reps must take the initiative themselves and are not closely supervised by managers. Additionally, sales reps must be very analytical in order to accurately track and understand the statistical performance measures, as well as the financial data which helps a consumer understand the financial advantages and disadvantages of buying the product. Basically a salesperson must first be empathetic towards the buyers needs and desires. A salesperson also uses their ego as driving force in wanting to match the consumers needs with the companys product as well as be efficient in order to meet the needs of the consumer expediently. Nobody perfectly possesses all of these qualities or traits. As a person takes on more of these qualities they will be more likely to successfully sell products. Each student needs to start with the beginning class in marketing management at the undergraduate or graduate levels. Taking the sales management class is absolutely necessary, and the course covering marketing strategy and business communications is also helpful. Those interested in the field should also enroll in the marketing research course. After that, those desirous of becoming salespeople should take courses that interest them. Students with interest in marketing to consumers or marketing consumer goods to the trade, should enroll in the consumer behavior and advertising course.
Especially helpful are classes which offer insight into the human mind such as psychology, sociology, economics, anthropology, etc. Other courses like cost accounting, computer science, and statistical analysis which help develop analytical skills are also useful. Other classes that help develop communications skills like speech, drama, and creative writing will prove to be an asset. Lastly, classes associated with ones special interests should be taken. For instance, if one has interest in international marketing then courses in foreign languages should be taken, and those with interest in technical selling might enroll in engineering or physical science courses.
Inter departmental relations:

Though an organization's sales are primarily the responsibility of the sales department, the feat cannot be accomplished by that department alone. The work carried out by all other areas of the company, including: marketing, public relations, product development, manufacturing, and shipping support a successful sales department. A sales coordinator serves as a liaison between each of these groups. The purpose of this is to keep all lines of communication open, thereby ensuring that each group is working in tandem with the others as opposed to performing any tasks that may be counterproductive. For example, a coordinator may reach out to ensure that the marketing team sends the appropriate materials to a convention that the sales team will be attending.
Selling skills:
Essential Sales Skills
y y y y y
Communication Skills Leadership Skills Presentation Skills Coaching Skills Key Skills
Negotiation Skills Executive course in Geneva on negotiation skills and strategies.graduateinstitute.ch/executive/ Control your Ad Sales Easily Manage your Ad Spaces with Google's Free Ad Serving Platformwww.Google.com/DFP There are a lot of different ways to approach sales, but they all tend to rely on the same skill set. Note that these are skills, not talents: talents are inborn, but skills are learned. Anyone can learn to be an effective salesperson, and good salespeople can become great ones by honing the following sales skills. Maintaining Self-Confidence: This is the absolutely most important skill a salesperson can cultivate. Why? Because all the other skills are based on persistence. If you have every other sales skill listed below but you give up at the first hint of a no, then you'll never have a chance to use those skills. The first time you speak to a prospect, they might not want to talk to you
because they're having a bad day... but if you call back a week later they'll be eager to buy. Selfconfidence doesn't end with persistence; if you believe in yourself and your product, your prospects will be inclined to believe as well. Self-confidence will also incline you towards a more assertive closing approach, which is vital to your selling success. Good Listening: Most salespeople are natural talkers. Unfortunately even a great speaker will only get so far without a little listening. Taking the time to ask your prospect questions and really listen to the answers shows respect for them, and gives you a clearer idea of what they want. So how can you tell if you're doing enough listening? The next time you cold call a prospect, ask an open-ended question and then hit the mute button and leave yourself muted for at least a minute (or until you are absolutely sure the prospect is finished). By forcing yourself to be quiet, you will notice right away how strong your urge is to jump in and say something before the prospect has stopped talking. Persuasiveness: Emotion plays a major role in sales. There's an old saying that features tell, benefits sell. Features are the facts about your product or service; benefits are their emotional connotations. For example, a 0% interest rate on a credit card is a feature... being able to save money while buying the things you need is a benefit! Persuasiveness is the skill that allows you to convey these emotions to the customer. If you can make your prospect feel how great it will be to own your product and how much their life will be improved when they have it, you can sell it to them. Building Strong Relationships: This sales skill is just as important to a salesperson's business life as it is to their personal life. Building and maintaining healthy relationships is the key to developing a strong network. And networking will allow you to reach far, far more prospects than you could manage on your own. Remember the theory of Six Degrees of Separation? Let's say you're trying to reach the decision maker at a major company but you don't know anyone who works there. A call or two to your network contacts yields someone who knows someone who works for your target; armed with that person's name and direct phone number, you now have access to the prospect. Self-Motivating Even the best salesperson is a work in progress. You can always find a way to develop your skills, work on your pitch, and learn more about the products and services you sell. But the drive to constantly improve yourself has to come from within. Your manager might direct you to make some changes if your sales start to plummet, but if you are constantly working to become a better salesperson you can start working on the issue
Professional Selling Skills The Top Ten

So, keep in mind that the star sales performers probably do many of the things below without thinking about it. Its just the habits they have acquired over the years. 1. Outcome Setting
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The best salespeople probably make fewer sales calls - but better ones. They understand that the best persuasion techniques in the world work much better with some planning behind them. They focus a lot of effort on preparing for a call. They determine the logical next step for each meeting. Then, working backwards, they think about what they need to do to make this outcome a reality. They look at every idea they come up with from their customer's perspective. They think: If I said or did this, how would my customer interpret it or react? Then they make changes before the call to increase their chances of success. Before they walk into a meeting they know exactly what they want from the meeting and have thought about what their customer wants. They have made sure that these Outcomes are Well-Formed Outcomes and they have thought through possible differences in their customers thinking and how to phrase or adjust their offer to be more in line with the customers outcome. This is probably one of the most overlooked professional selling skills. For more discussion about this Professional Selling Skill see Persuasion Article #8. (Free Persuasion Article button on your left.)
2. State Control If you are in a good state of mind, your language will flow easier, you'll gain rapport instantaneously, you will sound more convincing and you'll get the information you want faster. In short, your Professional Selling Skills will all be operating at their peak. The skill is being able to master your state so that it doesnt matter if youve just been booked for speeding, had an argument with your partner or been in a car accident, when you walk into the sales meeting you are focused on the client. Focused enough to sense the clients mood and if their mood is down and youre feeling on top of the world you are capable of toning down your mood to be only a little more upbeat than them. (You can gradually improve their mood once you establish rapport.) For coaching on how to control your state you can contact me by clicking on the Sales Coaching button to your left.
3. Rapport Rapport is the process of establishing and maintaining a relationship of mutual trust and understanding between two or more people.
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I would also like to suggest that being in Rapport with someone is like getting the attention of their unconscious mind. The real test for rapport is the degree to which a person is responsive and open. When people are in rapport there is mutual responsiveness. If someone is hesitant, uncooperative and reluctant to communicate, it is highly likely that rapport is not sufficiently deep for the person to be open. A really good salesperson can reach this level of rapport quite quickly with almost anyone. This is probably the most under-trained professional selling skill. How important is rapport to the sales process? The professional selling skill of Rapport is one of the most important selling skills. Sharon Drew Morgan in her book Sales on the Line writes, There are three ways to make a sale: Rapport, Rapport and Rapport. No matter how good your product is, how good your questions are, if you are out of Rapport with your buyer then there wont be a sale. (Morgan, p.58) Yes, sales rapport is that important !
4. Time & Self Management Most salespeople are out on the road. Often, without someone to keep them organised. Top salespeople plan their time; y y y y y y y y y they they they they they they they they they use their diaries extensively focus on the priorities are disciplined remember to bring their sales aids with them carry change for the parking meter or motorway always have business cards with them always carry a pen and notebook are on time are organised.
I couldnt count the number of sales I won by jumping the gun. What I mean is that I knew how much stock the client had and their use pattern, so I made a note in my diary to make sure I contacted them well before their reorder date and often I had the sale before the opposition had even been in contact with them. For coaching on how to manage your time you can contact me by clicking on the Sales Coaching button to your left.
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5. Listening Listening Skills are essential Professional Selling Skills if you want to be a good salesperson. Listening shows respect for your client. It also allows you to hear whats really important to them and to spot needs when they arise. It also allows you to learn more about the customer themselves. An old sales manager of mine used to say, You have two ears and one mouth; use them in that ratio! It is easier to listen if you have planned a series of questions to ask BEFORE you go into the sales call. That way, you are free to concentrate on listening to your client, rather than thinking about the next question to ask. Dont be afraid to ask as many questions as you need to, to be absolutely sure you know what your customers wants. Repeat back to them your understanding of their situation and confirm it before you proceed. For more discussion about the Professional Selling Skills of listening see Persuasion Article #4
6. Questioning The questions you ask your prospect should be aimed at finding their pain (i.e. their problem) and how big a problem it is. You can then ask questions that focus on the effects of the problem, which in turn focuses the prospect on all the benefits they would gain in solving the problem. Many sales trainers and books focus on the above but few even mention the professional selling skill of really understanding your prospect. While you are establishing the above information you should also be asking questions to gain more information about your prospect: y y y whats important to them, how they think, how they recognise a good deal.
For more discussion about the Professional Selling Skills of questioning see Persuasion Article #4
7. Language Successful sales people are very good at the use of language. You can often spot the Professional Selling Skills of a salesperson just by listening to their language.
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They are very good at reframing an objection to appear like a benefit. They can use language to minimise a shortcoming of their product and make the benefits of their offering seem more important in the eyes of their prospect. They use language to control the focus of their prospects attention. I have written four issues of my eZine that refer to some specific examples of the artful use of language. Take a look at this information: y y y y Persuasion Persuasion Persuasion Persuasion Article Article Article Article #2 #3 #23 #25
8. Handling Objections Uncovering and handling objections is one of the most important professional selling skills a salesperson can have. Click on the Sales Objections button to your left for more information.
9. Closing Skills There are hundreds of closing methods. The ones I list below are used often. Do you know the: y y y y y y Order Blank Close? Alternative Choice Questions Close? Ben Franklin Balance Sheet Close? Scarcity Close? Minor point Close? Judger / Perceiver Close?
The Judger / Perceiver Close can be extremely effective if used correctly and on the right person. For coaching on how to use the Judger/Perceiver Close you can contact me by clicking on the Sales Coaching button to your left. Hang on, that's only NINE ! Well, I actually hinted at the tenth skill at the very start of this page.
10. Practiced. The most professional salespeople practice ALL the skills mentioned above.
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They practice until they are masters at them. Until they have unconscious competence. Professional Selling Skills are very relevant in business-to-business sales where you are selling to professional buyers. And growing your small business sales through exceptional sales skills is a necessary part of business.
Selling strategies:
Selling strategies A number of specific selling strategies come under the umbrella of sales or selling, including the following:

Cold calling: Cold calling is the process of approaching prospective customers or clients, typically
via telephone, who were not expecting such an interaction. The word "cold" is used because the person receiving the call is not expecting a call or has not specifically asked to be contacted by a sales person.

Consultative selling Direct selling: Direct selling is the marketing and selling products directly to consumers away from
[1] a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes
sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales.[2] A textbook definition is: "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs
Guaranteed sale: The guaranteed home sale is a program offered by some realtors in North America. The program guarantees that a home will be sold for a certain amount of money and by a certain date, or the realtor (or in some cases the brokerage or an investor) will purchase the house. Needs-based selling Persuasive selling Hard Selling Heart Sellling Price based selling: Price-based selling is a specific selling technique in which
a business exclusively reduces their price in attempt to close the sales cycle. Price-based selling clearly exists in businesses such as: commodity sales, auto sales, hospitality, and even some retail stores. However, it is only recommended that commodity items like petroleum be sold

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exclusively by price. Selling on price is even more apparent now in the current US economy as most businesses make the switch to the lowest price approach in attempt to attract more consumers. Car insurance companies like Progressive Auto Insurance advertise specifically with their price, as they promote the amount of money that can be saved by making the switch. Price-based selling may result in a good or service becoming a commodity and a commodity by definition is a product or service that has no differentiating qualities or characteristics from competing products or services in its class.
[1]
A survey of Canadian consumers by Wishabi in 2009 finds that only 10% of

[2] [3]
shoppers see price as the only factor , but a 2007Shopzilla survey of 2000 shoppers showed that 49% of consumers feel that price was the most important factor in their buying decision. Thus it can be seen that while pricing is not the only factor that matters, it is definitely the most important.
Relationship Selling Target account selling Solution selling: Solution selling is a special approach to sales. Rather than just promoting an
existing product, the salesperson focuses on the customer's pain(s) and addresses the issue with his or her offerings (product and services). The resolution of the pain is what constitutes a true "solution". A limitation of this approach is that not all customers buy to address a "pain", not every need is a problem needing a solution.
Selling and business style: no Selling situations:

The situation where a salesperson approaches a client to make a sale is termed as a Selling Situation. Selling situations can be of two types : Service Selling and Developmental Selling. Service Selling Salespersons often make sales calls to customers who may already be awre of the companys products. This type of selling has less difficulty associated with it, as it does not require convincing the customer about the company and about the value for money that the product offers. So Service Selling aims to obtain orders from existing customers whose habits and patterns of thought are already conductive to the products. Consider a scenario. Jack Webster is a Team Leader in the Direct Sales Divisionat DreamKids. He has been assigned the target of selling 200 units of the virtual reality video game recently launched by DreamKids. His team comprises eight salespersons.
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Jack divides the team into two groups. The first group is assigned the northern part of the city. They decide to approach customers directly utilizing the DreamKids Mobility Van. They park near Dembel City Center, the most popular shopping area near DreamKids biggest retail outlet. During their conversation with customers,they are delighted when a group of young professionals reveal that they are regular customers of DreamKids. These salespersons realize that they dont need to convince this group about the quality of products offered at DreamKids. Thus, the sales process is smooth and successful. Service selling also includes sales of newer or enhanced versions of products offered by the company, salespersons still need to convince them regarding new product being offered. Developmental Selling Developmental selling aims at converting prospects into customers. It seeks to create customers out of people who may not view the company products favourably, be unaware of the companys products, or are resistant to changing their present source of supply. Unlike service selling,developmental selling is relatively tougher. It requires a lot of convincing before a customer finally agrees to buy the product. The second team at Dream Kids is assigned the southern region of the city. Their competitor, Toys & Toys Inc., is already offering such games at much lower rates. The team is faced with the task of convincing prospective customers about the value for money of their product. One prospective customer ,Elizia Smith shows some inclination towards the video game. Mary Bigelow, the Group Leader, attempts to convince Eliza by conducting a detailed demonstration and giving out a free sample of the game. Marys efforts finally pay off and she makes a successful sale.
Selling process:
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Determine goals or outcome: Once the decision to sell has been made, a number of other questions come to mind. What is a fair price under the current market conditions? What are the current market conditions? How can the property be marketed most effectively? How long will the process take and how should I proceed with future plans? Who will be able to help with contract and closing requirements? Some sellers have the experience and expertise to answer these questions, many others would prefer professional assistance from a real estate broker and/or an attorney. Interview and select a broker: The process for selecting a broker is described above in the How to Select a Real Estate Broker section. As a seller, pricing and marketing issues are very important. Everyone wants to make sure they get the best possible price and terms. Proper preparation goes a long way towards that end. Competitive Market Analysis: The brokers that you interview will want to take a careful look at your property in order to gather information to help them estimate its value. This estimate is not an appraisal, but a competitive market analysis. This is a tool that will allow you to compare your property with similar properties recently sold and currently on the market. Marketing Strategy: Newspapers, yard signs, open houses, internet, multiple listings service? How should your property be marketed? What kinds of advertising really pay off? What works for sellers in my price range? A broker who knows your area will be able to help you devise a marketing plan based on previous successes. The Listing Agreement: The listing agreement is the written contract where by a property owner hires a real estate broker to market real property and provide services. A listing contract describes the property ( address and legal description), the listing price and the terms that are acceptable to the seller. The listing also outlines the compensation that the broker is to receive. A listing may specify a percentage of the selling price, a flat fee or any other negotiated agreement mutually acceptable to the parties (the seller and the broker are the parties to the listing contract) as compensation to the real estate broker. Colorado brokers are required to use listing contracts approved by the Colorado Real Estate Commission. Preparing for a Showing: Your broker can give you good advise about how to prepare your property for showing. Common sense applies, but a trained third party observer can help you to make the best possible first impression on prospective purchasers. A thorough clean-up, a little fresh paint or minor repairs can help show your property in a favorable light. Counteroffers: An offer to purchase made by a prospective buyer has no limits on what price or terms it may contain. An offer that mirrors the listings asking price and terms may be common under certain market conditions, however, from a purchasers point of view, it may represent a minor issue in a search for an exceptional value. A licensed real estate broker is required to submit all offers regardless of its terms. The seller always has the option of accepting or rejecting an offer that does not meet his requirements. If the terms do not meet with the sellers approval, a counteroffer may be utilized as an attempt at compromise rather than dismissing what might be a qualified prospective purchaser.
A Commission approved "Counterproposal" form is used to modify the terms of an offer to purchase. Once a counteroffer is made, the terms of the original offer have been rejected and the seller proposes new terms. The original purchaser then has the option of rejecting or accepting the new terms.
Steps in selling process

1. Prospecting 2. Call planning 3. The visit preliminaries 4. Presentation 5. Trial close 6. Listening to the objections 7. Objection handling 8. Trial close 9. Close 10. Follow-up and service
Sales presentation:
Creating a Powerful Sales Presentation The quality of your sales presentation will often determine whether a prospect buys from you or one of your competitors. However, experience has taught me that most presentations lack pizzazz and are seldom compelling enough to motivate the other person to make a buying decision. Here are seven strategies that will help you create a presentation that will differentiate you from your competition. 1. Make the presentation relevant to your prospect. One of the most common mistakes people make when discussing their product or service is to use a generic presentation. They say the same thing in every presentation and hope that something in their presentation will appeal to the prospective customer. I have been victim to this approach more times than I care to remember having been subjected to many canned PowerPoint presentations. The discussion of your product or service must be adapted to each person; modify it to include specific points that are unique to that particular customer. If you use PowerPoint, place the companys logo on your slides and describe how the key slides relate to their situation. Show exactly how your product or service solves their specific problem. This means that it is critical to ask your prospect probing questions before you start talking about your company. 2. Create a connection between your product/service and the prospect. In a presentation to a prospective client, I prepared a sample of the product they would eventually use in their program. After a preliminary discussion, I handed my prospect the item his team would be using on a daily basis instead of telling him about the item I placed it in his hands. He could then see
exactly what the finished product would look like and was able to examine it in detail. He was able to ask questions and see how his team would use it in their environment. Also, remember to discuss the benefits of your products, not the features. Tell your customer what they will get by using your product versus your competitors. 3. Get to the point. Todays business people are far too busy to listen to long-winded discussions. Know what your key points are and learn how to make them quickly. I remember talking to a sales person who rambled at great length about his product. After viewing his product and learning how much it would cost I was prepared to move ahead with my purchase. Unfortunately, he continued talking and he almost talked himself out of the sale. Make sure you know what key points you want to discuss and practice verbalizing them before you meet with your prospect. 4. Be animated. The majority of sales presentations I have heard have been boring and unimaginative. If you really want to stand out from the crowd make sure you demonstrate enthusiasm and energy. Use voice more effectively and vary your modulation. A common mistake made when people talk about a product with which they are very familiar is to speak in a monotone voice. This causes the other person to quickly lose interest in your presentation. I recommend using a voice recorder to tape your presentation. This will allow you to hear exactly what you sound like as you discuss your product. I must profess to being completely humiliated when I first used this tactic. As a professional speaker, I thought all my presentations were interesting and dynamic I soon learned that my stand-up delivery skills were much better than my telephone presentation skills. 5. Use showmanship. In the book, The Sales Advantage, an example is given how a vending sales person lays a heavy sheet of paper on the floor and asks his prospect, If I could show you how that space could make you some money, would you be interested? Consider the impact of this approach compared to the typical approach of saying something like, We can help you make more money. What can you do to incorporate some form of showmanship into your presentation? 6. Use a physical demonstration. A friend of mine sells sales training and he often uses the whiteboard or flipchart in the prospects boardroom during his presentation. Instead of telling his client what he will do, he stands up and delivers a short presentation. He writes down facts and figures, draws pictures, and records certain comments and statements from the discussion. This approach never fails to help his prospect make a decision. 7. Lastly, believe in your product/service. Without doubt, this is the most critical component of any presentation. When you discuss solutions, do you become more animated and energetic? Does your voice display excitement? Does your body language exhibit your enthusiasm? If not, you need to change your approach. After all, if you cant get excited about your product, how can you expect your customer to become motivated enough to buy?
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Handling customer objections:

How to Handle a Hesitant Customer: Customer Objections Teaching/Learning Activities: 1. Discuss the skills and concepts for handling customer complaints or objections. Instruction:
y
Understanding Objections.
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Objections are concerns, hesitations, doubts, or other honest reasons a customer has for not making a purchase. Objections should be viewed as positive because they give you an opportunity to present more information to the customer. ."A customer objection is just a request for more information in disguise."

Excuses are insincere reasons for not buying or not meeting with the salesperson. Customers often use excuses when they are not in the mood to buy or when concealing real objections.
Types of Objections.
o
Real Objections. A customer that has a concern about a product will usually say, That is too difficult for me to operate, or That is too difficult to repair. Excuses. The customer delays making a decision or doesnt become involved in the sale at all. Not today, thank you. That costs too much money. Hidden Objections. The customer doesnt reveal any objections aloud, but once you try to close the sale, he/she lets a few objections slip out. Buying Decision Objections. The customer has a problem with productstyle, color, size, or design. Place. The customer has a problem with the location. Product. Product isnt worth the price (in the mind of the customer) so salesperson must point out the special features that make the product high quality. Time. The customer is not sure they want to by it new, so salesperson says the price will be increasing on the product, making it a wise buying decision if purchased thatday. Quantity. The customer believes there are too many extras needed when buying initial product, so salesperson has to prove that the extras are needed to make product work or enhance products performance.
o o
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Specialized Methods of Handling Objections.

o
Yes, But Method. This method is used the most. The salesperson answers the objection made by the customer. This is particularly good if the customer misunderstands some information about the product or service. Demonstration Method. The salesperson is given the opportunity to demonstrate the product to the customer without verbally answering the objection. Boomerang. Just as a boomerang returns to the thrower, an objection can be returned to the customer. With the Boomerang method, the objection comes back to the customer as a selling point. Question. The question method is a technique in which the customer is questioned in an effort to learn more about the objections raised. Your question may reveal hidden objections and or help you learn more about the customers needs and wants.
Superior Point. The superior point method is a technique that permits the salesperson to acknowledge objections as valid yet still offset them with other features and benefits. Because goods and services are not perfect, there are often trade-offs that take place when making a selection. Direct Denial. The direct denial method provides proof and accurate information in answer to objections. It is best used when the customer has misinformation or when the objections are in a form of a question. Third Party. The third party method involves using a previous customer or another neutral person who can give a testimonial about the product. Some salespeople keep letters from satisfied customers to use as testimonials when handling objections.
Methods for handling Customers Objections

1. Listen carefully; do not interrupt: Let the prospect talk, and do not get angry. It is because the sales person should plan and not interrupt. Now, in the heat of presentation, it is important to follow through on that promise and actually not to interrupt. 2. Repeat the prospect's objection: The sales must make sure that he understand the objection. He should ask questions to permit the prospect to clarifying objections. Acknowledge the apparent soundness of the prospect's opinion. In other words, agree as far as possible with the prospect's thinking before providing an answer.
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3. Evaluate the objection: That is, the sales person is to distinguish between a genuine objection and a mere baseless excuse. It is because, excuses are not to be given importance as they do not bear any fruit. 4. Decide on the method or methods to use in answering objection: Some factors to be considered are the phase of the sales process in which the prospect raises the objection; the mood, or frame of mind, evidenced by the prospect; the reason for the rejection; the personality type of the prospect; and the number of times the reason is advanced. Here flexibility is critical. 5. Get commitment from the Prospect: The answer to any objection must satisfy the prospect if a sale is to result. Get the prospect to agree that the objection has been answered.
Customers follow up:

How to Follow Up with Customers
As a small business owner, your sales process starts the minute a prospective customer first makes contact with you. But you might not always get the sale on the first try. And if a purchase is made, you also want to ensure that you get repeat business from each customer. Thats why your small business needs a salient customer follow up plan. Following up with customers is just as important as convincing them to purchase your products and services. Try Different Methods of Routine Business Follow Up You can follow up with customers using different methods of contact such as e-mail, sending postcards, flyers or greeting cards, or by simply using the telephone. Use these methods first, and observe which method generates the best results. That way, you can concentrate on that particular method. If possible, enlist the help of professionals to design your greeting cards, letters & flyers to make them visually appealing. For routine customer follow ups, set a monthly target and execute it accordingly. When it comes to following up with your customers, it pays to be consistent. This way, you ensure that your name and that of your business is always in the forefront of a customers mind.
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The more they hear the name of your business the greater the chances are that they will remember it. Once an inquiry is generated, then proceed to the following steps below. Communicate Once you have your prospective customers details such as their demographic information, contact with them regarding their inquiry. Do not ask them directly for to make their purchasing decision immediately; rather, tactfully ask whether they require any additional information regarding your products or services. Be pleasant when talking and answer their questions. Be direct and to the point. Your answers should be logical, but not overly technical. If you do not have the information on hand, then inform them that you will call back promptly. In a business follow up, it is important to stand by your word. This will indicate that you have taken the matter seriously. Arrange a Meeting If you are expecting a large order, or if a customer has placed a custom order with you, then you can arrange a face-to-face meeting to discuss the matter. Take the best people from your sales team along with you to execute your presentation. You want to appear confident and competent. Brief everyone involved well in advance of the meeting. Once the deal has been finalized, you can still follow up with the customer to get feedback about your products and post-sales services. Feedback is important for you to be able to fix any problems with your products or customer service. You can also call all your prospective customers one at a time to arrange a sales conference. This type of meeting should also be advertised with both your customers and vendors to generate extra publicity. Remember than any new customers that obtained in this way should receive a personal follow up call. Follow Up With Existing Clients You should also follow up with your repeat clients by meeting with them if time permits or by sending them some sort of correspondence. Reaching out to them personally will indicate that you value them and their business. It will also help to prolong your business relationship with them. It is these customers whose word-of-mouth referrals can generate new clients for you. The customer follow up process is a very important one in securing business from your new customers and in maintaining relationships with existing ones. Your diligence and perseverance in this area will determine how many new customers you can convert into loyal ones.
UNIT: 3 Management of sales territory:

Territory Management Territory management develops and implements a strategy for directing selling activities toward customers in a sales territory aimed at maintaining the lines of communications, improving sales coverage, and minimizing wasted time. It includes the allocation of sales calls to customers and the planning, routing, and scheduling of the calls. Territory management develops and implements a strategy for directing selling activities toward customers in a sales territory aimed at maintaining the lines of communications, improving sales coverage, and minimizing wasted time. It includes the allocation of sales calls to customers and the planning, routing, and scheduling of the calls. We know that territory management is a two-way street a dual process of information and communication. First, territory management provides sales managers with accurate measurements of territory results, and the relative success of that territorys sales teams. And second, territory management offers the sales team strategic information about the impact of promotional campaigns and a variety of other data and analyses. Some of the Business Benefits provided by territory management include:
y y y y y y y y y y y y y y
Managers can gain an up-to-the minute view of their individual territory pipeline from the highest level to the most granular. Regional sales teams can keep lock-step with one another when collaborating on important deals. Your company will gain better insight into sales effectiveness and performance by territory Easy set up and assignment of territories Simplifying territory realignments after sales reorganizations Eliminating lag time in lead assignment Stretching your selling day and spending more time with your customers Planning effectively and avoiding losing sales to better organized competitors Selling more, earning more and accomplishing more Setting goals and priorities to maximize your selling effectiveness Increasing selling time by minimizing distractions and procrastination Maintaining contact with key prospects and accounts Making more productive use of travel time Improving your return on investment (ROI) and reducing turnover
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Territory Management enables organizations to automatically route opportunities, accounts, contacts, and activities to exactly the right sales team members, based on a set of flexible and configurable business rules. Sales team members can include your employees as well as your channel partners' employees, for leverage of partnerships and corporate relationships across sales organizations. Assignment rules can be based on geography, industry, product interest or virtually any other criteria you choose. Territory management features include:
y y y y y y y y y y y y
Multiple territories per account Rules-based descriptions of territories Allows bulk calculation of territories Automatically identifies accounts that have not been assigned territories Smart rebuild of unassigned accounts Configurable territory calculations on account entry or update Calculate by country, state/province, postal code and industry segment Manual territory overrides to support exclusive territory assignments Ability to recalculate selective territories Ability to use territories as for designating account ownership and sales teams Ability to assign sales agents and partners to one or more territories Territory breakdown reports
Territory Management allows you to manage your various sales territories by setting up a customized company position chart that maps your reps into territories. Regional managers can easily access critical pipeline information and monitor all the deals active within their territory. As the organization changes, territory management allows you to very quickly and easily transfer accounts from one rep to another, build cross-functional teams, share reports, dashboards and documents, and run reports segmented by the territories you define.
Sales territory:
Definition Geographical area or type of customers assigned to a sales unit such as salesperson, sales manager, franchisee, distributor, or agent.
How to Set Up a Sales Territory:

While every department in a company is important, there is no substitute for a good sales force. The challenge is determining strategy for territory coverage. The 80/20 rule states that 80 percent of your profits come from 20 percent of your customers. Segmenting your customer base into strategic targets based on territory will provide the optimal sales strategy.

Research factors contributing to projected sales and gather the data. Previous year's sales can be found in the annual report, and expected market growth can be researched through industry-specific economic forecasts.
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Customer surveys and market research can also help with projecting customer demand. Sales forecast figures can be found in the company's business or strategic plan. Estimate the sales force size by analyzing economic forecasts, market potential and expectations of growth. Look at the average sales per person. Compare the sales forecast with the average sales per person. Determine your size. A global sales territory is more complex than a state sales territory. State sales forecasts can be determined based on current market size or future growth rates. Research the competition. There's nothing wrong with making your competitor's idea better. Develop your own strategies based on those firms with market saturation. Look up UPS transit maps by zip code for insights on the most efficient routes. Pinpoint 80 percent of your profitable clients. Segment based on market saturation and average dollar per sale. Assign the other 20 percent of your sales force to less profitable areas. Prioritize based on the opportunity.
The Sales Territory concept:

A sales territory is a grouping of customers and prospects assigned to an individua salesperson Irrespective of geographical designations sales territory is grouping of customers and prospects that can be called upon conveniently and economically by an individual salesperson. For instance:
When sales personnel sell mainly to personal acquaintances as in selling insurance or investment securities, little logical basis exist for dividing the market geographically. House Accounts: An account handled by a group of executives or home office personnel. Generally house accounts are responsible for significant shares of companys business.
Reasons for Establishing / Revising Sales Territories:

1. 2. 3. 4. 5. 6. To provide proper market coverage. To control selling expenses. To assist in evaluating sales force personnel. To contribute to sales force morale. To aid in the coordination of personal selling and advertising efforts. To establish a sales persons responsibility.
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7. To improve customers relations. Customer related benefits: Provide excellent service: Greater satisfaction Provide intensive market coverage Salesperson benefits: Foster enthusiasm Facilitate performance evaluation Rewards Managerial benefits: Enhances control Reduces expenses Objectives and criterion for Territory formation: Determine optimum number of territories to be formed and their configurations. (There should not be lack of coverage/ dont make account base fragmented) Territories should differing potentials Coverage should be effective and efficient Analyze workload and nature of job Type of product
WHO IS RESPONSIBLE FOR TERRITORIAL DEVELOPMENT: Development of sales territories is usually the responsibility of the sales manager overseeing the larger sales units within the organization. He/She must possess variety of skills.
Designing sales Territories:

Breaking down a firms customer base so that accounts can be well serviced by individual salespersons Several territories are usually combined into district, several districts to a region, several regions to a zone, and a number of zones into the national market place.
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1. Selecting a basic geographical control unit.
2. Determining the sales potential present in each unit.
3. Combining control units into tentative territories.
4.Adjusting for differences in coverage difficulty.
Procedure for setting up sales territories:

1. Selecting a basic geographical control unit. Commonly used units are postal code numbers, areas, towns or cities. Sales territories are put together as consolidations of basic geographical control units. 2. Determining the sales potential present in each unit. Sales potential : Maximum possible sales opportunities open to a specific company selling a good or service during a stated future period to particular market segment. Identify the present and prospective buyers precisely in a unit and ascertain the units total market potential that the company has an opportunity to obtain i.e. Sales Potential. 3. Combining control units into tentative territories. Assumption : No significant differences exist in the physical and other characteristics of the control units. Contiguous control units are combined into tentative territories having approx. same sales potential. Planner decides the number of territories.
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Planner then decides the territory shape:

Circle: Appropriate when accounts and prospects are distributed evenly throughout the area. Clover Leaf: When accounts are located randomly through a territory. Wedge: For territories containing both urban and non urban areas. Radiates out from densely populate urban center. Travel time among the adjoining wedges by balancing urban and non urban calls 4. Adjusting for differences in coverage difficulty. Removal of unrealistic assumption that no differences in the characteristics of geographical control units exist. Certain large cities, for instance, have greater sales potential than some states but time required to contact the customers in city is less as compared to the state. The optimum arrangement is reached when incremental sales per dollar of selling expenditures are equated among all territories. Differences in coverage difficulty represent differences in work loads. When final adjustments for coverage difficulties are made, sales territories have varying sales potential and different sized work loads, but none exceeds the maximum desirable work load depending upon the capacity of the sales person.
Factors influencing the modifications of a territory: Mergers Market consolidation Split in division Sales force turnover Deciding assignment of sales personnel to territories: Customer relocations Product life cycle change Product line change
Up to this point in territorial planning an implicit assumption has been that all sales personnel are average, i.e. all are interchangeable, each capable of producing same results at similar costs regardless of territorial assignments. This assumption is unrealistic Sales persons vary in ability, initiative and effectiveness and also in the desirable work load. One sales person might be outstanding in one territory but a failure in another. Performance moreover is conditioned by customer characteristics, customs and ethnic influences.
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Routing and Scheduling Sales Personnel: Routing and scheduling plans aim to maintain the lines of communication, to optimize sales coverage and minimize wasted time. When management is informed at all times about the whereabouts of sales person it is easy to contact him and give last minute instructions. While deciding the route detailed information is required on the numbers and location of customers, means of transportation and desired call frequency rates. Routing and scheduling plans reduce wasted time by sales personnel in backtracking and travelling and gives a optimized sales coverage which automatically builds up the size of average order and increases the efficiency and productivity of sales personnel. In assigning sales personnel to territories, management seeks the most profitable alignment of selling efforts with sales opportunities. Management should assign each sales person to the particular territory where his or her relative contribution to profit is the highest.
Advantages of designing a sales territory: It ensures better market coverage Effective utilization of the sales force Efficient distribution of workload among salespeople It is convenient to evaluate the performance of sales people To control over the direct and indirect costs of the sales function Optimum utilization of sales time by sales people Methods of Designing territories: Build up method Breakdown method Determining the number of territories by dividing projected average sales per salesperson into an overall sales forecast. Incremental method Establishing additional territories as long as the marginal profit generated by the territories exceeds the cost of servicing them.
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STEPS TO CONSIDER WHEN DETERMINING A FIRMS BASIC TERRITORIES: 1. Forecast sales and determine sales potentials. 2. Determine the sales volume needed for each territory. 3. Determine the number of territories. 4. Tentatively establish territories. 5. Determine the number of accounts for each territory. 6. Finalize the territories, and draw the boundary lines.
Territory Management cycle:

Account load: number of actual and potential customers assigned to a given sales person Account potential: share of an accounts business that the firm can expect to attract. Routing: Establishing the sequence of locations a salesperson will visit. Scheduling: Sequence of appointments or unannounced visits for maximum contact time
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Routing:
After establishing sales territories sales personnel must be routed. Length of visits to customer Frequency Objective should be minimize travel time and maximize frequency.
Straight-Line Pattern Base
c c c
First Call c c Work Back
Sales quota:
WHAT IS A QUOTA?
A quota refers to an expected performance objective. Quotas are tactical in nature and thus derived from the sales forces strategic objectives. WHY ARE QUOTAS IMPORTANT? Quotas provide performance targets. Quotas provide standards. Quotas provide control. Quotas provide change of direction. Quotas are motivational.
Sales quota :Individual sales target figure assigned to each sales unitsuch a sales person, dealer, distributor, region, or territory, as a required minimum for a specified period (month,quarter, year). Sales quotas may be expressed either indollar figures (monetary terms) or in number of goods orservices sold (volume terms). Sales quotas are a way of life for the sales force. All activities of the sales force revolve around the fulfillment of sales quotas. Sales quotas are targets assigned to sales personnel. They signify the performance expected from them by the organization. Sales quotas help in directing, evaluating and controlling the sales force. They form an indispensable tool for sales managers to carry out sales management activities. Sales quotas are prepared on the basis of sales forecasts and budgets. Sales quotas serve various purposes in organizations.
How to Set Sales Quotas

Setting accurate quotas will help you achieve sales goals. A sales quota is the target or minimum sales volume expected from a sales employee, sales team and/or department, during a defined period. Sales quotas are frequently set in monthly, quarterly and annual allotments and commonly expressed in sales dollars or sales units. When quotas are set effectively, the consistent attainment of quotas will directly and positively impact a company's ability to achieve its overall sales budget or plan. Most sales commission payouts are linked to the attainment of quotas. It is common for sales quotas to increase year over year.
Instructions:
How To Set Sales Quotas
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1 Review future, company and department performance goals and budgets. Understand what the sales department must deliver monthly, quarterly and annually in order to achieve its goals. 2 Analyze sales trends for the past two years including dollars, units and product/service information. Understand the causes for sales growth, sales declines and seasonal fluctuations. Examine quota attainment at the representative, team and department level. Consider changes to sales resources and staffing levels. 3Compare the prior year's performance trends with the future, company and department goals. Determine what growth or decline is expected. Quantify the overall gap between last year's performance and the future, expected performance. Determine the revenue expected from existing customers versus new business. 4 Complete an opportunity analysis. Identify where the best sales opportunities are within your existing customer base and with prospects. Look externally at geographic and industry trends that may impact future sales performance. Familiarize yourself with internal changes that could help or harm sales such as new product introductions or changes. 5 Review the sales expense budget. Determine if your full time equivalents (FTEs) will grow, decline or remain flat. Understand the budget for sales commission expense and cost of sales. 6 Determine if you will "over assign" quota dollars. This is the process of adding a buffer between the sum of your sales quotas and the sales budget. For example, if your sales budget is $10 million, you could set sales quotas to sum $11 million, to add a $1 million buffer. Some sales leaders consider the over assignment, as insurance to improve their chances of achieving sales goals. 7 Determine how you will spread the sales growth or decline including the "over assignment," if applicable, across your sales team. Some sales leaders hold all sales representatives to the same level of quota growth, regardless of territory, skill set or geography. Other leaders tailor the sales quota amounts to individual employee or territory needs. 8 Build a quota model that will allow you to create "what if" scenarios for different quota amounts. Some of the data inputs and outputs will include number of FTEs, sales dollars, expected quota attainment, commission dollars and cost of sales. (Quota models are often built using Microsoft Excel or Access.) It may be helpful to include finance and human resources experts in the quota modeling process.
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9 Set reasonable quotas that will lead to the achievement of the overall sales revenue budget while also meeting your sales expense goals.
Objective of Fixing Sales Quota:

Sales force management is part of any sales force automation softwarewith agency management software. We talked Sales Forecasts, Sales Budgets and Fixing Sales Quotas in our last post. Today we are going to talk about Objectives of Fixing Sales Quotas. The basic objective is that a sales management has in mind in using quotas is to control the sales efforts. A skilled management uses quotas to motivate personnel to achieve desired performance levels, apart from these there are some other objectives also which are as follows:
y y y y
To provide quantitative standards To obtain tighter sales and expense control. To motivate desired performance. To use in connection with sales contents.
Types of sales quotas: Sales volume quotas. Breakdown total sales volume. Profit quotas. Expense quotas. Activity quotas. Quota combinations.
Types of Quotas Sales quotas

y y y y y y y
Based on dollars or units Most common easy to develop easy to implement Typically a breakdown of the sales forecast May put pressure to sell low profit high volume items. Good for fast growing markets without too much price competition Expense quotas
y y y
Mature products and services Must cut marketing cost to maintain profitability Can lead salesperson to cut expenses to the point of losing business
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y y
Profit quotas Incentive to sell profitable products or profitable customers
Sources Tradition of sales managers Inappropriate resistance goals to gearing up Incorrect the Sales sales Strategy force to sell Inadequate more Sales profitably Support.
y y y y
It implies that the sales force are order takers Afraid of the impact on manufacturing Most quotas have no relationship to profits Few attempts have been made to link quotas to product, customer or margins Tendency to think that all customers are alike No segmentation No Targeting Sales people cannot negotiate Salespeople don't know what products or customers are profitable They don't care either
y y y y y y
Quota Base Balanced Product Mix

y y y y y y y y y y y y y y y
Activity quotas Objective Gets selling time for all products Diversifies company Can help balance production Training customers sales force Setting displays Workshops Studies at customer's business Encourages diversity of customers Firm is less dependent on one type or size of customer Encourages prospecting New customers are vital Demonstrations Closes Bids Prospecting
Minimum Services Balanced Customer Mix New Customers Increased Selling Effort
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Combination quotas
y y y y
Sales New customer Service Any of the above can be combined
Methods of setting sales quota:

1. Establish parameters for developing quotas The start of the quota-setting process is to look at history to determine what sales success your team has had in the past or what sales success your team is likely to have in the future. Common parameters that can be used to define quotas include:
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Historical trends: How much of which product lines have been sold in your various sales territories over time? Last year's revenue: What was the total revenue from all products and sales territories? National standards: How much did all vendors (selling the same types of products) sell? Territory analysis: How much does each salesperson think can be sold in his or her territory based on the existing pipeline and recent successes?
y y y
The best quota-setting practices include looking at several of these parameters. For example, you might look at historical trends while your staff members go through their own records for a detailed territory analysis. 2. Add a growth expectation Step one helped you understand history. Now you have to take the next step to predict revenues for the next year (and then convert that revenue into quotas for your sales team). Each company has its own method for determining how much growth in revenue should be achieved. That expectation should be:
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Realistic: What is doable for your products in the current state of your market? Some industries can realistically expect sales growth of 5% while others may see 100%. Challenging: The goals you set should require each member of your team to work hard to meet the assigned goals.
3. Adapt the quotas to each sales rep Adding the figures from steps one and two, you have the total revenue expected from your sales force. You could now be tempted to divide this total revenue by the number of salespeople to define the quota for each person. But in fact, not all salespeople are created equal. And not all sales territories are created equal.
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Instead, look at each salesperson individually before determining the appropriate quota to assign. Some factors you need to consider are:
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Tenure: Sales reps who have been with your company for several years have welldeveloped pipelines and contacts within their territories. They are more likely to sell more than those who have just joined your sales team. Assigned job: If you have different types of salespeople within your team, you may need to adjust quotas based on the type of job. The potential for sales of telemarketing people may be different from that of outside salespeople. Sales skills: Face it -- some members of your team just have better sales skills than others. Having better sales skills is more likely to result in higher sales results. Market potential: Each territory may be different in its needs and appetite for acquiring each of your products. Competition. In some territories, the competition may be strong and thereby reduce the potential for sales. In other territories, competition may be weak or non-existent.
Using these factors (and others that might be unique to your company), assess your expectations for each of your sales reps. Then use those expectations to determine the right quota for each person. 4. Get buy-in from your sales team If quotas are imposed on your salespeople without an explanation of how they were defined, the result could be resistance. It's important to have your staff buy in to your process for setting quotas, believe that these goals are achievable and work toward meeting or exceeding their assigned quotas. To increase the buy-in of your sales staff to your quota-setting process:
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Start with a planning meeting. In one of your sales meetings, outline the process you'll be using to set quotas. Describe each of the steps you will be taking and the likely completion date. Most importantly, explain how your team will be involved in this process. Have your reps help gather information for the quota-setting process. Let your salespeople gather the information about their individual territories that you will use as one of the parameters for setting your quotas. Meet with each person to determine an individual quota. In the meeting, discuss any factors that might influence the setting of that person's quota. Make it a joint decision, if possible, to assign a specific quota.
5. Adapt quotas to market realities No matter how careful we are in our plans to set revenue targets or break these targets into
quotas, we cannot predict what will happen in the economy. Changes in market conditions are inevitable. That means that quotas may have to be changed accordingly. Set a timetable for yourself to periodically review and assess your team's quotas. That way, you can make any necessary adjustments.
OR METHODS FOR SETTING SALES QUOTAS:

Quotas based on forecasts and potentials. Quotas based on forecasts only. Quotas based on past experience. Quotas based on executive judgments. Quotas salespeople set. Quotas related to compensation.
Sales budget:
What Is a Sales Budget? A sales budget is a valuable tool that gives a direction to a company with regard to its targeted sales. It helps to improve the profitability of a company. The company makes a financial plan with regard to the amount of goods and services that it plans to sell in a year and the price at which the goods and services are to be sold. This plan is its sales budget. 1. Features
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The sales budget is the first component of the master operating budget. This is because sales affect all other parts of the master budget. It includes the total sales valued in quantity. It consists of three parts; break even, target and projected sales. The budget also includes sales by product, location, customer density and seasonal sales patterns. It provides a plan for both cash and credit sales. The basis of a sales budget is the sale price per unit of goods to be sold multiplied by the quantity of goods to be sold. A sales budget is planned around the competition, the material available, cost of distribution, government controls and the political climate. Significance
A sales budget controls the finances allocated for achieving sales targets of a company. It is the standpoint for comparing the actual sales performance and the budgetary sales performance of a company. The budget guides the company with regard to how much money should be allocated to selling distribution and sometimes for advertising and marketing. A sales budget that sets realistic targets will help the company make a profit. Effects
A good sales budget should serve as a guide to company with regard to its sales target. It should be flexible and resilient to the volatile changes in the market.
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The budget should not put too many restraints on the sales functions of the company. A sales budget is a financial plan for the sales of goods and services of a company. It is the basis on which all the financial decisions of a company with regard to sales are taken. The budget also controls the general sales prospects of a company. Online and off line marketing, marketing in the media and other advertising expenditures are planned around a sales budget. Benefits
A sales budget helps a company achieve its sales targets. It helps prevent sales losses and provides a basis for sales evaluation. A sales budget helps to integrate all departments in a company because achieving a sales target is the secret of making profits. It helps each department to assess their performance and correct any mistakes in function. It helps a company distribute goods and services in a cost effective way. It also helps the company to keep its marketing expenditure within affordable limits. Warning
A sales budget comes with inherent limitations and a good sales budget is made by overcoming these limitations. A sales budget cannot effectively forecast the future trends of events. It may not be easily accepted by all people in the organization. Preparing a sales budget takes up too much managerial time. Usually sales budgets shy away from expenditure that will give returns in the long run.
The Sa les Budget:

We need to forecast the volume of sales to understand the possible revenue that the business will generate. Sales are estimated in physical units of production and dollar values, as we saw earlier in the breakeven point section. To enable us to forecast sales for the budget period we can use a number of methods and some are listed below: Customer Surveys: Customer surveys include surveys of past customers as well as future customers and groups identified as being possible customers. These groups can provide information that will assist in predicting future trends in sales, such as whether sales demand will increase, decrease or remain stable. Market Research : Market research can be carried out by organisations that specialise in this field and are skilled in market research techniques. Market research will enable those preparing the budget to make decisions on possible changes in the market and to identify new markets to move their products and services into. Statistical Analysis : Statistical analysis will enable those preparing the budget to predict possible future demand. Statistical analysis can be as simplistic as calculating averages based on past sales to identify trends that can be extrapolated into the future. It can also include more complex regression analysis that takes into account changes in past sales and converts these into expectations on the basis of sales forecasting.
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Example: To illustrate this point let us consider the example involving $20 million in annual sales. Let us assume that projections suggest that sales of 400,000 units at an average price of $100 can be confidently included in the budget. Product Type Units Produced Revenue X Y Z ZX Total 160,000 80,000 60,000 20,000 320,000 6,000,000 2,000,000 8,000,000 4,000,000 20,000,000
Sales budget, targets &territories: Sales target

Definition
A specified amount of sales that a management sets for achieving or exceeding within a specified timeframe. Sales targets are apportioned among different sales units such as salespersons, franchisees, distributors, agents, etc.
The Importance of Sales Targets

Performance-related bonuses and incentives are essential to get the best from your salespeople. The advantage of sales roles is that the effectiveness of each salesperson can be measured and clearly determined. Therefore targets should be set to give a clear indication of what kind of performance is expected, and incentives should be provided to encourage sales staff to meet and exceed those expectations. Targets should be broken down into different areas depending on the type of customers being sought: New customers this is the main role of salespeople, to bring in new customers who have never previously purchased the product or service.
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Existing customers its likely that there are product or service enhancements that you can sell to existing customers, known as upselling. Upselling is the key to success for many businesses as the initial sale only has a small margin. It is upselling that is most profitable. Past customers previous customers should not be considered lost forever. Set targets to encourage salespeople to pursue past customers. The exact sales targets will depend on what drives the profitability of your business. Although you should set final sales targets its also important to set activity targets. These are day-to-day activities that your salespeople will carry out, each one increasing the likelihood of bringing in a successful sale. Possible activity targets include: Phone calls the number of completed phone calls, where a conversation has been held with a potential customer Letters sent out this refers to the number of prospects targeted. It will often be followed up with a phone call. Leads generated this figure will enable you to evaluate how effective your salespeople are at generating leads from each phone call. Face-to-face meetings actual appointments with customers. With figures for the number of completed sales as well youll be able to identify a clear picture of how many prospects are converted into leads and how many leads into customers. This can form the basis for identifying leakages in the system, such as a high percentage of generated leads not resulting in sales, to help you improve the efficiency of your sales staff. You may decide that its best to try to arrange a meeting with prospects if for example sending over additional information initially often results in the prospect losing interest. Alternatively the information that is sent over to prospects may need to be improved. One aspect of the sales target process that is worth noting is that your sales staff should be involved in the process of deciding appropriate targets, as noted by Joel Deceuster, founder of Deceuster & Associates:
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By including your salespeople, you give them added motivation to succeed. But without inclusion, salespeople will figure out the best excuses in the world why they cant achieve. Reassess targets from time to time and evaluate performance. It may be that the geographical areas for each salesperson to cover are too large, a competitor has introduced a new service which is more attractive compared to yours, or theres a general slowdown. Move quickly to resolve any problems, readjusting sales targets where appropriate.
How to set sales targets and achieve them!

1. Determine the area in which you will be selling your product 2. Determine the demand for your product in your projected sales area 3. Determine how much of the market a product similar to yours presently controls 4. Determine if there are reasons for clients to switch to your product. 5. Determine the difference between present supply and demand, and the potential switched over clients that might be available to you. 6. This is your total potential gross sales amount. 7. Determine how much of the gross sales volume you could support with your supplier, sales staff, amd similar considerations. 8. Your sales target would be the percentage of this potential serviceable demand you could supply in years one through ten. Assume sales would increase annually if your product is better, cheaper, better serviced etc.
Sales Target Planning

Purpose
In Sales Target Planning, a sales manager set sales or contribution targets for the sales employees in the field. Since the sales manager and the sales employees use a common planning platform, the planning tasks performed by the sales manager are closely reconciled with the business planning and operational planning tasks performed by the sales employees. You can specify as many dimensions for entering planning figures (such as sales region, product group) as you need for your planning requirements. The different planners can access the same data but plan at different levels. For example, the sales manager can plan at the product group and sales organization level while the sales employees plan at the product and sales office level. Since the data is stored in SAP Business Information Warehouse (BW) in InfoCubes, it is very easy to perform a plan/actual analysis using the analysis tools in SAP BW.
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The dimensions and key figures named in the process flow below are only intended as examples. For these, SAP delivers Business Content within an example scenario in SAP BW. You can use your own Business Content in SAP BW to specify alternative dimensions and key figures for your planning.
Prerequisites
You have access to sales figures and sales plans in SAP BW.
Process Flow
...
1. 2. 3. 4. 5.
You use queries to perform a situation analysis to gain an overview of the current situation. This overview then serves as the basis for your planning. You select the business unit for which you want to enter plan data. You select the product category for which you want to enter plan data. You plan key figures such as quantity, revenue, costs, and contribution margin for the selected business unit and product category. You distribute the target values top-down to the business units belonging to the sales employees. Top-down distribution is performed on the basis of historic distribution or distribution keys.
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6.
7. 8.
9.
10.
You release the distributed plan data as target figures for the field. The sales employees can then apply these targets in their planning tasks. The planning figures entered by the sales employees and key account managers are automatically rolled bottom-up to the higher planning levels. You check whether the sales employees plan data falls within the targets set. Any necessary adjustments to the plan data are made in a new planning cycle (top-down and bottom-up). You approve the field plan figures. When you save the results, they are saved in the transactional planning cube. Once the plans have been reconciled, the planning phase is complete. In the ensuing period, actual data relevant to planning is saved in the Plan/Actual InfoCube. This data is extracted from the operational systems, such as SAP CRM. You monitor the development of the actual data, comparing it against the planning target values. Year-to-date/Year-to-go analysis (YTD/YTG analysis): In the course of a fiscal year, plan and actual data is compared period by period. Plan/actual comparison: A the end of a fiscal year, plan and actual data is compared at specific points in time. Goal achievement: In the course of the fiscal year and at the end of that year, management checks the level of goal achievement for the set targets. You adjust the sales targets if the development of actual data makes this necessary.
Sales budget:
A sales budget is the amount of money available or assigned for a definite period. It s based on estimates of expenditure during that period and on proposals for financing the budget. Thus the budget depends on the sales forecast and the amount of revenue expected to be generated for the organization during that period. The budget for the sales force is a valuable resource that the sales manager redistributes among lower level managers. Budget funds must be appropriated wisely in order to properly support selling activities that allow sales personnel and total marketing group to reach their performance goals.
Budget Purposes
The budget is an important factor in the successful operation of the sales force. Top sales managers spend a great deal of time attempting to convince corporate management to increase the size of their budget. Budgets are formulated for many reasons, including the major ones of planning, co-ordination & control. Planning: Corporations and their functional units develop objectives for future periods and budgets determine how these objectives will be met. For example alternative marketing plans, the probable profit from each plan and individual budget for each will be considered before management is able to decide on future management programes. Co-ordination: The budget is the major management tool for co-ordinating the activities of all functional areas and sub-groups within the entire organization. For example sales must be co-ordinated with production to ensure that enough products are available to meet demand. The production manager can use sales forecast and the sales department s marketing plans to determine the necessary production ESHWARI.S---LORAA BUSINESS ACADEMY Page 80
level. Budgeting allows the financial executive to determine the firm s revenues & expenses and have enough capital to finance all business operations. However some flexibility must be built into the budget so that plans may be changed in response to market conditions. Many companies allocate a dollar lump sum to their managers, allowing their managers to invest in selling activities dictated by the sales and marketing plans. Thus each sales group has a budget. Control Allocation of budgeted funds gives management control over their use. Sales managers estimate their budget needs, are given funds to operate their units and then are held responsible for reaching their stated goals by using their budgets effectively. As the sales program is implemented and income and expenses are actually generated, managers assess results against the amount budgeted and determine whether they are meeting objectives.
Sales Budgeting Methods:

How much money does the sales manager receive to operate the sales force ? although no fixed financial formulas exist to appropriate funds, firms use one of the three general methods to determine how money should be allocated. First, some firms use an arbitrary percentage of sales. Second, other firms may use executive judgement. Third , a few companies estimate the cost of operating each sales force unit along with the cost of each sales program over a specific period to arrive at a total budget. Whichever method is chosen the actual amount budgeted will be based on the organization s sales forecast, marketing plans, projected profits, top management s perception of the sales force s importance in reaching corporate objectives, and the sales manager s skill in negotiating with superiors. Budgets are often modified several times before the final dollar figures are estimated.
Sales Budgeting Process:

A sales budgeting is a smaller budget that is part of the master budget of a business. The sales budget focuses only on the sales the business conducts and how much it is costing the business to produce the products or services for sale. The sales budget is developed to help the business plan the sales, communicate the needs of the production team, evaluate the sales and performances and control the expenditures.
1. List of Products or Services

o
A sales budget will have a detailed layout and list of each of the products or services offered in the business. This type of budget will show how much each product or service offered through the company's product and service line is earning the business on a monthly basis.
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For example, the budget may have a single line per product and service, so the reader can easily find out how much the product is selling for, how much it costs to produce and how many quantities are being sold on a monthly basis. This type of sales budget should be updated and printed monthly, so executives can use the information for financial planning.
Production Fees
o
As mentioned in the previous section, the sales budget must show detailed information regarding the product or service. This includes the production fees. A product may cost a specific amount to produce, because it uses specific tools or supplies that may need to be imported. The production fees may also include labor cost, but whether or not it is included in the sales budget is up to the budget creators and executives. Services, such as website development and design, may not cost much in production but can be costly in terms of software programs or membership fees that need to be paid for the business to use specific design programs, for example.
Testing
o
Depending on the product or service being created by the business, it may be subject to testing before it hits the market for sale. For example, any baby toys or products that could be potentially dangerous to users must be tested to ensure it is safe to use for those who the product is designed for. Services must also be tested, as a website needs to be fully functional before it is launched and given to the user. Depending on the testing in question, it may require some additional fees, which needs to be included in the sales budget.
Maintenance and Updates

o
Once the sales budget has been completed with the relevant information, an accountant or sales manager must update the budget on a monthly basis to ensure that all figures and sales totals are truthful and accurate. The information is not only used by the sales manager to determine whether the budget is maintained, but also used by executives to plan ahead and make changes to the existing products or product line.
Stages of a Sales Process

When you own a business, increasing sales of your products or services is most likely one of your primary goals. To increase sales, you may want to get back to basics and teach your staff the proper sales process. The sales process has several stages that a sales representative must go through. Prospect and Interview: The first part of the sales process involves prospecting for customers. If you work in inside sales, the customers might come to you. In that case, you will start by interviewing the customer. During both of these stages, you contact the customer for the first time and begin talking to him. This stage involves finding out what the customer wants and needs. By getting this information, you can determine what products to show.
Presentation: After you decide what to show the customer, it is time to make a presentation.
Depending on what you are selling, this presentation might be more involved or it could be subtle. During this stage, you simply show what your product or service can do for the customer. You try to differentiate your product from anything else in the market and convince your customer that he needs or wants this product. This is the time to use persuasion skills to make the customer want to buy.
Closing the Sale: Once you present the product or service to the customer, it is time to
negotiate. Depending on your product, you may have a fixed price for your product. In many industries, you may have to negotiate a specific price for your product or service. Then you negotiate the terms of the deal, such as financing or add-ons to the sale. You may also have to overcome some objections along the way before you can close the sale. Once the objections have been dealt with, you can close the sale.
Follow Up: Many sales personnel make the mistake of closing the sale and then moving on
completely. While you always want to focus on prospecting and selling to new customers, you also need to follow-up with your existing sales. Make sure that your customers are happy with the products or services that they bought. When you create happy customers, you can also create a stream of referrals for yourself. This also helps lead to repeat business at some point in the future.
How to Build Rapport With Customers:

y Create a positive impression with body language.: A smile and relaxed, open body position is an invitation to your customer to approach you for help. Scowls, frowns, and folded arms create boundaries with people. Even if you're talking with the customer by phone, your body language plays an important part in the message you deliver. Your tone mirrors your posture. Match your speech pattern to your customer's.: Matching your speech helps your customers identify with you as someone who is "one of their kind." There is a difference in matching and mimicking your customer's speech pattern. You don't want to mimic someone's dialect nor do you want to match emotional tones such as anger or sarcasm. But if your customer talks slow, talk slow. If your customer has a soft voice and you usually talk loud, match your customer's volume. If your customer speaks very informally, using clichs and colloquialisms, then you do the same. Build trust with a confident tone.: Stammering, word-fillers, and pauses can create the impression that you are unsure of your job, incompetent, or passive. Your tonevolume, pace, pitch, word choicecreates or destroys trust. Speak confidently to your customers. Avoid a condescending, haughty, impatient, or irritated tone.:Stay away from any "judging" tones. Keep your voice and words friendly and assertive, yet empathetic when appropriate. "Thank you, Mr. Jones, for waiting. Please give me your I.D. number, and I'll pull your file immediately. I understand that you need to get this matter taken care of today. Inject energy and enthusiasm into your interaction.: You can do this by varying voice tone and rate of speech, as well as by using active body language. Show that you care and that the customer is your number one concern.
y y
y y
y y
y y
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Use the customer's name to personalize service.:Everyone likes to hear his or her name. When you call a customer by name, you add that personal touch to your service. However, you don't want to address a customer by "Honey," "Sweetie," or some other inappropriate nickname. Be informal without being overly familiar.: A "professional" tone does not mean a formal, stiff tone. As you speak, you should be conversational, using short sentences, simple words, contractions, and even occasional slang. But in an attempt to be informal, be careful not to be slapstick, corny, obscene, or too familiar. At best, these may create doubts about your professionalism. Choose positive or neutral words.:Words trigger emotions. Avoid words that trigger unpleasant emotions, such as complaint, upheaval, fake, and terminate. Use positive or neutral words, such as concern, update, substitute, and conclude. Frame the positive approach.: In addition to choosing positive words, remember to express your message in a positive way. Say "The customer service desk will be happy to approve your check for payment at any register," rather than "I can't take this check at my register. You have to go to customer service to get it approved." Be clear and specific.: Vagueness in communication causes misunderstandings. Commonly used vague terms include as soon as possible and at your earliest convenience. Your customer deserves specific information. Keep your promises.: The surest way to diminish trust with customers is to break promises. If you promise Mrs. Bronson to check on an order and call her this afternoon, do it. No matter what the excuses or foul-ups on someone else's part, you should take responsibility to follow through with what you told the customer. Tell the truth.: Don't lead your customer on with false information. If the shipment isn't coming until Monday and you know that product A is on back order, tell her the whole truth, not simply that the order will arrive on Monday. Tell the truth upfront to minimize false customer expectations and the resulting anger. Customers forgive errors if they can always depend on you for the truth.
y y
y y
y y
y y
y y
Handling objection with customer:

In order to defuse customer objections, there are a few steps you should follow: y y y LISTEN to see if it`s a real objection. ACKNOWLEDGE that you understand the customer`s concern. QUESTION using soft words "Just suppose...".
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y y
EXPLAIN the relation to customer concern with benefit. REVIEW what`s just happened and the final outcome.
What is an Objection How many real objections do you actually get? What exactly is an "objection"? Is it a roadblock to be overcome? Is it an obstacle to closing the sale? Is it a mountain to be climbed? Webster's dictionary defines "objection" as "an expression of opposition or disapproval." If you disapprove of or oppose someone or the company he represents, are you going to do business with them? Hardly. When the customer says your price is too high, or your delivery is too long, or the specifications don't meet his needs, or he's happy with his current supplier, does that mean he disapproves of or opposes you? Of course not. So what you might consider to be objections aren't really objections at all, but are sales realities or simple expressions of concern on the part of the customer. Of course the customer is concerned about the high price because he's not convinced of the value. Of course he's concerned about long delivery because that will cause him delays or problems. Of course he's concerned about the specifications because your solution isn't going to do the job. And of course he's happy with his current supplier. If he wasn't, he'd come looking for you instead of the other way around. Are there any real "objections?" Probably. How about, "The last time I bought from you delivery was eight weeks late," or "Every time I try to get service, no one calls me back." Biases and Roadblocks You can also run into biases and uninformed customers who throw roadblocks in your way because they simply aren't going to buy from you no matter what. That's not a sale, that's a sales nightmare. Some people won't buy because you're a woman or not a woman, you're too young or too old, or for whatever reason they don't like you or your company. These aren't real objections. They're biases and you're dancing to someone else's tune, the title of which is "There's No Sale Today, Martha."
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Avoid Objections So what's the secret to handling objections? The secret is to manage the sales process so as to avoid them. That's it. Now, how exactly does one do this? Well, first of all, remember that people buy from people they know, people they like, and people they trust. So build rapport, be likeable and be trustworthy. Do what you say you'll do when you said you'd do it. Secondly, listen to your customer's concerns. Find out what's standing in the way of his buying from you. What is he unsure or uncomfortable about? If you've spent the major part of the sales process asking questions, probing and qualifying the customer, you will probably have a good idea of what situations have to be solved or clarified before the customer will feel comfortable moving ahead. Sometimes there's no simple solution to the customer's concerns. That's when the customer will hesitate to move forward. If you can't find a solution, maybe you can negotiate a resolution. Perhaps a delayed delivery can be offset in some manner. Maybe no one's product will meet the customer's required specifications and your task is to help the customer accept your solution as the closest match he's likely to find. Negotiate a Resolution Whatever it is that's keeping the sales process from moving forward, it's your job to identify it and to address it in a professional, non-confrontational manner. You're not trying to overcome the objection; you're working with the customer to resolve the situation in a mutually beneficial manner. When you do this in a spirit of friendly cooperation, you're partnering with the customer and coming across as a problem solver, not a peddler. So, by treating what is often considered objections as simple requests for more information or clarification, you can reduce the stress of the situation and keep the sales process moving, hopefully to a successful conclusion. Should sales trainers stop teaching objection-handling techniques? No, but they should put more emphasis on how to avoid customer concerns from coming up in the first place. They should help salespeople recognize the difference between a valid customer concern and an emotional bias. Salespeople need to improve their skills at uncovering the customer's concerns early in the sales process. They also need to know the difference between a put-off and the reality of human nature that causes a customer to say, "I want to think about it." The final secret of handling objections is to listen. Most salespeople wouldn't listen at all if they
didn't think it was their turn to talk next! You need to hone your skill at not just hearing what the customer is saying, but understanding what the customer is saying. Once you understand what is standing in the way, you can work with the customer to pave the way to a smooth sale. The key to handling objections isn't confrontation; it's cooperation.
Building relationship with customer:

1. Make your advantages easy to understand. For instance, Computer Resources International AS originally sold consulting, for which they used proprietary software. Only when they started selling the software first, and then customization and consulting as extras did their business take off. Buying software was easier to understand than the more intangible consulting. LifeUSA insurance, and many other businesses, focus on speed in every aspect of their business. They make fun of the slower industry standards and provide a simple advantage clients understand. Other ways to set yourself apart are through great service or association with worthy causes. 2. Dont try to be everything to everyone. Just as customers screen you, you should decide who you want to serve. Printing Resources originally took any printing business that walked in the door. When they realized which kinds of customers they worked with best, they were able to cut down their marketing costs and make more money. Some computer consulting firms only work with one customer per industry so they will have no conflicts of interest. You can bet they select customers carefully, and that customers are flattered by the partnership approach. Consider creating a checklist of who shouldnt hire you! It will help you focus, and may impress the right customers if you share it with them. 3. Work for referrals. Word of mouth is the least expensive, most effective way to get new business. Barry Farber has new customers write on the back of their business cards why they bought. These become minitestimonials. Bob Brassard calls at least one client a day just to keep in touch. This builds the relationship by showing he doesnt just care about them when he wants something, allows him to update files, and generates referrals. One upscale dentist put up a Web page. He got about six extra referrals a month because his clients thought it was cool that their dentist had a Web page. 4. Use online marketing. You dont have to have a Web site like Eastern Mortgage Services to do business online. You can send personalized e-mail like Michael Swartz of DNA Software. You can pay only for the leads generated for you by advertising on many sites. You can research potential clients for better presentations. You can gather customer input inexpensively as Ritchey Design does. Or you can post free ads in discussion groups. 5. Dont sell, help people buy. When you truly put the clients interests above your own, you will become a consultant, a team member, and a partner for your client. When youve earned trusted advisor status, doing business is no problem. For instance, computer consultant, Amadaeus Consulting Group, helps its customers make more money by using computers to help their clients sell more. Of course, the
extra business comes around as the client grows. A small accountants client felt they needed a Big 5 firm to handle their audit because they wanted to go public. Instead of resisting, the accountant helped the client select a Big 5 firm, thus maintaining and extending the relationship with the client. Conrad International added warehousing services near overseas clients so they could afford to buy in bulk for a lower price. When you put the customer first, you earn longterm loyalty that is more profitable than a larger quick sale. 6. Partner with other companies reaching your market. This might be neighborhood merchants cooperating on a sidewalk sale, or Digital Equipment partnering with Infinite Technologies to better serve the Bank of New York. Or it could be you partnering with a charity to create a fund raising event that brings attention to both of you, like Service Merchandise and Goodwill did. 7. Shift the risk to yourself and you will profit. A believable guarantee makes it safe for prospects to give you a try. Very few people will exploit a generous guarantee compared to the extra business it generates. YoyoDine is one of many companies that guarantee you results from their online advertising. Even Kaiser, the big HMO, found a money-back guarantee to be successful. 8. Be personal. To build relationships you have to build a personal connection. A handwritten invitation pulled great for Frank Candy, president of the American Speakers Bureau and for restaurateur Murray Raphael. Internet consultant Dan Janal gives clients links from his page. One nursing home created a waiting list through great referrals by greeting visiting relatives by name and filling them in on their loved ones at the start of each visit. 9. Create free publicity. Our old Construction Computer Applications Newsletter had a hard time finding reviewers for computer programs of interest to readers. Our reviewers not only got publicity from their reviews, but we gave them referrals. A large CPA firm specializes in citrus growers. Every year they do a survey of their clients costs of operations. The survey data helps their clients benchmark their operations, positions the CPAs as the experts, and gets the CPA firm publicized in trade articles. Inquiry Handling Services gets regular publicity from newsletters and articles, as well as a book they wrote for their industry. And Luxury Limo received major coverage about a special rate created to allow three regular women to share the commute in a limo at about the cost of carpooling. 10. Integrate your marketing. This means that everything you do should convey the same message and represent what you stand for. Putnam Investments manages $150 billion in assets. All their literature, and even their office, conveys the same message. Viva Knight, a script consultant, rents mailing lists from the same magazine he advertises in. If he also wrote articles for the same magazine, it would add to the integrated approach.
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Unit: 4
Sales force recruitment:
Sales Force Recruitment and Hiring
Improve Your Sales Force Recruiting & Retention! Are you still doing the same things youve always done that have yielded inconsistent results and left you looking for new salespeople time and time again? Sales force recruiting is where a company can really look to improve bottom line results. By effective sales force hiring, the path to more robust results becomes a straighter one. The current job market is flooded with people looking for work. Is your next sales superstar just around the corner? Dont let sales force recruitment become your Achilles heel. At The Sales Training Center - and our sister website, HRTrainingCenter.com, you will find sales force recruitment training through a variety of courses and products. Benefits Of Effective Sales Force Recruiting With effective sales force recruiting, you can increase your return on investment through some of these methods:
y y y
A lessened acquisition cost per new employee Less paperwork for your human resources and sales managers Improved quality of new hires
Importance of good Recruitment/Selection Program:

Qualified Sales people are scarce Good selection improves sales force performance Good selection promotes cost savings Good selection eases other managerial tasks Sales managers are no better than their sales force
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Sales Force Selection and Strategic Planning: Sales force most directly involved in strategic plans of the company Therefore selection process should be consistent with the Strategic plans Selection process should be strategically integrated with all aspects of Sales Force Management
Sales force Staffing Process:

Planning Recruiting Selecting Hiring Assimilation
Planning:
Establishing Responsibility for Recruiting Determine the number of people needed Conduct Job Analysis Prepare Job Description Determine Hiring Qualifications
o Establishing Responsibility for Recruiting: HR dept. usually does the initial screening and The Sales Manager does the Final hiring decision o Determine the number of people needed: y Based on analysis of past experience and future expectations y Also review for any change in Marketing Plan to be made in future
o Conduct Job Analysis: y Analysis should clearly identify specific tasks y Identify which activities are critical for job success y Sometimes an outside specialist is hired o Prepare Job Description: Put the Job Description in writing Uses o Develop tests and selection tools o Turnover can be reduced o Foundation for sales Training Program o Developing Compensation Plans o For Periodic Evaluation o Determine Hiring Qualifications: Most difficult part of Selection A few generally accepted Characteristics o Mental Capacities o Physical Characteristics o Experience o Education o Personality traits o Skills o Socio-environmental factors
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Recruiting:
Identify Sources Select Sources Contact the Recruits
Sources o Referrals Current Employees Other companies (Competitors, Customers, Non Competitors) o Internet o Educational Institutes o Advertisements o Agencies o Part Time worker
Selection : Phases Involved:

Developing a system of tools and procedures for matching the applicants with the predetermined requirements Using the system to select the salespeople Selection Tools Hiring Assimilating Tests
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Selection Tools:
Application blanks Personal interviews Psychological tests References and credit reports Assessments tests
Application Blanks: It is also known as personal-history record Information Asked for on Application Blanks Intended use of the information by the company Personal information Physical characteristics, experience, and socio-environmental factors
Experience involves Educational Background Work Experience It involves questions on Offices held in organisations Hobbies and other outside interests It reveals something about his or her interests, capabilities, and personality Personal interviews: It determines Conversational ability, speaking voice, and social intelligence Certain personality traits Aimed at learning 4 major points Is this person capable of excelling at this job?
How badly does this person want the job? Will the job help this person realize his or her goals? Will this person work to his or her fullest ability? Improving validity of the interviews Thorough review of the applicants resume or application before proceeding further in the selection process More than one interview at different place with different interviewer Standardized ratings to be used Training of interviewers Interview Structure Guided interviews Nondirected interviews Interview Focus Behavior-Based interviews Performance-Based Interviews Stress Interviews
Questions for Traditional Vs Behavior-Based:

Do you get along with people? What qualities do you think are important for success in this job? What is your biggest weakness? Tell me about any incident in your last job that caused conflict with a customer. What did you do to work it out? Give me a specific example of a job situation in which you had to use your problem-solving abilities Tell me about your greatest failure
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Timing and Method of the Interview(in personal interview): During Initial Screening Interviewer should disclose a brief job description Ask few questions concerning the minimum requirements of the candidates Through telephonic interview, face-to-face interview (Lasts for 15-20 min), videconferencing interview At later stages More time is spent with the candidates to know them well Psychological testing: Legal aspects of testing A framework of testing Selecting and developing tests Problems in testing Mental Intelligence Tests Aptitude Tests Interest Tests Personality Tests Selecting and developing tests
References and other outside sources: References Legal considerations Background check References Legal considerations Background check
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Job offer decision:( Assessments tests ) Ranking the recruits Communication with applicants Extending the offer What will be included How will offer be extended
Socialization and assimilation:

Pre entry socialization Assimilation of new hires Relationships Mentoring new employees Meeting social and psychological needs
Training: Phases in sales training program:

Training Assessment Program Design Reinforcement Evaluation
Training Assessment: Establish program objectives Increased sales productivity Lower turnover Higher morale Improved communication Improved customer relationship
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Improved self- management
Identify who should be trained Experienced reps Customers Sales managers
Identify training needs and specific goals Standardization and customization Sources of information managerial judgment, sales volume, no of calls, selling expenses and customer complaints difficulty analysis
How much training is needed ? - depends on the training objectives Program Design: Who should do the training ? - line personnel, staff trainers, outside training specialists When should the training take place? - placed in the field after trained - placed in the field before training Where should training be done? Decentralized training o field sales office instruction, use of senior people, on the job training, sales seminars, self-guided assignments
Centralized training organized schools , periodic sales meetings Content of training

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Attitude towards selling and training Knowledge of the company Product knowledge and application Knowledge of competitive products Knowledge of customers Knowledge of business principles Selling skills Relationship- building skills Team selling skills Team- management skills Computer- assisted skills Legal constraints on selling
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Reinforcement:
Xerox sales people retained only 13% of information learned in training after 30 days.
Evaluation:
Reactions - participants complete questionnaires, recording verbal comments Learning - before and after tests Behavior Results
Sales force motivation, compensation, evaluation, & supervision:

Sales force motivation:
Motivation is the process of simulating people to perform in order to accomplish desired goals. Motivation is a three-dimensional construct. consisting of the following: Intensity Persistence Direction
Why motivation????????? Improve efficiency Relieve the tension Keep the sales force happy Human treatment
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Motivational theories addressing the issue: what motivates salespeople

Need Hierarchy Theory Two Factor Theory ERG Theory Equity Theory Expectancy Theory
Motivational tools
Incentive remuneration plan Promotions Personal contact Correspondence Sales contests Sales conferences Bulletins and Magazines Honour and Awards Participation
Sales force supervision:

The face of any organization is the sales force. Companies spend a considerable amount of time and money on sales force rather than on any other promotional activity. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. Designing of the Sales Force Sales force is linking between companies and customer. Therefore, companies have to be careful in designing and structuring sales force. 1. The first step is setting out an objective for sales force. Earlier companies had a single objective increasing sale making it objective also for sales people. Sales people are asked to perform a search for prospective clients or lead. Sales people are asked to balance time
between a prospective customer and current customer. Effective communication of product and services is essential to close the deal. Sales people also play an important role in after sales service and can make a difference for the company. Sales people are eyes and ears of the company in the market gathering information about competition and customer changing demands. 2. The second step is use sales people strategically. Sales people have to combine efforts with other team members to achieve the objective. Sales people should be aware how to analyze market data been provided and convert them into marketing strategies. 3. The third step is deciding the structure of the sales force. The structure of the sales is dependent on the strategy followed by the company. Common sales force structures are as follows: Territorial structure is used where every sales representative is assigned specific geographical area. This structure is preferred for building relationships with locals. Product structure is used for complex and un- related product portfolio. Here the sales people are directly associated with research and development of the products. Market structure is used if the companies are operating different industry or market segments. Every sales force specializes in a definite market and helps push a product efficiently across the given market. However, the disadvantage would arise if customers are located over a wide geographical area. Complex structure is used when companies are in business of selling complex product to different customer across a large geographical area. Here sales force structure is a combination of other structures discussed. Once the structure is designed companies need to make a decision with respect to the size of the sales force. The size of the sales force is dependent on the market size and number of customers. 4. The next step is to design compensation for the sales force. Compensation plays a big motivational factor for sales people. Companies follow a structure of a fixed amount plus a variable amount depending of success achieved in the market. Allowances play an important factor in the salary owing to continuous travel and market visits.
Managing Sales Force:
Integral part for success of marketing strategy is management of the sales force. The management of sales consists of following:Recruitment is at the centre of an effective sales force. One approach in the selection is asking a customer what characteristics they look for in a sales representative. Companies develop selection procedure where behavioral and management skills are tested. Training is essential to remain ahead of the competition. Sales force needs training before entering the market as well as training at different stage of the product life cycle.
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Supervision on sales force is decided on the profile of product portfolio. A general supervision is maintained with respect to sales people dealing with potential clients. Another supervision is related to efficient time management from preparation of client call to closing of the deal. Motivation is a key aspect for management of the sales force. Here compensation plays an important in driving up the motivational level. Compensation can be assigned based on sales quota. Other motivational tools are social gathering and family outing. Evaluation is essential to management of a sales force. Sales reports sent by the sales force serve a good starting point of evaluation. Art of negotiation and relationship marketing these two are the important aspects of successful sales representative and long term benefit for the company.
Sales force Supervision consists of:

Leadership Leadership- the process of getting things done through others Leadership Styles
Supervision Supervision- the actual oversee and directing of the day-to-day activities of salespeople
Evaluating Analysis of sales volume Marketing cost analysis
Directing Identify Customer Targets & Set Call Norms Develop Prospect Targets Use Sales Time Efficiently Annual Call Schedule Time-and-Duty Analysis Sales Force Automation
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Motivating Organizational Climate Sales Quotas Positive Incentives Honors Awards Merchandise/ Cash Trips
Sales supervisor job description:

y y y y y y y y y y y y y y y To assist the Sales Manager in leading, directing and motivating the sales team in order to achieve the overall corporate sales objectives. To assist the Sales Manager in revising and implementing the sales strategies plans. To assist the Sales Manager in generating sales opportunities by identifying appropriate business targets. To assist the Sales Manager in providing a professional and excellent level of customer service with existing and new customers. Supervise the shift that you are scheduled Assist Sales Manager by completing all assigned duties Clean up . stations and facilities throughout shift and ensure bathroom products are adequately stocked Handle customer issues, resolution and communicate escalated issues to the Sales Manager. Supervise Sales Representatives Assist with sales rep questions, concerns and product/service questions. Create reports showing Sales %, install %, adherence, and attendance etc. Make sure all employees adhere to company policies and procedures (example: dress code, eating food at station, cell phone usage, etc.) Deliver positive feedback, Employee Rewards . and Customer Recognitions to employee Communicate all employee relations issues, concerns, and incidents to Sales Manager. Monitors calls, provide feedback to reps and assist reps on sales %, install %, and quality assurance goals.
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Sales force Performance Analysis:

1. To ensure that compensation and other reward disbursements are consistent with actual salesperson performance 2. To identify salespeople that might be promoted 3. To identify salespeople whose employment should be terminated and to supply evidence to support the need for termination 4. To determine the specific training and counseling needs of individual salespeople and the overall sales force 5. To provide information for effective human resource planning 6. To identify criteria that can be used to recruit and select salespeople in the future 7. To advise salespeople of work expectations 8. To motivate salespeople 9. To help salespeople set career goals 10. To improve salesperson performance
Salesperson Performance Evaluation Approaches:

1. Most evaluate on an annual basis 2. Most combine input and output criteria which are evaluated using quantitative and qualitative measures 3. When used, performance standards or quotas are set in collaboration with salespeople 4. Many assign weights to different objectives and incorporate territory data. 5. Most use multiple sources of information 6. Most are conducted by the field sales manager who supervises the salesperson 7. Most provide a written copy of the review and personal discussion
Type of Measurement Type of Measurement
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Type of Measurement:
y Objective Statistically-based Use internal data y Subjective Personal evaluations Usually sales manager Objective Measures I
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Objective Measures II & III
Subjective Measures I: y Focus is on how well salespeople do their job vs. focus of objective measures, what they do. Qualitative vs. Quantitative. y More difficult to measure qualitative (how well) rather than quantitative (how much). y Qualitative measures tend to be inconsistent and plagued with biases because they rely on human judgment. Subjective Measures II y To force some consistency in judgment, and eliminate bias, salespeople are judged along multiple attributes using a rating scale. y Five attributes rated: Sales results Job knowledge Territory management Customer/Company relations Personal characteristics
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Sales Results: y Volume performance y Sales to new accounts y Selling the full product line Job Knowledge: y y y y Product knowledge Pricing Company policies Competitors
Territory Management: Planning activities and calls Controlling expenses Reports and records
Customer/Company Relations: y Solid, professional relationship with customers y Working well with colleagues y Good company citizen Personal Characteristics: y y y y Initiative (also drive and ambition) Personal Appearance (yes, its important) Personality Resourcefulness (getting things done)
Merit Rating Forms: Common Problems:

y y y y y y y Lack of an outcome focus Ill-defined personality traits Halo effect Leniency or harshness Central tendency Interpersonal bias Organizational uses influence
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Protections Against Biases:

y y y y Instructions on forms Descriptive categories not words Request objectivity Use Objective Measures
Sales force compensation:
Overview: The compensation of the salesforce is an important tool to boost the motivation-level of the sales personnel. Designing an efficient compensation program for the salesforce is, therefore, an essential requirement. A good sales compensation plan should be economical yet competitive and should attract and sustain deserving sales personnel. The paper examines issues involved in designing the sales compensation plan. y Sales compensation is a crucial factor in their motivation, but other factors impact motivation, too. y Sales force incentives are a vital part of business and one of the best reasons is that they work. This is one of the few motivators that can rev up a sales force for pennies on the dollar.
Principles of Sales Compensation:

Building a World Class Sales Force The basic principles that shape compensation plans How different customer needs vary The specific type of salesperson best matched to each of the four market stages Critical skills and behaviors 16 characteristics of plans that work Evaluating the role of salespeople
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Sales Compensation Plan:

Creating an Effective Compensation Plan for Sales Representatives An effective sales compensation plan for sales representatives is critical to the success of any goto-market strategy. Yet the design and management of a compensation plan for sales teams is rarely easy. After all, determining how people are paid is a sensitive matter which can become increasingly complicated when reconciling the disparate needs of key stakeholders in sales, finance, HR, and marketing. To better manage this complexity and to keep the discussions constructive, consider the four cornerstones of an effective sales compensation plan. 1. Align your compensation plan with corporate objectives Sales compensation is an output of the business planning process. It is defined within the context of business strategy, and directly supports the achievement of corporate objectives. However, in order to best align compensation with strategy, care must be taken to distinguish between simply being directionally consistent with corporate objectives, and being in lockstep. To illustrate, consider a sales compensation plan that supports an aggressive growth strategy. One option in these circumstances is to use a flat commission rate; salespeople earn more if they sell more. A second option is a plan which pays higher commission rates for new customers than for repeat business, and which offers attractive bonuses for exceeding quota. While one could argue that both plans are aligned with a growth strategy, the second demonstrates this alignment to a much higher degree. Good alignment means that each component of the sales compensation plan maps directly to a corporate objective and significantly increases the probability that it will be achieved. 2. A compensation plan is not a substitute for sales management A well-designed sales compensation plan articulates corporate priorities for salespeople. It defines the context within which all decisions should be made, as well as the rewards for contributing to the achievement of corporate objectives. As a result, there is a temptation to let sales compensation play a larger role in the day-to-day management of salespeople. Usually, this is in the form of rewards for good sales behaviour, such as booking appointments or passing leads, in place of actual sales results like revenue or margin. While the judicious use of behavioural measures may be appropriate in some selling environments, relying significantly or solely on sales compensation to manage salespeople is risky at best. Sales compensation is a very compelling tool when the challenge is to focus personnel on specific goals. However, it is just thata tool. It should never be considered as a substitute for sales management.
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3. An effective compensation plan relies on careful execution Even the most well designed compensation plan will fail if poorly executed. Good execution is achieved by first setting clear expectations and then delivering on them. In order to set and maintain expectations, rely on comprehensive documentation that is written in laymans terms and easily accessed. It should describe payment calculations, all related administrative policies and practices, and most importantly, the process for resolving payment errors. To consistently deliver on these expectations, all related processes should be automated. With an abundance of feature-rich, reasonably-priced software solutions on the market, it is becoming increasingly difficult to defend the use of error-prone manual calculations or spreadsheet farms. Automation improves the overall integrity of the program and provides opportunities to redeploy staff in value-add activities such as reporting and analysis. Effective execution is good for sales productivity. It gives salespeople the confidence to fully engage in the selling process instead of wasting valuable time wandering through administrative back alleys. 4. Actively manage your sales compensation plan Active management refers to the regular, ongoing analysis of a sales compensation program. The programs objectives, such as acquiring new customers or increasing the sale of highermargin products, will dictate what reporting and analysis is undertaken. The focus should be on whether the plan designs are delivering the specific results that were intended. Other analyses may include topics such as the correlation between pay and performance, the number and type of payment errors, the performance of new hires, the effectiveness of draw/guarantee programs, or a search for unintended seasonal or regional trends. Active management of sales compensation provides a statistical, factual basis for evaluating the effectiveness of the program and for considering possible changes. Knowing whether, when, and how to implement a change will minimize contention and keep salespeople focused on overachieving.
Sales force motivation and compensation:

Compensation Plans Compensation plans for the sales force are designed to achieve several objectives. Some of these are: i. ii. iii. To assist the company in meeting its sales projections, To bring the earnings of the sales force to desired levels, To reward individual salespersons in direct proportion to their efforts and performance.
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Attitudes towards A Compensation Plan: Salespeople Look for

1. Adequate income for adequate performance.
Companys Attitude
1. No conflict, no argument on this point.
2.
Superior income for superior performance.
2.
None here either.
3. 4.
Incentives for special achievement. A base of fixed-income for security purposes.
3. All but a few reactionary companies agree. 4. Many companies agree, but some cannot afford a fixed expense such as salary. In certain industries compensation ranges from 100 per cent salary to 100 per cent commission. Company attitude will depend on circumstances peculiar to it. 5. No argument here, but not all companies can afford full range. 6. As much to the companys advantage as the salespersons. 7. Equally important for the company to measure performance. 8. Equally important to the employer.
5.
At least primary fringe benefits.
6.
Opportunity for advancement, promotion.
7.
A yardstick to measure performance.
8. Equitable treatment to all sales people; pay based on performance no free loaders, no favouritism or exploitation. 9. A sense of security because of the feeling that he is respected and regarded as a human being who is important to the company.
9. Just as important to the company which must rely on the morale of its sales force. The sense of security and well-being of sales force pay many bonuses to an employer. 10. Equally important to a company.
10. Flexibility in a plan, sensitivity to changing conditions. 11. Simplicity easy to understand.
11. The company agrees the simpler the plan, the easier and cheaper to administer it.
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Various Modes of Compensating the Sales Force

Salary A straight salary payroll is by far the easiest for employers to handle. Deductions for provident fund, income taxes and other fringe benefits are fixed and the work of accounting is reduced. In many industries, this method of compensation is generally used. There is always an overriding reason for choosing a salary plan. The following industries are using this method Highly seasonal industries High-tech industries Trade salespeople Route salespeople Missionary and educational salesmen Group selling
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Strengths of the Salary Compensation Plan

1. 2. For the sales force Simple to calculate Fixed income Job security For the company Reduces turnover in sales force Increases authority of sales manager in controlling sales force An effective tool in case Group efforts are required Of business that is technical in nature Hiring new staff Of seasonal business
The following are the weaknesses of the Salary Compensation Plan

1. 2. For the sales force Lack of incentive to excel Old sales force/under achievers tend to be overpaid For the company Fixed expenses, difficult to cut down expenses Frequent adjustments in salary necessary, yet too many changes are as bad as too few Requires excellent supervision which is not always available.
Straight Commission:
Paying a commission is a variable expense rather than a fixed one. If sales are made, a commission is paid no sales, no commission. This keeps sales expenses strictly in line. A straight commission pay plan has many advantages. It is desirable for a company suffering from a severe cash shortage since the commission need not be paid until proceeds are received from a sale. Flexible commission rates can be a strong incentive and many organisations are successful because the sales force enjoys a liberal commission schedule.
Target Commission :
A straight commission is paid on sales volume. On a fixed commission base, a fixed percentage of sales volume is paid to the sales force. Other plans call for increase in rate as volume increases. A fixed rate commission is easy to figure and administer. If the rate is 2 per cent, it stays at that percentage whether the salesperson sells goods worth Rs 40,000 or Rs 4,00,000. A progressive commission rate accomplishes a major objective of most companies: it provides a constant incentive to the sales force to do better. The following example explains this:
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Sales (Rs) Up to From Above 40,000 40,000 to 1,00,000 1,00,000
Commission Rate 2% 3% 4%
If a salespersons quota is Rs 80,000, he would earn Rs 2,000 if he achieved that target exactly a composite rate of 2.5 per cent. For example: Smith Kline Beecham is using this method in their worldwide selling. Bonus, Profit Sharing, Fringe Benefits Paying bonus is a method that a company adopts to reward special contribution and as an incentive to superior performance. Profit Sharing Many experts in the field of sales management disapprove extending profit sharing to salespeople. For once, companies agree with them. There may be an argument in favour of such a payment if no bonus plan is established for excellence in sales performance. Fringe Benefits Fringe benefits have become a fascinating subject and an item of considerable expense to organisations. The costs of fringes can be as high as 30 per cent of direct compensation expense depending on what benefits are offered and whether a portion of the expense is shared with the employee. Reimbursement of Expenses Travel usually by car or scooter Meals Lodging Entertainment Miscellaneous
Proper Sales Compensation Plan Provide a living wage Have performance Based pay levels Be adjustable to meet companys goals and individual aspirations. needs of a
Such a plan not only helps in normal times but also takes care of special company.
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Motivation to the Sales Force:

Motivation is the force within us that directs our behaviour. A sales manager can use the question guidelines suggested by Ginger Trumfio for motivating his salespersons.
Low-Cost Ways to Motivate:
Sales Career Stages and Motivation

Are salespersons motivated by different rewards at different stages of their career? Do salespeople have different career and personal concerns based on career stages? The basic answer to both these questions is Yes. There are four career stages: exploration, establishment, maintenance and disengagement.
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Characteristics of Different Stages in a Salespersons Career: Exploration

Career Concern Finding an appropriate occupational field.
Establishment
Successfully establishing a career in a certain occupation.
Maintenance
Disengagement
Holding on to Completing ones what has been career. achieved; reassessing career, with possible redirection. Developmental Learning the Using skills to Developing Establishing a Tasks skills required produce results; broader view of stronger self to do the job adjusting to work and the identity outside of well; becoming working with organisation; work; maintaining a contributing greater autonomy; maintaining a an acceptable member of an developing high performance level. organisation. creativity and performance innovativeness. level. Personal Establishing a Producing Maintaining Accepting carrer Challenges good initial superior result on motivation accomplishments; professional the job in order to though possible adjusting self self-concept. be promoted; rewards have image. balancing the changed; facing conflicting concerns about demands of career ageing and and family. disappointment over what one has accomplished; maintaining motivation and productivity. Psychological Support peer Achievement Reduced Detachment from Needs acceptance; esteem; competitiveness; organisation and challenging autonomy; security; helping organisational life. position. competition. younger colleagues. Source: Adapted from William L Cron, Industrial Salesperson Development: A Career Stages Perspective, Journal of Marketing (Fall 1984) 40; and William L Cron, Alan J Dubinsky, and Ronald E Michales, The influence of Career Stages on Components of Salesperson Motivation, Journal of Marketing (January 1988); 79-92
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Importance of Motivation Theories for Sales Force:

i. Nature of Job: A sales representatives job is usually tiring with irregular working hours. They do not often have the authority to do what is necessary to win an account and they sometimes lose large orders that they have worked hard to obtain. Human Nature: Most people operate below capacity in the absence of special incentives, such as financial gain or social recognition. Personal Problems: They are occasionally preoccupied with personal problems, such as sickness in the family, debt, etc.
ii. iii.
High productivity in a sales force comes about neither naturally nor accidentally. It requires motivation. The problem of motivating sales representatives has been studied by Churchill, Ford & Walker. They propose the following way.
Dimensions of Motivation
Motivation has mainly three dimensions:
1. 2. 3.
Intensity: It is the magnitude of mental and physical effort put in by a salesperson for his or her activity or goal. Persistence: It is the extension of effort over time. Direction: It implies that the individual can choose how his or her efforts will be spent.
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Motivation Can Also be Intrinsic or Extrinsic Intrinsic motivation means that individuals are motivated internally by a to please themselves or merely by the satisfaction of performing a job. Extrinsic motivation means that someone else provides the motivation through methods such as pay, promotion or recognition. Model of the Motivation Process The motivation process consists of six steps : 1. 2. 3. 4. 5. 6. Recognise need deficiency Search for ways to satisfy needs Establish goal-directed behaviour Performance Provide rewards or punishment Process needs. desire
The Six Step Motivation Process:
Motivation Theories
Motivation theories are approached through two main models 1. 2. Cognitive Approach/Model Non-Cognitive Approach/Model
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Cognitive Approach/Model:
Models of motivation which focus on internal states and mental processes are known as cognitive models.
Content Theories These theories answer the question What motivates people?, To answer such a question most of the theories under this category focus on human needs and desires that are internalised and that give impetus to individual behaviour. Some of the theories which are: i. ii. iii. iv. v. vi. vii. viii. March and Simon Model Maslows Need Hierarchy Model Herzbergs Hygiene-Motivation Model Alderfers ERG Model McClelland Three Need Model McGregors Participation Model Maturity and Immaturity Theory Theory Z: A Hybrid Model.
Process Theories These theories answer the question, How are people motivated? To answer this, most of the theories under this category focus on the dynamics of major variables that are interrelated in explaining the direction, degree and persistence of effort in human behaviour. Some of the theories which are described under this category are: i. ii. iii. iv. v. Vrooms Expectancy Model Porter and Lawler Expectancy Model Equity Theory Self-concept Theory Vrooms Valence Expectancy Theory
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Non-cognitive Approach This approach concentrates on operating conditions, i.e., Behaviour is a result of its consequences and is explained through the Reinforcement Theory. Reinforcement Theory This theory is based on the operating conditions that behaviour is a result of its consequences. It has been developed by well-known psychologist, A F Skinner. According to him, individuals, having learnt from the past, develop patterns of behaviour to control future consequences.
The main strategies of this theory are: Positive Reinforcement: Entails the use of rewards that stimulate repetitive behaviour. Negative Reinforcement: Also known as avoidance learning and implies the use of unpleasant consequences to condition individuals to avoid undesirable behaviour. Extinction: This is withdrawal of all forms of reinforcement to remove or extinguish undesirable behaviour. Punishment: This tool is used when an unpleasant behaviour needs to be reduced or eliminated. Applications of Various Theories Using Self-concept in Motivating Salespeople Using Maslows Theory Using Herzbergs Two Factor Theory Using McClelland Theory Using Expectancy Model
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Other Factors of Motivation Job Related Factors The Job Itself Skill variety Task identity Task significance Job autonomy Job feedback Leadership Job Organisational and Involvement Commitment Job involvement Organisational commitment Institutional stars Corporate citizens Apathetics
Individual Related Factors Career Stages Exploration Establishment Maintenance Disengagement Career Plateauing Performing deficiencies Selection and training Redesigning job to increase intrinsic motivation Reducing stress and burnout Increasing growth opportunities Acceptance of growth opportunities
Non-financial Factors and their Impact on Sales Force Motivation Meetings between Manager and Sales Force Clarity of Job Sales Contests Sales Conferences and Conventions Positive Feedback Reward and Recognition Persuasion Observations and Future Directions
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Nature of motivation:
A manager gets results through other people. His effectiveness depends on a large extent on the willingness of his employees to do the assigned tasks with interest an enthusiasm. Motivation is the work a manager performs to inspire and encourage people to take required action. According to Scott motivation is a process of stimulating people to action to accomplish desired people. Motivation has three distinct features: 1) It results from a felt need. Motivation triggers behavior impelling a person to action. 2) It is goal directed. Motivation is a driving state that channels behavior into a specific course that is fulfillment of a felt need. 3) It sustains behavior in progress. It persists until the satisfaction or reduction of a need state occurs. Further, motivation is a personal and internal feeling. The feeling arises from needs and wants. Human needs are unlimited. Fulfillment of one set of needs gives rise to other needs. Therefore motivation is a continuous process. Since needs are interrelated a person cannot be partly motivated as he is a self contained and inseparable unit. The successes of an organization ultimately depend on how effectively managers are able to motivate their subordinates. In the other words of Allen poorly motivated people can nullify the soundest organization. It is not easy to understand the complexities involved motivating people. If an employee has an argument with this boss and fails to report to work the next day it may appear that his behavior is a result of the confrontation. However his behavior may actually be motivated by a combination of factors including overwork, family illness or some other problems, As things stand now the whys of behavior cannot be explained easily. Let us examine some of the factors that complicate this process. Multiple Cases: Different people may have different visions for behaving in the same manner For example a bank officer may join a service club because it is a good place to have business contacts another may join because of the social atmosphere still another joins because of the interesting programs and speakers at the club . Thus, three different ways underline the same behavior further complicating the process of inferring motivation from behavior. For example, the motivation of people trying to pursue a certain behavior can spring from quite different reasons. Personality background experiences group effects or many other factors can impact a persons career choice.
Multiple behaviors: Further the same motive or drive may results in different behavior. For example, if Rao wants a promotion he may concentrate on performing his job exceptionally well, but Siddharth who also wants a promotion may take a different approach. He may try to apple polish the boss to get the promotion. Another manager who also wants the promotion very badly may be afraid to do anything at all for fear he will fail. The motivation for these three behaviors is the same, but it cannot be determined simply by viewing the behaviors f three managers. Motivation obviously is a complex subject. It is difficult to explain and predict the behavior of employees. The introduction of an apparently favorable motivational device may not necessarily produce the desired ends if it brings opposite motives into play. In a factory, when blue green lighting was introduced to reduce eye strain, the output of men workers increased but that of women workers decreased. On investigation it was found that the latter disliked the change in lighting because they felt that the new lighting made them look simply ghastly! An intelligent manager is expected to look into the complex factors that go into the behavior of employees carefully initiate appropriate steps to motivate them.
Importance of Motivation
Improve Performance Relax Tension Make Sales force happy
Motivation Satisfaction
Effort
Performance Reward
Sales Managers tool for Motivation:

Remuneration Plan Promotion Personal Contact & Counseling Correspondence Training Participation Positive Feedback Job Clarity Sales Contest Publications- Bulletins, Magazines, Journals etc Honours & Awards
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Three Motivating Factors for Your Sales Team

Motivating a Sales Team is mission critical to successes. However, it is very easy for a sales manager to THINK that he or she is sufficiently motivating the team simply because no one offers any objection or criticism. Since the sales team is not complaining, I must be doing everything right? Wrong. Here are three main motivators for your Sales Team. Concentrate on these, and the rest will take care of themselves! Let your sales team know that the company cares. Contrary to popular belief, the primary motivating factor for sales people is NOT the money. While it is true that most sales people originally join the organization they work with primarily due to the lure of money, the fact is they STAY because they feel the company cares about thempersonally. Demonstrate to your sales team that you deeply care for them; their personal welfare, their success. Let them know that you put their success BEFORE yours and the companys, and they will stay motivated. Frankly, that is how every Sales Manager should feel anyway. Think about it: If they fail, you and the company fail. Their success does come before YOURS! When Sales people feel like the company puts the bottom line before them; when they feel that the firm only cares about the money and that they are expendableno amount of money or anything else will motivate them to reach high levels of success. Number onelet them know you care. How do you do that? Its real simpleYOU CARE! Demonstrate to the sales team that they are the most important people in the firm. Dont just talk about it live it! Second, treat sales people like the executives they are. Treat your sales team like they are true executives; directors, CEOs and give them the support they need to perform as such. In conjunction with the first rule above, understand that if that sales person does not make a sale, you, the director, the CEO, the founder, the factory, the secretaries, the accounting staff, the development staffALL of you are out of a job!! The sales person is the real chief executive treat them as such. Create a sales support system that allows sales people to do what they get paid to do: SELL. In an effort to save money, too many organizations pile a bunch of crap and non-sales activity tasks on the sales team. The thought is that you save 25,000 by NOT hiring an administrative person to handle the paperwork. Why not just let the sales people do it? Well, you might save the
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25,000 salary of the admin person, but you LOSE a million pounds in the process. Give your sales team sales support to handle those tasks that are not of a selling nature. And third, in motivating your sales team; PAY THEM FIRST! In most firms the sales structure is such that the sales person gets paid LAST. In other words, the sales person goes out and makes the sales and then a ton of things happen; sometimes it is financing or delivery options or collections or bill payments, or any number of things, but think about this: in the mean time everyone else gets paid ANYWAY!! Everyone gets paid before the SALES PERSON. Let them know the company cares, treat them like executives and pay them first. After you do those things, then and only then will all of the motivational speeches make sense.
Employee Motivation Factors

Within any organization, there are always at least a few employees who need extrinsic motivation. If you want to reach the highest level of productivity, your employees must be sufficiently motivated. High productivity satisfies employees, management and stockholders. Some employees are motivated by the pride they take in their jobs. It can become a little more complex for others. It is management's job to keep employees motivated day in and day out by using the right tools.
1. Environment
o
If you want to motivate employees, you must create an environment consistent with motivation. Everyone likes working for a company when the atmosphere is charged with enthusiasm, excitement and inspiration. An environment of this sort must start with management. Managers must motivate and encourage employees every opportunity they get. When your employees are sufficiently motivated, rarely is there time for griping and complaining.
Individual Motivation
o
When it comes to motivation, every employee does not receive inspiration from the same thing. It is the manager's job to find out which things motivate which employees. The best way to find out is to ask. Have each employee fill out a survey and ask them what motivates them. Some employees are motivated by competition and others are motivated by taking a leadership role.
Monetary Rewards
o
Many employees are motivated by money. Some employees want the opportunity to make as much money as they possibly can. After an employee hits the goals and objectives of the day, monetary incentives are added when he goes above the status quo. If you can set monetary goals at different levels of accomplishment, it gives the cash seeker constant motivation and helps improve productivity.
Recognition
o
Recognition is another way to motivate employees. For the employee that seeks recognition, there is no better way to give it than in front of her peers. Associates want to feel that their contributions are valued and that management, as well as their peers, understand what they bring to the table. If recognition is given, it should be done as often as possible but it must be sincere praise for a job well done.
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Competition and Contests

o
Having contests and games is another way to motivate employees. Certain employees thrive on competition and various contests. That provides them with excitement, inspiration, fun and the opportunity to go head-to-head with other competitive employees.
Combinations
o
It's a good idea to use all forms of motivation with all employees. An employee may find that she is motivated by different factors other than her primary source of motivation. Combining factors such as good wages, job security, opportunities for growth and promotion, and scope of work helps to create a culture conducive to motivation.
Gifts
o
Gifts, such as cups, mugs, t-shirts, concert tickets, and tickets to sporting events, have always been good ways to motivate employees. For some, there is nothing like receiving a free gift for hitting the stated goals and objectives.
Compensations:
Meaning: Compensation is a systematic approach to providing monetary value to employees
in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Compensation is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be adjusted according the business needs, goals, and available resources.
Compensation may be used to:

Recruit and retain qualified employees. Increase or maintain morale/satisfaction. Reward and encourage peak performance. Achieve internal and external equity. Reduce turnover and encourage company loyalty. Modify (through negotiations) practices of unions. Recruitment and retention of qualified employees is a common goal shared by many employers. To some extent, the availability and cost of qualified applicants for open positions is determined by market factors beyond the control of the employer. While an employer may set compensation levels for new hires and advertise those salary ranges, it does so in the context of other employers seeking to hire from the same applicant pool. Morale and job satisfaction are affected by compensation. Often there is a balance (equity) that must be reached between the monetary values, the employer is willing to pay and the sentiments of worth felt be the employee. In an attempt to save money, employers may opt to freeze salaries or salary levels at the expense of satisfaction and morale. Conversely, an employer wishing to reduce employee turnover may seek to increase salaries and salary levels.
Compensation may also be used as a reward for exceptional job performance. Examples of such plans include: bonuses, commissions, stock, profit sharing, gain sharing.
Types of compensation plans:

There are many different varieties of compensation plans out there. They often have exotic names. But they tend to be variations on four major types of plans.. Let's examine the different types of payments that a Network Marketer can receive. The Matrix Plan
y y
y y
Limited to a certain number of recruits at each level. E.g., in a 3x5 matrix, each Level down to Level 5 can only sponsor 3 downlines. New members may be placed underneath uplines who did not directly sponsor them. E.g. In a 3-wide matrix, the 4th distributor you sponsor would be placed under one of the first 3 distributors you personally sponsored (your first-level distributors). This "Spillover" can be attractive to novice distributors if they sign on with strong leaders who help fill their grids. Also, it works well in companies where most of the products are used by the distributors, rather than sold to outside consumers. Criticised by regulatory agencies because they sometimes look like "a game". Nevertheless, several major companies operate matrix plans. No successful record in the industry, and they foster sleeping downlines.
The Unilevel Plan

y y y y
Members do not advance to positions above basic distributors, regardless of performance. Easy for company administration and to explain to potential recruits. Limited in depth of levels of payment. Sponsors "thin" in support. Over time, most companies that start with unilevel plans evolve to look more like a stairstep breakaway plan.
Uni-Level MATRIX plans

y y y
Unlimited Width BUT Limited Depth. You may recruit unlimited number of members in your first level. E.g., you earn commissions from your 10 downlines. If each of your 10 downlines sponsor 10, you will have 100 people at Level 2. A Typical Uni-Level will pay down 5 or More Levels (Limited Depth). If each person were to continue to get 10, Level 3 = 1,000 people, Level 4 = 10,000 People and Level 5 = 100,000 People.
Forced Matrix Pay Plans

y y
Similar to Unilevel Matrix BUT limits amount of people each person can have in their first Level. E.g., 3x9 matrix where maximum member for Level 1 is 3, and Level 2 is 9.
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Advantage is Spillover. Spillover occurs when you sponsor more people than can fit in Level 1. Hence, you are able to help your downlines fill in their Levels as well.
Fast Start Bonus

y y
Seldom the only part of the compensation plan. Often used as an extra incentive to sponsor more people. Typically a Lump sum payment of up to 100% of the First Months Membership for anyone you sponsor
Sponsor Bonus
y y
Often used with Forced Matrix. Usually a Monthly Recurring Bonus and is paid each month on everyone you personally Sponsor.
BREAKAWAYS
y y
y y y
Used with Matrix Pay Plans. When a downline reaches certain qualification, they break away from your team and you no longer receive the Matrix payout on that team member or anyone in that part of the Matrix (the Break Away). However you will receive a Monthly Commission of the entire Group Volume of the Break Away Unit. flexibility to motivate distributors to perform and advance. has a good track record, is easy to modify, is accepted by regulatory agencies, and is driven by volume and performance. The primary disadvantage of this plan is that it is sometimes so complicated that it's difficult to explain to new recruits. Another disadvantage is that if the company does not monitor its distributors, they tend to get involved in inventory loading. And sometimes, there is an unreasonably high ongoing monthly personal purchase volume requirement. Nevertheless, the stairstep breakaway plan remains the most tried-and-true type of plan out there today - and the most likely to survive in the decades to come.
INFINITY BONUSES
y y
Often used with Matrix Pay plans. Allow you to earn down an Infinite number of Levels if you meet the Qualification. You could be blocked by someone on a lower level who also qualifies.
BINARY PLANS
y
2 Legs. You would earn a commission on the Entire Volume of your weakest Leg. a distributor is allowed to occupy one or more "business centers," each limited to two downline legs. Systems in place to earn Commissions at a later (via a Carryover) on your Strongest leg.
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y y y
Compensation is paid on group volume of the downline legs rather than a percentage of sales. Sales volume must be balanced in the two legs to be eligible for commissions, which are paid at designated points when target levels of group sales are achieved. No depth limit on payment but each matrix has a finite amount that can be paid out, thus necessitating involvement in multiple two leg matrices. Payment in binaries is often on a weekly basis. Simple to explain. Group cooperation promoted because payout is on group volume and requires balancing of volume in each leg to be eligible for payout. More democratic because of limitation on payout in each matrix. Unlimited depth of payout, and the allowance of looping or re-entry. Controversial unfortunate origins in the early 1990s in fraudulent gold coin programs, and its use later for other questionable products did not help. By the end of the 1990s, and after many legal challenges, the binary was not in great favor, and only companies like USANA, that had applied the concept to consumables, seemed to be around. Legal and business problems. Companies and distributors tended to promote the plan rather than the product, creating accusations of a "money game." The multiple business centres approach was often presented as a "purchase of a business center," or an "investment". The required balancing of sales volume between legs meant that hard work might not pay off and income would be forfeited. Finally, the multiple re-entry or looping created a "game-like" atmosphere in which an individual could end up in the downline of someone he or she had sponsored. For the distributor looking long term at a distributorship that might be sold, this "looping" also made it virtually impossible to place a value on a distributorship because no continuous downline genealogy could exist.
Important aspects of a compensation plan to check out: Overall Payout Most plans pay between 35 and 45 percent of the company's wholesale purchase volume, and about 30 percent of suggested retail volume. Look for a plan that gives health profits, without going overboard. A plan that is overly "generous" to its distributors can run itself into financial ruin. Orphan Commissions When distributors fail to qualify to earn the commissions or bonuses on their purchase volume in a given month (usually because they fall short of the minimum purchase qualifying amount), the commissions they would otherwise have earned are called "orphan" commissions. Avoid plans in which orphan commissions return to the company. A plan should be structured in a way that orphan commissions "roll up" to the next qualifying distributor that month, rather than return to the company. This approach is also called "compression." Orphan commissions from terminated distributors should be handled the same way.
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Lock-In Look for a plan that has the lock-in feature; that is, when you reach a certain level, you "lock in" and cannot be demoted because of a temporary drop in monthly performance. Other Perks The compensation plans of most companies offer at least some perks for top performance above and beyond commissions and bonuses. These come in many forms: company cars, health insurance, free training, lead and co-op advertising programs. A few publicly traded companies even offer stock or stock options. "Does it emphasize getting products or services into the hands of consumers; or does it emphasize making money by finding new recruits? If it falls into the latter category, run away fast. In the end, it's the product - not the compensation plan - that drives success.
What Is the Sales Force Evaluation Process?

Sales Force Evaluation
o
When a business, particularly a retail business, finds sales slacking off, they usually want to know why. Whether it's fluctuations in the marketplace, incompetent staff or simply an old sales strategy that isn't working anymore, the answer can be vastly important to continued business. Sales force evaluation is nothing more than asking these questions regarding sales performance (whether good or bad) and trying to find out the answers. Some companies have internal evaluations for this process, but many companies pay outside evaluators, to save time and to elicit a more impartial view. Evaluation
A sales force analysis will seek out the answers to questions. The analysis will often ask, among many questions, whether the right people are in the right roles, what impact is sales management having and are employees fulfilling their roles and carrying out the set strategies. To find the answers, the evaluators will likely conduct private interviews with company employees and ask employees to fill out surveys. The evaluators will also examine sales records for past performances and attempt to understand which strategies correlate to higher sales and morale and which ones have failed. Results
A sales force evaluation is then scored, based on what the evaluators found in their investigation. Additionally, the evaluators will provide the company's upper management with recommendations based on the results. The recommendations could be as simple as changing the roles of certain employees to best utilize their abilities, It could also be as complicated as trying to enhance morale and turn around the sales force's opinion of management. Once the results of the evaluation have been delivered in the form of a report (written and sometimes with a verbal complement), the sales force evaluation is complete.
Performance appraisals process

y
Prepare - prepare all materials, notes agreed tasks and records of performance, achievements, incidents, reports etc - anything pertaining to performance and achievement - obviously include the previous performance appraisal documents and a current job description. A good appraisal form will provide a good natural order for proceedings, so use one. If your organization doesn't have a standard appraisal form then locate one, or use the template below to create one, or download and/or adapt the appraisal forms from this page. Whatever you use, ensure you have the necessary approval from your organization, and understand how it works. Organize your paperwork to reflect the order of the appraisal and write down the sequence of items to be covered. If the appraisal form includes a self assessment section and/or feedback section (good ones do) ensure this is passed to the appraisee suitably in advance of the appraisal with relevant guidance for completion. A sample performance appraisal template is available free below, which you can adapt and use to create your own form. Part of your preparation should also consider 'whole-person' development - beyond and outside of the job skill-set - as might inspire and appeal to the appraisees. Many people are not particularly interested in job skills training, but will be very interested, stimulated and motivated by other learning and development experiences. Get to know what your people are good at outside of their work. People's natural talents and passions often contain significant overlaps with the attributes, behaviours and maturity that are required and valued in the workplace. Use your imagination in identifying these opportunities to encourage 'whole-person' development and you will find appraisals can become very positive and enjoyable activities. Appraisals are not just about job performance and job skills training. Appraisals should focus on helping the 'whole person' to grow and attain fulfilment. Inform - inform the appraisee - ensure the appraisee is informed of a suitable time and place (change it if necessary), and clarify purpose and type of appraisal - give the appraisee the chance to assemble data and relevant performance and achievement records and materials. If the appraisal form does not imply a natural order for the discussion then provide an agenda of items to be covered. Venue - ensure a suitable venue is planned and available - private and free from interruptions - observe the same rules as with recruitment interviewing - avoid hotel lobbies, public lounges, canteens - privacy is absolutely essential (it follows also that planes, trains and automobiles are entirely unsuitable venues for performance appraisals......) Layout - room layout and and seating are important elements to prepare also - don't simply accept whatever layout happens to exist in a borrowed or hired room - layout has a huge influence on atmosphere and mood - irrespective of content, the atmosphere and mood must be relaxed and informal - remove barriers - don't sit in the boss's chair with the other person positioned humbly on the other side of the desk; you must create a relaxed situation, preferably at a meeting table or in easy chairs - sit at an angle to each other, 90 degrees ideally - avoid face to face, it's confrontational. Introduction - relax the appraisee - open with a positive statement, smile, be warm and friendly - the appraisee may well be terrified; it's your responsibility to create a calm and nonthreatening atmosphere. Set the scene - simply explain what will happen - encourage a
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discussion and as much input as possible from the appraisee - tell them it's their meeting not yours. Confirm the timings, especially finishing time. If helpful and appropriate begin with some general discussion about how things have been going, but avoid getting into specifics, which are covered next (and you can say so). Ask if there are any additional points to cover and note them down so as to include them when appropriate.
y
Review and measure - review the activities, tasks, objectives and achievements one by one, keeping to distinct separate items one by one - avoid going off on tangents or vague unspecific views. If you've done your preparation correctly you will have an order to follow. If something off-subject comes up then note it down and say you'll return to it later (and ensure you do). Concentrate on hard facts and figures, solid evidence - avoid conjecture, anecdotal or non-specific opinions, especially about the appraisee. Being objective is one of the greatest challenges for the appraiser - as with interviewing, resist judging the appraisee in your own image, according to your own style and approach - facts and figures are the acid test and provide a good neutral basis for the discussion, free of bias and personal views. For each item agree a measure of competence or achievement as relevant, and according to whatever measure or scoring system is built into the appraisal system. This might be simply a yes or no, or it might be a percentage or a mark out of ten, or an A, B, C. Reliable review and measurement requires reliable data - if you don't have the reliable data you can't review and you might as well re-arrange the appraisal meeting. If a point of dispute arises, you must get the facts straightened out before making an important decision or judgement, and if necessary defer to a later date. Agree an action plan - An overall plan should be agreed with the appraisee, which should take account of the job responsibilities, the appraisee's career aspirations, the departmental and whole organization's priorities, and the reviewed strengths and weaknesses. The plan can be staged if necessary with short, medium and long term aspects, but importantly it must be agreed and realistic. Agree specific objectives - These are the specific actions and targets that together form the action plan. As with any delegated task or agreed objective these must adhere to the SMARTER rules - specific, measurable, agreed, realistic, time-bound, enjoyable, recorded. If not, don't bother. The objectives can be anything that will benefit the individual, and that the person is happy to commit to. When helping people to develop, you are not restricted to jobrelated objectives, although typically most objectives will be. Agree necessary support - This is the support required for the appraisee to achieve the objectives, and can include training of various sorts (external courses and seminars, internal courses, coaching, mentoring, secondment, shadowing, distance-learning, reading, watching videos, attending meetings and workshops, workbooks, manuals and guides; anything relevant and helpful that will help the person develop towards the standard and agreed task. Also consider training and development that relates to 'whole-person development' outside of job skills. This might be a hobby or a talent that the person wants to develop. Developing the whole person in this way will bring benefits to their role, and will increase motivation and loyalty. The best employers understand the value of helping the whole person to develop. Be careful to avoid committing to training expenditure before suitable approval, permission or availability has been confirmed - if necessary discuss likely training requirements with the relevant authority before the appraisal to check. Raising false hopes is not helpful to the process.
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y y
Invite any other points or questions - make sure you capture any other concerns. Close positively - Thank the appraisee for their contribution to the meeting and their effort through the year, and commit to helping in any way you can. Record main points, agreed actions and follow-up - Swiftly follow-up the meeting with all necessary copies and confirmations, and ensure documents are filed and copied to relevant departments, (HR, and your own line manager typically).
Unit: 5
Distribution (logistics):
Logistics is the management of the flow of goods and services between the point of origin and the point of consumption in order to meet the requirements of customers. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security. Logistics is a channel of the supply chain which adds the value of time and place utility. Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software. Distribution Logistics (DELIVER): Distribution Logistics encompasses a broad range of activities concerned with the efficient movement of finished products from the end of the production line to the consumer. In two main areas of Distribution Logistics, order fulfillment and warehouse management, S&V provides its customers with a set of optimization tools and methodologies. Order Fulfillment: S&V will help you with the redesign of your customer service organization and its processes taking care of customer orders and questions. Local or central customer service organization will be designed in line with your business strategy, the market expectations and your performance objectives. From the order taking up to the dispatching of the goods to be shipped, our improvement projects will focus on:
y y y y
Transaction efficiency Process throughput time Transaction reliability Accurate and timely internal and external information showing. Warehouse Management: Warehouse management is the second area of distribution logistics. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations.
Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. A warehouse concept is developed optimizing the throughput time, the workforce efficiency and the hardware, such as storage and material handling equipment. Subsequently, the warehouse organization is defined as well as the physical infrastructure and the required information system support.
Physical distribution:
Definition Handling, movement, and storage of goods from the point of origin to the point of consumption or use, via variouschannels of distribution. See also business logistics. Activities concerned with efficient movement of products and raw material from producers to consumers. It is the set of activity concerned with the physical flow of materials, components and finish goods producer to channel and consumer . Physical distribution refers to the actual physical flow of products. It means the movement of materials from the producers to the consumers.
A companys physical distribution system contains the following elements:

y y y y y y Customer Service Transportation Inventory Control Protective packaging and materials handling Order Processing Warehousing
Physical Distribution
Physical distribution is the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site selection, and warehousing.
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Physical distribution is part of a larger process called "distribution," which includes wholesale and retail marketing, as well the physical movement of products. Physical distribution activities have recently received increasing attention from business managers, including small business owners. This is due in large part to the fact that these functions often represent almost half of the total marketing costs of a product. In fact, research studies indicate that physical distribution costs nationally amount to approximately 20 percent of the country's total gross national product (GNP). These findings have led many small businesses to expand their cost-cutting efforts beyond their historical focus on production to encompass physical distribution activities. The importance of physical distribution is also based on its relevance to customer satisfaction. By storing goods in convenient locations for shipment to wholesalers and retailers, and by creating fast, reliable means of moving the goods, small business owners can help assure continued success in a rapidly changing, competitive global market. A SYSTEM APPROACH Physical distribution can be viewed as a system of components linked together for the efficient movement of products. Small business owners can ask the following questions in addressing these components:
y y y
y y y
Customer servicewhat level of customer service should be provided? Transportationhow will the products be shipped? Warehousingwhere will the goods be located? How many warehouses should be utilized? Order processinghow should the orders be handled? Inventory controlhow much inventory should be maintained at each location? Protective packaging and materials handlinghow can efficient methods be developed for handling goods in the factory, warehouse, and transport terminals?
These components are interrelated: decisions made in one area affect the relative efficiency of others. For example, a small business that provides customized personal computers may transport finished products by air rather than by truck, as faster delivery times may allow lower inventory costs, which would more than offset the higher cost of air transport. Viewing physical distribution from a systems perspective can be the key to providing a defined level of customer service at the lowest possible cost.
CUSTOMER SERVICE Customer service is a precisely-defined standard of customer satisfaction which a small business owner intends to provide for its customers. For example, a customer service standard for the above-mentioned provider of customized computers might be that 60 percent of all PCS reach the customer within 48 hours of ordering. It might further set a standard of delivering 90 percent of all of its units within 72 hours, and all 100 percent of its units within 96 hours. A physical distribution system is then set up to reach this goal at the lowest possible cost. In today's fastpaced, technologically advanced business environment, such systems often involve the use of specialized software that allows the owner to track inventory while simultaneously analyzing all the routes and transportation modes available to determine the fastest, most cost-effective way to delivery goods on time. TRANSPORTATION The United States' transportation system has long been a government-regulated industry, much like its telephone and electrical utilities. But in 1977 the deregulation of transportation began with the removal of federal regulations for cargo air carriers not engaged in passenger transportation. The deregulation movement has since expanded in ways that have fundamentally altered the transportation landscape for small business owners, large conglomerates and, ultimately, the consumer. Transportation costs are largely based on the rates charged by carriers. There are two basic types of transportation rates: class and commodity. The class rate, which is the higher of the two rates, is the standard rate for every commodity moving between any two destinations. The commodity rate is sometimes called a special rate, since it is given by carriers to shippers as a reward for either regular use or large-quantity shipments. Unfortunately, many small business owners do not have the volume of shipping needed to take advantage of commodity rates. However, small businesses are increasingly utilizing a third type of rate that has emerged in recent years. This rate is known as a negotiated or contract rate. Popularized in the 1980s following transportation deregulation, contract rates allow a shipper and carrier to negotiate a rate for a particular service, with the terms of the rate, service, and other variables finalized in a contract between the two parties. Transportation costs vary by mode of shipping, as discussed below. TRUCKINGFLEXIBLE AND GROWING The shipping method most favored by small business (and many large enterprises as well) is trucking. Carrying primarily manufactured products (as opposed to bulk materials), trucks offer fast, frequent, and economic delivery to
more destinations in the country than any other mode. Trucks are particularly useful for shortdistance shipments, and they offer relatively fast, consistent service for both large and small shipments. AIR FREIGHTFAST BUT EXPENSIVE Because of the relatively high cost of air transport, small businesses typically use air only for the movement of valuable or highly-perishable products. However, goods that qualify for this treatment do represent a significant share of the small business market. Owners can sometimes offset the high cost of air transportation with reduced inventory-holding costs and the increased business that may accompany faster customer service. WATER CARRIERSSLOW BUT INEXPENSIVE There are two basic types of water carriers: inland or barge lines, and oceangoing deep-water ships. Barge lines are efficient transporters of bulky, low-unit-value commodities such as grain, gravel, lumber, sand, and steel. Barge lines typically do not serve small businesses. Oceangoing ships, on the other hand, operate in the Great Lakes, transporting goods among port cities, and in international commerce. Sea shipments are an important part of foreign trade, and thus are of vital importance to small businesses seeking an international market share. RAILROADSLONG DISTANCE SHIPPING Railroads continue to present an efficient mode for the movement of bulky commodities over long distances. These commodities include coal, chemicals, grain, non-metallic minerals, and lumber and wood products. PIPELINESSPECIALIZED TRANSPORTERS Pipelines are utilized to efficiently transport natural gas and oil products from mining sites to refineries and other destinations. In addition, so-called slurry pipelines transport products such as coal, which is ground to a powder, mixed with water, and moved as a suspension through the pipes. INTERMODAL SERVICES Small business owners often take advantage of multi-mode deals offered by shipping companies. Under these arrangements, business owners can utilize a given transportation mode in the section of the trip in which it is most cost efficient, and use other modes for other segments of the transport. Overall costs are often significantly lower under this arrangement than with single-mode transport.
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Of vital importance to small businesses are transporters specializing in small shipments. These include bus freight services, United Parcel Service, Federal Express, DHL International, the United States Postal Service, and others. Since small businesses can be virtually paralyzed by transportation strikes or other disruptions in small shipment service, many owners choose to diversify to include numerous shippers, thus maintaining an established relationship with an alternate shipper should disruptions occur. Additionally, small businesses often rely on freight forwarders who act as transportation intermediaries: these firms consolidate shipments from numerous customers to provide lower rates than are available without consolidation. Freight forwarding not only provides cost savings to small businesses, it provides entrepreneurial opportunities for start-up businesses as well. WAREHOUSING Small business owners who require warehousing facilities must decide whether to maintain their own strategically located depot(s), or resort to holding their goods in public warehouses. And those entrepreneurs who go with non-public warehousing must further decide between storage or distribution facilities. A storage warehouse holds products for moderate to long-term periods in an attempt to balance supply and demand for producers and purchasers. They are most often used by small businesses whose products' supply and demand are seasonal. On the other hand, a distribution warehouse assembles and redistributes products quickly, keeping them on the move as much as possible. Many distribution warehouses physically store goods for fewer than 24 hours before shipping them on to customers. In contrast to the older, multi-story structures that dot cities around the country, modern warehouses are long, one-story buildings located in suburban and semi-rural settings where land costs are substantially less. These facilities are often located so that their users have easy access to major highways or other transportation options. Single-story construction eliminates the need for installing and maintaining freight elevators, and for accommodating floor load limits. Furthermore, the internal flow of stock runs a straight course rather than up and down multiple levels. The efficient movement of goods involves entry on one side of the building, central storage, and departure out the other end. Computer technology for automating warehouses is dropping in price, and thus is increasingly available for small business applications. Sophisticated software translates orders into bar codes and determines the most efficient inventory picking sequence. Order information is keyboarded only once, while labels, bills, and shipping documents are generated automatically. Information
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reaches hand-held scanners, which warehouse staff members use to fill orders. The advantages of automation include low inventory error rates and high processing speeds. INVENTORY CONTROL Inventory control can be a major component of a small business physical distribution system. Costs include funds invested in inventory, depreciation, and possible obsolescence of the goods. Experts agree that small business inventory costs have dropped dramatically due to deregulation of the transportation industry. Inventory control analysts have developed a number of techniques which can help small businesses control inventory effectively. The most basic is the Economic Order Quantity (EOQ) model. This involves a trade-off between the two fundamental components of an inventory control cost: inventory-carrying cost (which increases with the addition of more inventory), and order-processing cost (which decreases as the quantity ordered increases). These two cost items are traded off in determining the optimal warehouse inventory quantity to maintain for each product. The EOQ point is the one at which total cost is minimized. By maintaining product inventories as close to the EOQ point as possible, small business owners can minimize their inventory costs. ORDER PROCESSING The small business owner is concerned with order processinganother physical distribution functionbecause it directly affects the ability to meet the customer service standards defined by the owner. If the order processing system is efficient, the owner can avoid the costs of premium transportation or high inventory levels. Order processing varies by industry, but often consists of four major activities: a credit check; recording of the sale, such as crediting a sales representative's commission account; making the appropriate accounting entries; and locating the item, shipping, and adjusting inventory records. Technological innovations, such as increased use of the Universal Product Code, are contributing to greater efficiency in order processing. Bar code systems give small businesses the ability to route customer orders efficiently and reduce the need for manual handling. The coded information includes all the data necessary to generate customer invoices, thus eliminating the need for repeated keypunching.
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Another technological innovation affecting order processing is Electronic Data Interchange. EDI allows computers at two different locations to exchange business documents in machine-readable format, employing strictly-defined industry standards. Purchase orders, invoices, remittance slips, and the like are exchanged electronically, thereby eliminating duplication of data entry, dramatic reductions in data entry errors, and increased speed in procurement cycles. PROTECTIVE PACKAGING AND MATERIALS HANDLING Another important component of a small business physical distribution system is material handling. This comprises all of the activities associated with moving products within a production facility, warehouse, and transportation terminals. One important innovation is known as unitizingcombining as many packages as possible into one load, preferably on a pallet. Unitizing is accomplished with steel bands or shrink wrapping to hold the unit in place. Advantages of this material handling methodology include reduced labor, rapid movement, and minimized damage and pilferage. A second innovation is containerizationthe combining of several unitized loads into one box. Containers that are presented in this manner are often unloaded in fewer than 24 hours, whereas the task could otherwise take days or weeks. This speed allows small export businesses adequate delivery schedules in competitive international markets. In-transit damage is also reduced because individual packages are not handled en route to the purchaser.
Warehousing decisions:
Warehouses are still considered an integral part of wholesale businesses. Warehouses are distribution hubs where the wholesale products are kept or stored until they are sold to the customers. The main objective of having a warehouse is to deliver the products to the customers easily and safely in little cost without compromising on quality. Wholesalers should always choose the warehouses that are efficient in operations and are according to the business needs. Following are given few things which should be kept in mind while making warehousing decisions. Cost: The first item that should be considered by the wholesalers is the cost of the warehouse. When wholesalers need warehouse they have two options available with them: 1. Purchasing a warehouse 2. Taking a warehouse on rent
In most of the times taking a warehouse on rent is less costly. But it depends upon the needs and requirements of the business. Wholesalers should compare the expense of both the options and then should choose the one that is most cost efficient to them. Accessibility: Another thing to consider is its location. A warehouse should be located in the area which has greater accessibility to various distribution markets and seaports or any other delivery docks. If warehouse has a close proximity to these places loading and unloading would be easy. Also, it would be less costly if you deliver to the nearby places as compared to the distant ones. Closer proximity also ensures on time and safe deliveries of wholesale products.
Space: Before making warehousing decision you should have a clear idea on the space of warehouse you require to store the products. Besides space consider other expenses like electricity and other amenities your staff needs to work in a warehouse. Many warehouses have different spaces but the most beneficial is to have wholesale products stacked from ceiling to the floor in containers in the form of steps to make the best use of space.
Warehousing Decisions:
The nature and importance of warehousing:
y y y
In 1999, $75 billion, or 0.8 percent of GDP was spent on warehousing. The total supply of U.S. warehousing space in 1999 was 6.1 billion square feet, an increase from 1990 of 700 million square feet of space. Warehousing provides time and place utility for raw materials, industrial goods, and finished products, allowing firms to use customer service as a dynamic value-adding competitive tool.
The Role of the Warehouse in the Logistics System:

Basic Conceptual Rationale
y y
The warehouse is where the supply chain holds or stores goods. Functions of warehousing include: o Transportation consolidation o Product mixing o Cross-docking o Service o Protection against contingencies o Smoothing
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Warehouse Value-Adding Roles Value-Adding Roles Consolidation Product mixing Service Contingency protection Smooth Operation Trade-Off Areas Transportation Order filling Lead times, stockouts Stockouts Production
Transportation Consolidation
Supply and Product Mixing
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Basic Warehouse Decisions:

A Cost Trade-off Framework
y y
Ownership Public versus contract versus private Centralized or Decentralized Warehousing o How many
o
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o o o o
Location Size Layout What products where
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The Ownership Decision

y y y y
Public warehousing costs mostly all variable. Private warehousing costs have a higher fixed cost component. Thus private warehousing virtually requires a high and constant volume. Factors to consider o Throughput volume o Stability of demand o Density of market area to be served o Security and control needs o Customer service needs o Multiple use needs of the firm Firm Characteristics Affecting the Ownership Decision Firm Characteristics Throughput volume Demand variability Market density Special Physical control Customer service required Security requirements Multiple use needed
Public Warehousing
Private High Stable High Yes High High Yes Low
Public
Fluctuating Low No Low Low No
Rationale for Public Warehousing o Limited capital investment o Flexibility y Public Warehousing Services o Bonded warehousing o Field warehouses Public warehousing regulation: o Liability o Receipts Public warehousing rates based upon: o Value o Fragility o Potential damage to other goods o Volume and regularity
o o
Weight density Services required
Contract Warehousing
y y y y y y y
Up 23% per year in 2000 to $20.4 billion. Compensation for seasonality in products. Increased geographical coverage. Ability to test new markets. Managerial expertise and dedicated resources. Less strain on the balance sheet. Possible reduction of transportation costs.
The Number of Warehouses
Factors Affecting the Number of Warehouses

o o o o o o
Inventory costs Warehousing costs Transportation costs Cost of lost sales Maintenance of customer service levels Service small quantity buyers
actor Centralised Low High Large Yes Diverse Low High Low Small No Limited High Decentralised
Substitutability Product Value Purchase size Special Warehousing Product Line Customer Service
Basic Warehouse Operations:

y
Movement
o o o o
Receiving Put-away Order picking Shipping

o o
Storage Stock location Warehouse Management System (WMS)
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Warehouse Layout and Design

y y y y y y y y y
Develop a demand forecast. Determine each item's order quantity. Convert units into cubic footage requirements. Allow for growth. Allow for adequate aisle space for materials handling equipment. Provide for the transportation interface. Provide for order-picking space. Provide storage space. Provide recouping, office, and miscellaneous spaces. Warehouse Space Requirements
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Principles of Warehouse Layout Design
Basic needs: Receiving Basic storage area Order selection and preparation Shipping Layout and Design Principles: o Use one story facilities where possible. o Move goods in a straight-line. o Use the most efficient materials handling equipment. o Minimize aisle space. o Use full building height. Layout and Design Objectives o Cubic capacity utilization o Protection o Efficiency o Mechanization o Productivity
o o o o
Warehouse Productivity Metrics

y y y y y y y y
Kilograms or units per day Employees per kilogram moved Kilograms unloaded per hour Kilograms picked per hour Kilograms loaded per hour Percentage of orders correctly filled Productivity ratio = kilograms handled/day divided by labor hours/day Throughput = amt of material moved through the system in a given time period
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How to Manage a Warehouse

Successfully managing a warehouse requires processes and procedures both easy to follow and execute. It also requires experienced, organized employees who understand the importance of their jobs. Receiving, storage, picking, packing, shipping and replenishment are the main areas involved in operating a warehouse and each area has its own unique challenges when it comes to management. Difficulty: 1
Quality planning provides a roadmap to follow Develop an operations plan that will allow the warehouse and its employees to meet the goals and expectations of the company and its customers, and will allow the warehouse to achieve the company's vision.
o
Quality people make success possible. Hire great workers to perform all the warehouse tasks, always willing to give a little extra as the job demands. o 3
Clear communication leads to meeting expectations. Communicate expectations clearly to all employees. Both management and customers have expectations--overall and per job.
o
Written standards allow for consistent training. Develop standard procedures for every warehouse task. This includes data entry, receiving, stocking shelves, lift-truck operation, picking products for orders, delivering products, shipping, packaging and more.
Training leads to consistent performance. Train employees on all procedures regularly. Provide refresher training every six months or whenever a procedure is changed.
o
Good decisions come from good data. Create a cycle count program. This is the process of scheduling regular inventory counts, at least four times per year. Collect data from the analysis done at each count for future decision making.
o
Without knowing where you are, you will not know where you are going. Track and measure all pertinent operational information. This includes cycle count accuracy, labor dollars per transaction, space utilization efficiency, transportation costs and annual inventory turns-the frequency that inventory is sold during that time period.
o
Even a small change can mean positive results. Encourage continuous improvement and process evaluation of all employees. No matter how well a process works, certain areas can always stand improvement.
Inventory decisions: Decision Rules for Inventory Control:

y
Inventory control is an important cost control process for any company. To keep inventory control procedures uniform, a company should develop a series of rules for making decisions about inventory changes. These are the rules that will determine what inventory gets rotated out, when new inventory is purchased and when inventory begins to get phased out at the end of a product's
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life. Without rules for inventory tracking, inventory decisions could be left up to the opinions of individual warehouse managers and purchasing agents, which could lose the company money.
Audit
y
An accurate inventory is important to maintaining a company's financial records. Establish a regular inventory audit and create a set of guidelines that must be followed to complete a successful audit. A good time is the final day of each financial quarter. Aspects to include in the audit are a hand count of every item in inventory, a verification of all part numbers and model numbers on hand and an accurate amount of time that the product has been in stock.
Product On Hand
y
To reduce the amount of inventory on hand, create guidelines for how long products can remain on hand before they are cycled out. Finished products should be built based on quarterly sales projections, and the inventory on hand should be dictated by those numbers. Carrying excess inventory costs money in both product costs and warehouse costs. By limiting your product on hand you can lower production costs and reduce the amount of unsold inventory.
Removal Procedures
y
Procedures should be established to define who can remove inventory, the process for removing inventory and what monitoring equipment needs to be used. Larger warehouses would benefit from a bar code system that scans inventory in and out of the system. When a product is shipped or received, the person who took care of it should have to sign off on the paper work so that everyone knows whom to go to if a problem arises.
Things to Consider When Making a Decision in Inventory Management

Managing the inventory in your company can be crucial in the success of the business. Proper or improper inventory management affects costs dramatically and can increase or decrease the bottom line. A number of things must be considered when making inventory management decisions. Keeping each one of these aspects of the job in mind will help to ensure your business stays on the right track.
1. Actual Needs
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The first thing to consider when making inventory decisions is what the business actually needs when it comes to products or raw materials. It is important in most cases to limit purchases to the actual needs of the company. Purchasing only what is needed to complete business in the proper way will ensure that cost of goods percentages stay as low as possible and the cash flow builds to its highest potential.
Quantity Discounts
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There are exceptions to purchasing limitations, especially when the goods can be held for extended periods of time. At times, wholesalers will offer quantity discounts to businesses that are willing to purchase a large amount of products at one time. These quantity discounts should only be considered when there is a significant savings and when there is little doubt that the entire stock being purchased will be useful to the company and can be sold eventually.
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Storage
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Quantity purchases and regular purchases require a minimum amount of available storage. Do not order more goods than the business has a place to store them. Regardless of discounts or other advantages of buying a particular item, it will only lead to problems if something gets overstocked. It may even mean that there isn't enough room to keep a more important essential item because some of the space had to be allotted to the new goods. Always keep a standard amount of products on hand or have a plan in place for storage that makes sense before placing the order.
Product Life
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Consider the product life of any item you order for your inventory and think about the realistic time it will have to be stored before being used. This will help you set ordering limits and keep perishable inventory items from spoiling, which will result in wasting the money spent to purchase it in the first place.
Record Keeping
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Inventory management success hinges on proper record keeping. Always consider the accuracy and efficiency of record keeping methods and conduct inventory audits regularly to make sure the onhand counts are correct. Record keeping will help prevent overstocking and will also prevent instances where the company runs out of a product and misses potential sales because of shortages.
Transportation:
Transportation Modes
1. A Diversity of Modes
Transport modes are the means by which people and freight achieve mobility. They fall into one of three basic types, depending on over what surface they travel land (road, rail and pipelines), water (shipping), and air. Each mode is characterized by a set of technical, operational and commercial characteristics:
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Road transportation (Concept 2). Road infrastructures are large consumers of space with the lowest level of physical constraints among transportation modes. However, physiographical constraints are significant in road construction with substantial additional costs to overcome features such as rivers or rugged terrain. Road transportation has an average operational flexibility as vehicles can serve several purposes but are rarely able to move outside roads. Road transport systems have high maintenance costs, both for the vehicles and infrastructures. They are mainly linked to light industries where rapid movements of freight in small batches are the norm. Yet, with containerization, road transportation has become a crucial link in freight distribution.
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Rail transportation (Concept 3). Railways are composed of a traced path on which are bound vehicles. They have an average level of physical constrains linked to the types of locomotives and a low gradient is required, particularly for freight. Heavy industries are traditionally linked with rail transport systems, although containerization has improved the flexibility of rail transportation by linking it with road and maritime modes. Rail is by far the land transportation mode offering the highest capacity with a 23,000 tons fully loaded coal unit train being the heaviest load ever carried. Gauges, however, vary around the world, often complicating the integration of rail systems.
Pipelines (Concept 3). Pipeline routes are practically unlimited as they can be laid on land or under water. The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km in length. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe. Physical constraints are low and include the landscape and pergelisol in arctic or subarctic environments. Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (from gas, low viscosity, to oil, high viscosity). The Trans Alaskan pipeline, which is 1,300 km long, was built under difficult conditions and has to be above ground for most of its path. Pipeline terminals are very important since they correspond to refineries and harbors.
Maritime transportation (Concept 4). Because of the physical properties of water conferring buoyancy and limited friction, maritime transportation is the most effective mode to move large quantities of cargo over long distances. Main maritime routes are composed of oceans, coasts, seas, lakes, rivers and channels. However, due to the location of economic activities maritime circulation takes place on specific parts of the maritime space, particularly over the North Atlantic and the North Pacific. The construction of channels, locks and dredging are attempts to facilitate maritime circulation by reducing discontinuity. Comprehensive inland waterway systems include Western Europe, the Volga / Don system, St. Lawrence / Great Lakes system, the Mississippi and its tributaries, the Amazon, the Panama / Paraguay and the interior of China. Maritime transportation has high terminal costs, since port infrastructures are among the most expensive to build, maintain and improve. High inventory costs also characterize maritime transportation. More than any other mode, maritime transportation is linked to heavy industries, such as steel and petrochemical facilities adjacent to port sites.
Air transportation (Concept 5). Air routes are practically unlimited, but they are denser over the North Atlantic, inside North America and Europe and over the North Pacific. Air transport constraints are multidimensional and include the site (a commercial plane needs about 3,300 meters of runway for landing and take off), the climate, fog and aerial currents. Air activities are linked to the tertiary and quaternary sectors, notably finance and tourism, which lean on the long distance mobility of people. More recently,
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air transportation has been accommodating growing quantities of high value freight and is playing a growing role in global logistics.
Intermodal transportation (Concept 6). Concerns a variety of modes used in combination so that the respective advantages of each mode are better exploited. Although intermodal transportation applies for passenger movements, such as the usage of the different, but interconnected modes of a public transit system, it is over freight transportation that the most significant impacts have been observed. Containerization has been a powerful vector of intermodal integration, enabling maritime and land transportation modes to more effectively interconnect.
Telecommunications. Cover a grey area in terms of if they can be considered as a transport mode since unlike true transportation, telecommunications often does not have a physicality. Yet, they are structured as networks with a practically unlimited capacity with very low constraints, which may include the physiography and oceanic masses that may impair the setting of cables. They provide for the instantaneous movement of information (speed of light in theory). Wave transmissions, because of their limited coverage, often require substations, such as for cellular phone networks. Satellites are often using a geostationary orbit which is getting crowded. High network costs and low distribution costs characterize many telecommunication networks, which are linked to the tertiary and quaternary sectors (stock markets, business to business information networks, etc). Telecommunications can provide a substitution for personal movements in some economic sectors.
http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c1en.html
In INDIA, various modes are available for all type foods transportation either its home goods or office or comercial goods shifting/ transportation. The packing and moving companeis are now having all type of modes available for you like they have their own trucks, containerised trucks for faster movement & timely delivery. If you wish to move overseas now its not a problem as the Sea Transportation and Air Cargo ovement is available to do so. The beattransportation mode for your household goods in India is truck transport since moving companies owns them & no delay will be there. We at Movers and Packers portal (PackersMoversWorld.Com), have some of the best companies listed here that can provide any type of transportation in India. Just fill in the Request Quote Form (link given at top right) and relax. In India, each transportation mode has its own advantages and disadvantages in terms of cost, service, reliability and safety. The transport systems and the result is very good. Currently we have 2 types of main transportationsystems. [1] Intermodal Transportation System [2] Multimodal Transportation System
Intermodal Transportation System: This system uses two or more transport modes with a single rate thats why its also called 'Linked System'. The companies or transportation modes operators ensures that the modes have common characteristics for easy transfer of the freight during a goods move between the origin & destination points. In this system the compnaies have tie ups between other companies and can use so many companies services to deliver their goods to the destination point. Multimodal Transportation System: In the Multimodal Transportation System, there is a set of transport modes that offers connections between origin and destination point. This model may also be treated as intermodal transportation but its not must to be. To transfer/move household goods, office or commercial articles or corporate items, from one place to another, packing moving companies have many options to transport the goods from any part of UK to any destination in UK and abroad. The multimodel transportation system consists of many transportation modes like (combination of any of) Trucks, Cargo, Trailors, Air Shiping and Sea Shipping. On the customers requirements, the transportation system is selected either its Intermodel or Multimodel Transportation System. Some of the Common Transportation Modes are given below: Mini Trucks:Mini trucks are spacious enough , fast, easy to handle are considered as a very good transportation mode in UK since these trucks are easy to move and user friendly in case the clients needs to transport small amount of goods from any city of UK to any part of UK or overseas. These trucks are sized like an midium car having features as: two seats at driver cabuin, clear instrument cluster, utility trays, magazine pockets, twin-blade, twin-speed wipers and combination switches. These are considered best when you need to move between less thick roads & most importtant is they don't require a professional driver. So anyone having driving experience can easily operate it. Trucks:Full size trucks are really helpful when it comes to load a lot and move to any very far destination. Full trucks comes for various purposes and sizes. Normally trucks are of 6 ytres and can load 1 MT- 12 MT while some business purpose / commercial trucks are of 16 tyres and can load 9 MT- 40 MT and more in a single load. These are fast, safe and easy for huge transpoortation. Full trucks are normally used for commercial purposes. These trucks offer a good transportation option in the surface travel. These might look like a huge long boses and have an driver cabin and rest is for loading of goods. Driver cabin consists of 2 seats, a sleeper, clothing and other items racks. These trucks needs professional drivers and can't be easily drove by anyone since they need extra care while driving due to their heavy size. They are extremely
useful in moving for huge goods. Lift Van:A wooden or metal container used for packing household goods and personal effects. These are used for storage as well as transportation, lift vans are generally used when the total shipment weighs less than 4,000 pounds. Lift-vans are usually lined with water-resistant paper and may be caulked as necessary to keep the goods dry. After caulking, steel straps are placed around the outside to secure the lift-van. Though custom made sizes can be there, the standard sizes are 185 to 210 cubic feet. They also offer the advantage of easy inspection for custom clearance. Containers:Containers are used worldwide for the moving and packing purpose as containerization allows the mechanized handling of cargoes of diverse types and dimensions, that are placed into boxes of standard dimensions. In this way goods that might have taken days to be loaded or unloaded from a ship can now be handled in a matter of minutes. The container is a load unit that can be used by several transport modes. Indeed, the container is usable by maritime, railway and road modes, making it an essential part of intermodal transportation. The usage of containers shows the complementarity between freight transportation modes by offering a higher fluidity to movements and a standardization of loads. Trailers:Useful in rail as well as road transportation, truck trailers are used for moving freight. Typically, regular semi-trailers can be used in their standard form only and need not be specially designed. In cease pf transport by rail, semi-trailers are transported on railway flatcars. This arrangement is called "piggyback". Steamship Containers:Resembling motor freight trailers, steamship containers are mainly manufactured using good quality steel. Due to their robust construction, they allow for best protection of a shipment as compared to other containers. These containers can only be used by ocean carriers and are not be fit for storage purposes. If the minimum weight and volume criteria is met with buy the goods, lower transportation charges are an additional advantage. These are used for bulky shipments and have the capacity to hold more than one lift van. To effectively use a steamship container, a minimum of 700 cubic feet (approximately 4,000 pounds) is suggested. Also, it must be checked if it can be shipped in the destination country (some foreign countries do not allow it). Air Freight Containers:These containers have particular standards of construction. The construction is restricted to certain dimensional specifications in order to pass through aircraft cargo doors. It is made up of a
triple-layered corrugated cardboard and range in size from 18 to 96 cubic feet. The larger air freight containers are fitted with skids for ease in moving with a forklift. Shipping:Mention has been made already how in the maritime sector passenger services have become divorced from freight operations. The exception being ferry some services where the use of RORO ships on high frequency services adapt to the needs of both market segments. Deep sea passenger travel is now dominated by cruise shipping which has no freight-handling capabilities, and bulk and general cargo ships rarely have an interest or the ability to transport passengers. Rail:Most rail systems still operate passenger and freight business. Where both segments are maintained the railways give priority to passengers, since rail persists as the dominant mode for inter-city transport in UK, China and much of the developing world. In Europe the national rail systems and various levels of government have prioritized passenger service as a means of checking the growth of the automobile, with its resultant problems of congestion and environmental degradation. Significant investments have occurred in improving the comfort of trains and in passenger rail stations, but most notable have been the upgrading of track and equipment in order to achieve higher operational speeds. Freight transport has tended to lose out because of the emphasis on passengers. Because of their lower operational speeds, freight trains are frequently excluded from day-time slots, when passenger trains are most in demand. Overnight journeys may not meet the needs of freight customers. This incompatibility is a factor in the loss of freight business by most rail systems still trying to operate both freight and passenger operations. Roads:Freight and passenger vehicles still share the roads. The growth of freight traffic is helping increase road congestion and in many cities concerns are being raised about the presence of trucks. Already, restrictions are in place on truck dimensions and weights in certain parts of cities, and there are growing pressures to limiting truck access to non-daylight hours. Certain highways exclude truck traffic the parkways in the US for example. These are examples of what is likely to become a growing trend the need to separate truck from passenger vehicle traffic. Facing chronic congestion around the access points to the port of Rotterdam and at the freight terminals at Schiphol airport, Dutch engineers have worked on feasibility studies of developing separate underground road networks for freight vehicles. Air Transport:Air transport is the mode where freight and passengers are most integrated. Yet even here a divergence is being noted. The growth of all-freight airlines and the freight-only planes operated by some of the major carriers, such as Singapore Airlines, are heralding a trend. The interests of
the shippers, including the timing of the shipments and the destinations, are sometimes better served than in passenger aircraft. The divergence between passengers and freight is also being accentuated by the growing importance of charter and no-frills carriers. Their interest in freight is very limited, especially when their business is oriented towards tourism, since tourist destinations tend to be lean freight generating locations.
Distribution channels:
Definition A path through which goods and services flow in onedirection (from vendor to the consumer), and the paymentsgenerated by them that flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from the vendor to the consumer or may include several interconnected intermediaries such as wholesalers,distributors, agents, retailers. Each intermediary receivesthe item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Also called channel of distribution or marketing channel.
What Is a Distribution Channel in Marketing?

Distribution is a major business and marketing consideration for companies, which is why the distribution concept commonly has replaced "place" as one of the marketing mix, or 4 Ps of marketing, elements. A distribution channel is a means by which a business or provider delivers products or services to a customer and receives payment in exchange. Manufacturers, wholesalers (distributors), retailers and consumers are the four participants in the distribution channel. Manufacturers
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Manufacturers are the starting point of the distribution, trade or marketing channel. They typically make products and sell them to wholesalers, or the middle man. Manufacturers can market and ship directly to end customers, but this is not generally an expertise of product makers. This method without intermediaries (wholesalers and retailers) is known as a directmarketing channel, according to the Tutor2u website. Manufacturers can also sell directly to retailers and avoid one step in the process. This usually improves manufacturer profits because one less step is required in distribution. Wholesalers
Wholesalers offer expertise in carrying products to the marketplace. Salespeople for wholesalers call on retailers and try to persuade them to carry their products in stores. Wholesalers specializing in buying and storing large quantities of products from many distributors. Tutor2u notes that they move products through the distribution channel by separating products into bulk shipments to market and deliver to retailers. The wholesaler's goal is to get high-demand
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products at a reasonable price from the manufacturer and sell them for profit to retailers, in hopes they ultimately succeed with end customers. Retailers
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Retailers take on much of the responsibility of marketing products to end consumers in the distribution channel as they are conventionally the final link from production to consumption. Retailers attempt to acquire products that will sell will through their retail format. Retailers must balance reasonably buying prices with the need to profit. They add value to the final solution through services and other benefits that are part of their retail brand. Retails break bulk and sell inventory directly to customers. Customers
Communication and contact with end customers is a major contributor to distribution channel success, notes Tutor2u. Manufacturers, wholesalers and retailers all can participate in marketing to end customers. Manufacturers want to convey product quality to drive demand. Wholesalers and retailers want to sell products to the customers and build their brand. Ultimately, certain customers are a good fit for the retail provider and the products being sold. Retailers must decide which target markets make the most sense for their product offering.
How to Develop a Distribution Channel Strategy:

Distribution channels are used to sell products to customers. Distribution strategies help identify sales channels that can maximize sales and profits. Distribution is one of the "4-Ps" of marketing -- the first three are product, promotion and price. The fourth, placement, means distribution. A distribution channel must be developed with care so that it does not become a "repository of lost opportunities," cautions Harvard University professor Learn about the available direct and indirect channels. Direct channels include online, retail and telephone sales. Indirect channels include retailers, such as WalMart or Home Depot, that sell products without major modifications; value-added resellers, or VARs, that add features and services before selling; distributors and wholesalers that typically resell to other channel partners; and telemarketers, sometimes outsourced, who prospect for customers and close deals. 2 Evaluate your customers' requirements. These include what they buy, how often and whether they require additional products and services along with your merchandise. Be aware of emerging trends and preferences. For example, if your customers are ordering more items online, you may have to shift your marketing resources more toward the Internet. See if customers are being offered valued-added options by your competitors and adjust your product strategy accordingly. 3 Match the distribution strategy to your objectives and to customer needs. Your objectives may include sales growth, profit margins, market penetration and brand recognition. For example, a retail presence may be necessary if you sell baked goods. However, if you sell insurance, the best distribution strategy may be a combination of wholesale and retail brokers and direct
telemarketers. Computer manufacturer Dell sells directly to customers through its web site and a toll-free telephone center, while Apple uses a combination of direct and indirect channels to sell its computers, iTunes, iPhones and iPads. 4 Select the right channel partners. According to marketing firm Moderandi's "Marketing [m.o.]" web site, your natural partners are companies that have existing relationships with your customers. Cindy Kennaugh, president of Silicon Valley marketing consulting firm On The Mark, believes that the strategic fit--alignment of philosophy and outlook--with your channel partner is important. To recruit the ideal partners, Kennaugh suggests that you establish your business credibility and identify how you will meet your potential partner's needs. 5 Manage the distribution channel performance. Professor Rangan has proposed the concept of a "channel steward" who can be any entity in the distribution channel with a vested interest in addressing the needs of end users. A small business often has limited options, but it can leverage the resources of a bigger channel steward, such as an Intel in semiconductors or WalMart in retail, to drive sales and profit growth. Moderandi suggests several ways to improve channel performance, including devoting resources to managing channel relationships, tracking the performance of channel partners, minimizing pricing conflicts by ensuring a fair profit for each channel partner, and taking charge of driving revenues through the channel because your partners will most likely be busy selling products from multiple vendors.
Types of Distribution Channels:

Distribution channels are the methods that companies use to enter the consumer market with their product. While many methods exist, they have changed over the years because of the Internet and global sales. Definition
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A distribution channel is the method a company uses to get its products into the marketplace for consumer use. The traditional channel goes from supplier, manufacturer, distributor, wholesaler and retailer. Two types of distribution channels exist: indirect and direct. Indirect Channel
The indirect channel is used by companies who do not sell their goods directly to consumers. Suppliers and manufacturers typically use indirect channels because they exist early in the supply chain. Depending on the industry and product, direct distribution channels have become more prevalent because of the Internet. Direct Channel
A direct distribution channel is where a company sells its products direct to consumers. While direct channels were not popular many years ago, the Internet has greatly increased the use of direct channels. Additionally, companies needing to cut costs may use direct channels to avoid middlemen markups on their products.
Indirect Channel Methods

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Distributors, wholesalers and retailers are the primary indirect channels a company may use when selling its products in the marketplace. Companies choose the indirect channel best suited for their product to obtain the best market share; it also allows them to focus on producing their goods. Direct Channel Methods
Selling agents and Internet sales are two types of direct distribution channels. Selling agents work for the company and market their products directly to consumers through mail order, storefronts or other means. The Internet is an easy distribution channel because of the global availability to consumers.
Types of Distribution Channels in Marketing:

In marketing, a distribution channel is a vehicle used by the company to sell its products and services to it customer base. In general, distribution channels are either direct, meaning the company interacts with customers directly, or indirect, meaning intermediaries perform activities on behalf of the company to reach customers. When a company develops its marketing strategy, it determines which channels it wants to use. Companies can choose to use a single channel or multiple channel strategy. Traditional Media o Traditional media is a common distribution channel that businesses use to generate awareness about their products and services. Traditional media outlets include TV, radio, billboard advertising, magazines and newspapers. Because the cost of using these channels tends to be high, it's harder for small businessesjust starting out to take advantage of them; however, local markets often have small, independent newspapers or community television stations that offer lower cost advertising options. Direct Response
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Direct response marketing is another type of distribution channel. Direct response includes a variety of communications vehicles such as postcards, sales letters, email marketing and television direct response infomercials. When you use direct response marketing, it's important to have a call-to-action. For instance, infomercials often start by showcasing a common problem, then illustrating how the product or service solves that problem. Direct response marketing can be an affordable way for companies to reach potential customers. Public Relations
Public relations is a broad distribution channel. Today, PR involves pitching stories to media outlets and generating positive buzz about your company or brand, as well as managing your company's online presence and how your company interacts with its customers. For example, if a customer writes a negative review of your business online, your PR team might have a standard way of responding. The purpose of PR is to make people feel good about purchasing your products or services. Internet and E-Commerce
While all the other distribution channels listed work in conjunction with the Internet -- for example, using social media as a part of a PR campaign -- there is a separate set of tools that can be used as a distribution channel that is purely made up of online activities. Internet marketing includes search engine optimization, affiliate marketing and online advertising. Search engine optimization, or SEO, involves tailoring your website and its content so when users search online for products and services similar to what your company provides, your website shows up at the top of the search results. Affiliate marketing and online advertising allow you to promote your brand on other websites with content that would be of interest to your customers.
The Major Functions of a Distribution Channel:

Marketing consists of four key P's: product, price, promotion and placement. The fourth P, placement, is the distribution channel, which consists of all organizations between production and consumption. It is the bridge between producers and consumers, creating cost efficiencies and multiplying selling opportunities through networks of intermediaries (wholesalers and retailers). A distribution channel serves eight major functions. Information o A distribution channel collects and analyzes market intelligence on current and potential customers, competitors, suppliers, regulators and on the general political and business environment. For example, a multinational company's Chinese distributor can potentially tap into his government sources and provide timely information about impending regulatory changes that could prove valuable in adjusting strategies ahead of the competition. Promotion
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A channel develops marketing strategies, including preparing the marketing budget, designing the promotional and advertising material, recruiting and training sales representatives and organizing trade shows and other networking events. The channels can adjust their marketing efforts faster than the head office because they are closer to their customers. Contact Distribution channels find and establish contact with prospective buyers. For example, a computer wholesaler's job would be to find computer retailers, while a retailer's job would be to find customers. This can be done through promotions that pull in customers--including attracting them directly to the company's online store--and also through old-fashioned telephone calls and door knocking that push products to customers. Matching
Once contact is made, the channel partner's job changes to a matching role, which involves tailoring the product to fit customer needs. For example, if a retailer only wants to sell laptops with word-processing software included, the distributor needs to contact her company's nearest manufacturing facility to ensure the laptops are properly configured prior to shipment. Negotiation
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Closing the sale is part of a channel's negotiation function. For a computer wholesaler, it could mean negotiating price and minimum quantity levels with the retailer. For a master franchise operator (an experienced franchisee with exclusive rights in a region), it could mean negotiating the franchise agreement with a new franchisee and providing training and mentoring services. Transportation
A distributor often transports products from the manufacturer to retailers and customers. For example, a potato chip distributor may have one or more delivery vans departing every day to different retailers (chains and convenience stores) to drop off their merchandise. Financing A distribution channel partner finances his costs, including buying and storing inventory. For example, a car dealership may arrange financing through the car manufacturer or the local banks or a combination. Risk
A distribution channel shares in some of the business risks. For example, if a new product launch does not go well, the distributor may get stuck with excess inventory. There also is the risk of unpaid bills and damaged inventory. Foreign distributors also bear the risk of political and economic uncertainty in their respective countries.
Distribution Channel Strategies:

Distribution is one of the four basic tools in the marketing mix, together with product, promotion and price. Marketers design a distribution strategy to ensure that their offering is available for purchase by target consumers when, where and in what way they wish to shop. Some key considerations include market, product, resources and intensity.
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Market The characteristics of the target market play an important role in distribution strategy. Business customers, for example, commonly expect to buy direct from a manufacturer. Household consumers are accustomed to intermediary distribution channels like wholesalers and retailers. However, individuals can differ in their shopping preferences based on age, income and other demographics. Additionally, where they live and how widely they are dispersed will help determine the most effective number and type of distribution outlets.
Product o Distribution choices must take into account the nature of the product. Typically, the more complex and/or expensive an offering, the more it will benefit from direct selling. For example, most buyers of computer systems, boats or pianos expect to interact with knowledgeable manufacturers' representatives. In contrast, household goods that have fairly standard features, low cost and a relatively long shelf life, like shampoo, can be distributed through a wide array of stores and websites. Resources
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It is expensive for a firm to provide its own distribution facilities, like warehouses and showrooms, and to hire salespeople and support staff. In general, only companies with large marketing budgets are able to make direct distribution efficient by spreading its costs over many products. Smaller firms with limited lines and fewer resources are typically forced to rely on wholesalers, retailers and other intermediaries to fund basic distribution costs as storage, transportation and display. Intensity
The intensity of a distribution strategy refers to the number and diversity of outlets chosen to sell a firm's products. High intensity means using as many retail and/or wholesale outlets as possible, an approach especially appropriate for low involvement, frequently purchased goods like soap or cereal. Low intensity, commonly chosen for luxury products in a form called exclusive distribution, may restrict availability to just one specialty store or manufacturer's showroom. As a middle ground, marketers may use selective distribution, making their products available through a few stores located in the same region.
Difference Between Personal Selling & a Channel of Distribution:

Personal selling and distribution channels both play a role in the marketing mix. Personal selling is a type of promotion, while channels are the foundation of distribution strategy. But marketers need to consider both these tools as part of a sound and integrated approach based on the nature of the product, their resources and whether they are targeting household consumers or businesses.
Product
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For some types of products, personal selling is a critical tool. In particular, costly or customized goods like homes, cars and boats, or items based on new or complex technologies, need to be explained and promoted one-on-one. Similarly, the nature of the product must be considered in choosing a channel of distribution. Low cost, frequently purchased goods like soap and cereal can be distributed through a wide range of wholesale and retail outlets, but expensive, high-involvement products are generally limited to specialty stores or manufacturer showrooms.
Resources
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Personal selling is far more expensive on a per-unit basis than the other major tools of promotion: advertising, sales promotion and public relations. Small or start-up companies often cannot afford to train and pay a sales force, especially for a new product. A marketer's choice of distribution channels is also related to resources, as the firm may be unable to support its own warehouses, transportation, inventory management and other facilities and services provided by distribution intermediaries like wholesalers or jobbers.
Target Consumers
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Whether a firm needs to use personal selling may depend on whether the target buyers of its product are businesses or household consumers. Across a range of products, business buyers tend to respond more positively to a knowledgeable salesperson than to an advertisement or a price discount. Likewise, the channels of distribution used in business-to-business transactions are more likely to be direct manufacturer outlets than retail stores, though specialized websites are increasingly effective for both institutional buyers and household consumers.
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Competitive Advantage
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A competitive advantage can sometimes be created by personal selling, or based on the extent and diversity of channels of distribution. For example, high-end real estate sales often depend as much on the skill of the salesperson as on the features of the property. In many low-margin consumer goods categories, like toiletries, packaged foods or cleaning products, how many stores carry a particular brand can make the difference between its success or failure.
What Is a Marketing Channel or Channel of Distribution?

A marketing channel is a specific medium or means by which to communicate with consumers. A distribution channel is a means or medium by which to transport goods or deliver services to consumers. Comprehensive marketing strategies cover supply chain and distribution issues, linking the concept of distribution channels with that of marketing channels. Understanding these two topics and how they relate to each other can ensure that your supply chain strategies always meet the demand for your products.
Direct Marketing Channels

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Sales, promotions and public relations messages can be transmitted via a variety of media. Sales activities, for example, can take place in person, over the phone or on the Internet. Promotions can similarly take place within a store, over the Internet or through other media. Public relations messages can be sent through news outlets, social media or on product packaging. Each of these methods, or techniques, of sending messages to the marketplace constitutes an individualized marketing channel.
Advertising Channels
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As the most visible component of marketing, advertising utilizes a wide range of media channels to reach consumers. Traditional advertising media include newspapers, magazines, television, billboards and posters. Newer advertising media includes the Internet and smartphones. Each of these media is a different marketing channel, and each reaches different segments of people with different levels of effectiveness and cost efficiency.
Distribution Channels
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Distribution channels can be classified in two distinct ways. First, there are a range of different methods of physically transporting goods, whether over land, through the air or via ship. You also have different ways to deliver services, whether in person, online, over the phone or through the mail. Second, specific strategies for moving products through the pipeline can also be referred to as distribution channels. The term "distribution channel" could refer to a partnership between a manufacturer, a distributor, a third-party warehouse and a retail purchasing agent, for example, through which the manufacturer gets its goods into retail stores.
Channel Strategy
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A successful marketing- and distribution-channel strategy utilizes a mix of different channels to ensure that the supply chain can always handle the demand stimulated by the messages sent through marketing channels. In the end, sending the right messages to the right people via the right
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channels is just as important as sending products to the right places on time via the right distribution channels.
Importance of channel of distribution:

Cost Savings in Specialization - Members of the distribution channel are specialists in what they do and can often perform tasks better and at lower cost than companies who do not have distribution experience. Marketers attempting to handle too many aspects of distribution may end up exhausting company resources as they learn how to distribute. Reduce Exchange Time - Not only are channel members able to reduce distribution costs by being experienced at what they do, they often perform their job more rapidly resulting in faster product delivery.
Customers Want to Conveniently Shop for Variety - Marketers have to understand what customers want in their shopping experience .Resellers within the channel of distribution serve two very important needs: 1) they give customers the products they want by purchasing from many suppliers (termed accumulating and assortment services), and 2) they make it convenient to purchase by making products available in single location.
Resellers Sell Smaller Quantities -They allow customers to purchase in quantities that work for them. Suppliers though like to ship products they produce in large quantities since this is more cost effective than hipping smaller amounts. The ability of intermediaries is to purchase large quantities but to resell them in smaller quantities not only makes these products available to those wanting smaller quantities but the reseller is able to pass along to their customers a significant portion of the cost savings gained by purchasing in large volume. Create Sales - Resellers are at the front line when it comes to creating demand for the marketer's product. In some cases resellers perform an active selling role using persuasive techniques to encourage customers to purchase a marketer's product. In other cases they encourage sales of the product through their own advertising efforts and using other promotional means such as special product displays. Offer Financial Support - Resellers often provide programs that enable customers to more easily purchase products by offering financial programs that ease payment requirements. These programs include allowing customers to: purchase on credit; purchase using a payment plan; delay the start of payments; and allowing trade-in or exchange options.
Deciding channel members and location:

How would you select a distributor or an agent? Here are some criteria: 1. Market Coverage, 2. Sales Forecast, 3. Cost, 4. Other Resources, 5. Profitability, 6. Control, 7. Motivation, 8. Reputation, 9. Competition, 10. Contracts 1. Market Coverage: - does the profile of existing customers match your target market profile? is the number of customers big enough to meet the required distribution penetration? - is the existing sales force big enough to cover the territory? - are they dependant on a single individual? - are the existing delivery fleet and warehouse facilities adequate? 2. Sales Forecast: How many can they sell? What are their forecasts based upon? Do they give a 'best, worst and average' forecast? Will they invest in large stock commitment? Do they have budgets to run promotions? Some suppliers even ask their distributors for a marketing plan showing how they intend to market the supplier's products. 3. Cost: What will it cost in terms of discounts, commissions, stock investment and marketing support? 4. Other Resources: Does the target market require anything special such as technical advice, installation, quick deliveries, instant availability? If so can the distributor provide it? 5. Profitability: How much profit will the distributor generate for the supplier? 6. Control: Do they have a reporting system in place? How do they deal with problems? How often are review meetings scheduled? Can you influence the way they present your products? 7. Motivation: Does the agent or distributor convey a sense of excitement and enthusiasm about the product? What about its sales force - what's their reaction? 8. Reputation: Has it got a good track record? This includes the number of years in business, growth and profit record, solvency, general stability and overall reliability. Is it dependant on one key player? 9. Competition: Do they distribute any competitor's products? 10. Contracts: Some distributors demand exclusivity. Some agreements tie the supplier in for certain periods of time. Check for flexibility in case things go wrong. The bottom line is: Can the agent or distributor be motivated, controlled and trusted? Motivated to sell your product among a range of others. Controlled to feed back results or change strategy if requested. And trusted to act as a reliable ambassador of your product?
Channel Management Decisions:

Selecting Channel Members
Attracting suitable intermediaries is very important to producers for successful designing and maintaining channel of distribution. But the task is not easy for all producers. Old producers with reputed brands find it easier to attract intermediaries while new producers with relatively unknown brands may be in difficulty to pull suitable intermediaries. In selecting intermediaries, the company should be very clear about the characteristics of intermediaries. Issues to be considered arc : channel members length of business, other lines carried, growth and profit record, cooperativeness and reputation. When intermediaries are sales agents, the company should evaluate the number and nature of other lines carried, and the size and quality of the sales force. When a retail store is to be selected as an intermediary seeking exclusive or selective distribution, the company should evaluate the stores customers, location, and future growth potential. Motivating Channel Members
Once selected, channel members must be continuously motivated to help achieving companys goals. Producers make endeavor to find ways for gaining intermediary cooperation. At times they resort to positive motivators such as higher margins, special deals, premium, cooperative advertising allowances, display allowances and sales contests. At other time they offer negative motivators, such as threatening to reduce margins, to slow down delivery, or to end the relationship altogether. This approach should be discouraged as it ignores the needs, problems, strengths, and weaknesses of its distributors. Farsighted companies try to build long-term relationship with their distributors. It requires creating a planned, professionally managed, vertical marketing system which fulfill the needs of both the manufacturer and the distributors. General Electric works closely with its smaller independent dealers to help them be successful in .selling the companys products. In managing its channel, a company must convince distributors that by being part of an advanced vertical marketing system they will be able to make fortune. Evaluating Channel Members
The producer must continuously evaluate each channel members performance against standards such as sales quotas, average inventory levels, customer delivery time, treatment of damaged and lost goods. cooperation in company promotion and training programs, and service to the customer, Intermediaries having excellent performance should be recognized and rewarded by the company. Intermediaries having unsatisfactory performance should be helped, if not possible, replaced. A company may, from time to time, set new qualification for its intermediaries and trim the weaker ones. For example, when IBM first introduced its PS/2 personal computers, it reevaluated its dealers and allowed only the best ones to carry the new models . Each IBM dealer had to submit a business plan, send a sales and service employee to IBM training classes and meet new sales quotas. Only about two-thirds of IBMs 2.200 dealers qualified to carry the PS/2
models, Finally, manufacturers need to be attentive to their channel members. Treating channel members lightly may result in loss of their cooperation or may even invite legal problems.
Dealer:
Performing a double role for clients, a broker/dealer takes on both the responsibilities of a broker and a dealer. In their roles as dealers, a broker/dealer will act on the behalf of the brokerage firm, initiating transactions that involve the firms account. As brokers, the broker/dealer will focus on the needs of clients of the firm, handling transactions that are placed on behalf of client accounts. While functioning on behalf of the firm, the broker/dealer will go about the usual business of buying and selling securities on behalf of the brokerage. This will involve all the usual aspects that are involved with creating transactions. The broker/dealer engages in trades that involve both the buying and selling of various stocks, bond, and other securities. As in all types of financial transactions, the broker/dealer will performdue diligence in investigating the background of an investment opportunity, making sure the investment is in the best interests of the firm, and seek to secure the investment as the best price possible. GETTING PARTNERS MOTIVATED: Motivation, whether in the context of domestic or international channels, is the process through which the manufacturer seeks to gain channel-member support in carrying out its marketing objectives. Three basic elements are involved in this process: 1. Finding out the needs and problems of channel partners; 2. Offering support to the channel partners that is consistent with their needs and problems; and 3. Building a continuing relationship (partnership).
Managing a Successful Dealer Relationship

Pro-active Management Helps to Avoid Pitfalls The business relationships between credit unions and automotive, boat and other dealerships can often be described as a love/hate relationship. There exists the potential to deliver substantial benefits to both business parties, but it can also present major challenges and adverse financial outcomes. This is especially true on the credit union side. Since both sides benefit from a successful relationship, it makes good sense that both parties work to make sure the business partnership works smoothly. Since credit unions are taking the
financial risks, it is vital that participating credit unions manage and monitor the relationship. Developing a sound business strategy will achieve this goal. Here are several key areas that should be addressed, along with some helpful tips in each. Dealer Contact The key element to maintaining strong dealer contact is frequency. Regular and routine visits by the dealer representative not only build positive relationships but also provide valuable feedback. Personnel changes in a dealers finance department (Finance Managers) can affect the types of loans you are getting and the paper quality. Frequent contact will help you be aware of personnel relocation from one dealership to another, particularly helpful with those Finance Managers who have been difficult elsewhere. These regular visits should include a review of production reports used for managing the dealer relationship and for holding the dealer accountable. Reports should address the following points; error/issues data, customer complaints/concerns and customer satisfaction feedback. Thorough and on going training is a critical factor as well. The better the training, the cleaner and tighter your operations will run and the more likely the dealership will use the tools provided and produce according to expectations. An integral element of the dealer/credit union relationships is the development of quality expectations. Setting clear expectations compels dealers to be accountable. A solid structure and foundation will be invaluable when the dealerships test you. Dealerships sometimes go fishing to see what bites with a new lender, to find the lenders niche, and then only send that niche loan business. (do I have this right?) Paper Quality Measurement Paper quality will define the long term relationship between credit union and dealer, so it is important to closely monitor the performance of each dealer and be able to make timely corrective actions. Dealers want you to buy a range of tiers, and you will want to accommodate them when this is profitable. This means adjusting your buying habits accordingly. As you experience losses and charge-offs, it is critical to contact the dealership and define how you will buy from them in the future. It is advantageous to share your loss and charge off experience with each dealer, setting future expectations.
New Dealer Audits

Setting the right course of action from the very beginning in terms of audits will help you to establish your standards for the future. Closely monitor the quality of paper you receive in the first 30 to 90 days. Make sure the relationship is starting on the right path; that you are getting the paper you want, and that the dealer understands what paper you want and will buy, they should be clear as to what type of lender you are. Inexperience and lack of education about dealerships within a credit union will sometime cause dealers to take advantage of a situation, so it is important to discuss expectations, strategies, and red flags immediately with any involved staff. Continually review and communicate your concerns.
It is also important to validate the quality of information provided by the dealer, for the purpose of detecting fraud or dishonest data. Check information integrity: How valid is the information provided on the applications? Have phone numbers been verified, etc.? Survey customers to see how satisfied they are with the service they have received. If you discover negative feedback, contact the dealership, monitor future results. There are many reasons for poor feedback. The results may help you to assess risk and can be used to determine who you should be working with in the future. Be Alert to Volume Changes When monitoring dealer audits and reviews, one should look for spikes in volume. Check to make sure that there are no conflicts of interest between a dealer and a loan officer. A volume spike may be a good trend, but it is wise to be aware of why the increased business has occurred. Is it the volume you want, or is there something happening that is not in your best interest? Example: Is a dealer buying thin paper (junk), not the kind of business your credit union wants in your portfolio? This is frequently noticed too late, so monitoring is crucial. Write a Good Contract All participating dealers should be contracting with the lender they intend to send consumer paper. The make-up of the contract is very important, it should clearly outline the requirements of each participating party, include all local and state regulations, as well as require the contracting party to provide required information that provides proof that the dealer will have the ability initially and ongoing to perform under the contract requirements. Here are some important items that should be included in the contract that can protect the lender 1. Clear contract terms, which define when the lender is obligated to fund a retail contract, including rights and remedies against the dealer, should a deal be funded under the pretense of fraud. 2. Clear representations, warranties and covenants, defining things about the dealer, actions they will take and that they will stand by what they say. a. Examples of this include Perfection of liens, compliance to all consumer laws, valid consumer paper, etc 3. Indemnification against claims caused by third parties. 4. Right to offset any funds owed to the lender. Dealing with Non-franchised Dealers Managing a non-franchised dealer relationship is usually more sensitive than franchised dealers. Franchisors often have concerns that a dealer will reflect poorly on the brand and therefore closely monitor and measure dealer performance. With non-franchised dealerships, the
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manufacturers name is not in the title. It is also easier to get in and out of the business. This puts the lender at greater risk. Here are a few things that can be done to mitigate the risk. 1. Sign-up requirements: Maintain a copy of the dealers license. Perform a physical location exam, financial review, officer/owner review to determine if the dealer is financially sound and understands the business, and offers a product you are willing to stand behind and represent to your members. Requirements should reflect your credit unions own business practices. Look at the average vehicle cost and the location. (Is it a trailer on a lot?) Request from new dealerships their financial plan, personal statements on principals, physical location, and basic information such as how many cars they plan to stock and sell. 2. Perform regular audits: In addition to routine visits, your credit union should perform a yearly audit of all non-franchise dealers. If you perceive that the financial position of the dealership has deteriorated or that the dealership appearance or product offered has become less than acceptable, the risk increases and action to remove the dealership should be considered. The time to react is before doors close and products are left unpaid for, then there is much higher risk.
How To Maintain a Good Relationship with Your Customers

Handling New Customers Often, people who have just started their business are too busy chasing new customers. They sometimes fail to realize that their existing customers could also be a source of new business. As a small business owner, you should stay in contact with your existing customers and get regular feedback on your products and prices. Also, dont be afraid to ask your customers questions about your competitors strategies, products and services. Once a new customer decides to do business with you, then you should immediately handle all his or her needs in the most courteous and efficient manner. Always provide service politely and with a smile. You should make your customers feel warm and comfortable while in your store or on the telephone. Keep in touch with them by sending them greeting cards or sale notices. Treat every customer with respect - no matter how large or small their purchases are. Improve With Time
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Once your new customers become comfortable with you or one of your employees, you should remember them by name. If you and your staff are able to greet customers by name, it makes their experience much more personal. If customers believe that you take a special interest in them, they are also more apt to think that they are receiving one on one service. Always thank them for their business and invite them to come again. Make it a point to send customers advance notice of special sales, or offer additional discounts on certain products. Regular Customers Become Your Sales People Regular customers will inform their friends and relatives about your business and if youve done your job well, you will soon have lots of new customers, courtesy of your old ones. Your regular customers are actually now advertising your business - without you having to spend an extra dime on marketing. In business, referrals are like gold. With new customers already convinced of your honesty and reasonable pricing, you will not have a difficult time convincing them to buy your products. The Cycle Begins Again Once new customers start buying your products and services, then the entire cycle of converting new customers into loyal customers continues. Soon, you will have a wider customer base and your small business will benefit from this recycling process. Holding Up Your End of the Bargain New and old customers alike all have some expectations from you, and you should at all times honor those expectations. You should always be honest with your customers; never mislead them. It is important that you communicate effectively. Notify customers immediately if a problem arises, such as a shipping delay. They will appreciate your honesty. You should the ensure privacy of all your customers conversations and their personal and financial information. In many cases, this isnt an arbitrary situation it is the law.
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Channel management decisions:

After a company has chosen a channel alternative, it must select, train, motivate, and evaluate the individual inter mediaries .it consists of following steps: Selecting channel members Training channel members Motivating channel members Evaluating channel members
SELECTING CHANNEL MEMBERS

Manufacturer has to ensure that the channel members possess certain essential qualifications. Some of the common qualifications irrespective of the product lines involved are: * Business reputation. * Business capacity. * Salesmanship. * Experience in the line. * Financial capacity. * Creditworthiness. * Capacity to provide storage facilities, showrooms, shops, service workshops. * Positive attitude towards the company. * Capacity to offer assortment of products and services required by the customers. * Good relations with consumers, opinion leaders, government officials and others
SELECTION PROCESS
y Giving Dealer Wanted Ad. Conducting interviews. Selecting the highly qualified members
MANAGING THE DEALER NETWORK

Territory of operation, Trade margin, Functions which the dealers have to perform, Functions which the firm has to perform: Fixing the trade relations mix Servicing the dealer. Securing shelf space and merchandising support from dealers. Dealer motivation. Performance appraisal of dealers. Dealer training and development. Resolving channel conflicts.
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MOTIVATING CHANNEL MEMBERS

A company needs to view its intermediaries in the same way that it views its end users. The company should provide training programs, market research programs and other capability building programs to improve intermediaries performance. Producers use the following types of power to elicit cooperation:
Reward power. Coercive power. Expert power. Legitimate power. Intermediaries can aim for a relationship based on cooperation, partnership or distribution programming. They often use positive motivators such as: Higher margins. Special deals. Premiums. Display allowances. Cooperative advertising allowances.
Sales contests
EVALUATING CHANNEL MEMBERS PEWRFORMANCE

Producers must periodically evaluate intermediaries performance against such standards as: Sales quota attainment. Average inventory levels Customer delivery time Co operational promotional and training programs --------------------------------------------------------------------------------------------------------------------End of sales notes
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Sales Notes 175

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Sales management notes:

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Importance of Sales Management

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Read more: Importance of Sales Management | eHow.com http://www.ehow.com/info_7984828_importance-salesmanagement.html#ixzz1LtcwvWxI

FUNCTIONS OF SALES MANAGEMENT:

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TRENDS IN MODREN SALES MANAGEMENT:

Emerging Sales Trends in the New Economy

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Situation ( questions ) Problem ( questions ) Implication ( questions ) Need-payoff ( questions )

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What is Personal Selling?

Advantages of Personal Selling

Disadvantages of Personal Selling:

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Objectives of Personal Selling

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Types of Selling Roles

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Personal Selling consists of the following steps.

Personal selling strategies:

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Determining the sales force profile:

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Salesforce Staffing: How to Forecast a Sales Force Size

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CUSTOMER ORIENTED SELLING STRATEGIES:

Emerging trends in sales management:

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Electronic Sales Presentations Electronic Sales Training Use of Customer Teams

Elementary study of sales organizations:

Factors influencing structure:

Concepts of Sales Organisation:

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Market orientation Effective co-ordination

Tall & Flat Organization Structures:

Span of Control vs. Management Levels:

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Tall & Flat Organization Structures:

Span of Control vs. Management Levels:

Basic Types of Sales Organisation Structure :

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salespeople salespeople salespeople salespeople

Line and staff organization:

Marketing Research Manager

Customer Service Manager

Area Sales Manager-1

Area Sales Manager-1

Area Sales Manager-1

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Marketing Research Manager

Customer Service Manager

Area Sales Manager #4

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Specialisation within Sales Organisation:

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Marketing Research Manager

General Sales Manage Promotion Manager