Chapt er

The Personal Selling Process

The sales process itself plays an increasing role in creating customer value. Neil Rackham

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THE EIGHT STEPS OF THE SALES PROCESS 8. Follow-up 7. Gaining Commitment 6. Meeting objections 5. Presentation 4. Need Assessment 3. Approach 2. Preapproach 1. Prospecting
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Challenges in Personal Selling

Inability to hard-sell Manager resistance Priority dilution Irregular reporting Poor data quality Employee turnover Loss of interest over a period
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1) Prospecting
The method or system by which sales-people learn the names of people who need the product and can afford it.

Leads can be identified through

Referrals from customers Referrals from internal company sources

Sales manager; Marketing dept.; Telemarketing dept.

Referrals from external agencies

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Trade Associations,Industry Associations,Internet,Online Information services

Prospecting Activities for Residential Real Estate

Property Exhibitions Customer References Corporate Tie Ups (Discount of Rs 2550/sft) Tie up with Property Portals e.g Indiaproperty.com

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Prospecting Activities for Commercial Vehicles

Financier Demo Caravans Advertisements in local newspapers Visit to Competition customers Tenders/Contracts Brokers
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Vehicle Clinic

Existing Sources

Prospecting (Mutual Funds)

Activities

Bank Customers,mostly salary account holders Customer Referrals Directories of Industrial zones
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Local Advertisements(L eaflets) Kiosks in Apartment Complex Corporate PPT Financial Trade Fairs

NASSCOM,CII,FIC

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Lead Management Tools

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Activity Prospect Stack Up Tracker

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Prospect Customer Form

Name of the Customer along with address & contact details. End use application of the product for each segment. Product/Brand currently used Type of customer Standardised or Customised Mode of Enquiry Model Description & Quantity 5/2/12

Qualifying Leads

A qualified prospect

Has a need for the products being sold. Can afford to buy the products. Is receptive to being called on by the salesperson.

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Prospect Management Puzzle

Prospect?

Cold Prospect?

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Warm Prospect?

Hot Prospect?

The Answer!

To improve availability and predictability of prospect data and complete control over prospect management cycle
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Defining prospect categories

Cold Prospect Warm Prospect Hot Prospect
0

Mont hs

Point of Contac t

Intension to purchase

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Our Prospects
Cold Prospect: Expected Purchase < 3 months Suspect contacted from CDB Retailed: Goods delivered after invoicing

Warm Prospect: Expected Purchase <2 months Taken quotation

Full Payment: DO / Payment Received Commercial transaction complete Can be skipped if credit offered Hot Prospect: Expected Purchase- within the month PO / Token money taken

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Check Compliance to the following activities when Qualifying Hot Prospects

Checklist to Qualify Hot Prospects for CV

1. SE aware of the specific requirements of prospect. 2. Product related discussion (demo) has happened. 3. Quotation given to prospect. 4. Price agreement reached. 5. Applied for loan from a financier.
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Check Compliance to the following activities when Qualifying Hot Prospects

Checklist to Qualify Hot Prospects for WM

1. RM aware of the investment requirements of prospect. 2. Financial Profiling based on age group has happened. 3. Different Financial Product (MF, Insurance/Pension plans, Real Estate, Equities & Term deposit in banks, PPF, Fiduciary Services) information along with a model portfolio recommended to prospect . 5/2/12

Hot Prospect Tracking Sheet

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Prospect Funnel
Understanding prospect funnel is essential for effective Prospect Management

How is a prospect funnel different from a prospect pipeline or are 5/2/12

Prospect Funnel vs. Pipeline

Cold Warm Prospect s

FP Full Payment R Retailed

Hot FP R

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Conversion Ratios
Cold
100

Hot to Retailed

R Hot + FP + R

Measure of : Deal closing skills Financier relationships

73 %

54 Warm 7 Hot FP 2 R 19

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Conversion Ratios
Cold
100

Warm to Hot

R + FP + Hot 32 R + FP + Hot + Warm

54 Warm 7 Hot FP 2 R 19

Measure of : Quality of coverage in previous and this month Selling skills and product / market knowledge
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Conversion Ratios
Cold
100 54 7 2 19

Warm to Retailed

Warm = R R + FP + Hot + Warm Hot 23 % FP R

Measure of : Quality of coverage in previous and this month Selling skills and product / market knowledge
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Conversion Ratios
Cold
54 Warm 40 % 7 Cold to Warm = R + FP + Hot + Warm Hot R + FP +Hot + Warm + Cold FP 2 R 19 100

Measure of : Quality of coverage in previous and this month Quality of prospect, segment selection Availability of a comprehensive CDB Competition knowledge
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Conversion Ratios
Cold
100

Cold to Retailed
+C

= R 10.5 R + H + FP+ W %

54 Warm 7 Hot FP 2 R 19

Measure of : Quality of coverage in previous and this month Quality of prospect, segment selection Availability of a comprehensive CDB Competition knowledge
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Month Closing Funnel

Cold Warm Hot FP R Conversion Ratios
Cold to warm=(W+H+FP+R)/ (C+W+H+FP+R))100 = Warm to Hot = ((H+F+P+R)/ (W+H+FP+R)) 100 = Warm to Retailed = (R/(W+H+FP+R)) 100 = Hot to Retailed = (R/(H+FP+R)) 100 =

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Reclassification of Prospects on 1st of Month

30th /31st of a Month

Cold=600 Warm=25 Hot=50 0 FP R

1st of Next Month

Cold = 250 Warm=12 Hot =25 5 FP R

Out of 600 cold

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Estimating Prospect Funnel

Sales target: 50 Conversion factors are as: Cold to Warm Warm to Retailed Hot to Retailed Calculate: Target Cold, Warm, Hot prospects for the month (Cp, Wp, Hp)
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Cold Warm Hot FP R

Opening Prospect Funnel Cold - 150 Warm - 75 Hot - 8 Full Payment -0 Retailed -0

40% 23% 73%

Hot to Retailed = Retail/(Hot + FP+ Retail) (0.27/0.73) x 50 = 18 Balance Hot for the Month = 18 - 8 = 10

Cold to Warm Warm to = Retailed = (Warm+Hot+ Retail/ FP+Retail)/ (Warm + (Cold+Warm Hot + FP+ +Hot+FP+Re Retail) tail) 0.23 x 18 + 0.23 x W + (50+149+18)/ 0.23 x 50 = (50+149+18+ C) = 0.4 50 This gives a visibility in the system in terms of the = 326 = 149 need to generate to number of prospects you Balance Cold Balance achieve the planned results. Now you have toWarm for the for the Month make an action plan to generate = 326 - 150 = the 5/2/12 required number of prospects. Month = 149

At the end of the month, you need to calculate these ratios to see your performance vis--vis industry benchmarks. If the ratios are lower than the industry benchmarks, then take the ratios achieved in previous month as the benchmark. i.e.

If IB>CR,then use CR of the previous month

If they are higher than the industry benchmarks then use the industry 5/2/12

TARGET FUNNEL SALES TARGET =50

Conversion Ratios Prospec t Target

MONTH OPENING FUNNEL

Prospec t Target

SHORTFALL FUNNEL
Prospec t Target

C TO W = W TO H = W TO R = H TO R =

Cold Warm Hot FP R

(A)

= 326 = 149 = 18 =0 = 50

Cold Warm Hot FP R

(B)

= 150 = 75 =8 =0 =0

Cold Warm Hot FP R

(C)= (A) (B)

=176 =74 =10 = =

Use conversion ratios to calculate the prospect targets required to achieve the given vehicle target

Use fig. from previous month closing funnel and update the status of the prospects

Calculate shortfall by subtracting balance prospect requirement from target no of prospects

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Sales Executive

Tap new prospects and build pipeline/Funnel. Keep feeding the sales funnel at the top Classify prospects Fill Prospect Forms Update prospect status Implement Activity plan finalized with DSM.
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Daily Prospect Call Tracker Format

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MIS Operator

Receive daily prospect report from all DSE Compile daily reports from DSE in the given format/ tool Submit the report to DSM Send a daily status of reports received from SE to SM
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Daily Prospect Monitoring Sheet

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Area Sales Manager

Month Planning Prospect target calculation Activity Planning Review Meetings Prospect position analysis Review & corrective action for each SE Inventory Planning Analyze daily compiled report from 5/2/12 MIS operator and highlight problem

2) Preapproach:
the Sale

Planning

Includes all the information-gathering activities salespeople perform to learn relevant facts about the prospects, their needs, and their overall situation. Adaptive selling:
When a salesperson alters the initial objectives or plans of the sales process because of new information gained from 5/2/12 the customer during the actual call.

Customer Research

Size Present purchasing practices The location of its HQ,Branch offices & location of manufacturing plants The names of people who make the buying decisions as well as those who influence the purchase. Buyers background Education,social affiliations & personalities.
5/2/12 Become familiar with the problems of

Planning the Sales Presentation

It takes 4-5 calls to close a sale. The salesperson must obtain from the buyer some type of commitment for action that moves the sales process forward.e.g.

Vendor Selection Criteria Meeting with other decision makers

Salespeople recognize differences across selling situations & adapt their 5/2/12

3) The Approach:

The first minute or so of the call.(Icebreak)

A good approach makes a favorable impression and establishes some degree of rapport between the salesperson and the buyer. Salespeople can draw attention of the buyer by

Handing over a sample Highlighting some benefit in which the buyer will likely be interested

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4) Need Assessment

The stage in which the salesperson must discover, clarify, and understand the buyers needs. The best way to uncover and understand needs 5/2/12

They Need it! Why do people Buy! They want it! They Desire it! They just want to Spend! Find out what is

Open Probes

Closed Probes Ask Closed ended questions Have opposite effect of open ended questions Restrict responses to YES/NO. This is possible where a specific answer is

Start with Who, Where, Why, What, When & How They cannot be answered as YES/NO Shall be used to gain info/Opinion Makes the 5/2/12

The Probing Triangle

F A B
Gain Commitment to a Solution

Effect Building Problems Areas of concern Quantity Evaluate Situation

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NEED Situational questions ASSESSMENT

How often do you change the cutting oil in your drill presses?

In addition to the hospital administrator, who else has an influence on the decision?

Problem discovery questions Have you experienced any delays in getting repair parts?

In which part of the production process is quality control the most important?

Problem Impact questions How do these delays in getting parts affect your production costs?

What impact do the quality consistency problems have on your production costs?

Solution value question

If your inventories could be reduced by 20%, how much would that save you? If your rejection rate on final inspection was reduced to under one percent, how much would that save you?

5/2/12 Confirmatory questions

Situations to Sell Hand Sanitizer

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Situation Selling for Tata Nano

Shelter from adverse weather (Rain,Snow, Summer) Family of 4 wants to go out exursion An expectant mother to deliver a baby in the middle of night

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Inter City Travel 5/2/12

Intra City

5) The Presentation

A discussion of those product and/or service features, advantages, and benefits that the customer has indicated are important. Built around a forceful product demonstration Prepared presentation vs. Adaptive selling Tips for effective presentations

Keep it simple Talk the prospects language

Stress the application of the 5/2/12 product/service to the prospects situation

Canned Presentation

Advantages

Disadvantages

Very good impression in the mind of the consumer. Will know what to say and will be well prepared. Can manage to answer the 5/2/12 queries.

Will be a little less spontaneous. Will be caught off guard when questions come out of what he/she has not prepared

Presentation of Product, Features, Benefits, Advantages

Camera Telephoto lens Take pictures from longer images of animals distances. or people from a distance. Bicycle Attached water Can hold a water dehydrated. bottle. bottle holder stop for water. Feel more refreshed. Drill Press Multiple drill Can change bits bits attached without shutting down the machine. Motor Oil Rust inhibitor Oil and engine have longer life.

Product Advantages

Features

Benefits

Able to capture

Dont get Dont have to

Saves time. Saves money. Saves money.

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Use the FAB Model to sell following Products

PEN WATCH LIGHTER PEN DRIVE LAPTOP MOBILE PHONE RING NECKLACE CHAIR FAN ELECTRIC SWITCH POTATO CELLO TAPE SCISSOR STAPLER PUNCH CHOCLATE CHEWING GUM TIE SHIRT KPL SHOE VISION SPECTACLES SOAP DUSTBIN MINERAL WATER BRACELET MOUSE EGGS STEEL GLASS OB BOOK TISSUE PAPER PERFUME TILE WALLET BELT PAPER WEIGHT

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6) Meeting Objections

Objections should be welcomed because they indicate that the prospect has some interest in the proposition. In responding to an objection

Listen to the buyer Clarify the objection Respect the buyers concern Respond to the objection

Common types of objections

Price or value objections Product/service objections

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7) Gaining Commitment

Asking the buyer to commit to some action that moves the sale forward. Common Sales Closes

The Assumptive Close

Now what size do you want? If you buy this product today, well double the length of the warranty.

Special Offer Close

Summary 5/2/12

Close

1. Summary & Alternative Close

Summarize the benefits and present alternatives for a decision. e.g. Now Mr Customer, we have agreed that our product can take care of your requirements. Where do you want the equipment installed?
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A.

B.

2. Minor Decision Close

By getting the customer to make a decision on a lesser matter, you atleast get a decision. e.g. As I see it, its now come down to a decision whether to go for a product A or product B.

A.

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3. Blank Order Close

Ask the prospect question, the answer to which should be filled out on a proforma invoice. What is the exact company name? Who of our delivery people would be contacting?
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A. B.

4. Balance Sheet Close

This is the only close that physically involves the customer, and properly used sees the customer writing down all the reasons, why he should buy or use your product/service. Let the customer think of all positives & negatives. Divide a paper horizontally into 2 & let customer fill in all the 5/2/12 WHY on the left side and WHY NOT

5. Call Back Close

This may be used when you had a NO and have had to leave without any agreement on the next steps. e,.g Call back the customer Sir, I have an apology for you, I cant think how it happened but forgot to tell you about it. The forgotten fact must be genuine and 5/2/12 if possible significant.

6. Clean Sweep Close

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7. The Final Objection Close

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8. Sharp Angle Close

This is when a customer asks/comments on a particular feature of the product.

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9. Similar Situation Close

Many customers feel associated with others who had been in similar situations. Therefore, your cautionary tale can be negative illustrating what happened because the prospect did not go ahead to buy.
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8) Follow-Up

Reps must learn that the sale is not over when they get the order. It is much more expensive to acquire new customers than it is to retain existing customers. Following up to ensure that the customer is fully satisfied builds trust and is consistent with the concepts of Relationship Marketing.
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Benefits to Company

Higher internal efficiency Lower and active inventory Higher productivity of working capital Higher productivity of manpower Prediction accuracy of monthly retail Lesser product shortages Reduced seasonality effect on retail Higher retails and market shares Financiers performance measures
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