NOTES-SALES MANAGEMENTUNIT-4

VAISHNAVI VERMAASSISTANT PROFESSORVISION INSTITUTE OF MANAGEMENTKANPUR

UNIT-3

Theories of Personal Selling

There has been a lot of research by behavioural scientists and marketing scholars to examine whether selling is an art or science and various theories have been developed to explain the buyer-seller buying process. The process of influencing others to buy may be viewed from four different angles on the basis of different theories: thus there are four theories of selling viz.

1. AIDAS theory of personal selling2. “Right Set of Circumstances” theory of selling3. “Buying Formula” theory of selling4. “Behavioral Equation” theory

The first two of the four above-mentioned theories, are seller oriented and the third one is buyer’s oriented. The fourth one emphasizes the buyer’s decision process but also takes the salesperson’s influence process into account.

AIDAS Theory of Selling:

This theory, popularly known as AIDAS theory (attention, interest, desire, action and satisfaction), is based on experimental knowledge. This theory is very common.

According to this theory potential buyer’s mind passes through the following stages:

1. Attention Getting:

It is the crucial step in the AIDAS process. The objective is to put the prospect into the right state of mind to continue the sales talk. The salesperson has to convince the prospect for participating in the face-to-face interview. A good beginning of conversation may set the stage for a full sales presentation. The salesperson must apply his social and psychological skills to draw the attention of the prospect to his sales presentation.

2. Interest Creating:

The second step is to intensify the prospect’s attention so that it involves into strong interest. To achieve this, the salesperson has to be enthusiastic about the product. Another method is to hand over the product to the prospect and let him handle it. Brochures and other visual aids serve the same purpose. Throughout the interest phase, the hope is to search out the selling appeal that is most likely to be effective.

3. Desire Stimulating:

After the attention getting and creating interest, the prospect must be kindled to develop a strong desire for the product. This is a ready-to-buy point. Objection from the prospect will have to be carefully handled at this stage. Time is saved and the chances of making a sale improved if objections are anticipated and answered before the prospect raises them.

4. Action Inducing:

If the presentation has been perfect, the prospect is ready to act, that is, to buy. Very often there may be some hesitation on the part of the prospect at this stage. The salesperson should very carefully handle this stage and try to close the deal effectively. Once the buyer has asked the seller to pack the product, then it is the responsibility of the seller to reassure the customer that the decision was correct.

5. Satisfaction:

The customer should be left with the impression that the salesperson merely helped in deciding. After the sale has been made, the salesperson should ensure that the customer is satisfied with the product. The salesperson should sense the prospect’s mind and brief his talks.

“Right set of circumstances” Theory of Selling:

It is also called the “situation-response” theory. It has its psychological origin in experiments with animals. The major emphasis of the theory is that a particular circumstance prevailing in a given selling situation will cause the prospect to respond in a predictable way. The set of circumstances can be both internal and external to the prospect. This is essentially a seller-oriented theory and it stresses that the salesman must control the situation in such a way as to produce a sale ultimately.

“Buying Formula” Theory of Selling:

The buyer’s needs or problems receive major attention, and the salesperson’s role is to help the buyer to find solutions. This theory purports to answer the question: What thinking process goes on in the prospects’s mind that causes the decision to buy or not to buy? The name “buying formula” was given to this theory by strong.

The theory is based on the fact that there is a need or a problem for which a solution must be found which would lead to purchase decision, as shown below:

Whenever an individual feels a need, he is said to be conscious of a deficiency of satisfaction. The solution will always be a product or service or both and they may belong to a producer or seller. The buyer develops interest in buying a solution.

In purchasing, the “solution” involves two parts:

1. Product or service or both,2. The brand name, manufacturer or the salesperson of the particular brand name:

The product or service (Brand name) must be considered adequate to satisfy the need and the buyer must experience a pleasant feeling or anticipated satisfaction. This ensure the purchase.

Behaviour Equation Theory of Selling:

This theory is a sophisticated version of the “right set of circumstances” and this theory was proposed by Howard, using a stimulus response model and using large number of findings from behavioural research. This theory explains buying behaviour in terms of purchasing decision process, viewed as a phase of the learning process, four essential elements of learning processes included in the stimulus response model are drive, cues, response and reinforcement, which are given below, in brief:

1. Drive is a strong internal stimuli that impel buyers’ response. Innate drives stem from psychological needs and learned drives such as striving for status or social approval.

2. Cues are weak stimuli that determine when the buyer will respond. Triggering cues activate the decision process whereas new triggering cues influence the decision process.

3. Response is what the buyer does.4. A reinforcement is any event that strengthens the buyers’ tendency to make a particular

response.

Howard believed that selling effort and buying action variables are multiplicative rather than additive.

Therefore, Howard incorporated these four elements into a behavioural equation that is:

B = P × D × K × V

P = Response or internal response tendency, i.e. the act of purchasing a brand or a particular supplier.

D = Present drive or motivation level

K = “Incentive potential” that is, the value of product or brand or its perceived potential value to the buyer.

V = Intensity of all cues: triggering, product or informational.

Types of Sales Manager

1. Administrative Sales Manager

Administrative sales managers are found normally in highly integrated sales organisations selling multiple lines of products in national and international markets. He is known by alternative titles such as ‘vice president’, ‘in-charge of sales’, ‘director of marketing’, ‘general sales manager’ and ‘marketing manager’.

He is primarily concerned with coordination and integration of all the company activities relevant to marketing. He is not an authority on design, engineering, manufacturing and finance; contrary to these, he is an authority on sales and profits. It does not mean, however, that he can be aloof from other departments and their functions.

In addition to the crucial task of coordinating marketing with other company activities, he is to coordinate the activities of his own sales organisation within and with outside advertising and sales counsel. He is responsible for sales planning that involves integration of sales personnel, merchandising, advertising and promotion, financing, distribution network.

Planning also includes the determination of the functions of sales organisation, delegation of responsibilities, personnel selection, and performance evaluation. He frames the policies and strategies on the prices, distribution, relations with dealers, service, advertising and sales-promotion.

2. Field Sales Manager

The field sales manager or operating sales manager is a line sales executive reporting directly to the administrative sales manager. Operative sales manager works under the direction, guidance and supervision of the general sales manager.

He is mainly responsible for the effective implementation of sales plans and policies developed by the administrative sales manager.

He is known for personal direction and control of sales personnel and hence, spends major portion of his time in the field supervision of the work of sales-force. Manpower maintenance of the sales organisation is the basic task of this executive. He is to recruit, select, train, supervise, stimulate, evaluate, equip, control and route the sales-force.

Field sales manager moves with salesmen on visits of importance. He assigns sales territories and controls activities of salesmen through setting the standards of sales achievements, analysing the sales reports, holding the sales meeting, supervising the advertising and sales-promotion cooperation with dealers, directing sales contests, supervising warehousing inventories, dealer relations and coordinating territorial and home office activities.

Thus, a field sales manager provides the administrative sales manager with the latest information relating to the view points of dealers and consumers on company, company

products, policies, and practices with facts on market trends, competitors, distributors and individual salesman.

3. Administrative-cum-field Sales Manager

In case of smaller organisations, we come across such sales manager who combines the functions of administrative and executive sales officer. Generally speaking, administration and field operations cannot go together. However, size and economy points force many units to combine the distinct roles of administration and field operation.

As an administrator, he plans, organizes, directs and coordinates. As a field operator, he guides and supervises and controls the activities within the sales organisation. Thus, thinking and doing are done by the same person that goes against the very idea of specialisation for an administrator is a ‘thinker’ and a line officer as ‘doer’.

4. Assistant Sales Manager

Generally, the administrative sales manager is assisted by Assistant sales manager in the administrative functions of planning, analysis, direction and coordination. He coordinates the work of sales staff that is specialized in advertising, sales-promotion, research, merchandising and dealer relations.

He may also handle sales office personnel, records and routine. He acts as the link between the head-quarters and the field-sales-manager at distance. It is not a surprise if he discharges the functions of field sales manager. Thus, he acts as both line and staff officer in the sales organisation.

5. Product-line Sales Manager

A company that markets variety of products has such product-line sales manager responsible for one or group of products in the product- line. He is also known as product or brand manager.

He is responsible not only for sales but also for production, research, product- development, planning, advertising and profit for the product or the group of products in question. He is to report to the Marketing manager who coordinates the work of several product sales managers.

6. Marketing Staff Manager

As the title suggests, the Marketing staff manager is not a line-officer. He is one of the staff specialists who are delegated some of the responsibilities of administrative sales manager. These are the specialists in the areas of marketing research, sales-promotion, merchandising, advertising, sales planning, sales personnel, distributor/dealer relations, sales costs, budget

sales finances, traffic, sales office administration and service and the like. These staff managers being non-line officers have no field tasks.

These managers are accountable for analysing the needs of the marketing organisation in respect of their specific areas of specialisation, developing plans and recommending solutions to the problems encountered or thrown open.

7. Divisional/regional Sales Managers

In all the national organisations, one comes across these Divisional or Regional sales managers. These are also known as District sales managers who are responsible for the delegated sales operational duties on a territorial basis.

They report to Assistant sales managers or the field sales managers who act as the liaison officers with headquarters. The functions of Divisional or Regional sales manager are similar to those of field sales manager who is in charge of several divisions or regions and hence divisional or regional managers.

They are mainly responsible for maintaining the man-power in the concerned areas by recruiting, selecting, and training, supervising, motivating and controlling the sales-force.

They are also responsible for directing branch or local office sales managers. The divisional sales managers assist branch managers in solving their sales personnel problems, dealer relations, warehousing and inventory, advertising and sales promotion, sales campaigns and sales meetings.

8. Branch Sales Mangers

In case of sales organisations that operate branches or local sales offices in major cities of the country, one is to come across such Branch sales managers. Branch sales manager is a line executive responsible for the direction of a small group of salesmen calling on consumers or dealers in the branch area.

He recruits, selects and trains, sales people with the guidance of Divisional or Regional sales manager to whom he reports. He works along with salesmen in the field, supervises their sales activities, holds periodic sales meetings, evaluates sales performance and helps in key accounts. If warehouse is attached to branch, he supervises warehousing activities too.

9. Sales Supervisor

A sales supervisor is a line sales manager who supervises normally eight to fourteen salesmen. He is seen in branch sales office of a national sales organisation having branches all over the nation.

He is responsible to the local branch sales manager. In case there is no branch sales manager, then he is responsible to the sales manager of the company directly. His work is to train and motivate the salesmen under his charge.

His supervision, guidance and coaching helps in building up more confident sales personnel. He is the key communicator in the transmission of information on sales policies of new products, promotions and marketing programmes between the higher-ups and individual salesmen.

Qualities of sales executives

1. Self confidence and polite

Self-confidence is the first step to success. Be confident; if you are not sure yourselves, how can you convince your customer. Self confidence is not arrogance, be polite.

2. Commitment

You have to commit to your job, this industry is too tough for those who has only half-hearted, committed or choose another field, do not waste your time.

3. Discipline

Do not expect a “hit and run” system can bring any result, you should have discipline to follow up all your commitment.

4. Honest and Enthusiastic

All you tell should be the truth, but does not mean you have to tell all the truth which you have to keep due to positioning and negotiation. Do not over promise, if you are not sure, tell them I will find the answer for you.

5. Give impact

There are two many sales knocking at your customers’ door, they can only remember the sales executive who give them an impact (either good or bad).

6. Preparation

A good impact can only achieved if you prepare properly. I will not see any High Way salesman who just drop in and hear him talking nonsense, but I will accept somebody who has prepared a relevant topic which can arouse my interest (to get more value from him/her). No preparation do not go to see the customer, you waste you time and the company money.

7. Keep on learning

Every day we learn, we can only advise our customers if we know what they are current doing. And usually you learn more from your customers (on field learning) by asking relevant question, but before you can ask relevant questions you should have some basic knowledge on the issue.

8. Convey your idea to your customer

You should have a courage to convey your idea, not just “Yes, Sir”, you will lose your value if every time your response is “Yes, Sir”, then the customer will send you away with1 kg of spray powder or ink. Usually, most of the idea comes from your observation/listen from others customer. By systematically learning, you can obtain a lot of idea.

9. Be creative and pro active

Don’t bring the same topic every time you visit your customer, otherwise you become Order Taker and they will happily send you away with 1 kg of spray powder. Think of different topic, (ink, graphic supplier, logistic, business environment, competition, payment, pricing, investment, interest rate, capital etc.). The more knowledge you know on your relevant field, the more your customer will value you.

10. Killer instinct alias closing sales

Whatever value you add to the customer, some body has to pay and it is your customer who is going to pay. If you can’t close the sales, you have to question yourself: does my customer aware of my value?

Qualities of Highly affective Sales executive

1. Ability to define the position’s exact functions and duties in relation to the goals the company should expect to attain. Sales executives calculate what is entailed in their responsibilities. Whether or not the company provides them with a job description, they draw up their own descriptions consistent with the responsibilities assigned by higher management. Revision are necessary whenever changes occur in the assigned responsibilities or in company goals.

2. Ability to utilize time efficiently. The time of sales executives is valuable, and they budget it and use it carefully. They allocate working time to tasks yielding the greatest return. They arrive at an optimum division between office work and field supervision. Even the use of off duty hours is important. Excessive work time and too little leisure reduces efficiency. Successful sales executive balance such leisure time activities as community service and professional meeting against personal social activates, recreation, and self improvement.

3. Ability to select and train capable subordinates and willingness to delegate sufficient authority to enable them to carry out assigned task with minimum supervision. Ability to delegate authority is must. Effective executives select high caliber subordinates and provide them with authority to make decisions. Within existing policy limits, decision are made by subordinates; when an exception falling outside these limits occurs, the superior decides. The more capable

the subordinates, the wider policy limits can be And the more the superior’s time is freed for planning.

4. Ability to exercise skilled leadership. Competent sales executives develop and improve their skills in dealing with people although they rely to a certain extent on an intuitive grasp of leadership skills, they depend far move on careful study of motivational factors and shrewd analysis of the ever changing patterns of unsatisfied needs among those with whom they work. Skilled leadership is important in dealing with subordinates and with everyone else.

5. Ability to allocate sufficient time for thinking and planning. Able administrators make their contributions through thinking and planning. They know how and are willing to think. They recognize that reviewing past performances is a prerequisite to planning. They strive to gain new insight that will bring problems into better focus. Effective sales executives shield themselves from routine tasks and interruptions. Failing this, they retreat to surroundings which are conductive to thinking and planning.

Sales Process

The 7 Steps of the Sales Process

1. Product Knowledge

This step is fairly straight forward, but it is also the great undoing of many a technical expert turned sales person. When one is extremely well versed in a particular product especially a technical one, it is easy to get caught up in a monologue of all the great features it provides.

The technical expert turned sales person is so eager to explain how the product works or why it’s unique that the benefits to the customer are left out of the discussion. Never assume that a prospect will easily link a feature to a benefit. That relationship must be stated clearly (something done in the presentation step 4, after the needs assessment step 5). The acquiring of product knowledge for a “technician” therefore, is less about the features of the product itself, and more about how the customer will benefit from those features. When discussing product, the technicians mantra should be; “So what?” Consider those two words to be what the prospect thinks every time a feature is mentioned, and re-learn your product from that perspective.

2. Prospecting

Prospecting, just as the word implies, is about searching for new customers. Like product knowledge, this step may seem fairly straight forward but upon closer examination it becomes more complex. The key to prospecting effectively is knowing where to dig and what to look for. It’s also important to distinguish between a lead, a prospect, and a qualified prospect. The most important element in this step is to create a profile of existing customers. This may have been done at your company, but have approach tactics (step3) been tailored to match each profile. For instance, you may have identified the following major market segments: State Governments, County Governments, Consulting Firms, Federal Agencies, Utilities, Universities,

but have you fully profiled each of these in order to adjust marketing tactics appropriately? A direct mail, seminar invitation might work well to generate State Government leads, but will it be effective in developing Consulting Firm leads? For each market segment do you really know what the ideal customer looks like? These questions should be answered fully in the “Tactics” portion of a marketing plan.

In the broadest sense, prospecting is an ongoing process that everyone in the company (particularly the sales force) should be involved in. This simply means everyone should have their “prospecting radar” up when they are out and about in the world. Very often, a great lead turned customer was first discovered after being heard or seen in the news at a party, or event, etc.

3. The Approach

This is where the rubber meets the road in the sales process. For our present purposes lets consider the approach in the context of a sales call rather than lead generation (i.e. the difference between a mass mailing and a telephone call). This is the step where you begin to build a relationship and the intelligence gathering continues (it started with prospecting). A good approach is crucial to sales success because it will either identify you as a bothersome salesperson and cause a prospect’s guard to go up, or it will identify you as an obliging salesperson with something of value to offer. (There is probably a middle road too, but you get the idea.). Consider the example of tele-marketers selling a seminar:

Their product is a seminar, about which they presumably have sufficient knowledge. They prospect by scanning the house lists for appropriately titled leads, (generated by earlier prospecting efforts). They approach by saying “I’m Jay from XYZ and I’m calling to follow up on an invitation to a seminar that we mailed to you last week. Do you recall receiving it?” Then the dialog begins, often it’s perfunctory, other times however it can be extremely informative. The difference more often than not depends on how astute and articulate the caller is. What do you think is good about this approach? What do you think is bad?”

Quite often the type of call one makes is a follow up to some action i.e. seminar attendance, brochure mailed, etc. Technically these calls are part of follow up step 7, but let us address them in the context of a sales approach. What would be a good approach for each of the above follow up actions? Think about eliciting information and advancing the sale (closing, step 6). What would be a good approach for a cold call?

Additional Note on recording information: Regardless of the type of call or the results, it is important to take detailed call notes and schedule a subsequent action item, no matter what it is be it a week, a month, or a year down the road. (One can invent a system of abbreviations to make this easier i.e. LVM = left voice mail.) History notes are important for a variety of reasons, not the least of which is tracking where a prospect is in the sales process, including what follow up is necessary and when. Noting that “packet was mailed” or “attended seminar” or “inquired about model” is only half the information and not the most important. Why?

4. The Needs Assessment

This is arguably the most important step of the sales process because it allows you to determine how you can truly be of service. To be a highly effective salesperson, that is to sell to the prospect’s needs, you first have to understand what those needs are. This means you must think in terms of solving a prospects problem. The only way to do that is by asking lots of questions. Does a health practitioner prescribe remedies before a thorough exam? Asking good questions will not only help you determine what will best suit the prospects needs, but it builds confidence, trust, and will very often help the prospect consider issues they may never have thought of. This last point is powerful because it provides an opportunity to showcase features, which the prospects answers led you to. What questions would you ask to illustrate how your product is different/better than a competitor’s. Although intelligence gathering occurs throughout the sales process, it is at step four where it happens in earnest. What other information would be important to gather at this stage? (hint: who’s who, referrals).

5. The Presentation

Remember the discussion in step one, focus on benefits rather than features? If you consider your product/service in terms of how it benefits the customer, your presentation will be a focused and relevant dialogue rather than a self aggrandizing monologue. Nothing is worse than a sales presentation which proceeds from the sellers perspective. This is why the needs assessment is so important and why it will ideally flow in and out of this step. A good needs assessment allows you to tailor your presentation to your audience, and keep it interactive.

6. The Close

Eighty percent of sales are lost because a salesperson fails to close. Closing is about advancing the sales process to ultimately get an order. What you are trying to sell at each stage may be different. For example, a close early in the sales process may be to get an appointment to discuss your product/service, in that case you are selling an appointment not a widget. In a later stage you might need to meet with a committee, in that case what you are selling is a meeting. Seeing the sale process in this light takes a little pressure off of each encounter and makes things a bit more manageable. But don’t be lulled into complacency, you must ultimately ask for the order and no sales conversation should ever end without an agreement to some next step. Do not be satisfied with “we’ll get back to you”, where is the agreement in that? What could you say in response to such a remark in order to advance the sale?

In large part, closing is about discovering obstacles. Have you heard these before: “I’ll need to think about it.”, “It’s too expensive.”, “Let me run it buy some other people.” “Sounds good but I’ve already got one.” What could you say to overcome these objections?

There are lots of ways to close, indeed closing a sale has become a science unto itself. Books have been written on this topic alone. But there is one elemental truth – if you don’t ask you

don’t get. Just for fun, following is a sampling of a few closing techniques from among the many:

— The Ask For It Close. “What do we need to do to get this model into your organization?”— The If-Then Close. “If I could demonstrate how an XYZ model provides you with, (things you know are important based on the prospect needs assessment) then would you be willing to… demo,rent, buy, switch, etc.”— The Process Of Elimination Close. “So you like the model, you have use for it, it’s not too expensive!”— The Either Or Close. “Will that be cash or charge?”— The Lost Puppy Close. “I guess I didn’t do my job very well.”

Additional note: The question “How much does it cost?” Is a great buying signal yet it is a question you want to avoid early in the sales process. What could you say to defer that question politely? When you do mention price, don’t be afraid that they are too high, say it with pride. Don’t forget to ask for the referral.

7. Follow-up

Good follow up will double your closing ratio. When a sales person makes contact with a prospect a relationship has been built, and follow up is how it is nurtured. Staying at the forefront of a prospect’s mind requires persistence and should not be confused with being bothersome. This is why it’s important to get agreement on some next step each time there is contact. Follow up therefore should never end. The pace may slow but it will never end. When a sale is made, then a new type of follow up begins.

Follow up conversations are best handled by the salesperson who started the relationship. Who else can better gauge a prospect’s “willingness to buy”, or pick up where “we last left off”. This means that detailed notes must be kept on each prospect with particular emphasis on their “state of mind”. It is unwise and ineffective to keep track of this information anywhere other than a centralized database.

Additional note: It’s important to hold some follow up ammunition in reserve. Overwhelming your prospects with every piece of information you possess on their first request hampers your ability to stay in touch. Having a stable of collateral materials gives you reason to follow up.

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