Sasank.

Bandarupalli AGBS - Hyderabad

Module I Changing world of Sales Management and Professionalism in sales. Classification of Personal Selling approaches. Sales jobs, Qualification and skill required for success. Organizational buyer behavior and buying situations. Contrasting Transactional and Relationship Selling models, Sales Teams. Sales management Competencies for effective and outstanding results. Module II Job analysis, description, qualifications, buyers perspective and methods of locating prospective candidates. Selection: Application forms, Types of Interviews, Testing and validating the hiring process. Determining training needs, Training analysis, Methods of Evaluating sales Training and building a sales training program. Instructional methods used in training. Module III Motivation and the reasons for motivating sales people. Maslows Hierarchy of Needs related to the sales force motivators and companys actions to fill needs. Methods of giving status to sales people to motivate them. Sales force compensation. Components of compensation and their purpose. Comparison of various compensation plans. Module IV Sales territory; Reasons for establishing or revising Sales Territories, Setting up and revising Sales Territories: Market build-up and Work load method; optimizing sales territory. Prospecting: Developing a prospect base, Strategic prospecting, Sources of prospects, common causes of customer attrition, preparing a prospect list and organizing information. Planning the initial sales call and approach. Sales Presentation techniques: Types of presentation techniques, Presentation sequence, Adoptive Selling Model. Demonstration plans, actions, custom fitting demonstrations, use of sales tools.

Module I Changing world of Sales Management and Professionalism in sales. Classification of Personal Selling approaches. Sales jobs, Qualification and skill required for success. Organizational buyer behavior and buying situations. Contrasting Transactional and Relationship Selling models, Sales Teams. Sales management Competencies for effective and outstanding results. Sales Management: Involves planning the selling program and implementing and controlling the personal selling effort of the firm. The tasks involved in managing personal selling include. 1) Setting objectives; 2) organizing the sales force; 3) recruiting, selecting, training, and compensating salespeople; and 4) evaluating the performance of individual sales people. Personal Selling Approaches To market their product to customers, organizations use different approaches, depending on the nature of product or services, resources of the organization, expertise or others. Initially there were four approaches which were being practiced but later one more approach came into practice. Diversity of personal selling All of us being consumers often come across a variety of selling situations. Differences in marketing factors cause each company to have individualized selling styles. Each different type of selling job requires the sales person to perform a variety of different tasks and activities under different circumstances. The job of a soft drink driver salesperson who calls in routine fashion on number of retail stores is different from that of a computer salesperson who sells a system for managing information to the executive of a travel agency. Let us now discuss the different kinds of selling positions. Service selling: 1) Delivery Salesperson The Primary job of the delivery salesperson is to deliver the product e.g. soft drink, tickets, bread, milk etc. The selling responsibilities are secondary. Good service and a pleasant personality may lead to more sales. 2) Inside Order Taker

The retail salesperson standing behind a counter is an inside order taker. The customer comes to the salesperson with the intention to buy a product or service, the salesperson only serves him or her. Here, we need to consider the difference between product and service sales. A person going to the grocer to buy flour is served by the person behind the counter. But if the person behind the counter is a good salesperson and provides good service like being polite to the customer, being prompt, asks politely if he or she can get anything might end up sell more than just flour. Tourism sales gives the best example of sales of services. One does not necessarily goes to a travel agency to buy services but many a times just to consider the various options and prices. The person behind the counter sells the services. The manner of speaking, behaviour and the service provided by the person to the client can either clinch the deal or break it completely. For example, pushing a 3 star hotel with excellent services to a client who wants only and only a 5 star hotel is not going to clinch the deal. Rather the client might consider that the person pushing the 3 star hotel has some profit from the deal, whereas it is also possible that once in a while a client may go for a 3 star hotel with quality service instead of a 5 star hotel. It is for the person behind the counter to judge the client and his or her needs. In case of tourism sales the persons behind the counter often provide their own suggestions regarding choosing a destination or say hotel. The manner of answering questions or providing suggestions can win over the indecisive clients. 3) Outside Order Taker or merchandise A soap or spices salesperson calling on retailer is an outside order taker. They do little creative selling. In contract with store personnel these representatives actually may be discouraged from doing any hard selling. That task is left to executives higher in the hierarchy. Ex: Calling on retailer 4) Missionary Sales People These sales persons are not expected or permitted to solicit an order. Their job is to build good will or to educate actual or potential user or provide services for the customers, as in the case of medical representatives working for the pharmaceutical company or a software programmer for an information system, etc. 5) Technical sales person: Emphasizes technical knowledge and educates customer. Development selling: 1) Creative Salesperson of Tangible Products

In sales job it is often difficult to conduct creative selling for tangible products such as vacuum cleaners, automobiles, airplanes, encyclopedias, etc. The job happens to be difficult because the customers may not be aware of their need for the product or they may not realize how new products can satisfy their wants better than those they are presently using. When the product is of a technical nature, this category may overlap that of the Sales Engineer. Ex: Vaccum cleaner 2) Creative Salesperson of Intangible Product Sales of intangible products such as tourism products/services, insurance, advertising services, consulting services, communication systems or educational programmes, require creativity of salesperson to handle the situation. Generally selling the intangible products is difficult as their benefits cannot be demonstrated tangibly. For example, a travel agency, says ABC, is vying for the account of an organization whose travel related needs are at present being catered to by a rival agency, say XYZ. It would be very difficult for ABC to convince the organization of their superior services. A lot of brain wave and research is required to sell intangible products. It might help if ABC can come up with the hotel rates provided by XYZ to the organization (through some contact or say market shop talk). This would give ABC a chance to negotiate the hotel rates with the organization so as to get the account. But creative selling will require ABC to add discounts, conference packages, incentive tour packages, transportations and others, so as to inspire some sort of interest in their agency by the organization. Remember, though intangible products are difficult to sell, a little creativity can ease the selling process. From the above mentioned varieties of sales job it is clear that different sale positions require different amount and kind of skills. In todays market where self service stores and counters have made the selling task easier, technically developed products or intangible items require greater amount of creativity and perseverance, on the part of the salesperson. Ex: Education programs To facilitate an understanding of the various roles of salesperson, they can be grouped into four task specific determinants such as: i) Consultative Sales Consultative sales are characterized by the products or services that are sold at the higher level of an organization (e.g. computer systems or management consultancy services). The decision to purchase such products involves higher capital outlay. Thus, sales job requires a low key, low pressure approach by the salesperson. It would also require a very strong knowledge about products, patience to discuss products with several people of the organization and potential benefits to the user. Even at times when the progress of sales slows down, the representative has to make creative and sensitive efforts to resume interest but without appearing to exert pressure on the prospect.

ii) Technical Sales The most distinctive characteristic of technical sales is the product knowledge required by its salesperson, unlike the consultative sales, where sophistication in organization relationship and persuasive ability are the salespersons most valuable assets. Even time required to sell the product is relatively less than consultative sales. Most of the technical purchasing requires approval of several people but only one or two people with technical knowledge influence decision. If the sales representative is able to satisfy these people with product characteristics, application, installation process, approval from higher management is usually forthcoming. The technical salespersons, though not strangers to the process of making a sale, are trained to utilize the rational approach; by going into details of product utility and features. iii) Commercial Sales This field generally includes non-technical sales to business, industry, government and non-profit organizations. Examples are office equipments, wholesale goods, building products, business services and others. Unlike the previous two types, it is customary for the commercial salesperson to make sales on first or second call. The process stresses approach to right person (decision maker), making a smooth presentation and closing the sales. iv) Direct Sales Direct sales are primarily concerned with the sales of products and services to ultimate consumers. Examples are restaurants, door to door sales, insurance, encyclopedias, magazines, etc. There is normally some emotional appeal associated with this type of selling and the salespersons are required to possess a strong persuasive ability. Often length of time to close sales is shortest in the case of above product categories. In fact, salespersons are trained to close the sales on the first visit because it is felt if consumers are given time, they will either cool off from buying or will buy from a competitor. Creative selling (Basically Development) 1) Political / indirect / backdoor: Selling big ticket items by catering to other interests of the customers (which have no connection with the products) 2) Sales person engaged in multiple sales: Where the sales person required making presentations to various entities of an organization. Classification of personal selling approaches Stimulus response selling:

It is the simplest approach to selling. It uses structured questions and statements, which act as stimuli for the customer and sales person get the desired response in their favor. Words and statements of sales person furnish a stimulus if they are well planned and hit the nail on the head.

Planning or preparation of conversation is being done at the sales person end. He prepares structured questions whose answer is most likely to be in YES leading towards the end of the sale in YES. This approach involves less contribution of the buyer, its one sided conversation in favor of sales person, who has the aim to sell at any cost. So its suitable in the situations when buyer is unprofessional and has less knowledge. Example includes telemarketing, in which one script is being memorized and then repeated on every call till the sale call is closed. Mental State Selling: It is formula approach to selling. It is similar to stimulus response selling as it also uses structured question to lead the buyer to different mental states. These mental states are AIDA (Attention, Interest, Desire and Action). Sales person should be intelligent enough to keep track of buyers mental state while asking him questions. It is bit technical and requires sound mental ability of the sales person. First he tells customer about his product/service to gain Attention, then tries to develop customers interest, after that a stage, conviction comes, when salesperson describes the functions and benefits of products/services. After that in the stage of desire he should overcome the hesitation of customer and make him positive about his product/service and at the end sought the sales call. Need Satisfaction selling: In this approach, first of all the problem is identified. What does customer need to solve his problem? Sales person first listen to customer and let him take the initial part of conversation to uncover the needs of buyer. When need is identified then sales person tells about his product/services and how can they benefit customers and tell the entire features. Then sale is closed either with positive response from the customer or negative. Problem Solving Selling: In this approach problem is already identified, sales person need to define it to the customer and then tell him all the alternatives available even of competitors to solve the problem. He also explains his own companys product/service, after that he evaluate the alternatives carefully; doing comparisons of all and then sought the sales call. Consultative Selling: In this approach both buyer and seller works with collaboration. In this approach seller tries to help the buyer out in accomplishing his organizational objectives and strategies. It involves two way interactions. Seller sincerely tries to

seek out the problem of buyer and use all his resources and expertise to provide him services. It may take several days for sales to be done.

Organizational buyer behavior and buying situations Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. Organizational buyer behavior Organizational buying as a complex process of decision making and communication, which takes place over time, involving several organizational members and relationship with other firms and institutions. According to them, it is much more than a simple act of placing an order with the suppliers. In this sense, they define organizational buying behavior as the decision making process by which formal organizations establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers. Some of the characteristics of organizational buyers are: 1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in number for most of the products. 2. The purchases are in large quantities. 3. Close relationships and service are required. 4. Demand is derived from the production and sales of buyers. 5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products. 6. The organizational buyers are trained professionals in purchasing. 7. Several persons in organization influence purchase. 8. Lot of buying occurs in direct dealing with manufacturers. Organizational buying situations Straight rebuy In this buying situation, only purchasing department is involved. That get an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list. The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service. Modified rebuy In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is

looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities.

New task buy In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives is involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently. Systems buy A system buying is a process in which the organization gives a single order to a single organization for supplying a full system. The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system. Buying decision making process Buyers decision process consists of five stages: Need recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior. Marketers need to focus on entire buying process rather than on just the purchase decision. Need Recognition: The buying process starts with need recognition buyers recognize a problem or need. Information search: An interested customer may or may not search for more information. If the customers drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not the consumer may store the need in memory or undertake an information search related to need. The consumer can obtain information from any of several sources. These include personal sources (family, friends), Commercial sources (advertisings, sales man, dealers, and displays), public sources (mass media, organizations), and experimental sources (handling, examining, and using the product). Evaluation of alternatives: The consumer arrives at attitudes toward different brands through some evaluation procedure. How consumers go about evaluating purchase alternatives depends up on individual consumer and the specific buying situation. Consumers make buying decisions on their own, sometimes they turn to friends for buying advice. Purchase decision: The consumers purchase decision will be to buy the most preferred brand, but 2 factors can come between purchase b/w purchase intention and purchase decision. Attitude of others: (others=product)

Unexpected situational matters: Factors such as expected income, expected price and expected product benefits. However unexpected events may change purchase intention. Post purchase behavior After purchasing product a consumer may be satisfied or dissatisfied and will engage in post purchase behavior of interest to the marketer. If the product falls short of expectations the consumer is disappointed, if it exceeds expectations the consumer is delighted. Buyers decision process: A new product is good, service or idea that is perceived by some potential customers as new. It have been around for a while, but our interest is in how consumers learn about products for the first time and make decisions about to whether adopt them. Adoption process: A mental process through which an individual passes from first hearing about an innovation to final adoption. Contrasting Transactional and Relationship Selling models Transactional Selling: This strategy is all about short-term solutions. The sales rep is primarily concerned with the promotion and selling of the product with little or no emphasis on customer needs. This strategy, also known as traditional selling, is all about the single sale. Relationship Selling: This strategy is all about building long-term relationships. The sales rep gets to know his/her customer, their needs and their wants. Then and only then does the sales person even think about trying to make a sale.

Sales jobs, Qualification and skill required for success Project Manager Skills: List of Skills and Abilities Leadership: An experienced team leader Influencing, leading, and delegating abilities Ability to initiate/manage cross-functional teams and multi-disciplinary projects. Critical thinking, decision making and problem solving skills. Planning and organizing Organizational abilities Result oriented: Ability to achieve the target within given time Excellence Communication skills. Negotiating skills Conflict resolution. Adaptability Efficient under pressure, always meet deadlines

Sales Manager Skills: List of Skills and Strengths Sound expertise in sales Excellent written and verbal communication skills Good communicator Strong Presentation skills

Persuasiveness Know-how to demonstrate, promote and sell Goal-oriented Strong networking skills Negotiating skills Good Judgment Decision making

Office Manager Skills: List of Skills and Attributes Superb organization skills Good communicator Multitasking Can handle many assignments Ability to prioritize independently Decision Maker Project management abilities Accuracy and punctuality Willing to stretch extra hours to complete assigned work.

Marketing Manager Skills: List of Skills and Competencies Excellent communication skills both written and oral. Leadership abilities Strategic thinking: Experienced in developing marketing strategies Decisive: Capable of delivering quick solutions to the marketing troubles. Strong sales support and project management, leadership and training skills. Excellent analytical skills: Expert in forwarding thinking & market research Sound expertise in development processes and product marketing. Excellence presentation skills Effective listener

Product Manager Skills: List of Skills and Qualifications Superb written and oral communication skills Technical knowledge and Background Business aptitude skills Creative, insightful and innovative Coordination Team working skills Ability to influence people and clients Analytical thinking Quantitative skills Effective Presentation skills

Business Development Manager Skills and talents

Strong networking skills Presentation skills A work hard, play hard approach Analytical abilities Team player Energetic In-depth knowledge and understanding of ABC technology in relation to market needs. Outstanding knowledge in the technical/selling [the field] Excellent research abilities Great at interpersonal communication effective coordinator, excellent verbal and written communication skills Upbeat personality

Account Manager Skills and Qualities Strong prospecting-account management and closing skills Win-win attitude and accountability Sales characteristics such as competitiveness, accountability. Quickly develop relationships with clients Easy going and personable with clients Professionalism Diplomacy Tactfulness to generate positive company image

Module III Motivation and the reasons for motivating sales people. Maslows Hierarchy of Needs related to the sales force motivators and companys actions to fill needs. Methods of giving status to sales people to motivate them. Sales force compensation. Components of compensation and their purpose. Comparison of various compensation plans. Motivation and the reasons for motivating sales people Motivation makes an important contribution to an effective sales call Sales people get rejected, frustrated Internal support may sometimes disappoint salespeople Some salespeople spend much time alone or on the road Morale

Salespeople are motivated by

Personal Individual Elements

needs interests abilities

attitudes

Job Elements Organizational Elements

Authority to make decisions Level of responsibility Opportunities for advancement Supervisory practices Peer relations

Compensation Looking at the reconstructed figure, one can see fairly quickly why financial compensation alone is not sufficient to explain the motivations at work in a sales workforce. Financial compensation - though not, strictly speaking, a physiological need - is analogous to the lowest tier of needs in Maslow's hierarchy. It is basic and important, but it touches upon only one dimension of motivation, and a comparatively low-level one at that. Trust Trust is a difficult thing to establish within a sales organization when it comes to the complex and ever-changing calculation of commissions. The story of Canadian telecommunications company Telus Corp. is instructive in this context. Telus was suffering from the effects of inconsistent and manually intensive incentive management processes, dependent on multiple data sources that have little or nothing in the way of audit trails and traceability. As a consequence, the company's salespeople were very skeptical about how their compensation was determined: Without reliable, detailed reporting on commission payments, the compensation system was a "black box" as far as the sales force was concerned. Esteem and a Sense of Belonging Moving further up the modified Maslow hierarchy, we come to two principles that are closely linked in terms of motivating a sales force: the need to belong and feel a part of a group, and the need to be held in esteem and receive recognition. One important aspect of belonging and esteem is the respect accorded to individuals by senior management. But recognition from a peer group is also critical to motivating the sales force. Fulfillment of Potential At the highest level of Maslow's motivational hierarchy is what he called "self-actualization," which we have expressed more simply as the fulfillment of potential. People have an instinctual need to make the most of their unique abilities, and they advance toward that goal by having the conditions in place which often means acquiring new knowledge and skillsthat enable them to take on ever-greater challenges. Going Back to Go Forward In the face of complex performance environments and looming worker scarcity, sales executives must return to the basics of human motivation to understand why financial incentives alone cannot hope to move the behaviors of the

sales organization in a direction that can support business growth. When compensation is approximately equal among the sales forces of competing companies, those with a better chance of achieving high performance will be the ones that recognize the importance of such things as peer recognition and a trusting relationship between salespeople and management. Maslows Hierarchy Universal Needs How can one best understand the factors that influence the motivation of a sales force? One way is to return to the work of Abraham Maslow, a pioneering American psychologist who introduced, in the 1940s, a hierarchical understanding of basic or innate human needs. Generally depicted as a pyramid, the original version of Maslow's hierarchy set forth five levels of needs. The bottom four levels proceed through basic physiological needs, a need for safety, for belonging and for esteem. Finally, at the top of the hierarchy sits "self-actualization," something Maslow called a "growth need" - striving to live up to one's potential. Central to the application of Maslow's hierarchy are two principles - first, that people are motivated to satisfy the lowest level of unmet need, and second, that a satisfied need cannot serve as a source of motivation. For example, a starving person can be motivated by the prospect of attaining food; a well-fed one cannot. Maslow's hierarchy is based on the principle that human beings share a set of universal needs regardless of their culture and experiences. However, to apply that hierarchy to a business setting, Maslow's general principles must be expressed in terms more relevant to a particular workforce. The figure below provides that reinterpretation for a sales force, and shows four levels of motivational need.

Sales force compensation Effective compensation plan motivates performing employees at an optimum cost to the company. This compensation plan needs. 1. 2. 3. To effectively separate performing employees from non performing employees and accordingly compensate To effectively align with long term & short term company objectives To understand uncontrollable & non controllable factors at the employee level

A sound sales compensation package enables the organization to focus sales activities towards desired results, and rewards these outcomes with compensation tied directly to the level of achievement. The key to a successful sales compensation program can be achieved in three steps

Clearly defining sales goals that are realistic but challenging Tracking and measuring performance against goals Rewarding achievement with competitive and motivational compensation

Sales people are a company's ambassadors to the world. They actively promote the company and its products and services. They are the front line between the company and its customers, and are typically the driving force of revenues - top-line company growth. These employees have a direct impact on how the market place perceives their employer and its products. The way sales people conduct themselves is often a reflection of the company's sales compensation program; and how well the company does is often a reflection of the effectiveness of its commission program. A well designed sales compensation program focuses salespeople on activities that support the company's business objectives, and, in turn, rewards those salespeople for their contributions. Base salary, commissions, and sales prizes make up the bulk of a typical salesperson's compensation package, but the specifics vary by industry. Stock options grants to salespeople are becoming more widespread too. In a snapshot Sales compensation packages typically comprise one or more of the following components: Base Salary Periodic incentives tied to short-term goals Annual Incentives tied to longer-term sales activities Commission-based incentives Perquisites to facilitate sales efforts Stock option

Base Salaries Paying a base salary that assures salespeople a steady income is a good idea. A guaranteed salary provides salespeople the comfort of knowing that despite good and bad economies, streaks and slumps, they can maintain their current lifestyle. A salesperson's commission is typically based on either a percentage of sold revenues or profit margins. Commissions usually account for 30 to 50 percent of a salesperson's cash compensation package, which means that commissions routinely run between 43 and 100 percent of base pay. The percentage that commissions contribute to a salesperson's compensation depends on factors such as required technical knowledge, sales cycle time, product profitability, and whether the sale is dependent on the skill of the salesperson. Commissions will account for a larger portion of pay when the sales cycle is short, the sales highly profitable, and sales dependent on the skills of the sales person. Commissions play a smaller role when the sale requires greater technical knowledge and when the sales cycle is long. Components of compensation and their purpose The basic components of employee compensation and benefits Employee compensation and benefits are basically divided into four categories: Guaranteed pay - monetary (cash) reward paid by an employer to an employee based on employee/employer relations. The most common form of guaranteed pay is the basic salary. Variable pay - monetary (cash) reward paid by an employer to an employee that is contingent on discretion, performance or results achieved. The most common forms are bonuses and sales incentives.

Benefits - programs an employer uses to supplement employees compensation, such as paid time-off, medical insurance, company car, and more. Equity - based compensation a plan using the employers share as compensation. The most common examples are stock options. Comparison of various compensation plans

Direct financial payments (Wages, salaries, incentives, commissions and bonuses) and indirect financial payments (Employed paid insurance and vacations) All organizations have a compensation plan, written or unwritten, formal or informal. For some organizations, the purpose of that plan may be merely to meet compliance requirements. For other organizations, the goal of the compensation plan may be to attract qualified employees, to retain those employees, and to motivate employees to direct their efforts towards achieving the goals of the organization. Regardless of the goal, size and complexity of a compensation plan, there are generally many easily-identified elements to any compensation plan. This commentary reviews these elements, poses questions management can use to determine the stance it would like to take regarding compensation, and offers some advice and recommendations on implementing these ideas. The topics that will be covered are development of a compensation philosophy, objectives of a base pay program, developing rates of pay for jobs, pay rates and increases, performance appraisal, maintaining and auditing a compensation plan.

Module IV Sales territory; Reasons for establishing or revising Sales Territories, Setting up and revising Sales Territories: Market build-up and Work load method; optimizing sales territory. Prospecting: Developing a prospect base, Strategic prospecting, Sources of prospects, common causes of customer attrition, Preparing a prospect list and organizing information. Planning the initial sales call and approach. Sales Presentation techniques: Types of presentation techniques, Presentation sequence, Adoptive Selling Model. Demonstration plans, actions, custom fitting demonstrations, use of sales tools. Sales territory Sales territories are the customer groups or geographic districts for which individual salespeople or sales teams hold responsibility. Territories can be defined on the basis of geography, sales potential, history, or a combination of factors. Companies strive to balance their territories because this can reduce costs and increase sales. The purpose of a sales force coverage (or sales territory) metric is to create balanced sales territories. There are a number of ways to analyze territories. "Most commonly, territories are compared on the basis of their potential or size. This is an important exercise. If territories differ sharply or slip out of balance, sales personnel may be given too much or too little work. This can lead to under- or over-servicing of customers." "When sales personnel are stretched too thin, the result can be an under-servicing of customers. This can cost a firm business because over-taxed salespeople engage in sub-optimal levels of activity in a number of areas. They seek out too few leads, identify too few prospects, and spend too little time with current customers. Those customers, in turn, may take their business to alternate providers.

Reasons for establishing or revising Sales Territories

Market build-up and Work load method

Work load method According to this method the basic assumption is that all sales personnel should shoulder equal workloads. Management estimates the total workload involved in covering entire companies market and divides by the

workload that an individual sales person should be able to handle, thus determining total number of sales people required. The companies applying this approach generally assume that the interactions of three major factors customer size, sales volume potential and travel load then determine the workload involved in covering the entire market. Optimizing sales territory Sales territory optimization keeps your organizations sales territories as geographically compact as possible while balancing on the variables you have chosen. A compact territory will be travel efficient, increasing the amount of sales time, and reducing travel time and expense. By optimizing, you will balance workload, sales, percent of sales, number of customers, etc. - whatever your balancing variable is - to create the optimal size and shape territory to meet the needs of your customers. Generally, your organization will benefit from an optimization if you have: A Large Sales Organization: A company with a large number of territories or a complex sales organization should optimize because the cost of imbalance - even a small imbalance - is large. Studies have shown that firms may be missing as much as 2-7% of top-line revenue by not aligning salespeople with sales opportunity. Significant Changes to Your Sales Organization: Strategic and large-scale changes resulting from an acquisition, reorganization, downsizing or geographic growth all take a significant amount of effort to align or realign. In these cases, optimizing territories is a necessity. A Need to Distribute Accounts among Sales Team: The optimizer is well suited to quickly test alternate sales coverage and deployment scenarios in cases where accounts can be distributed evenly among your sales team and few specific accounts must remain with any one sales person. If you use ProAlign or the ProAlign optimizer infrequently, or if your organization lacks the internal resources to conduct a sales territory optimization, you may want to consider working with us on a consultative or project basis. For a more in depth discussion about territory optimization and alignment, see our sales territory design section. Prospecting: Developing a prospect base, Strategic prospecting, Sources of prospects Prospecting is a systematic process of identifying potential customers. The main purpose of a salesperson is not to make sales, but to create customers. Identifying potential customers is an important aspect of the customer strategy. In the terminology of personal selling, this process is called prospecting, as a potential customer - someone who meets the qualification criteria established by you or your company - is referred to as a prospect. The goal of prospecting is to build a prospect base made up of current customers and potential customers. Many successful companies find that current customers account for a large percentage of their sales. Every effort is made to keep these clients satisfied because they provide the repeat business that is necessary to maintain profitability. THE IMPORTANCE OF PROSPECTING Every salesperson must cope with customer attrition - that is, the inevitable loss of customers over a period of time, which can be attributed to a variety of causes. Unless new prospects are found to replace lost customers, a salesperson will eventually face a reduction in income and possible loss of employment. To better understand the significance of prospecting, examine a few common causes of customer attrition. 1. The customer may move to a new location outside the salespersons territory: The Canadian population is very mobile. This cause of attrition is especially common in the retail and service areas.

2. A firm may go out of business or merge with another company : In some areas of business the failure rate is quite high. In recent years we have witnessed a record number of mergers, which have caused massive changes in purchasing plans. 3. A loyal buyer or purchasing agent may leave the position because of promotion, retirement, resignation, or serious illness. The replacement may prefer to buy from someone else. 4. Sales are lost to the competition: In some cases, the competition offers more value. The added value may take the form of better quality, a better price, a stronger relationship, better service, or some combination of these factors. Strategic prospecting Richardsons Strategic Prospecting Program helps salespeople develop the three most critical components to successful prospecting: (1) The skill to have a need-based dialogue with an executive that immediately begins to differentiate you and your organization and persuasively position your value. (2) The strategic insight to develop an effective Prospecting Plan. (3) The confidence and discipline to execute the Plan. Participants learn a Prospecting Model that serves as a roadmap for an executive conversation and work through the psychology that drives each part of the Model so they can more realistically think like a prospect. Highly customized cases and exercises simulate the exact prospecting challenges salespeople face in their individual organizations to increase the potential for securing a meeting with an executive on the first contact. Business Benefits Increase the number of contacts made and meetings scheduled Build the quality and integrity of qualified leads at the top of the pipeline Generate more leads by better leveraging referral sources and Centers of Influence

Objectives Provide a consistent strategy, Model, and skills for making more compelling prospecting calls Master the key mechanics of delivering a need-based message at the very start of the executive conversation through an efficiently researched Hinge and persuasive Need/Benefit Statement Develop an actionable, measurable Prospecting Plan that lives on after the training and delivers quantifiable results Provide strategies to overcome the biggest obstacles to making contact with executives: objections, voice mail, and gatekeepers Common causes of customer attrition Customer attrition, also known as customer churn, customer turnover, or customer defection, is a business term used to describe loss of clients or customers. Banks, telephone service companies, Internet service providers, pay TV companies, insurance firms, and alarm monitoring services, often use customer attrition analysis and customer attrition rates as one of their key business metrics (along with cash flow, EBITDA, etc.) because the "...cost of retaining an existing customer is far less than acquiring a new one." Companies from these sectors often have customer service branches which attempt to win

back defecting clients, because recovered long-term customers can be worth much more to a company than newly recruited clients. There are many factors that can affect customer attrition. One of the most common is dissatisfaction with the business. For example, customers may stop purchasing from a business because they feel unappreciated by the business owner or because of poor customer service. Sometimes they leave a business because the product or service no longer meets their needs. For example, if a business only sells small-sized clothing and a customer eventually comes to need larger sizes, the customer may move on to a business that is capable of serving his needs. Sometimes customer attrition occurs because of issues related to customer service. For example, if a business has rude representatives, customers may stop patronizing it simply because they do not want to be treated poorly. In some cases, however, even pleasant customer service representatives can be the cause of high customer attrition rates. For instance, customers may leave a company because the representatives seem confused, ill informed, or disinterested. Additionally, customers might leave a business because its representatives fail to follow through with actions required for completing sales or providing acceptable service. A company may also lose customers because of competition. For example, a customer may receive high-quality products and services from a company but decide to leave because of an attractive offer made by another company. This can happen when a lower price is involved or when the new company makes purchasing more convenient for the buyer. For instance, if company A and B both sell the same product but company B offers financing, customers may defect from company A to company B because of its convenient payment options. Often, companies spend a great deal of time focusing on attracting new customers and clients. While this is an important goal, business experts agree it is a mistake for a company to focus too much on attracting customers and too little on retaining them. Effective customer retention strategies are key to the success of any business. Prepare your marketing collateral If you want attract new business, what are you going to use as "bait". I like to fish, so bear with me on the analogy! What is it about you and your company that is attractive? Why should they consider you at all? To begin with, prepare a list of assets that you can give to your prospects over a period of time. These can include: White Paper eBook Video Toolkit Multi-Part Email Series ROI Analysis Calculator Webinars Seminars Demonstration Free Analysis or Review

If you are a reseller of another product, speak to your dealer or area manager and ask them for anything they have that you can use. The point here is to create a list of marketing assets that your customers can really use and benefit from. Shoot a Business Video: It might seem like a tall order, but this is part of the overall strategy and a necessity if you don't want to waste your time cold calling and walking the streets!

It might not seem ideal, but using a small HD camera can have just as much impact for a small business as all the bells and whistles has for a large company. They want to see you and find out what your business is about, so in many cases having a full production team can be a bit overkill (and really expensive!). There are a number of smaller companies setting up that offer a walk-in video service at a very reasonable cost. Follow this link for more information on business video production (opens a new window). The video content should consist of an brief introduction followed by an explanation of the free giveaway, i.e. white paper, ebook, download etc. Create a Personalised URL Campaign: A Personalised URL or pURL campaign is a strategy whereby you use the full name of your prospect in all your communications, from the direct mail that is sent to the actual URL on your web pages. A PURL server is used to store all the names on your prospect list. When your customer enters his name john.smith@yourwebsite.com, his name appears in the title text and wherever it has been set up to appear in web page, rather like a mail merge but online. Follow this link for more information on personalised url marketing (opens a new window). Prepare a Direct Mail Campaign: Ask your current printer to prepare an invitation that will be sent to your database of cleaned names. This can be similar to a wedding invitation. Invite your prospects to attend your online event. They will be greeted by your video. As a "thank-you" for attending, they will be able to download your fee offer or you could include them in a free draw (the choice is yours, and will depend on finances). By downloading and requesting your marketing offer, you will be able to begin marketing to your prospects. This is the basis of all marketing - to ask for permission! By making an offer to give something away for free engages your prospect and begins a process of "drip-feeding" information that you feel will be helpful to your prospects. Planning the initial sales call and approach. There are at least six general steps that ought to be considered in preparing for a sales call. Prepare the prospect for the initial sales call: "Seeding" prospect-focused activities carried out several weeks or months before a sales call. Sell the Sales Call Appointment by pre notification: cold call e-mail fax mail telephone

Gather and analyze all relevant information about the prospect: Gathering Information About Consumer Prospects Consumer credit bureaus Market research Library sources Gathering Information About Organizational Prospects

In-house purchasing agents Electronic directories and databases Library sources

Identify the prospect's problems and needs Organizational Problems and Needs SPIN approach Situation Problem Implication Needs Payoff

Choose the Best Sales Presentation Strategy Rehearse Your Approach Or

1. Research
Anything you can do to learn about the person or people that you are meeting, the company, their products, their competition, and their customers can make a huge difference. It will help you understand how your product can tie into their overall goals: You can ask better questions, show the prospect you care enough to do the research, and gain the upfront confidence you get from doing your homework.

2. Confidence
Speaking of confidence: This is one of the most important elements of a successful meeting. People can and will read your expressions, body language and your voice inflection. They can determine if the words coming out of your mouth match your belief. I've seen many people with a great memory for scripts who lack the deep enthusiasm, passion, and knowledge that's needed when the customer asks them why they feel the offering would add value. Confidence in what you're selling puts the customer at ease and lets them know you believe there is value in your offering.

3. Time
A simple question here is all you need. "I know we set aside 30 minutes for today's meeting," you should say. "I just want to make sure that still works for you?" Common courtesy goes a long way: The last thing you want is someone looking at their watch because of a deadline that came up at the last minute. Knowing the customer's time frame also helps you manage the flow of the meeting.

4. Connections
Breaking the ice the right way can set the tone for the rest of your meeting. If you found in your research that the person you're meeting was featured in a recent article or has a hobby or interest that you can relate to, ask

them about it. Or just look around for information that could start a conversation--think about family pictures, sports memorabilia, awards. Just recently I broke the ice in a meeting with a reference to the customer's espresso maker and special Italian coffee beans. He loves his espresso--and he loves talking about it. People buy from people they like, trust, and respect. Initial rapport is a big part of starting the relationship off on the right track.

5. Goals
Once you get started, you need to explain why you are there and what you want to accomplish. Some people call this an "initial benefit statement" or "general benefit statement." It goes something like this: Thanks again for sharing your time with us. XYZ company has been helping companies [mention briefly what your company does and the benefits your customers receive]. Our goal today is to learn more about your overall needs, goals, and challenges and see if there is an opportunity for us to benefit by working together. We did our homework on your company but would like to hear more about [their business, their environment, etc.].

6. Questions & Answers

I've never--ever--seen a sales rep listen himself out of a sale. And no customer has ever told me that he doesn't like a rep because she listens too much. Your first meeting has a greater chance of success if you have listened at least two-thirds of the time. You can still get the information you're looking for by directing questions carefully. But having the prospect expand and elaborate on his answers gives you a deeper understanding of his situation. Note: This is even more important in longer and more complex sales cycles.

7. Qualifying
Your questioning process should be part of your qualifying. You need to understand how the customers buy-their time frame, budget, decision makers--and, most of all, whether you have added value to provide. If you don't find out this information, your deal may stall. Fashion Week: How Rebecca Minkoff Traversed the Recession Here's a question that should be easy to ask: "Is there anyone else, besides yourself, that you recommend speaking with about this decision?" Notice I said "besides yourself"--you don't want to offend or alienate the person. One trick that could help here: Always call the prospective customer's highest level. You may very likely be directed down the ladder to a more qualified person--but that's better than going from the bottom up.

8. Presenting a Solution
While you were listening to the customer, you should have been thinking about how to adjust your presentation-because you'll have much greater impact if you include all the information you've learned about the customer's situation.

When talking about your product, refer back to their earlier answers: "You mentioned that ease of use for your employees is critical; we've made it easy for ... etc."

9. Closing
If your sales cycle is short and can be closed on the first call, then once you've presented your solution and your value, you can move to a close. What I've found works is simply asking the prospect: "What's our next step?" They can give you the criteria you need to close the sale--or bring up any questions or objections they might have. It's better to know their concerns right from the start than trying to call back after the initial call.

10. Follow Up
One final thought: Be sure to follow up with your customer. It's that follow-through that can make all the difference. That's how a customer can really see your service in action. Sales Presentation techniques Make the presentation relevant Create a connection between your product/service and the prospect. Get to the point Be animated: he 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 effectively and vary your modulation. A common mistake made when people talk about a product they are very familiar with is to speak in a monotone - causing the other person to quickly lose interest in your presentation. Use show man ship: In The Sales Advantage, an example is given of a vending sales person laying a heavy sheet of paper on the floor, saying, 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? Use a physical demonstration Lastly, believe in your product/service Presentation sequence Outline Your Objectives What do you want the end result of your presentation to be? Do you want to convince people to buy something? Do you want to instruct them? The objective of your presentation will determine most of your substance; the simple act of writing down your objectives will make it that much easier to organize what youre going to say and when youre going to say it. Gauge Your Audiences Expertise The next step is to determine how much your audience already understands about the subject youre going to present. If youre asked to give a lecture about gravity to elementary school students then youre not going to treat

all of them like tenured physics professors. Try to gauge the level of expertise and design your presentation to build upon what they already know. If youre not sure how much experience the audience has had with a given subject, try to meet them somewhere in the middle. Make an Outline The next step is to make an outline of all of the concepts that youre going to cover in your present. I like to use a mind map to organize my thoughts into a rough outline, since I think that theyre a better tool for fleshing out ideas than traditional bulleted lists are. Regardless of what tool you use, build an outline of the topics you want to cover during the course of your presentation. Sequence Your Presentation Once you have an outline of all of the topics that you want to cover in your presentation then you need to determine the sequence of your presentation. A good way to do that is to use a simple flowchart which lays out the order of the ideas that youre going to present. Some people, usually hardcore PowerPoint users, prefer to use real storyboards where they produce mock-ups of each stage of the presentation. Determine What Visuals You Will Need The final step to preparing a presentation is to figure out what sort of visual aids youre going to need. You probably wont need a complicated visual for every single point of your presentation, but when it comes down to explaining something complicated, like how a business process works, then youre going to want to support yourself with a good visual. Figure out which concepts are going to require a visual typically its the most complicated or important concepts which really need it. Go ahead and make a list of what sort of visuals youre going to need. Adaptive selling A selling strategy in which the way a product or service is presented varies according to the type of consumer viewing it. Adaptive selling takes into account the situation in which the product or service is presented, the demographics of the consumer and feedback that has been received about the product or service. Demonstration plans These are important for Improving Communication and Retention Proving buyer benefits Giving a feeling of ownership

Planning effective demonstrations: Custom fit the demonstration to the client Choose the right setting Check your sales tools Have a backup plan Cover one idea at a time Appeal to all the senses Tell them, show them, and involve them Be creative Rehearse the demonstration

Demonstration sales tools The product Appearance and operation Prototypes or scale models Photographs or Illustrations Portfolios of sales supporting materials Journal reprints offered as proof or testimony Tests and Surveys Graphs & Charts Laptops/Software (e.g. PowerPoint) Spreadsheets Audiovisual Internet