Chapter One
Introduction to selling and sales
Management
Objectives
After studying this chapter , you should be able
to:
• Describe the major changes taking place in
selling and the forces causing these changes
• Define Sales management
• Describe the sales management process
• Discuss the competencies required to be a
successful manager
Personal Selling
Personal selling is critical to the sale of many
goods and services, especially major
commercial and industrial products and
consumer durables and can be defined as:
( Direct communication between the paid
representatives and prospects that lead to
transactions, customer satisfaction , account
development, and profitable relationships)
Figure 1-1:
Positions of Personal Selling and
Sales Management in the Marketing Mix
Marketing
mix
Products Prices Promotion Distribution
Public Personal Sales
Advertising Internet
relations selling promotion
Sales
management
Planning Motivating
Budgeting Compensating
Recruiting and selecting Designing territories
Training Evaluating performance
Personal selling
*Marketing programs are designed around four
elements of the marketing mix: products to be
sold , pricing , promotion and Distribution
channels.
* Advertising and sales promotion are non-personal
communications whereas salespeople talk
directly to customers
* Advertising and sales promotion “ pull “ the
merchandise through the channel , personal
selling provides the “ push “ needed to get order
signed.
Personal selling
It’s often the job of the salesperson to:
1. Cover the special needs of customers
when they have questions or concerns
2. Providing an appropriate explanations
3. Furthermore , it can be directed to
qualified prospects
Personal selling
The person responsible for management of
the field sales operation is called the sales
manager.
Sales management focuses on the
administration of the personal selling function
in the marketing mix
Sales management could be defined as ‘The
planning , organizing , leading and controlling
of personal contact programs , designed to
achieve the sales and profit objectives of the
firm ‘
Personal selling
Regardless of whether the sales manager
directs salespeople or other sales
managers, all managers have two type of
responsibilities:
1. Achieving or exceeding the goals
established for performance in current
period
2. Developing the people reporting to them
A changing marketplace
There are three reasons for the
development of the marketplace which
are :
Competition
Customers
Selling Process
Competition
Which includes:
Globalization
Shorter product cycles
Blurred Boundaries
Globalization
It’s usual to compete with companies
from other countries , to use suppliers
located in other parts of the world or to
sell to customers that are selling in
other countries , any of these
situations may result in intensified
competition and require the sales
force adjust from a local to a global
focus.
Shorter product cycles
The rate of technology transfer is
increasing and the increasing number of
competitors lead to shorter product
cycles and the imitation becomes Rapid
Sales and customer relationship skills
are most important when the product is
new and when it’s late in its product life
cycle
Blurred Boundaries
Contributing importantly to increased
competition is the phenomenon of boundary
Blurring.
Indirect competitors are entering each other’s
business.
For example: Banks , insurance companies ,
mutual fund and credit card companies all
compete for the same consumer savings and
investment dollars.
Customers
Which includes:
Fewer suppliers
Rising expectations
Increasing Power
Fewer suppliers
Many suppliers are very costly , so customers
try to deal with fewer suppliers who offer for
them reasonable price and good quality , too
At first Glance , customers purchasing from
fewer suppliers would appear to benefit
suppliers , but the question here is what if you
aren’t chosen as one of the ‘In suppliers’?
Rising expectations
Despite a focus on quality and service ,
customer satisfaction remains low.
Customer satisfaction is difficult to
manage because as customers receive
good treatment , they become
accustomed to it and demand even
better treatment
Rising expectations
In business to business sales , rising
customer demands are occurring in a
variety of ways including:
Access to greater level of information,
both from electronic and human sources
, on demand
Ever-increasing speed of response to
customer problems and issues
Rising expectations
A demonstrated Understanding of the
customer’s business and issues before
being permitted to ask questions
Personalization of offerings, services
and merchandising
Increasing Power
Many retailers have grown bigger and
powerful than the manufacturers that supply
them and they are know controlling the
supplier-customer relationship
Consumer good companies are finding that
marketing and sales must make joint
decisions about the product , price ,
promotion and all kinds of support.
( Integrated approach)
Selling Process
Which includes :
Relationship selling
Sales teams
Inside selling
Productivity metrics
Figure 1-2:
Contrasting Transactional and
Relationship Selling Models
TRANSACTIONAL RELATIONSHIP
Emphasis on Emphasis on general
Sales skills Management skills
Respond to Proactive innovation/opportunity
Customer needs Identification and offers
Provide good products, Value-based offers/
Price, and services Organizational enablers
Narrow the Broaden to
customer focus Customers’ customer
Differentiate through Differentiate through
Products People
Sales/revenue Profit management focus/
Focus Share of customer
Traditional customer Trusted business advisor
relationships and partner
Relationship selling
The traditional selling model emphasizes
selling products in the short term. The value
added by the sales force is in communicating
the benefits of the product or service to the
customer, helping customers make a
purchase decision , and making the whole
process convenient and easy for the buyers.
In many situations especially when the
product or service isn’t of strategic
significance to the buyer , this type of relation
is appropriate
Relationship selling
Relationship selling involves creating
customer value by addressing important
customer problems and opportunities
through a supplier-customer relationship
that’s more intimate than that of
traditional transactional selling
Sales Teams
No one posses the necessary knowledge and
resources to address the bigger opportunities
to create value that go beyond selling the
product.
This model allows for a boarder transfer of
Capabilities and communications. Also both
buyers and sellers should change , so the
degree and the extent of interaction expand
dramatically.
Note : Not all buyers and sellers are prepared
to make these adjustment.
Figure 1-3:
Traditional Buyer-Seller Interface
versus A Team Interface
TRADITIONAL BUYER-SELLER
BUYER-SELLER INTERFACE TEAM
INTERFACE
Sales Customer
Sales Purchasing
Team Team
Supplier Customer Supplier Customer
Inside selling
As a consequences of changes noted so far ,
relationship selling and sales teams, salespeople are
spending more of their time marshaling resources
and coordinating efforts within their own
organizations to address customer problems.
Companies are beginning to realize that in many
cases sales success depends as much on successful
inside selling as it does on external customer-focused
selling.
Sales people will need to work with a number of
functions across an organization if they are to
develop successful long term relationships with
clients.
Productivity Metrics
Historically , sales performance metrics
were simple_ Increase revenue over the
previous year. Sales managers
rewarded and compensated
salespeople by evaluating sales volume
over a certain period of time. Although
sales volume is still important,
companies are discovering that not all
sales are profitable.
Productivity Metrics
_ Profitability depends on the following:
The amount of time necessary to complete
the sale
The gross margin associated with the sale
The level of price discounting
The amount of promotional support
The amount of post-sale support
The impact of future product sales
Productivity Metrics
Salespeople are resource allocators why??
1. They decide on which customers and
prospects they will spend time selling and
how much time they will allocate to each
customer
2. The sales force also has an important role
in the allocation of marketing resources to
individual customers
The Sales Management
Process
The sequence of activities that guides
manager in the creation and administration
of sales programs for a firm is known as the
sales management process.
This process has 5 steps which are:
1. Focusing on the big picture
2. Roles of the sales force
3. Structuring the sales force
4. Building sales competencies
5. Leading the sales force
1. Focus on the big picture
An effective sales force is a powerful
asset for any organization
A company management process is
affected by the firm’s overall business
strategy and its strategy for accessing
its target markets.
2. Roles of the sales force
A firm’s business strategy and market access
strategy must be implemented by the sales
force.
In other words strategic plans are
implemented through the activities and
behaviors of the sales force.
Key sales force behaviors include calling on
certain types of customers and prospects,
managing customer relationships, and
creating value for individual customers.
3. Structuring the sales
force
To meet customer needs efficiently and
effectively and to sell the firm’s products and
services , a sales force must be well
organized.
Sales force structure decisions influence how
customers see the firm because sales force
structure will affect the selling skills and
knowledge level required of salespeople. In
turn, sales management activities such as
compensation, training and Evaluation are
effected
4. Building sales
competencies
Sales managers are responsible for hiring
salespeople with the appropriate skills and
backgrounds to implement the sales strategy.
Good sources must be found for new hires
and those who are weak in these areas must
be screened out.
In addition to hiring qualified people ,
salespeople’s competencies are training
before they are sent into the field
5. Leading the Sales Force
Effective sales managers know how to
supervise and lead their salespeople. Sales
managers provide leadership by inspiring
people to grow and develop professionally.
The most powerful motivator for salespeople
is often a well-designed compensation
package. Money is an important
consideration for attracting and motivating
people to work hard.
The sales management
competencies
The sales management competencies
are defined as sets of knowledge, skills,
behaviors, and attitudes a person needs
to be effective in a wide range of
industries and various types of
organizations
We have six competencies which are:
The sales management
competencies
1. Strategic Action Competency
2. Coaching Competency
3. Team Building Competency
4. Self Management Competency
5. Global Perspective Competency
6. Technology Competency
Figure 1-4:
A Model of Sales
Management Competencies
Strategic
Action
Competency
Technology Coaching
Competency Sales Competency
Management
Global Effectiveness Team
Perspective Building
Competency Self- Competency
Management
Competency
1. Strategic Action
Competency
Understanding the overall strategy and
goals of the company and Ensuring that
your actions and those of the people
you manage are consistent with these
goals Involves the strategic action
Competency.
1. Strategic Action
Competency Dimensions
Understanding the Industry:
Understands the history and general trends in
the industry and their implications for the
future
Stays informed of and anticipates the actions
of competitors and strategic partners
Identifies attractive market segments and
their buying needs
1. Strategic Action
Competency Dimensions
Understanding the Organization:
Understands the vision, overall strategy, and
goals of the organization
Appreciates the distinctive competencies of
the organization with respect to market
opportunities and limitations
Understands how to marshal organizational
resources to meet the needs of the customers
1. Strategic Action
Competency Dimensions
Taking Strategic Actions:
Assigns priorities and making decisions that are consistent with
the firm’s mission and strategic goals
Implements specific account selection, retention, and dominance
strategies
Develops an appropriate portfolio of account relationships
Considers the long-term implications of actions in order to sustain
and further develop the organization
Establishes tactical and operational goals that facilitate the firm’s
strategy implementation
2. Coaching competency
Coaching is defined as a sequence of
conversations and activities that provide
ongoing feedback and encouragement
to a salesperson or sales team member
with the goal of improving that person’s
performance. Performance
improvement is achieved by:
Coaching Competency
Dimensions
Providing Verbal Feedback:
Provides specific and continuous performance
and selling skills feedback
Builds a feeling of appreciation and recognition
by taking the time to acknowledge a job sell
done, and effort beyond the call of duty or an
important victory
Reinforces successes and nice-tries to support
desirable behaviors
Coaching Competency
Dimensions
Role Modeling:
Leads by example.
Provides role models, either themselves
or others, and sharing best practices
Models professional attitudes and
behaviors
Coaching Competency
Dimensions
Trust Building:
Maintains good rapport with the sales team and
fosters open communications, collaboration,
creativity, initiative, and appropriate risk taking
Adds value through communicating relevant
selling experiences
Helps salespeople to “look good” through two-
way communications
3. Team building
Competency
Accomplishing tasks through small
groups of people who are responsible
and whose work is interdependent
requires a team building competency.
Sales Managers in Companies that
Utilize sales teams can become more
effective by :
Teambuilding Competency
Dimensions
Designing Teams:
Implements an organizational architecture that will support
teams
Creates a reward system that is fair within the context of a
team effort
Coordinates team goals with the overall goals of the
organization
Coordinates team activities with the requirements of
functional areas within the organization
Teambuilding Competency
Dimensions
Creating a Supportive Environment:
Hires people that will be successful in a team
environment
Trains programs that encourage teamwork
Integrates the individual members of the
sales team together to form a functioning
supportive team
Teambuilding Competency
Dimensions
Managing Team Dynamics:
Understands the strengths and weakness of
team members and using their strengths to
accomplish tasks as a team
Facilitates cooperative behavior and keeps
the team moving towards its goals
4. Self-Management
Competency
Taking responsibility for your actions at
work and elsewhere Involves self
management competency. When
problems arise , people often blame
their difficulties on the situation or on
others.
Self management competency includes:
Self-Management
Competency
Dimensions
Fostering Integrity and Ethical Conduct:
Has clear personal standards that serve as a
foundation for a sense of integrity and ethical
conduct by the sales team
Projects self-assurance and does not just tell
people what they want to hear
Willing to admit mistakes and accepts
responsibility for own actions
Self-Management
Competency
Dimensions
Managing and Balancing Personal Drive:
Seeks responsibility, works hard and is willing to
take risks
Shows perseverance in the face of obstacles and
bounces back from failure
Ambitious and motivated to achieve objectives,
but does not put personal ambition ahead of the
organization’s goals
Understands that goals are achieved through the
success and development of the salespeople
Self-Management
Competency
Dimensions
Developing Self-Awareness and Management Skills:
Has clear personal and career goals and knows
own values, feelings and areas of strengths and
weaknesses
Analyzes and learns from work and life
experiences
Willing to continually unlearn and relearn as
changing situations call for new skills and
perspectives
Self-Management
Competency
A sales manager’s job is more than just
balancing the many issues that arise
each day. The most important part of
his or her job is achieving the balance
between personal goals and those of
the organization and of the people they
manage.
5. Global perspective
Competency
Drawing on human, financial ,
information and material resources from
multiple countries and serving
customers who span multiple cultures
requires a global perspective
competency .
Global perspective competency
includes:
Global Perspective
Competency
Dimensions
Cultural Knowledge and Sensitivity:
Stays informed of political, social, and economic
trends and events around the world
Recognizes the impact of global events on the
market and the organization
Sensitivity to cultural cues and ability to adapt
quickly in novel situations
Travels regularly and has a basic business
vocabulary in languages relevant to the position
Global Perspective
Competency
Dimensions
Adapting Global Selling Program:
Adopts an appropriate sales force architecture
for global accounts
Appropriately adjusts sales force measurement,
competency creation and motivation systems to
the local culture
Appropriately adjusts own behavior when
interacting and managing people from various
national, ethnic and cultural backgrounds
6. Technology Competency
Understanding the potential for
technology to improve sales force
efficiency and effectiveness and
knowing how to implement the
integration of technology into the sales
force is referred to as possessing
technology competency.
Technology competency includes:
Technology Competency
Dimensions
Understanding of New Technology:
Awareness of the potential for technology to
increase sales force efficiency and
effectiveness
Experience in using new technology
Attitude toward adopting new technology
Technology Competency
Dimensions
Implementing Sales Force Automation:
( Many experts consider the integration of
communications technology , more commonly known
as sales force automation) SFA
Knows what is to be accomplished and the benefits that are
possible
Adapts personal management style and procedures
Fosters sales force acceptance and use of selling technology
Technology Competency
Dimensions
Implementing customer relationship
management:
Develop clear project objectives that are
business focused and realistic
Understands the processes that will be
affected by CRM and the data needed for
these processes to be improved
Understands and sells the benefits of the
system and how it can be used.
Technology Competency
When implemented correctly, SFA &
CRM can streamline a company’s entire
selling process.
According to experts, company efforts
to automate are jeopardized by one of
the three reasons, each of which
causes sales force resistance:
Technology Competency
1. Sales force doesn’t understand how SFA
and CRM will help them in their efforts to
sell
2. Sales management may expect SFA &
CRM to allow better control of remote and
mobile salespeople
3. Resistance is likely when top management
is not committed to automation by adaption
technology themselves.
