Managing the Sales Force

• Recruitment and selection

• Training• Sales Budgeting/

Sales Quota

• Supervising and Managing

• Motivating• Evaluating • Compensating and

rewarding

Steps in Sales Force Management

Development of the Marketing Concept

Production Concept

Selling Concept

Product Concept

Marketing /Customer Orientation

Key Players in Business

Customers

CompetitionCompany

4Ps/4 Cs/4As in Marketing Mix

• Robert Lauterborn suggested that the seller’s four P’s correspond to the customer’s four Cs.

• 4 Ps 4 Cs 4 As• Product Customer Solution Acceptability• Price Customer Cost Affordability• Place Convenience Availability• Promotion Communication Awareness

Market Vs Product Strategy Mix-Anshoff’s Model

DiversificationMarket

Development/Segmentation

NewMarkets

Product Development

Market Penetration

PresentMarkets

MarketDimension

NewProducts

PresentProducts

Product Dimension

Source: Ansoff

Types of sales

• Types of selling

1. Product selling (eg: Copier machines, printers, Mobile Phones, credit card)

2. Services selling

3. Consulting selling ( KPMG, Mckinsey)

4. Solution selling/ systems sales ( eg-IT Solutions companies like Infosys, Wipro)

5. Project sales ( L&T, Siemens)

6. Sell through Vs sell to

7. B2 B Sales Vs B 2 C Vs B 2 G

Cold Lead Vs

Warm lead vs

Hot lead

Funnel?

6 Areas of focus

1. Business Knowledge

2. Industry Knowledge

3. Company Knowledge

4. Product Knowledge

5. Sales Knowledge

6. Soft skills

ASKS of a Sales Manager

• A : Attitude

• S : Skills ( soft skills and hard skills)-Negotiation Skills, Relationship Skills, Communication/Presentation Skills

• K : Knowledge

• S: Speed ( quick in response…etc)

No skill?(Level Zero)….then Acquire?…… then master?

Negotiation

• Negotiation is the process of trying to find an agreement between two or more parties with differing views on, and expectations of, a certain issue.

• Some people dread negotiating because they associate it with conflict, bad feelings, and having to make sacrifices.

• However, good negotiations find a balance between each party’s objectives to create a win-win outcome.

Competitive negotiations

• Competitive negotiations often have an unfriendly atmosphere and each party is clearly out to get the very best deal for themselves—the other party’s objectives tend not to come into the equation.

Co-operative negotiations

• In co-operative negotiation, conflict is minimised and the whole idea is to reach a solution where everyone benefits.

• This approach tends to produce the best results, mainly because there is much better communication between the

parties.

1.BATNA

• BATNA, a concept developed by Roger Fisher and William Ury.

• is the acronym for Best Alternative To a Negotiated Agreement.

• It is one’s preferred course of action in the absence of a deal.

• Knowing your BATNA means knowing what you will do or what will happen if you fail to reach agreement in the negotiation at hand.

2.Reservation Price• The reservation price (also referred to as the walk-

away) is the threshold point at which one will accept a deal.

• There’s a subtle difference between your BATNA and your reservation price.

3.ZOPA

• The ZOPA, or zone of possible agreement, is a third key concept in negotiation.

• ZOPA is the area or range in which a deal that satisfies both parties can take place.

• Each party’s reservation price determines one end of the ZOPA.

4.Value Creation

• Another fundamental concept of negotiation is value creation . trades.

• This concept tells us that negotiating parties can improve their positions by trading the values at their disposal.

4.Value Creation Through Trades• For a supplier, that greater value might take the form of an

extended delivery period.

• For a customer, greater value at low cost might take the form ofthree years of free repair services / warranty.

• For an employee, the opportunity to work from a home office two days each week may produce great satisfaction while costing the employer nothing.

• Just be sure that if you give something of value, then you ask for something in trade.

Sources of Value Creation• Evidence -References, research, reports etc. People tend to accept the

written word.

• Competitive edge -Is there anything you can offer that your competitors cannot?

• Competence -Clearly being skilful and having done your ‘homework’ gives you confidence and power

• Commitment -Being passionate about your case is powerful and impresses the other party.

• Risk-taking -Being prepared to take a reasonable risk gives an impression of power and confidence

• Money -The fact that your organisation has financial strength is a source of power.

• Personal warmth -People do deals with people they like: good relationships bring power.

4 Key Concepts of Negotiation- Summary• BATNA is the best alternative to a negotiated agreement. It is

one’s preferred course of action in the absence of a deal.

• Knowing your BATNA means knowing what you will do or what will happen if you fail to reach agreement. Don’t enter a negotiation without knowing your BATNA.

• Reservation price is the price at which the rational negotiator will walk away. Don’t enter a negotiation without a clear reservation price.

• ZOPA is the zone of possible agreement. It is the area in which a deal will satisfy all parties. This area exists when the parties have different reservation prices, as when a home buyer is willing to pay up to Rs.75,00,000 and the home seller is willingto take an offer that is at least Rs. 50,00,000.

• Value creation can help you gain premium.

Key Concepts in Negotiation

1. The alternative to negotiation –BATNA

2. The minimum threshold for a negotiated deal- Reservation Price

3. How flexible a party is willing to be, and what trade-offs it is willing to make –ZOPA

4. Value creation

Other 2 concepts:

1. MESOMultiple Equivalent Simultaneous Offers

2. Anchoring

Sales Strategy• What is the total market?/ What is the total addressable market?

• TRAI/SIAM/RBI/CMIE/RAI• Gartner, McKinsey. Forrester, Neilson, IDC, Accenture, Annual Reports

• Market/ Industry growth ( per capita income/ disposable income/SEC-A/B/C?)-short term vslong term

• How much market share you want to gain ?

• Which segment /market of customers you want to address?

• Who will be your target customer group?

• What will be your positioning Vs Competition?

• Feet on street/ channel strategy

• After Service network

• Services revenue projections

• What will be your route to market in each of the customer group / territory?

• Revenue budget/ Selling cost budget- Sales Compensation

• Productivity per sales person

Customers: Their Relationship with Sales Customers: Their Relationship with Sales StrategiesStrategies

Key IssuesKey Issuesinin

BusinessBusiness--levellevelStrategyStrategy

Who will be Who will be served?served?

What needs will What needs will be satisfied?be satisfied?

How will those How will those needs be satisfied?needs be satisfied?

Sales Organization

Sales Team structure

1. Territory based sales team

2. Product based sales team

3. Market oriented sales team: along the industry verticals or customer lines –Key Account Managers

4. Complex sales teams

5. Direct Sales team vs Channel sales teamDigital Commerce/ Telesales & Web sales

Designing the sales force

• Sales force is company’s personal link to the customers.

• Carefully need to consider the following issues in sales force design –

1. development of sales force objectives,

2. structure,

3. size and

4. compensation.

Basic Sales knowledge• Lead

• Suspect/prospect

• Cold/Warm/Hot prospect

• Geographical team: Territory/Area/Branch offices/ regional/National/APAC/Global

• Vertical Sales team- BFSI ,Manufacturing, Government ,IT/ITES, SMB, Telecom, Retail, Hospitality, Health care M&E verticals

• Channel partners –Distributor/Dealer/Retailer/Stockist

• Key Account Management

• Sales Vs Presales Team ( Domain Consultants/ Technical Consultants)

Types of sales

• Types of selling

1. Product selling (eg: Copier machines, printers, Mobile Phones, credit card)

2. Services selling

3. Consulting selling ( KPMG, Mckinsey)

4. Solution selling/ systems sales ( eg-IT Solutions companies like Infosys, Wipro)

5. Project sales ( L&T, Siemens)

6. Sell through Vs sell to

7. B2 B Sales Vs B 2 C Vs B 2 G

Various principles of selling

• SPANCO

• SPIN

• AIDA

• FABV

• Solution sales/consultative selling

• Key Account Management/Target Account Selling

Sales concept :SPANCO

• S : Suspecting

• P :Prospecting

• A : Analyse

• N :Negotiate

• C : Close

• O : Order

Suspect/Prospect

• Most companies leave this to sales person. • But now companies are taking this separately ( Business

Development vs sales /Telemarketing ) and leaving salespersons to spend their expensive time selling

• Companies generate leads/prospects through1. Examining data sources like newspapers in search of

names2. Putting up booths at trade shows to encourage drop bys3. current customers to drop names of prospective buyers4. Cultivating referral sources5. Contacting organizations and associations to which

prospects belong6. Dropping in unannounced on various offices (Cold

calling)

Sales Concept :SPIN

• Neil Rackham ‘s SPIN selling.

• He recommends that salesperson should probe 4 types of questions with a prospect

• S- Situation: ask about the buyers present situation

• P- Problem questions: deal with problems /difficulties and dissatisfaction that the buyer is facing

• I- Implication questions; the consequences or effects of a buyers problems difficulties

• N- Need Payoff Questions: value or usefulness of a proposed solution.

Sales Concept :AIDA

• The salesperson follows a logical steps in selling using AIDA methodology

• A : getting attention,

• I :holding interest, ( want?)

• D : desire ( need?) and

• A : obtaining action.(buy/order?)

Sales Concept :FABV

• selling using FABV approach .

• F : Features: basic characteristics( What is it?)

• A: Advantage: why features are advantageous ( how is better?)

• B: Benefits: economic technical etc advantage ( how will it help you do better?)

• V: Value: ( TCO/ Uniqueness/USP- Combined derived gain from buy)

Designing the sales force

• Sales force is company’s personal link to the customers.

• Carefully need to consider the following issues in sales force design –

1. development of sales force objectives,

2. structure,

3. size and

4. compensation.

Sales Team structure

1. Territory based sales team

2. Product based sales team

3. Market oriented sales team: along the industry verticals or customer lines –Key Account Managers

4. Complex sales teams

5. Direct Sales team vs Channel sales teamDigital Commerce/ Telesales & Web sales

1.Territory based sales team• Sales team is formed based on exclusive geographical

territories.

• Advantages of this –– Increased incentive to cultivate local business and

personal ties– Lesser travel expenses

• Territory size – designed to provide proportionate sales potential or work load.

• Can vary widely in size as the customer density varies with territory.

Sales Team structure

2. Product based team : Why?• Companies tend to increase product width and breadth

• Sales teams are formed along product lines.

• Sales reps should know their product/product specialists.

• Products may be technically complex, highly unrelated .

1. New products vs old products2. High value vs low value products3. High profit with low volume vs Low profit with High volume

Sales Team structure

3. Market oriented team: along the industry verticals

• Advantage is that each sales force becomes knowledgeable about specific Industry needs.

• Need Domain specialists

• Disadvantage is need for extensive travel as customers are spread throughout the country.

Sales Team structure

4.Complex Structure/Matrix Structure:

• Combination of wide variety of products, many types of customers, broad geographical area.

• Combined specialized structure

Why Matrix structure in Large Organizations?

• Multi products/multi solution company needs to monitor performance of

1. Individual Product Performance2. Industry vertical performance3. Individual geo regional performance

• Because :1. New products Vs existing products2. High Profitable products Vs low Profitability products3. High Volume products vs low volume products4. Not all regions will do well all the time5. Not all products will do all the time6. Not all products will be profitable all the time 7. Competition varies from time to time. region to region, product to

product

RFI/EOI / RFP / RFQ& Tender

RFI/EOI

• Pre-RFP stage

• To limit number of participating vendors

• To shortlist-quality players

RFP

• A Request for Proposal (referred to as RFP) is an invitation for suppliers, through a Bidding process, to submit a proposal on a specific product or service.

• RFP process is one of the best methods for leveraging a company's negotiating ability and purchasing power with suppliers.

• The Request process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront.

• Although the Request purchase process can be time-consuming, its many advantages outweigh any disadvantages and delays caused.

RFP• The added benefit of responses from a broad spectrum of functional

experts/vendors ensures that the solution chosen will suit the companies requirements.

• Key Objectives of the process:

• 1)To protect the companies brand

• 2)Providing correct information to enable sound business decisions

• 3)Making the correct strategic procurement decision

• 4)Leveraging the companies purchasing power to obtain the most favourabledeal

Major deciding factors in Vendor Selection

• Technical Solution and technical compliance

• Eligibility criteria-experience/references/company background/financial strength

• Commercial terms/commercial compliance

• Project Management capabilities/support capabilities

Major Steps in Vendor Selection

1. RFI-EOI

2. RFP-Tender

3. Queries on the RFP-Prebid meetings

4. Issue of Amendments to RFP

5. Proposal submission

6. Techno-commercial evaluation/ Evaluation Criteria ( T1/L1)

7. LOI/Award of contract/PO

8. Delivery, Installation ,Acceptance Testing ( Taking over certificate)

9. Warranty

10. AMC

11. Upgrade/Update/expand/Refresh

12. Payment & billing milestones against all the above steps

Government Procurement- Tender Process

• 2 types of tenders

• "Open tenders", in other words open calls for tenders, also called advertised tenders, are open to all vendors or contractors.

• "Restricted tenders" /Limited tenders, in other words restricted calls for tenders, also called invited tenders, pre-qualified, short-listed, or selective tenders, are only open to selected pre-qualified vendors or contractors. .

• Locating tenders1. A number of companies provide subscription alert services which

send notification of relevant tender documents to the subscriber. 2. Every Public Sector organisation is legally obliged to release tenders

for works and services above set thresholds. In the majority of cases these are listed on their websites

Tender-Various steps( 2 part bid)• EOI notice• EOI response• EOI selection• Issue of Tenders-Tender fee• Tender queries• Pre-Bid meeting• Tender response submission ( Technical and commercial

proposal )along with-EMD/Bid Security • Technical Bid opening with authorization letter to attend• Technical bid evaluation• Technical qualification/short listing• Price bid opening( some times there might be Reverse Auction)• LOI/LOA/Award of contract-Security deposit• Final Project delivery/Acceptance testing-Performance Security• Payment release and invoicing depending on various

milestones as agreed/defined.

Tender Opening

• Closed room tender opening by the committee

• Tender opening in the presence of the bidders

• Bidders needs to come with authorization

• Number of bidder’s reps will be specified

T & Cs

• EMD / Bid Security• BG• Validity• Risk Purchase• Short Closure• PBG• LOL• Arbitration• Infringement• Indemnification• Termination • Force Majeure • Gross Negligence and Willful Misconduct

Key Account Managementin Sales

What is Account Management ( KAM / Strategic Accounts Mgmt)

• What is a Key Account?

• Is a popular terminology used by Sales Organizations for a large Customer who might have a need to interact repeatedly for multiple products/services requirements.

• These are vital customers whose business means success or failure to your business.

• These are the customers which require management attention.

Account Managers in Sales Organizations

• Account Manager for set of few accounts

• Also called Strategic Account Managers or Key Account Managers ( KAM)

• Account managers handling one account- global/ Indian account

• Will have dedicated team members from other functions such as- presales/domain/technical, customer service, project manager, HR, Finance etc

Account Managers in Sales Organizations• Number of high potential large clients are limited and known

• They have Huge Capex and Opex spending

• They are large with presence in multi-country/multi locations with multiple divisions/business units/large no. of branches/large number of employees.

• Decision makers/Influencers could be spread in multi-locations/globally

• Multiple domains of product or services requirements

• Account management team would comprise of multiple sellers at multiple locations and they need to align as One team to the customer

• Need for Integrated Account planning

Account Management

• Account Manager’s mandate in Sales

• Mind Share

• Wallet Share

• Account Plan

Account Management-“It is all about Wallet Share”

• Account Manager’s mandate in Sales

• Increase Wallet Share ( Core Accounts/Base Accounts)

• Acquire Competitor's accounts ( Competitive Accounts)

• Invest in Green Field (New Accounts )( Invest Accounts)

Various steps in Solution Selling

• Open

• Understand

• Consult/explore/question

• Propose

• Objection handling

• Close

Value

• What is Value

• Price vs Value

• Value is the perceived benefit of the solution/product/servicesas seen by the client

• Best strategy to beat the pricing issues

Consultative selling/Solution sales

• How is it different?• Top-Down Vs Bottoms-up approach• Long salescycle …Can be 3 months to one year

engagement time• Multiple people will get involved at both sell and buy

side• Might involve multi locations• Multi phase ( technical/commercial)• Might sometimes encompass all the major

divisions/functions of the organization.• Eg: ERP / SCM / CRM / Core Banking-Any time any

where banking / e-commerce solutions etc

How do you create Value ?

• Relationship ( Knowledge of the account, Past experience, Knowledge of the account manager/sales manager)

• Project Quality (Project mgmt excellence ,one vendor team, clear/rapid issue resolution)

• Delivery ( flexibility to handle last minute/emergency changes/on time delivery)

• Offering capability (innovative products/best in class products and services/trusted brand)

• Pricing Models / Commercial Construct- outcome based/ opex vscapex

• ROI /TCO / Business Case

How to increase your win rate in solution selling?

1. Compelling reason to act now?( sales time & resources very expensive)

2. Be early in the stage…..

3. Be proactive rather than reactive

4. Value based selling rather than price based selling

5. Create solution with uniqueness-Value proposition

6. Relationship strategy

Summary : Consultative sellingYou need to focus/strategise your entire sales effort into:

– Aligning yourself with the customer buying cycles/buying stages

– Be Early and be Proactive

– Identify Compelling Reasons to Act Now

– Establish your Unique Value-USP

– Identify the Buying Decision makers/Difference makers and negotiate access to the Key Decision Leader

– Identify key information required to build the value proposition

Some keys to Succeed in Sales

• Do your homework

• Know your client better

• Ask more questions

• Answer questions

• Communicate clearly

• Be willing to say “No”

• Be willing to say “Yes”

• Be a problem solver

• Keep your word

• Show initiative

• Have a clear contract

• Stay focused

• Be a learner

• Have a positive attitude

• Work at it

Technology as Business Enabler in Sales Management

Definition

• CRM is the alignment of business processes and technology around the customer lifecycle

Customer Relationship Management

CustomerLifecycle

Attract

SellService

TechnologyEnvironment

Measurement

Transactions

Analytics

BusinessProcesses

Service Marketing

Sales

CRM Building Blocks

ProspectGet a Lead

SellOver the WebOn the PhoneFace to Face

Support CustomersIn same way you sell

Marketing

Service

Sales

Sales Modules of CRM

-Lead Management Module of CRM