SALES

1

Sales Management

Trading Environment &

Channel Management

Previous Session…..

� Overcapacity – Hypercompetion – Business Failure…..

� Selling Concept and Marketing Concept….

� Conceptualizing Business…..

� Distinction between Consumer Marketing and Trade Marketing.

� Distribution to the Outlet and Distribution in the outlet…..

� Core & Value Added Services….

Today’s Session

� Trading Environment

� Consumer Environment

� Emerging Channels

� Role of Intermediaries

� Strategic Channel Decisions

� Channel Conflicts & their Management

Understanding Environment

Organisational Environment:

All elements existing outside the organization’s boundaries that have the potential to affect the organization.

Internal Environment:

The environment within the organization’s boundaries.

Task Environment:

Includes those sectors that have a direct working relationship with the organization among them customers and competitors.

External Environment

� World as we know is undergoing tremendous and far-reaching change.

� Therefore we need to examine components of external and internal environments.

Changing Components: In addition to customers and competition, we have Technology & Economic conditions…….

Dimensions of External Environment

International Dimension:

Represents events originating in foreign countries as well as opportunities.

Technological Dimension:

Scientific and technological advancements in the industry and society at large.

Socio-cultural Dimension:

Demographic characteristics, Norms, Customs and values of the population within which the company operates.

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Overview of The Marketing

Environment

� Microenvironment

� The company

� The suppliers

� Marketing intermediaries

� The customers

� The competitors

� Publics

� Macroenvironment

� Demographic environment

� Economic environment

� Natural forces

� Technological forces

� Political forces

� Cultural forces

� The factors and forces that affect marketing management’s ability to develop and maintain successful transactions with target customers.

Key Message of Environment

� Constantly changing

� Need for Managers to adapt to the changing environment.

� In trade marketing we need to lean the changing trade environment and customer environment.

If the only constant is change

Where are we coming from ?

Premise 1:

Whatever got you where you are today is no longer sufficient to keep you there.

Premise 2:

In the complex sale a good tactical plan is only as good as the strategy that led upto it.

Premise 3:

You can succeed in sales today only if you know what you are doing and why.

Environment Uncertainty

If External environment creates change and uncertainty for the organisation, what are the strategies:

Two Basic Strategies:

� Adapt the organisation to the changes in the environment.

� Influence the environment to make it more compatible with organization’s needs.

In the context of Trade Marketing

Changes Affect Two Key Areas



Changes in the Trading Environment� Concentration in the trade with cross borders� As barriers are reduced, products will expand

into other markets� Internationalism will accelerate � National products spill into other country’s

markets� Companies will concentrate their purchasing

where it is most advantageous� International brands will grow in importance.� The trade will develop international strategies

for categories.� Manufacturers will become much closer to their

customers.

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Changes in Consumer Environment

� Reduced rate of growth in population

� An ageing population due to improvements in health services

� More households with fewer people per household

� Consumer are more critical

� Steady increase in disposable income

� Increased people mobility

General Industry Trends impact

trading and consumer environmentTrade Concentration

A reduction in the number of outlets and the emergence of large

strategic accounts.

Internationalism

Retailers are now opening operations in many different countries.

Major buying groups have emerged on an international basis with complex networks significantly impacting on manufacturer marketing plans.

Specialisation

Consumer loyalty has been established by new and varied retailing formats targeted at different consumer needs.

Emerging Outlets Types

� Hypermarkets and Superstores

� Convenience Outlets

� Discounters

� Supermarkets

� Petrol Stations

� Leisure Outlets

� Hotels, Restaurants, Cafes, Bars, Clubs, Discos

� Vending…………..

Impact of Technology

� Better informed trade

� Better management of the administrative details of the business.

� Total Inventory control

� Enhanced consumer activity allows trade to target customers specifically.

Marketing channels are behind every product

� Institutions specializing in manufacturing, wholesaling, retailing join forces to reach the end consumer.

� These institutions deliver everythingBooks to Mutual FundsMedical equipments to telephonyOffice Suppliers to ToiletriesMilk to NewspapersThe list can go on and on……..

Marketing channels change with changes in

environment

Personal Computers:� IBM sold its first PC in the early 1980s through its employee sales force –

direct to the end user. � Questions on merit the high cost of direct distribution� Channel quickly changed to VARs (Value-added retailers) � Dell (founded in 1984) changed the rules of the game – first through

telephone ordering and now over the Internet.� By 1999, Dell surpassed Compaq in the US with over 30 % MS.Books:� Publishers, Book Wholesalers, Book Retailers� Today it is necessary to operate on-line bookstores� Amazon.com / Books.com / BestBookBuys.com� These developments threaten traditional book shops but provide new

opportunities for shippers like UPS and Fedex

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Where do you look for influence

� It depends on how much impact the channel can have on your end consumer.

� You may decide on any of the Distributors / Wholesalers / Retailers / Value-added Retailers combination.

� But no two situations can be exactly alike.� The operative word therefore is “May”� In any sales opportunity, the task is to identify roles individuals

play.� There cannot be a universal pattern.� It is impractical to generalize about decision-making as you swim

the channel.

Basic Definition

“A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption.”

� It is not just one firm doing its best in the market – many entities are involved –each entity dependent on the other.

� It is a process and not an event.

Purpose of the process:

� Satisfy the end users in the market.� The goal is the use or consumption of the product or service being sold� It is critical that all channel members focus their attention on the end consumer –

“Happy Customers”

Definitions

“Channel of distribution is a path traced in the direct or indirect transfer of the title to a product as it moves from a producer to ultimate consumers or industrial users”

EW Cundiff & RS Still

“The course taken in the transfer of the title to a commodity constitutes its channel of distribution. It is the route taken by the title to a product in its passage from its owner, an agricultural producer, or a manufacturer, as the case may be, to the last owner, the ultimate consumer or the business user”.

Beckman and Others

“A channel of distribution or marketing channel is a structure of intra-company organisation, units and intra-company agents and dealers, wholesalers and retailers through which a commodity product or service is marketed”

American Marketing Association

Channel viewed as a key strategic asset

$ 70 billion merger in 1998 – Citicorp and Travelers Group – “Citigroup”

Travelers� Focused on insurance, mutual funds and investment banking.

�10300 Brokers

� 80000 financial services insurance agents.

�10000 travelers insurance agents.

Citicorp� World’s biggest bank

� World-wide distribution network of branch banks

Channel decisions are strategic

What does the example show:

� Marketing channel decisions play a role of strategic importance.

“Financial products “manufactured” in various parts of our company will be distributed through a broad range of methods, from the Internet and other technology–based methods to branch office locations in one hundred countries around the world to fully individualized, in-home service.”

� Marketing channels and structures have changed over time.

What do marketing channels do ?

Demand Side Factors:� Searching – End-users are uncertain about where to find the products

and sellers are uncertain about how to reach the target end users.

Intermediaries facilitate ……..

If intermediaries are not there how would sellers reach customers with an unknown brand name.

They are trusted by the end-consumers…..being the first point of contact.

Intermediaries facilitate on both ends of the channel.

Example: Laserjet printer manufacturers have to go to office supply retailers

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What do marketing channels do ?

Demand Side Factors:

� Sorting Out: breaking down heterogeneous supplies For example a fruit-seller sorting out oranges by size and grade.

� Accumulation: Similar stocks from a number of sources. Wholesalers accumulate for retailers and retailers accumulate for end-consumers.

� Allocation: Breaking the bulk. Lorry-loads to case lots etc.

� Assorting: Assortment of products for resale in association with each other.

What do marketing channels do on the

Supply Side

Supply Side Factors:

� Routinization of Transactions: Ordering, Valuating, Paying for goods and services.

� Electronic Data Interchange (EDI): Standardizing the management of business documents.

� Continuous Replenishment: Neither understocked / Nor overstocked. Shippers would typically increase frequency but decrease in size per shipment.

Marketing channels impact number of

contacts

Reduction in Number of contacts:

Imagine a small village of 20 families……Their number of transactions.They draw all their supplies from one Shop:

GroceryHardwareMilkVegetablesMedicineTelephony

Number of contacts involve cost. And in this example the next-door neighbour store is the most cost-effective.

Number of Contacts

Manufacturer

Ret.1

Manufacturer Manufacturer Manufacturer

Ret.4 Ret.5 Ret.6 Ret.7 Ret.8 Ret.9 Ret.10Ret.3Ret.2

Why marketing channels are there ?

Manufacturer

Ret.1

Manufacturer Manufacturer Manufacturer

Ret.4 Ret.5 Ret.6 Ret.7 Ret.8 Ret.9 Ret.10Ret.3Ret.2

W/S 1 W/S 2

Number of Contacts

Reduction in Number of contacts:

Contact costs may vary by the structure you choose with or without intermediaries.

28 Contact lines

Four manufacturers reaching ten retailers through two wholesalers

14 Contact lines

Four manufacturers reaching ten retailers through one wholesalers

40 Contact lines

Four Manufacturers reaching ten retailers directly.

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Value Network view

Kotler:Establish channels for different target markets and aim for efficiency, control and adaptability.

Companies are increasingly taking a value network view – Supply Chan Management.

But even Supply Chain is a “make-and-sell view”.Because it starts from raw materials and suppliers’ suppliers and so on…..

A better term for distribution would be demand chain and therefore a “sense-and-respond”.

Even this view is challenged with the impact of technology.

Objectives of Channels of Distribution

1. To ensure availability of products at the point of sale.

2. To build channel member’s loyalty

3. To stimulate channel member to put greater selling efforts

4. To develop managerial efficiency in channel organisation

5. To have an efficient and effective distribution system.

Role of Channels

Major Focus of channel of distribution is DELIVERY.

� Issues of Availability� How much available ?

Role of Intermediaries

� For efficiency of the process� Arrangement of routes of transactions� Searching the customer� Sorting the customer base

Who are marketing intermediaries

Middlemen: � Just about anybody acting as an intermediary between the producer and

customerAgents or Broker:� Intermediaries with legal authority to market goods and services� Agents generally work in continuity� Brokers may be engaged for a particular deal� Sometimes agents and brokers tend to work for buyer rather than seller –

should you allow it ? Real Estate brokers have to satisfy both.Wholesaler� Organisations that buy from producers and sell to retailers.� Bulk Buyers� Put in effort and investment and expect a return on their investment.

Marketing Intermediaries

Retailer:� Last link to the consumer� Sell directly to the final consumer� Either purchase from wholesaler or from the direct channel

Distributor:� General term used for various intermediaries� Perform several functions – inventory management, personal selling,

financing.� Sometimes wholesalers act as distributors.

Dealer:� Another general term that can apply to just about any intermediary.� Sometime the same type of intermediary acts as a distributor� Legal restrictions in the past – MRTP.

Wholesaler as a marketing intermediary

Establishments that sell to retailers or other merchants but do not sell insignificant amounts.

� Merchant Wholesalers Independently owned and separate from suppliers.Take ownership and associated risks.

� Agent WholesalersTied up with main wholesaler-distributor of the Company.Brokers / Commission Merchants / Selling Agents / Commercial auction companies.

� Manufacturers sales branches and offices – Stockists, Stock-Carrying Points.

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Different roles of a wholesaler

Full Function Service Wholesalers:� Distributor� Jobber� They perform all the functions in a given territory for the interest of

the principal.

Limited Function Wholesalers:� Cash and carry� Drop Shippers� Truck Wholesalers – Mobile for convenience of the retailer.

Role of a retailer

The final connection with the customer / consumer -End-user contact.

� Adds value through time, space which also forms part of the price that the end-user is paying for.

� Collect products and assort as per consumer preferences.� Provides information� Marks prices and pay for gods� Concludes transaction with the final consumer

Direct coverage relates to reaching the retailers and create a trade-partnership with them to promote your business.

Other marketing intermediaries

Value-added resellers (VARs)� Intermediaries who buy the basic product, add value and then sell

it� Some do their own labels.

Merchants:� Assume ownership and may speculate.

Facilitating Agents (C&F)� Transportation and storage� Covering the risk (insurance)� Financial services / Invoicing etc.

Types of Channels

1. Direct-marketing channel (or Zero Level)

2. Indirect Marketing Channel:One Level: Producer…..Retailer……Consumer

(White goods)Two Level: Producer….Distributor….Retailer….Consumer

Three Level: Producer…Distributor…Wholesaler…Retailer…Consumer.

Ownership change through the process

� Physical Possession / Ownership� Promotion� Negotiation� Financing� Risking� Ordering� Payment

Outsourcing: Services – After Sales Finance by Cars and Real Estate

Producer

W/S

Ret.

Consumer

Channel Selection Criteria

Since the controls change, it is a complicated process.

The following elements are examined:Market Factors:� Customer Preference (Where do they buy ?)� Organizational Customers (Institutional Buyers)� Geography (Where is he located ?)� Competitive Pressures (Replacing your product with theirs)

Product Factors:� Life Cycle� Complexity� Value� Size & Weight etc.

Personal Factors:� Financial stability – future requirements� Succession� Managerial capabilities.

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Manufacturing Strategies

Maufacturing strategies are to be integrated with distribution channels

1. FlexibleResponsiveness of production to consumer demandsBuild capabilities to reduce or increase productionCustomization

2. FocusedLowest possible per unit costFail-safe quality and leading edge technology

Each of the strategies may be differently suitable for varying products.

� Customer today is looking for ‘quality’ and ‘speed’� Critical for manufacturers to have their manufacturing policy marry with

the channel selection

Changing channel dynamics

Growth of Vertical Marketing Systems:

� A producer, distributor and retailer acting as a unified system.� Franchising� Purpose being to have greater controls� Disallow channel partners to use their own standards

Major forms of VMS:

� Corporate VMS – Successive stages of production and distribution under single ownership – Toyota wanting stakes in key suppliers

� Administered VMS – Control on successive stages of production and distribution but using power of one of the parties. Idea is to seek distributors who can seek strong support from their retailers.

Growth of Multichannel Marketing Systems

� A shift from single-market and single-channel� Proliferation of customer segments and channel possibilities� Multi-channel helps in

Increased market coverageLower costMore customized selling

� Companies also add channels where existing channels cannot reach – e.g. selling by phone (impact of technology)

� Companies may also add a channel whose features fit with the customer requirements e.g. retail malls and watch show-rooms, banking and insurance counters.

� Multichannel gives rise to “Conflict”.

Conflicts can occur anywhere

� A product development team having strong-willed people may make little progress.

� Salespeople promise delivery dates that production cannot match.

� Brand Managers trying to push their respective brands through relationships with trade marketing and shipping departments.

� People dislike each other.

� Career-centered people lobby politically against each other and try to hurt each other’s achievements.

What is a conflict ?

Conflict refers to antagonistic interaction in which one party attempts to thwart the intentions or goals of another.

Causes:� Scarce resources – Support need of channel partners.

� Jurisdictional Ambiguities – Territories and boundaries.

� Communication Breakdown – Poor communication leads to misunderstanding and mistrust.

� Personality Clashes – Do not see eye-to-eye.

� Power and Status Differences – Low prestige individuals.

Causes of Channel Conflict

Inherent vices of Buyer and Seller

� Goal Incompatibility: Manufacturer may want lower pricing and higher market-share. On the other hand the dealer may prefer high margins for short-run profitability

� Unclear roles and rights: IBM selling to institutional buyers, large customers, bulk off-take discounts.

� Differences in perception: Optimistic vs. Pessimistic view of the economy and social developments

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Causes of Channel Conflict at IBM

1. Conflict between the national account manager and field sales force. – National account customers located in salesperson’s territory.

2. Conflict between field sales force and telemarketers –Telemarketers engaged in expanding the market through smaller customers.

3. Conflict between field sales force and the dealers – Dealers adding value with additional customized requirements which salespersons could not do.

Types of Conflict & Competition

Vertical Channel Conflict:

� Conflict of General Motors with dealers on policies of service, pricing and advertising.

� Conflict of Coca Cola with its bottlers who may wish to bottle other products.

Horizontal Channel Conflict:

� Aggressive pricing of one dealer and its impact on adjoining territories –Wholesale markets in Sadar Bazaar, Khari Boali and Naya Baans thrive by exploiting company dealers.

� One Pizza-Hut franchisee complaining about the other on “ingredient quality and therefore overall image.

Types of Conflict & Competition

Multi Channel Conflict:

� When clothing manufacturers open their own stores.

� When Goodyear decided to sell its tyres through Wal-Mart

� Brick and mortar companies adding on-line e-commerce channel.

� If you do not do it, someone else will do it – online business may run to competitors.

� Look at the size of Amazon, E*Trade, Dell & Direct Line.

Challenge for Sales Managers

Intermediaries + Online.

Three Possible Strategies:

1. Offer different brands or products on the internet.

2. Offer the off-line partners higher commission to cushion impact on their sales.

3. Take orders on the website but have them delivered through retailers.

Styles to Handle Conflict

You can be either assertive or cooperative.

However effective team members vary their style of handling conflict to fit a specific situation.

1. The Competing Style: Assertiveness to get one’s own way; this can be used when quick and decisive action is vital.

2. The Avoiding Style: Neither assertive nor cooperative. This can be resorted to when the issue is trivial.

3. The Compromising Style: Moderate amount of both assertiveness and cooperativeness. When goals on both sides are equally important. Time pressures lead to compromises.

4. The Accommodating Style: When maintaining harmony is important.

5. The Collaborating Style: Bargaining and Negotiation to reach a win-win situation.

Managing Channel Conflict

� Certain channel conflict can be constructive but too much conflict can be dysfunctional.

Goals Incompatibility – Differences in goals….- Come to an agreement on the fundamental goal- Often it happens when there is an outside threat (develop a common goal, especially when a new channel emerges and eats into traditional channels

Situation:Levis selling through specialized stores decides to add their range through other departmental stores

� Information sharing at a very early stage…..� Prepare specialized stores well in advance….� Convince them that the initiative is to gain market share from competition� Convince them that it is in their overall interest.

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There can be a conflict between Maruti Sales Executive and Competent Motors Sales Executive.

� In terms of dispatch of requisite models� Accessories� Zero mileage

How do you resolve this ?

Exchange Programme is one of the ways…..

The Maruti executive may be deputed at Competent Motors for three months to appreciate the customer issues from the perspective of the Competent Motor executive.


There can be channel conflicts among competitors.

� On practices in the market.� The war-fare in the market place.� Bribing customers on displays can be endless.� You increase the incentive, the competitor increases and the

game goes on.

How do you resolve this ?

Cooptation: This can be achieved at business chamber level and industry association levels. CII, FICCI, ASCI etc.


Sometimes, the conflict can become chronic.

Where all your efforts with regard to cooptation and dialogue fail.

What is the next step:

1. Diplomacy: Where each side can send one representative to meet and discuss issues across the table.

There can be a series of meeting and common ground established.

2. Arbitration:Neutral Third partyConcept of OmbudsmanTwo nominated arbitrators and one neutral industry expert.

Motivational Tools

1. Reward:

If A possesses some resource which B wishes to obtain. Then B can conform to A’s wishes. Specific rewards to channel members could include wider margins, granting of exclusive territories and various promotional allowances.

2. Coercion:

Coercion amounts to negative sanctions or punishment including reductions in margins, withdrawal of reward and slowing down of shipments.

Motivational Tools

3. Expertise:

If A has expert knowledge, it tends to share some and keep vital information to be used as a level to achieve cooperation.

Ability to acquire information by a powerful partner can be usedand your pound of flesh extracted by sharing such information.

4. Identification:

Given equal returns, players decide to identify one party for dealership and leave the other by minimising effort and supplies.

Key Learnings







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Sales Management

Territory Management

In the previous session…..







In this session…..

� We shall move on to Sales Territories.� SWOT Analysis for Designing Territories.� Factors affecting Territory Design.� Criteria for Territory Planning.� Specific Techniques for Territory Planning.� Benefits of Territory Planning

Why establish Sales Territories ?

� Matching Sales effort with sales opportunities

� Lend direction to the planning and control of sales operation.

Meaning of Trade Marketing

� A more professional approach to Sales & Distribution.

Trade Marketing is…..

Adapting Products

Logistics

Brand Marketing

To the needs of Trade Channels and

Strategic Customers

Managing the Sales Effort

� Managing Sales effort involves analysis:

Analysis

PlanningDevelopSales Plans

ImplementingCarry

Out thePlans

ControllingMeasure ResultsCorrective Action

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SWOT Analysis for Designing Territory

� Utilizes internal and external information� Internal (Strengths and Weaknesses)

� Financial performance & resources, human resources, production facilities and capacity, market share, customer perceptions, product quality, product availability, and organizational communication

� External (Opportunities and Threats)

� Market (customers and competition), economic conditions, social trends, technology, political/legal

Making SWOT Productive for Territory Management

� Examine Issues from the Customers’Perspective

� Customer focus is critical, and really helps to identify key issues

� Avoid “talking to ourselves”

� What are our customer perceptions and what is important to them?

Matching Strengths with Opportunities

Basis of the Working Plan:

� Identify strengths compatible with opportunities

Part of the Working Plan:

� Convert Weaknesses to Strengths

� Convert Threats to Opportunities

The S.W.O.T. Matrix:Identifying Actions to Take

Strengths

ThreatsWeaknesses

Opportunities

Convert

Convert

Minimize/ Avoid Minimize/ Avoid

The S.W.O.T. Matrix:Identifying Actions to Take

Strengths

ThreatsWeaknesses

Opportunities

Convert

Convert

Minimize/ Avoid Minimize/ Avoid

Match

Designing a Territory- Competitor Questions

1. Who are our competitors?

2. What is their strategy?

3. Should we compete?

4. If so, in what markets?

5. How?

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Designing a territory - Customer Questions

1. Who are our actual and potential customers?2. Why do they buy our product?3. Why do non-customers not buy our products?4. Where do our customers buy our products?5. How do they buy it?6. When do they buy it?7. What do they do with our product?

Understanding Territory -What is a

Territory

� Represents a group of customers� Accountability units across hierarchy� Idea is to have a code / a name / a number to identify

the group of customers together� Essentially defining a territory based on

Geography Channel of distributionIndustry Sales potentialProduct Use Work Load of personnelBuying practices Arbitrarily / Rationally

� Central theme of defining territory remains better coverage and more productive coverage.

How do you determine a unit

Territorial Planning

� States, Areas,Towns, Villages, Tehsils etc.� Geographical Units are preferred because you can access

statistical data from credible agencies.� Easier to monitor and modify if requiredA More Holistic Approach

However a more holistic approach can be more productive – it requires an effort and in-depth planning

� Sales Potential � Buying practices � Sales Personnel skills � Frequency of Calls � Work-load and a combination of factors can be considered.

Developing Territories

Territories can be formed according to:

1. Geographic Location2. Industry3. Product Use4. Method of Buying5. Channels of Distribution6. Sales Potential7. Work-load Method8. Arbitrarily9. Rational Basis

Factors of sales volume of a terittory

1. Size2. Market Potential3. Number of customers’ accounts4. Firm’s experience5. Market share in the territory

Factors effecting size of the territory

1. Number of customers and prospects in an area2. Call frequency on existing customers3. Number of calls that the sales person makes in a day

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Basic control Unit for Territory

� Village / Tehsils / Cities / Trading areas etc.� Essentially, you are looking at productivity� Sales potential of each control unit� Focus to maximize return on effort and investments� Combining Territories / Double-Hatter arrangements

Objectives and Criteria for Territory Planning

� It affects sales force morale and performance� Need to work optimum number of territories� Equalization of territory potential and geographic

alignment / realignment� Route Planning of sales force – Straight-Line or Hub

and Spoke, Circle, Triangle and so on…..

Territory Management

� Trade Coverage – “Fish where the fish is”� Classification of Outlets – Types, “Strategic”,

Monitoring� Classification of Markets – Strategic, Important and

Development� Categorization of Markets – MS v SOV� Population Data base approach� Coverage Norms & Frequency Norms� Span of Control

Retail Census

� A specific tool to plan execution for both coverage and visibility

� Gives direction by establishing strategic customers and key accounts

� Enables merchandising to stimulate sell-out

� Focus on resource allocation.

Distribution Guidelines

� A structured framework for infrastructure and visibility planning process.

� Clearly define objective of distribution i.e. coverage numbers and in market visibility

Distribution Guidelines

Classification of Markets

� Strategic markets (SM) -Markets contributing 80% of our volume in a given Cluster/circle

� Important Markets(IM) - Markets contributing remaining 20% volume

� Development Markets(DM)- New Geographies

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Clarity of Task

Switches from Competition

New BusinessDevelopment Markets

Grow Business to shift it to “Strategic Market” status

20 % of BusinessImportant Markets

Be the Preferred Supplier

80 % of BusinessStrategic Markets

Territory Planning – Pop-strata

Regroup Markets - Basis Population

Category I Population above 10 Lacs

Category II Population 5 to 10 Lacs

Category III Population 1 to 5 Lacs

Category IV Population 0.50 to 1 Lac

Category V Population 0.10 to 0.50 Lac

Category VI Population less than 0.10 Lac

Two definitions of Markets

1. Classification : Strategic / Important / Development

2. Categorisation: Population Database

Based on these definitions, you can provide Coverage Norms and Frequency Norms

Direct Coverage Norms

40 %45 %60 %Village

50 %65 %80 %Town

Devlpment

Markets

Important Markets

Strategic Markets

Frequency of Visit - Norms

OnceOnce OncePop Less than 0.10L

ThriceTwiceThricePop 0.10 to 0.50 L

ThriceTwice/wkThrice/wkPop 0.50 to 1 L

AlternatDailyDailyPop 1 to 5 L

AlternatDailyDailyPop 5 – 10 L

AlternatDailyDailyPop Above 10 Lacs

Devlpm.

Markets

Import. Markets

Strategic

Markets

Resource Allocation – to meet norms

YYLess than 0.10L

YYY0.10 to 0.50 L

YYYY0.50 to 1 L

YYYYY1 to 5 L

YYYY5 – 10 L

YYYYPop Above 10 Lacs

Van3W2WSTKSCPDlr

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Resource Allocation

1296Salesmen/Supervisor

140100-12070Outlets/

Salesman

Devlpmnt. Markets

Imp. Markets

Strategic Markets

Benefits of Territory Coverage

1. Better Planning2. Proper coverage of potential markets3. Efficient call patterns4. Better customer service5. Choosing appropriate salesmen for specific accounts6. Some systems which are based on purely relationship

may follow planning selectively – LIC, Mutual Funds and stocks

Sales Management

Minimizing Sales Costs

In the last session…..

� Understanding of Sales Territories.� SWOT Analysis for Designing Territories.� Factors affecting Territory Design.� Criteria for Territory Planning.� Specific Techniques for Territory Planning.� Benefits of Territory Planning

In this session…..

� Managing sales is managing costs.

� Key responsibility of sales managers involve costs.

� How costs determine distribution models.

� Distinguish selling and distribution costs.

� Analysis of distribution costs.

� Productivity checks.

Key Decisions in Sales Management & Costs

� Competencies of Sales People

� Optimal size of sales force – workload / costs

� Territory Management

� Recruitment & Training

� Resource Allocation

� Performance Appraisal / Measurables

� Feedback – ‘Speed of response’

� Managing Channel relationships

� Internal Customers

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Responsibility of Sales Manager & Costs

� Profit Centre Heads

� Execution Process to achieve targets and profits

� Customer relationships for long-term growth

Cost – a strategic question in any

Distribution SystemKey Task:

How do you reach your end consumers ?

Strategic Questions:

1. Given the value proposition, who are the end consumers and therefore what are the distribution objectives ?

2. What channel structure will achieve these distribution objectives ?3. Optimal use of network – Lowest cost.

4. What processes and organisational structure will sustain performance.

Following the HLL Model

� Distribution-led demand creation.� Old Economy paradigm – ‘Reach & Availability’.� 1 Million retail points.� 7500 distributors.� Basket of products at every price-point.� Every income and geographical segment.

Other companies followed the leader.

But what it meant for other FMCGs (essentially MNCs) ?

A Hit on the bottomline !

Outcome of following HLL Model:

While HLL survived on size and variety of products / brands, others realized:

Traditional Distribution system operates on the lines of a command economy i.e.

1. Determine supply target – Number of retailers2. Push stocks whichever way to reach consumers.

This carried on for some time.

Revamp:� No more support from deep-pockets of MNCs for thin-margin operations.� Pressure to shore up bottomlines rather than working on topline alone.� Remove excess flab – birth of ‘Power Brands’

P&G’s Golden Eye

1. Company focuses on Class A & B towns.2. Gets out of smaller population clusters.3. Except Vicks Action 500 or certain detergent sachets, P&G would not

have much of distribution presence in rural areas.4. Reduces number of price points and pack sizes.5. Reduced manpower.6. Automation.7. Use of wholesale as a channel in territories that are not directly covered.8. P&G touts ECR (Efficient Consumer Response Model)9. ECR – Maximize consumer satisfaction by optimising the supply chain.

What is happening here ?

You fish where the fish is ?Maximization……Optimality

P&G’s Golden Eye

1. Company focuses on Class A & B towns.2. Gets out of smaller population clusters.3. Except Vicks Action 500 or certain detergent sachets, P&G would not have much

of distribution presence in rural areas.4. Reduces number of price points and pack sizes.5. Reduced manpower.6. Automation.7. Use of wholesale as a channel in territories that are not directly covered.8. P&G touts ECR (Efficient Consumer Response Model)9. ECR – Maximize consumer satisfaction by optimising the supply chain.

What is happening here ?

You fish where the fish is ?Maximization……Optimality

An outcome of Sales analysis

18

Sales Analysis

Why do sales analysis

� A detailed study of sales volumes performance to detect strengths and weaknesses.

� It has to be an in-depth study – summaries do not reveal.� Study of sales volume performance by towns and by villages� Sales volumes by dealers and stock-carrying points.� Sales performance by sales personnel� Sales performance by product linesObjective

� Strong and weak territories.� High volume and low volume products.� Type of customers providing satisfactory resultsImperative

� Allocate resources – sales effort.

Basic Sales Report Format

Total

Value (Rs.)

Brand D

Qty

Brand C

Qty

Brand B

Qty

Brand A

Qty

Name of Retailer / Customer

S.No

Quarterly Sales Analysis – Oct./Dec. Period

Region / Circle / Branch / All India

505050504050D

1101201101008090C

113120120100123120B

10390100120110100A

Avg

Sales /

MS

Dec.

Sales /

MS

Nov.

Sales /

MS

Oct.

Sales /

MS

Sales/MS

SPLY

O/D

Sales/MS

LY

Brand

Sales Analysis – Oct./Dec. Period

By Channels

410420410400430350Total

404040406050Counter

280290280270260200Ret.

90909090110100W/S

Avg.Dec.Nov.Oct.Sales

SPLY

O/D

Sales

LY

Brand

Sales Analysis by Regions

100+276275Total

93- 67580South

98- 2118120East

110+ 105550West

112+ 122825North

% of Target

Variance

+ / -

ActualTargetRegion

Sales Analysis by Sales Person

106+ 6238225Region

Average

110+ 104440Abhijit

112+ 129585Ankur

80- 202025Avinash

105+ 57975Ravi

% of Target

Variance

+ / -

ActualTargetASM

19

Analysis – Setting Distribution Objectives

Distribution Objectives are normally spelt out by the number of outlets to be covered.

Understandably distribution objectives are directly related to end consumer requirements.

1. How many and what kind of outlets do I need ?

2. Am I catering to a given target audience and their buyer behaviour

3. Do my distribution objectives match the overall marketing objectives.

Anderson Consulting Group

Strategy

Structure

Process

Distribution Objective

Channel NetworkDesign Design

Intermediate Warehouse Materials Management & Transport Management

Policies & Facilities & Channel ITProcedures Equipment Management

Achieving objectives at the lowest cost

•Controlling trade spends & distribution expenses.

•Right mix of direct coverage and reach.

•Monitoring of trade spends

•Lower inventories

•Lower trade spends.

•Setting objectives in line with demand potential.

•Demand Forecasting based on trend

•Consistently lower inventories with changing demand.

•Setting alternatives.•Inventory Management

•Supply Chain

Controlling Distribution Costs

Setting / Achieving Distribution Objectives

Distribution Processes

An optimal channel design

1. What activities and functions need to be performed –redistribution, stocking, collections etc..

2. Which channel intermediaries can perform these functions – C&F, Distributors, Wholesales or a combination.

3. What are the service level requirements that channel intermediaries require from an organisation – credits, inventory levels, infrastructure, lead times, receipt of goods etc.

4. What are the service levels that an organisation will require –number of outlets covered, frequency of coverage etc.

Developing physical network strategy

1. How many facilities – manufacturing units / depots / CFAs are needed

2. Which customer regions and which product lines should be served from each facility

3. How much inventory should be maintained in each facility

Contemporary terminology: “Supply Chain Management”

It involves ongoing review of Strategy, Structure, Processes in line with the distribution objectives.

Logistic Needs

Logistics is related to all the activities related to distribution of goods.

What will be required to move goods ?

� Land – for smooth conduct of operations.� Water, Energy, Storage spaces, stocking systems.� Transport equipments – trucks, trolleys etc.� Communications – Telephones, Telexes, Computers etc.� Manpower – Managerial, Supervisory, Workmen.� Pollution Control, Temperature controls, Humidity controls.

A Company needs to review logistics and spend considerable time in planning and coordinating of this activity.

20

Definitions of Physical Distribution

“The term Physical Distribution Management is employed in manufacturing and commerce to describe the broad range of activities concerned with the efficient movement of finished products from the end of production line to the consumer and in some cases, includes the movement of raw materials from the sources of supply to the beginning of the production line.”

Activities:1. Freight2. Warehousing3. Material Handling4. Protective Packing5. Inventory Control6. Selection of site for various activities7. Marketing8. Forecasting

The task of distribution

The task of distribution is concerned with the exchange process and gears itself to matching the demand and supply within a given periphery.

Challenge:

“Demand-side customization and Supply-side Commoditization.”

Achieve this at an optimal cost.

Selling & Distribution Costs

Selling & Distribution costs broadly represent marketing cost.

Selling Costs seek to create and stimulate demand…..Distribution costs are towards reaching the customer

Distribution Costs

�Transportation

�Insurance, Operating Expenses.

�Administrative costs

Selling Costs

�Secure orders

�Retain Customers

Why to analyse Distribution Costs

� To determine costs of sales of different products – review profitability by products or by brands.

� In turn fix-up optimum sales level.

� To control costs of effort – 80:20 rule and “fish where the fish is”

� Help in guiding marketing policy / strategy both for long-term and short-term

Allocation of Distribution Costs

Distribution Costs are substantial….

Distribution Costs are common and difficult to apportion.

Should it be apportioned on the basis of share ?

Should it be equally split ?

Sharing with other FMCG products:

� What should be the basis – Negotiation.� Win:Win to be worked out

Allocation of Distribution Costs

Distribution Costs are substantial….

Distribution Costs are common and difficult to apportion.

Should it be apportioned on the basis of share ?

Should it be equally split ?

Sharing with other FMCG products:

� What should be the basis – Negotiation.� Win:Win to be worked out

21

Analysis of Distribution Costs

The basis of analysis of distribution costs:

� Desires of Management – What is the priority ? What is the overall strategy ?If profit is to be maximised – direct sales effort to most profitable products.

Various ways of analysis:1. Product or product lines2. Individual customers or groups of customers3. Channels of distribution4. Salesmen5. Geographical territories

Freight Rate Fixation

There are two types of transport costs1. Standing Costs2. Operating Costs

Operating Cost

Repairs and Maintenace

Depreciation

Taxes

Insurance

License Fee

Administrative costs

Standing Cost

Cost of Vehicle

Capital cost of garage, repair shops etc.

What influences freight rates

� Nature of commodity� Demand and supply� Competitive conditions in the transport industry� State regulations

Organisations have to make a choice:

1. Option of a negotiated yearly contract rate2. Operate on market prices on transaction to transaction basis.

Like personal travel, return-trips have to be determined – certain locations will require two-way transport costs.

Inventory Costs

Three types of Inventory

1. Ordering Costs – Cost of stationery, postage, telegrams etc in placing an order.

2. Cost of Materials – Purchase Price + Transport + Insurance + Taxes.

3. Carrying Costs – Space Cost + Storage Cost + Insurance + Theft / Pilferages + Wastages and Loss etc.

One of the key responsibilities of Sales Managers is to control inventory costs.Turnover 100 CroresMonthly TO 8 CroresCost of 7 days stocks 2 CroresInterest @ 12 % Rs. 24 LacsOpportunity Cost @ 25 % Rs. 50 Lacs Per day Cost

Rs 14000/-

Control System for Efficiency

Logistics efficiencies are critical as huge costs can be saved.

Therefore efficiency at every level to be improvedThese are are interdependent and inter-related…..

� Operating Efficiency – e.g. Fuel consumptions.� Financial Efficiency – operating profit to gross earnings� Service Level Efficiency – number of direct service vs total service� Marketing Efficiency – market share and rate of growth� Personnel Efficiency – People performance� Organisational Efficiency – Adherence to schedule

Output of logistic system

Outputs1. Consumer

satisfaction.

2. Competitive advantage

Process1. Management

Actions.

2. Planning, Execution and control.

3. Inventory / Order processing/ Transportation / Packaging etc.

Inputs1. Physical

resources –land, facilities etc.

2. Human Resources

3. Financial Resources

4. Information Resources

22

Productivity Aspects

Right Delivery Ratio = No. of Deliveries on timeTotal No. of deliveries/year

Route Potential Ratio = Tons carried per routeTons capacity per route

Accidents Ratio = No. of accidents / yearNo. of trips operated / year

Service Ratio = No. of consignments booked/yearNo. of consignments planned/year

Productivity Aspects

Vehicle Utilisation Ratio = Vehicle Kilometers actually run/dayVehicle Kilometers planned per day

Breakage Ratio = No. of consignments damaged in traisitTotal number of consignments

Operating Expenses = Total Operating ExpensesRatio Total Earnings

Net Profit Ratio = Net ProfitTotal Earnings

Promptness Ratio = No. of prompt deliveries/yearTotal No. of deliveries/year

Summary

Distribution costs need to be examined in each area of distribution:

� Transportation

� Warehousing

� Inventory Material Handling

� Information Technology

Distribution is a source of cost – admittedly a necessary cost but a cost nevertheless.

Sales Management

Personal Selling

Personal Selling

Personal selling is all about dealing with a customer.

� The Customer is the crucial person in Trade Marketing.

� The more effectively you work with the customer the greater will be your success.

Knowing the customer

Difficult to generalise but….

The Positive Customer:

� Constructive & Open

� Reasonable and

concerned about the outcome.

The Negative Customer:

� Lacks Creativity

� Does not like taking risks

� Cannot see any advantage in a new idea.

23

Knowing the customer

Know-Everything Customer:

� Think they know everything about everything

� Opinionated

� Bad Listeners

� Think they know more about your brands than you do.

Personal Selling

� Personal Selling is all about Oral Presentation for the purpose of making a sale.

� Therefore we need to customize our presentation to the specific typeof customer.

� “It is the art of successfully persuading prospects or customers to buy products or services from which they can derive suitable benefit thereby increasing their total satisfaction, i.e. delight.

� A part of the communication mix – Advertising, Sales Promotion, Public Relations, Direct Mail, Exhibitions……….

Personal Selling involves communication

Communication is a way of exchanging – conveying ideas,thoughts, feelings, messages by speech, writing or sign.

The Process of Communication

� Clarify the message that you want to give.

� Decide on the best method of saying it (Encode).

� Communicate the message to the other party (Transmit)

� The other party listens to the message (Receive)

� The other party interprets the message (Decode)

How do you prepare yourself….

� Suspend judgment.

� Write down as many ideas as you can.

� Build on ideas of your peers.

Incubate the Idea

GetIlluminated

ApplyThe Idea

Sales person should be creative

It is an inter-personal process involving individual identities.

Therefore, there cannot be a standard solution.

Barriers to Creative Thinking:

� Routine: Comfort in routine… or “It is time for lunch”.

� Educational System: “Chapterisation” or “The right answer”.

� Dismissive attitude: “I can’t climb this hill” – Evaluating too quickly.

� Rules: Big advantage is often linked to challenging the rules.

� Specialisation: “It is not my area”.

The need is to communicate effectively

Effective Communication

� Increases our understanding of the customer’s needs and wants.

� Increases the customer’s understanding of our product.

� Provides a process for productive information about our products and merchandising.

� It is two-way communication – slower but more accurate.

24

Ways to improve communication

� Give an overview at the beginning.

� Simple Language.

� Logical structure – Perspective of the customer.

� Encourage eye contact – establishes rapport.

� Encourage feedback – Show concern for feedback.

� Seek clarification – Understand the feedback.

� Check commitment and agreement – to proceed further.

� Summarise often.

� Do not talk too fast.

Difference between Salesmanship &

Personal Selling

� Salesmanship Seller-initiated

Providing information

Motivates for favourabledecisions

� Personal Selling Two-way communication

Right Product to the Right Customer

Stimulate interest

Developing brand preference

Personal Selling

Personal Selling is about Inter-personal skills:

� It involves personal confrontation – Therefore interactive

� Impulsive…….. “Chemistry-match”.

� Opportunity to cultivate relationship.

� Buyer has to respond – ‘reciprocity’.

Personal Selling

High costs

Chance of Negative rub-offs on imagery

Can close sales

Feedback

Customized presentation

Lifetime value

DisadvantagesAdvantages

Situations conducive to personal selling

� Product

High unit value / Introductory stage / Precision engineering products / No brand value – Bus vendors.

� Marketing

Small number of buyers – Institutional

Trading – Sadar bazar transactions

� Consumer Behaviour

High value decisions (Cars) / Answers to querries

Last 30-seconds prompt.

Strategies of sales person

� Communication alone achieves little – only product information; So what ? “Walk the talk”

� Persuasive – Understanding needs and finding solutions

� Negotiation – Adjustments to commercial needs

� Client Profit-planning – Working with the client to produce a specific product

� Business Management – Multi-level contact where the frontline becomes an advisor.

25

Changing Roles of a Salesman

� Delivery Sales Person

� Behind the counter

� Direct-selling to retailer

� Missionary – Medical Representative

� Creative – Relate value that the product can add to customer’s needs

� New Business Selling – “Solutions”

Changing Role of a Salesman

� Consultative / Technical

Capital goods where high-end knowledge is imperative.

� Commercial

Non-technical like office stationary, equipment where price negotiation is the key to success

� Direct Sales

Customer / consumer

Door-to-Door

Personal Selling Process

� What is a process:

It is a naturally occurring or designed sequence of operations or events to produce an outcome

Machine-like operation / Coordinated effort

� A sales process has to be People-dependent but not individual dependent

� Process brings about a disciplined approach to execution.

� Process does not mean ‘auto’ mode

� ‘Eye-to-detail’ and grass-root level awareness is critical

� Standards not a standard to carry out a selling process

� Gains of best-practice sharing and experience

Some Negative Stereotypes of a Sales Person

� Talks too much

� Lies or Manipulates

� Doesn’t know about the product

� Doesn’t care about me (customer speak)

� Creates pressure

� Wastes time

What does the customer expect

� Trusted Advisor

Trust can be achieved through consistency

Competence + Concern = Trust

Therefore Industry knowledge – Be generally aware.

� Consultative partner –

On personal matters

� Theme of Partnership

Your and your trade partner want the same “Exact right solution.

� No guessing to know what the customer wants

Skillful questioning to uncover customer needs

Prospecting, Identifying & Qualifying

� This is the planning part of the process – “I will take seven days to sharpen my saw to cut a tree in one day”

� Prospecting is all about eliminating non-buyers

� Identification involves establishing sources of information:

Tele-marketing / Referrals / Influencers / Cold-calling / Directories / Mailing Lists / Trade shows

� Qualifying the prospects

M Money – Ability to Pay

A Authority – Ability to take a decision

N Need – Needs the product or service

26

Pre Approach and Call Planning

Don’t eat your cake before it is baked…

� Research the prospective customer

Needs / Likes and Dislikes / Others involved in the decision-making process.

Rani Mukherjee invited to all dinners hosted for Mrs and President Musharaff

� Call Planning – “Appointment” leads to obligation

Sequencing the presentation – Customer’s priorities.

Pre Approach and Call Planning

� Sales Person should get information like:

Financial Position of the prospect – “Ability to pay”

Special Needs and problems – “Am I providing solutions”

Who is the decision-maker – men behind decisions

What is going to motivate the buyer – Look at personal characteristics but remain “Ethical”

Call Planning

� Call planning is a specific planning sequence

1. Define objective

2. Devise a selling strategy

3. Settle past disputes and collect payment

Mid-course correction

� Slow down and check your process

If successive calls are unproductive

If you are not sure of the answer – revert back and do not cook an answer

If it looks you are loosing the deal / customer

If competitors are beating you on price -

Exit ‘early’ and ‘cheaply’

Presentation Approach and Demonstration

� Categories of Presentations:

Automated – Techno-savvy is more competent is the general perception.

Semi-Automated – Combination of ‘click’ and ‘brick’

Memorised – A prescribed standard

Organised – A structured approach - Attention to Interest to desire to action (AIDA)

Unstructured – Explore with the customer – may require authority to take spot decisions.

“Go for the visual impact – 50 % retention versus 10 % of spoken word”

Presentation Approach and Demonstration

� Buying signals

Watch for the buying signals

Is he examining the product ?

Does he have questions about features / use /price etc.

Mid-course changes for the desired outcome

� Buying Motives

Fear of being left out – ‘Competitor naming’

Recognition for a wise decision

Family/friends - societal approval

Sense of pride

27

Objective of a Presentation

Convince the Buyer

1. The need for the product exists

2. The product in question can satisfy the need

3. The prospect can afford to purchase the product

Approach

It is the approach that makes or breaks a

Presentation

Four Basic approaches:

1. Introductory Approach

2. Product Approach

3. Consumer Benefit Approach

4. Referral Approach

5. Demonstration

Handling of Objections

� To avoid is the easiest things for the customers –

they look for real and imaginary problems to postpone the discussion.

� Decision-making requires thinking and no one wants to think – ‘comfort in routine’

� Answer lies in knowing hidden needs and addressing them.

� Objections for price, quality, service and a mix of all these can be addressed by bench-marking with competition

� Institutional Selling – especially engineering goods -‘Empower the decision-maker’ / ‘Make him the hero’

Objections are opportunities

� By expressing their concern, customer are giving you the opportunity to resolve whatever it is they do not understand or agree with.

� Objections should be welcomed.

How do you respond to objections

� Ensure that you listen carefully and fully understand the objection.

� Avoid unnecessarily contradicting / arguing with the customer.

� Seek answers through the use of questions.

� Avoid dishonest responses.

� Ensure you know the products.

Different type of objections

Hidden Objections:

Customers asking unrelated or unimportant questions may have hidden objections.

They may not wish to reveal their real objections for fear of offending you or because they think it is none of your business.

Stalling Objections:

Are used when people want to postpone buying because

� they have hidden objections

� they require more information

� they are indecisive

28

The sequence of Objection Management

To overcome:

� Anticipate them.

� Consider objections as opportunities.

� Be positive.

� Understand the objection.

Ways of dealing with objections

The Principle:

Agree with the importance of the objection with the customer and seek first to understand and then be understood.

The Technique:

� Rephrase as a question.

� Ask questions

� Deny directly

� Compensate

� Appeal to third party

Closing the sale

� At the end of it……..Time / Effort /Money already invested

� Generally buyer may wish to postpone – may require more time to think – check brief ?

� Ask for the order – materialize the transaction

� Techniques

Action – facilitating of bank finance

Gift or benefit – Last minute additional discount to make it happen.

Conditional close – Defect to be removed before

execution of the order.

Mutuality

For US as Marketers

�Increased sales

�Increases inventory turnover.

�Improve brand / Co. image.

�Attracts new customers.

�Increased profit.

For Customers

�Increasing sales

�Increasing inventory turnover.

�Improve store image.

�Attracting new customers.

�Increasing profit.

Mutuality

Mutually AgreedStrategies

Develop regularAnd strong personal

Relationships at all levels

TailoredSupport

Develop CooperationAnd Trust

UnderstandingA target customer

Understanding customer’sStrategies & Motivations

Mutual Success

Road to achieve Mutuality:

� Channel-tailored support is the bridge from Mutual strategy to mutual success.

� Requires flexibility to take account of special requirements.

29

Key Learnings

� Locating a potential buyer – Prospecting / Identifying / Qualifying

� Call Planning – Objective of the call / Selling Strategy / Appointment

� Presentation – Automated / Semi-automated / Unstructured

� Handling Objections – Advantages vis-à-vis Competiton

� Closing the Sale – Financial Assistance / Gift Close /Benefit close / Conditionalities

Sales Management

Practical Skills for Selling

Last Session

� Locating a potential buyer – Prospecting / Identifying / Qualifying

� Call Planning – Objective of the call / Selling Strategy / Appointment

� Presentation – Automated / Semi-automated / Unstructured

� Handling Objections – Advantages vis-à-vis Competiton

� Closing the Sale – Financial Assistance / Gift Close /Benefit close / Conditionalities

� Mutuality in business.

This Session

Practical Skills for Selling

� Who can take up a selling career

� Sales strenghts

What do we mean by Selling Sills

� How can sales people contribute to achieving organisational goals.

� It is an important role and not everyone can represent the company.

Two ways of selling

� Direct to the consumer

� Through intermediaries

Different set of skills may be required for each way of selling.

Common Mistakes companies make

� Person’s background, education and experience determines a ‘good fit’.

� If that be so nurses can become medical representative and accountants may try selling financial products.

“The right Fit”…. ?

Fit is not about what we know.

Fit is about what we are.

Fit is about our talents not our knowledge

30

When Companies change

� Mergers, Acquisitions or a new business line altogether.

� Such changes can have dramatic effect on sales missions.

“Direct-selling versus Intermediate-selling.”

Questions to ask:

Are you in the right selling role ?

Do you have the aptitude to sell the particular product line ?

If the answer is NO, the best bet is find another company.

Sales Strengths

� Sales strengths do not spring from education, training or experience.

Best performers use recurring patterns to:

1. Build relationships

2. Have an impact on others

3. Discover and solve customer needs

4. Drive their individual performance by focusing on meaningful goals and rewards

5. Find the right structure in which to perform

Understanding talents in these areas is the key to build sales strengths.

The best sales people

� Adapt the job to suit their strengths

� They do not attempt to change their strenghtsto fit the job.

“It is easier to tailor a suit to fit your body than to tailor your body to fit a suit.”

Challenges of a selling job

� Highly stressful

� Issues of self-esteem

� Rejection

� Falling down and getting up again

There are two schools of thought

� Selling skills come naturally

� Ordinary people can be groomed to be good sales persons.

“If you are good and have the habit of succeeding, you will succeed anyway…..”

From Strengths to Fit

“Excellence is a bridge that spans from understanding to application”

Now read this statement:

“At work I get to do what I do best everyday”

Answer: If Yes…

� What is the intensity of your Yes

� How emphatic are you

Equation is simple:

Doing more of what you are best at can dramatically improve your performance.

Different sales positions

� Sales positions are different from one another as one sport is from another.

� Selling pharmaceuticals is different from selling real estate.

What people tend to do when not suitable for a job:

� Hard-work

� Perseverance

It may lead to increasing levels of frustration leading to disappointment and not success.

31

Essential skills for successful sellingNo prescribed characteristics – look at likes and dislikes of buyers:

�Calls me dear or sweetheart (I am a female)

�Gets personal

�Lies

�Wines and dines

�Does not credit me

�Acts pushy

�Plays one company against another

�No follow-up

�No appointments

�Starts with ‘cricket’

�Decries competition

�Poor listener

�Lousy presentations

�Poor product knowledge

�Honest

�Looses a sale graciously

�Admits mistakes

�Problem-solving

�Friendly / Professional

�Dependable / Adaptable

�Knows my business

The UglyThe BadThe Good

Selling Skills

Management answer:

� Communication skills

� Listening skills

� Conflict management and resolution skills

� Negotiation skills

� Problem-solving skills

Communication Skills

� Exchange of ideas and information between two parties – relationship management tool.

� Personal and Non-personal communication

Personal communication is effective as it allows interactive changes

� Dress code

� Body movements

� Voice intonations

� Expressions of emotions like laughter and surprise.

� Watch-out for external noise-levels

Communication Skills

Managing Body Language:

� Personal appearance

� Posture – the way you sit, stand and walk – an individual’s personality is revealed by his / her body movements.

� Gestures – Movements to indicate. Noding of the head…

� Facial expressions – A smile, A frown or raising of eyebrows. “A dead-wood expression?”

� Eye contact – a window to the soul

� Space distancing – How close you are in your relationship….Shake hands / Hugs etc.

Listening Skills

� The receiving end of communication

� Causes more problems than the sending end.

� It involves

� sensing,

� Interpreting

� evaluating

� Remembering

� Responding

Listening Skills

� Listening is the communication skill we use the most.

� There is a difference between listening and hearing.

� Hearing is a physical process,

Listening is a mental process.

32

To improve your listening

� You must first want to improve.

� Then work to pay attention.

� Give the speaker your undivided attention

� Physical distractions are easier to eliminate than mental distractions.

� Keeping an open mind results in a win -win situation

� Work on the accuracy of your filtering – think

� Involve yourself mentally in what the speaker is saying.

� Work to remember – concentrate.

The Ten Commandments

of Listening

� Stop talking

� Put talker at ease

� Show talker you want to listen (body language)

� Remove distractions

� Empathize with talker( get into speaker’s shoes)

� Be patient

� Hold your temper

� Go easy on argument and criticism

The Ten Commandments

of Listening

� Ask questions

� Take Notes; Decide on specific follow-up actions and specific follow up dates

Conflict Resolution


“Antagonistic interaction in which one party attempts to thwart the intentions or goals of another.”

What are the causes of Conflict ?

1. Scarce resources – Desire to achieve lead to seeking resources.

2. Jurisdictional Ambiguities – job boundaries and responsibilities are unclear

3. Communication Breakdown - misunderstandings

4. Personality Clashes – People do not see eye to eye.

5. Power and Status Differences – Hierarchy and status

6. Goal Differences – People pursuing conflicting goals.


Team members are either assertive or cooperative.







Methods of Conflict Resolution

Authors Nader & Todd:� Lumping – Failure of one party to pursue

� Avoidance – Relationship is called off

� Coercion – Imposition of one party on the other

� Mediation – Third party intervention – Mediator has adequate authority.

� Conciliation – Bring two parties together. Conciliator may not play an important role.

� Arbitration – Parties consent and abide by arbitrator.

� Adjudication – Legal process

� Negotiation – Dialogue…..

33

Negotiation Skills

� When someone else has what you want

� Readiness to bargain

� Negotiate for business to pay.

� Retailer: “Leave your stocks and get cash when sold”

Salesman: “Part payment as advance”

� B School Entrepreneur: Survival money + profit sharing

� Profit-sharing with Consultants / ESOPs

� Inventing options for mutual gains

� BATNA – Best alternative to a negotiated agreement.

Problem Solving Skills

Belief in solution

Re-evaluates, Looks for creative solutions

Checks and rechecks

Breaks the problems into small bits and starts at a point.

Giving up early

Fence sitter

No checking

Does not break the problem.

Does not know where to start

Attitude

Actions

Accuracy

Solution Procedures

EffectiveIneffectiveCharacteristics

Stephen Covey’s seven Habits

1. Be proactive – choice option

2. Begin with an end in mind – Outcome forecast

3. Put first things first - priority

4. Think win-win – there is always a possibility

5. Seek first to understand, then to be understood

6. Synergize – Make the whole greater than the sum.

7. Renewal – Physical Exercises + Reading

…

Sales Management

Building Customer Engagement

Selling Technique

Only one selling technique works and that is Customer Relationship, CRM and therefore Customer Engagement.

Kotler :

“The successful salesperson cares first for the customer, second for the products”.

Selling is all about customer engagement.

Building Customer Engagement

Questions:

1. How many customers are satisfied with you and your company ?

2. How many of those customers are engaged ?

3. How do great people develop engaged customers ?

34

Customer satisfaction

Companies work towards customer satisfaction :

1. By providing best service

2. Higher margins

3. Fast-selling products

4. Caring relationships …

Question: Is that going to be enough ?

Customer Satisfaction

Gallup’s research demonstrates:

“Customer satisfaction is merely the foundation for a continuing relationship”.

� Satisfaction therefore is an unreliable standard for gauging relationship.

� Customer satisfaction is simply the entry point for achieving a deeper foundation.

Customer Satisfaction

� Company’s most important asset is its customer base.

� Engaged customers are most valuable

Expectations from Sales People:

� Not just generating sales

� But generating loyal engaged customers

Because

� Engaged customers assure sustained profitable growth.

� Engaged customers help you sell to other accounts.

What leads to customer engagement ?

Is it products + marketing + services + follow-up….

Yes, all of that and most importantly:

“How they feel about their interactions with sales people or company people”.

Interactions should lead to

� Customer becoming more confident

� Gaining a greater sense of you and your company’s integrity

� Developing pride in doing business with you.

� Developing a passion for your products.

Customer Satisfaction & Growth

In the 1970s:

� Quality and Customer Satisfaction were the buzz words.

� US Car manufacturers were getting killed by the likes of Toyota and Honda

� Intense interest in TQM.

In the 1990s

� Companies attained 80 % level of customer satisfaction.

� As customer satisfaction level reached 80 %, they became less valuable as a predictor of growth.

Success in Sales

� Customer dissatisfaction is a surefire way of loosing business.

� But customer satisfaction is no guarantee for business.

Because:

You and your competitors will have close ratings.

Therefore:

Customer loyalty represents strength in customer relationship.

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What builds loyal customers

Gallup’s research on factors that cause customers to stop buying your products:

� Dissatisfaction with product performance

� Customers severe when basic expectations – promise that brand communicates – are not met,

� Freedom from defects is a minimum requirement and no assurance for repurchase.


Loyalty Components:

1. Likelihood to repurchase

2. Likelihood to recommend to others.

Customer Response:

1. Products high on quality ratings found favour on repurchase.

2. Customers who felt strongly positive about sales representatives were as much as twelve times more likely to continue.


Loyal and engaged customers have an attachment that extends beyond “a good deal”:

� Attachment

� Customer engagement is not a function of economics.

� It is personal and emotional

� People play a very important role.

Customer Engagement

While

Brands / Image / Reputation builds a Customer Base

People build customer engagement.

While

Each rupee spent on branding adds to brand equity

Each interaction by people adds to customer engagement.

Therefore

Customer engagement like brands leads to sustainable growth and enhanced profits.

How do great sales people create customer

engagementHow tough it can be:

Gallup’s research has shown that “fully engaged” customers has ranged around 6 to 8 percent to as high as 35 to 40 percent. –compare this with 80 % Customer Satisfaction discussed earlier.

Four dimensions that comprise customer engagement

1. Confidence

2. Integrity

3. Pride

4. Passion

These are therefore building blocks of customer engagement.

Indicators of emotional connection

1. ______ is a name I can always trust.

2. ______ always delivers on what it promises.

3. ______ always treats me fairly.

4. If a problem arises, I can always count on ______ to reach a fair and satisfactory resolution.

5. I feel proud to be a ______ customer.

6. ______ treats me with respect.

7. ______ is the perfect company for people like me.

8. I can’t imagin a world without ______.

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Notice the word “Always”

� Building customer engagement is not a “sometims”thing.

� Trust has to be there all the time or there is no turst.

� The same is true of respect, confidence, fair treatment

Everytime we are having an interaction with a customer, we are either building engagement or eroding it.

Customers engagement is different from

friendship.

� It is not simply a matter of liking the salesperson.

� Customer engagement relates to the company and its products and services and not only to the salesperson.

� Customers are different from friends and salespeople should not try to be too friendly.

� There is no saying “The friend is always right”.

� Customer engagement is different from friendship.

Building Blocks

� Given that People are our most important asset as companies seek to differentiate themselves.

� TQM & reengineering have squeezed defects and costs.

� Technology has increased productivity and capacity.

� Now customer engagement is going to be the leading edge.

Dimensions of Customer Engagement

1. Confidence:

Customers feel that the brand or company is trustworthy and that it keeps its promises.

Software Salesperson:

“I never say that our software can do something unless I am positive that it can. If I am unsure, I check with our systems engineers and have them demonstrate that functionality to me. I won’t sell it untill I see it work.”

Building Trust with another person:

� Highly individualistic process

� No simple formula but the first step in customer engagement.


2. Integrity

When customers feel that the company treats them fairly.

� Customers are fair in their expectations.

� Therefore customers seek fair treatment

� They want salespeople to take their side and that sales people work for them instead against them.

How an organisation and its people react to the problems can be more effective developer of customer engagement than problem-free delivery.


3. Pride

Customers feel good about the product or service and also feel that using the product reflects well on them.

� What kind of car do you drive ? / What wine do you drink ?

Your answers to these questions will reflect the way you feel.

� How does the company treat me

� A Taj restaurant where you are a regular starts calling you by name

What is he actually saying, “Look what a smart choice I made”. It is indeed inspirational …like brands…

“I drive a Lexus”, “I stayed at Taj Westend at Banglore when I last went there”……

37


4. Passion:A strong relationship that exists between a company and a clientwhen the latter views the former as irreplaceable.

� When you bring new ways to do business.� When you innovate on your customer’s behalf instead of waiting

for his request.� Relent on Conflict of interest. Delivery at a time when it would

mean for your warehouse to be open late till 10 p.m. – If you do not do this, you are competing with the customer.

Key Learnings

� Sales is about people who are trustworthy, diligent, consultative and inspiring.

� Customer satisfaction + Emotional Bond = Customer Engagement.

� Customer Engagement leads to sustainable growth.

� Customer engagement is tied with your own engagement and degree of your fit.

� Using own talents at building relationships.

� Thinking about customers problems is key to customer engagement.

Sales Management

Personal Selling Objective – MIS & Forecasting

Last Session – Customer Engagement

� Sales is about people who are trustworthy, diligent, consultative and inspiring.

� Customer satisfaction + Emotional Bond = Customer Engagement.

� Customer Engagement leads to sustainable growth.

� Customer engagement is tied with your own engagement and degree of your fit.

� Using own talents at building relationships.

� Thinking about customers problems is key to customer engagement.

This Session – Information & Decision

Making

� Facilitating information flows critical for success

� MIS

� Forecasting

Sales Management – Many Activities

Sales Managers have multifarious responsibilities…Territory, Channel, People, Communication, Research and feedback etc.

They are “incharge” of the operations.

Management of Information is a control mechanism to monitor profitability of the operation.

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Marketing Information Systems (MIS)

Kotler on MIS:

“MIS consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers”

� Information users are Marketing Managers, SalsManagers, Brand Managers, internal and external partners.

� Assessment of needs – developes information from internal company databases, marketing intelligence activities and marketing research.

� It also helps in analysis at various levels.

Developed MIS

Coca Cola Company knows:

� We put 3.2 cubes of ice in a glass

� See 69 of its commercials every year

� Prefer cans to pop out of vending machines at temperatures of 35 degrees

Kimberley Clark which makes Kleenex knows:

� Average person blows his nose 256 times a year.

Hoover knows

� We spend 35 minutes each week vacuuming, sucking up about 8 pounds of dust each year and using 6 bags to do so.

Sales Information

It is like the circulatory system in the human

body.

Circulatory system provides blood to the

brain to operate the entire body system.

Similarly sales information systems help

organisation to run the sales set-up.

In today’s context

IT and software applications expedite the

process of information.

Automation and Linkages to the remotest

corners.

Information is captured, collated and

presented all in one stroke.

Decision Support System

� Can pass data back and forth from various sections

across hierarchies.

e.g. A sales person makes a transaction….

Information comes into a centralized data…

Senior Manager uses the system for data

aggregation and territorial reports….

This becomes the basis for decisions on forecast,

reward systems, sales promotion etc.

Developing Information Systems

Focus On:1. Regular decisions

2. Information required to make decisions

3. Information already available

4. Information sought from time to time.

5. Information that you want and are not getting.

6. Periodicity of Information –Daily/Weekly/Monthly…..

7. Standard data analysis ….MS , Variances etc.

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Internal Data

Opportunities for analysis and action:

� Internal reports on orders, sales, prices, costs, inventory levels, receivables, payables and so on….

� Analysis helps spot opportunities for action

� Order to payment cycles – speed of response

Wal-Mart

� Knows the sale of each product by store and total

each evening.

� Nightly orders to suppliers

� Shares sales data with P&G

� Expects P&G to replenish stocks in a timely manner.

� Has entrusted P&G with management of inventory.

Internet and extranets today improve the speed,

accuracy and efficiency of the delivery systems

Using computer technology� Salespeople use their laptops to dial into

Company’s world-wide data network.

� They can retrieve latest price lists,

improvements, status reports on previous

orders.

� When deals are struck during the day,

laptops can record each order, double-check

the order for errors and send it electronically

to the place of supply for instant supplies.

Data base, data warehouse and data mining

Data bases to organize information:� By customers

� By products

� By territories…..

Customer Database:� Not only demographics and psychographics and addresses but also

Purchase recency

Purchase frequency

Competitive sales

Payment patterns…..

Companies warehouse data and statisticians are employed to “mine” the data to get fresh insights.

Effectiveness of the Operation

Seeking information

� Sales Analysis

� Cost Analysis

� A sales Audit

A Sales Audit

“A systematic, critical and unbiased review

and appraisal of the basic objectives and

policies of the selling function and of the

organization, methods, procedures and

personnel employed to implement those

policies and achieve those objectives.”

40

Objectives of Sales Audit

� Each selling input should have clearly stated

objectives.

� Inputs should be related to desired output –

e.g. a firm may have the objective of raising

its market share from 15 to 20 % without

reducing per unit profit.

Sales Audit of Policy

Both explicit and implicit policies are

appraised for their consistency in achieving

the selling objectives.

e.g. Policy of no internal promotions but an

internal guy can increase market share. –

Need to revise policy.

Audit of internal capabilities

Does the organization has sufficient

resources in terms of staff, infrastructure

and their required capabilities.

What are the planning and control systems in

place and compatible to the enormity of the

task.

Sales Audit of Procedures & Personnel

Procedure: Steps in implementation to be

logical, well designed.

Procedure to establish responsibility by

individuals.

People evaluation process check

Sales Analysis is a source of information

Sales analysis is a detailed study of sales

volume performance to detect strengths and

weaknesses.

� Indepth sales analysis and not summary

sales data.

Cost Analysis is a source of information

Cost analysis determine the relative profitability of particular aspects of sales operations.

Which channel is more profitable

Which territory is more profitable

More informed decision-making.

41

Marketing Intelligence – critical information

� Developments in the end market on day-to-day basis is critical on an ongoing basis.

� Collation to track trends and forecast competitive action.

Other Sources:

� Magazines / Newspapers Trade Publications / News Clippings.

� Trade Shows.

� Customers / Panels by towns e.g. 20 members on a quarterly basisto know service standards.

� Common Suppliers with discretion.

� Competitors’ Intermediaries.

� Competitors Company Managers / Web-sites / Financial sites

� Stock-holders meetings / Govt. Agencies / Legal sites

How to improve quality of Marketing

Intelligence � Compare with internal data bank

� Train people to smell and respond

� Sales force are important information

gatherers.

� Motivate distributors and other network

associates to use their strengths and

influences and look for information to pass

on.

Hiring of Specialists or Agencies

� Mystery shoppers in hotels.

� Mystery-shopper check on services:

In a car show-room:

How long before a sales associate greeted

you ?

Was he eager to do business ?

Knowledge on product ?

Market Information more important now

� Rise of global marketing

� New emphasis on trade channels

� Trends towards non-price competition –

“Blue Ocean strategy”.

� Speed of response.

� Proactive approaches in the end market.

Sales Managers Multifarious activities and

control responsibilities

� Sales Managers are pulled in different

directions all the time.

� They need information to make decisions.

� There has to be a structure to provide this

information on time and regularly.

Components of an Information System

� Internal records

� Computer based decision support system

� Marketing Intelligence

� Sales Audits

� Market Research

Sales managers have to make this information “Basis” of their decision making.

…

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Forecasting…..A

critical decision

Companies work on “Plans”

� Plans involve forecasting

Sales forecasts are critical because these are used by

1. Finance: To raise funds / cash flows

2. Production: To establish capacity and output

levels.

3. Purchasing: To acquire raw materials and right

amount of supplies.

4. HRD: Hire men needed to accomplish plans.

Consequences of an ‘Error’

� Excess inventory of raw materials

� Idle Cash

� Idle Manpower

� Idle Machines

� New Machines can be bought on the basis of forecasts.

Accurate sales forecasts have a direct bearing on:

1. Productivity

2. Bottomline

Visioning….. Thinking Big…..COCA COLA

When Roberto Goizueta became CEO of Coca Cola, many

people thought that Coke’s sales are maxed out.

Goezueta reframed the view:

� Coca Cola amounted for less than 2 ounces of the 64 ounces

of fluid that each of the world’s 4.4 billion people drank on an

average everyday.

� The enemy is Coffee, Milk, Tea, Water….

And Coca Cola ushered in a huge period of growth.

“Driving Market or Market-Driven”

How do you measure demand

Two set of customers:

1. Existing Market - “Your Customers”

2. Potential Market - “Customers who may be interested in your product”

Interest + Income + Access + Freedom to buy = Potential Customer or Potential Market.

Available Market

1. Interest – Those who have interest.

2. Affordability – Those who can pay for it.

3. Access – Is it possible to reach them.

4. Govt Regulations – Do the laws permit.

43

Options for Marketers

1. Interest – Reposition in the mind of the consumer.

2. Income – Target your market or price change.

3. Access – New distribution thrust or price change.

4. Freedom to buy – Work on qualifications with Government or redesign to meet safety norms.

Types of Demand MeasurementProduct Levels: All Sales

Industry Sales

Company Sales

Product line sales

Individual Product

Variants.

Space Level: World / India / Region / Branch / Area / Customers

Time Level: Yearly / Quarterly / Monthly….

Total Market Potential

� Maximum sales that can be achieved.

� Number of customers likely to buy or made

to buy (through promotions).

� Identification process as to who are likely

to buy.

� Customer Base or Consumer Base

How to estimate Books

1. Total Population – 100 Lacs

2. People who buy Books – 10 Lacs.

3. Average Book Buyer buys – 3 Books

4. Average price per Book – Rs. 200/-.

5. Total Market Potential – 10 Lacsx3

booksx200 = Rs. 6000 Lacs

Arriving at the Customer Base for Books

1. Total Population of the Country – 100 Crores

2. Less Groups that would not buy books (Illiteate or

Children…) – 70 Crores.

3. Suspect Pool – 30 Crores.

4. Low Income Group (who do not read books) – 9

Crores.

5. Occupational / Skilled labour – 3 crores

6. Prospect Pool – 6 crores x 3 books x Rs. 200 = Rs.

3600 crores.

Chain Ratio Method (“Light Beer”)

1. Population with personal discretionary income.

2. Discretionary income spent on food.

3. %age of amount spent on beverages

4. %age of amount spent on alcoholic beverages.

5. %age of amount spent on beer

6. %age of amount spent on “Light Beer”

44

Market Build-up (Preferred by industrial

goods)

� Requires a list of customers…

� Suppose you are selling lathe machines

Aim is to list all potential buyers.

Who are they – Workshops engaged in machining work.

� Obtain a directory of manufacturing establishments.

� No. of lathes per ten employees

� No. of lathes per rupee value turnover.

Multiple-factor index Method (Consumer

Goods)Here market potential is directly related to population size.

Drug Example: If Patna has 2.8 % of India’s population – a single factor would mean Patna to contribute 2.28 % of Drug Sales.

But Single factor is not enough…

Sales are also influenced by per capita income

Multiple-factor index Method (Consumer

Goods)Therefore you assign a weight to each factor

1. Suppose Patna has 2 % of disposable income (weight assigned .5)

2. Suppose Patna has 1.96 % of India sales (weight assigned .3)

3. Suppose Patna has 2.28 % of India population (weight assigned .2)

.5(2.0)+.3(1.96)=.2(2.28) = 2.04

Thus 2.04 % of country drug sales might be expected to take place in Patna.

Industry Shares & Market Shares

� Identifying competitors and estimating their sales:

Sources: Industry Trade Association, Government Department of Industry

� Look at relative growth rates:

Industry will grow at 10 %

Airtel will grow at 12 %

Tata will grow at 8 %

Hutch will grow at 12 %

Reliance will grow at 8 %

� Look at research reports of audit.

Survey of Buyers Intention

� Research firms are engaged in surveys.

� For Example – Automobiles:

Question: Do you intend to buy an automobile in the next six months ?

Purchase Probability Scale:

1. No chance 0.00

2. Slight Possibility 0.20

3. Fair Possibility 0.40

4. Good Possibility 0.60

5. High Possibility 0.80

6. Certain 1.00

Sales Force Estimates

� Sales Rep. – ASM – BM – HO

� Issues of Optimistic / Pessimistic

� Cushions up their sleeves – lower quotas.

� Frontline may not be aware of larger economic

dimensions (GDP/Petrol Prices / Interest rates etc.)

� You may need to link KRAs – eg. Forecast vs

actuals.

� Advantages – Better insights into trends /

Commitment leading to confidence / Grass root

estimates is detailed by size and variants.

45

Expert Opinion (Delphi Technique)

� Dealers / Suppliers

� Marketing Consultants

� Trade Associations

� Govt Agencies

� Economic forecasting agencies

They can be subject to strengths and weaknesses:

Therefore Group of experts / Exchange of vies /

Brain storming assumptions.

Past Sales Analysis

� Trend analysis

Sales versus consumer expenditure

Quarterly fluctuations / Seasonality

� Projection

Extrapolation or exponential smoothening

Avg. Past sales vs more recent sales

LY SPLY Last three months

Oct Nov Dec

100 90 100 110 120

90 100 90 80 90

Key Learnings

� Developing MIS and Decision Support

Systems.

� Sales Analysis / Cost Analysis / Sales Audit

� Marketing Intelligence

� Forecasting – Types of demand and

methods of measurement

� Multiple factor Index and Trend Analysis.

Sales Management

Selection & Recruitment

Recruitment & Selection

� It is about selecting the ‘right-fit’.

� A good sales person can be terrific performer but not necessarily a good manager.

� It is about finding where do the individual’s strengths lie.

� More and more companies prefer to have coffee-table chats instead of interviews – they do not seek to fill a position.

� They look at the individual and then fit him into the position most suitable for him.

Sales people have to deliver every day

� This requires unique capabilities – most of us would want to produce results on our own terms.

� We need space and time to ourselves.

This is how an old joke goes:

“Have you heard about Bill ? He couldn’t sell anything at all.”

“Did they fire him ?”

“No. They made him a manager !”

46

Contexualizing through history

� Do you have the right stuff to be a great sales person

� During the War in the US, the North had more men, more money and more factories.

� But they did not have generals “who could command”and “who loved to fight”.

� Lincoln’s generals were good peace-time leaders.

� They had all necessary social graces for a refined life in Washington.

� During war, they were getting kicked off.

General Grant was an exception

� General Grant was fighting battles and winning them.

� General Grant was not popular – questionable drinking habits and checkered past….

� The more refined military leaders found Grant vulgar.

� But Lincoln recognized Grant’s willingness to fight and elevated Grant above his other military chiefs.

� As a result of subsequent victories, General Grant became a war time hero.

� After Lincoln was assasinated, the Republican party nominated him to encash his popularity and General Grant became the President.

General Grant as President

� Many scholars view Grant’s administration as one of the worst in American history.

� He had a strong desire to grow the nation, but did not have the expertise to do accomplish his goal.

� He was suited for military engagements.

� He fumbled at diplomacy, tact and finesse.

� General Grant could pick superb battle commanders for the battle field.

� But he picked the most incompetent cabinet.

Moral of the story: “A great general can make a poor president”

Success – Myths & Relity

Myths:

� Some people are successful others are not.

� If you are successful in one role, you will be successful anywhere.

� Successful people have some habits to flourish.

Reality

� People who are successful in one job are average performers in others.

� Great sales people do become sales managers but turn into appalling managers.

Terrific Sales People are promoted

Anshul, a terrific sales person became a sales manager and his trouble began.

� He wanted people to work round the clock seven days a week –After all that’s what Anshul did.

� In Anshul’s mind he was not a workaholic.� He took time to play golf – with customers.� He went for vacations and dinners – with customers.� Anshul did not count all these as work.� Anshul startd entertaining his sales rep’s customers.Before long

� Low morale and people left� Sales numbers became off target

“What worked for Anshul as a Sales Representative worked against him as Sales Manager.”

Success Stories

Shyam was a successful Representative and a

Sales Manager

� He had a natural interest in developing people.

� He complemented his best performers.

� He thought he works for his sales people rathern than the otherway round.

� He was ready to listen and respond.

“The same strengths that built relationships with

customers helped him build a team.”

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No Magic bullets

� People achieve through configuration of talents.

� How you relate to or impact different set of people.

� Can you sit on the sidelines and watch others play or will you grab the ball.

What are your reasons

Reasons for best sales

managers

� I enjoy developing others

�I enjoy building a team.

�I get a kick out of helping others succeed.

�I like others to reach their objectives.

�I like working with talented perople.

Reasons for poor sales

managers

� More control and autonomy

� I deserve a promotion.

� My company wants me to take the job.

� I have been sales rep for ten years.

� More time in office.

� I am tired of daily pressure.

Themes of Strength Finder

Achiever

� Everyday starts at zero - tangible results to feel good.

� You have fire inside you – it dwindles but rekindles quickly.

� Achievement once it happens, it becomes history.

Activator

� “When can we start ?”

� Impatient for action.

� Only action can make things happen.

Adaptability

� Responds willingly to demands.

� Don’t resent sudden work.

� “It has to be done”.

Analytical

� “Prove it. Show me why what you are claiming is true.”

� Objective and dispassionate.


Arranger

� Best configuration possible – very methodical

� Will often ask others “How can you keep so many things in your head?”

Competitive

� Rooted in comparison.

� Has to outperform others.

� Likes contests because they make you a winner.

Dliberative

� Careful, Vigilant and a private person

� Walking with care


Discipline

� Your world needs to be predictable

� You want to feel in control

� Structure / time-lines / routines keep you going and in control.

Empathy

� Sensing emotions of others.

Focus

� “Where I am headed ?”

� You need a clear destination.

Futuristic

� “Wouldn’t it be great if……”

� You love to peer over the horizon.


Ideation / Intellection

� Fascinated by ideas.

� Exercising the muscles of your brain.

Learner

� Love to learn.

� “Do you put in practice ?”

Maximizer

� Excellence, not average is your masure.

Responsibility

� Ownership for anything you commit.

Restorative

� Loves to solve problems.

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Self Assurance

� You have faith in your strengths.

� Similar to confidence.

Strategic

� “What if this happened”

� What if…..Select ….. Strike.

Winning Others Over

� Enjoying the challenge of meeting new people.

� You try that they start liking you.

� You are drawn towards them – you want to know their names

� In your world, there are no strangers, you have only friends.

RecruitmentWhat is Recruitment:

“Recruitment involves seeking and attracting a pool of people which qualify for job vacancies.”

� Fitment – Good person but not suitable for the sales job that needs to be performed.

� Therefore choice of candidate becomes critical – ‘Down-to earth’vs ‘Upwardly Mobile’.

� Issues of ‘head-hunting’ at every level

� ‘Market Anchor’ used to retain good people.

Important to determine:

� What job needs to be done

� What kind of a person will do it best

Selecting

� Everyone wants to have Corporate Tendulkars

� Selection is an accurate estimate of success or failure

� Process – Any one or a combination depending on need

Prlims / Application (with details and even statement of objects in some cases)

Interview / GD / Tests

Negotiation of compensation / Internal Fitment

Reference checks – How ?

Physical medical checks

Recruitment

Policy

� To make the process smooth and credibility with the prospective employees.

� Determinants of policy

Size / Internal or Outsourced / Costs

Sequencing

� Guidelines or a checklist

� Sources – Agencies / Direct / Internal Transfer / Double-Hatter / Campus recruitment / Ongoing Dialogue with a set of prospects

� Job Profile giving principle accountabilties

� Job specifications – What sort of person we require

� Technical Competencies / Soft Skills

Factors Involved in Recruitment Policy

1. Number of recruits required

2. Recruitment sources

3. Recruitment Needs / Recruitment Costs

4. Size of sales organisation

5. Rate of turnover

6. Forecasted sales volume

7. Government Policies

8. Personnel Policies of competing organisation

9. Organisational personnel policies – ‘Life-time employment’ or ‘Hire for value’

Sequence of Recruitment Process1. What kind of job is to be filled ?

Main Role / Accountabilities

Job Description: Name of the Job / Who is the boss /

Responsibilities / Accountabilities

2. What sort of person would do this job successfully ?

Intellectual Abilities / Motivation / Specific Attainment / People Skills

3. Where will this person be found ?

Employment agencies / Advertisements / Educational Institutions / Employee referals / Internal transfers

4. Which person is to be recruited out of the selected applications ?

Education / Experience / Family background / Present financial situation / Health / Leisure interests / Ambitions & Future Plans.

49

SelectionA set of successive ‘screens’

1. Preliminary Interview

A sorting out process for both parties

2. Formal Application

A history sheet of personal information / education / employment and so on…..

3. Interview

Structured / Unstructured

4. Reference Check

5. Testing

6. Physical Examination

7. Interview – formal or informal

8. Rating and employment offer

Basis of Selection

Selecting People

MultifacetedField Force

Leadership ParadigmDistribution

Reflecting on SelfChannels

InterpersonalTerritory

Managerial Competencies

(Soft Skills)

Technical Competencies

(Subject Knowledge)

Interviewing Techniques

� Structured vs Unstructured – No hard and fast rule

� Value judgment – Inherently ‘Qualitative’ and subjective

� Typical Questions:

Tell us something about yourself ? Introduction (To break ice)

Education – Ability to retain knowledge

Employment – Achievements – What difference have you made (Quantitative validation of the qualitative judgment)

Other interests – Awareness check (Open to learn ?)

� Patterned / structured provide aids to the interviewer thereby making it relatively scientific – Rating scale.

� Rating scales are only indicative

Interviewing Techniques

� Psychological Tests

Aptitude – Ability to adapt and learn the job or skill

Personality – Check of value system – Intellectual honesty (Do you cross the red light ?)

Achievement Test – Indepth knowledge versus surfacialknowledge

� Attitude is everything – 1 % knowledge & 99 % attitude

Attitude to life / Determination to succeed / Desire to make a difference

Not a parking place

Placement & Future

� Orientation including Introduction

� Shorter Honeymoon periods

� Probation a mere procedure

� Assigned responsibilities – Written document of key responsibilities and KRAs

� Easier to recruit than retain – ‘Turnover issues’

� Roadmaps giving milestones of achievement and progress

� Challenges linked to reward

� Cannot be ambiguous – Never a false ‘promise’

Key Learnings – Recruitment & Selection

� Recruitment

The right fit for the right job /

Seeking and attracting talent for job vacancies /

‘Market Anchor’ / Recruitment Policy / Sequence of Activities

� Selection

At best it is an accurate estimate.

Set of successive screening

Basis of selection

Interview techniques

Placement

50

The Supreme Court about Examination:

“The very concept of examination justifies a minimum as bench mark for passing. In addition, further requirements are necessaryfor assessment of suitability of the candidate”

The Supreme Court on Interviews:

In our opinion, the interview is the best mode of assessing the suitability of a candidate for a particular position. While the written examination will testify the candidates’academic knowledge, the oral test alone can bring out or disclose his overall intellectual and personal qualities like alertness, resourcefulness, dependability, capacity for discussion, ability to take decisions, qualities of leadership etc.

Sales Management

Training &Evaluation

In the last session…..Recruitment

What is Recruitment:

“Recruitment involves seeking and attracting a pool of people which qualify for job vacancies.”

� Fitment – Good person but not suitable for the sales job that needs to be performed.

� Therefore choice of candidate becomes critical – ‘Down-to earth’vs ‘Upwardly Mobile’.

� Issues of ‘head-hunting’ at every level

� ‘Market Anchor’ used to retain good people.

Important to determine:

� What job needs to be done

� What kind of a person will do it best

Selecting

� Everyone wants to have Corporate Tendulkars

� It is an accurate estimate of success or failure

� Process – Any one or a combination depending on need

Prlims / Application (with details and even statement of objects in some cases

Interview / GD / Tests

Negotiation of compensation / Internal Fitment

Reference checks – How ?

Physical medical checks

Basis of Selection Basis of Training

Selecting People Identifying Gaps






(Soft Skills)


(Subject Knowledge)

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Job Description & Personnel Specification

Personnel Specification

� Physical requirements –can withstand travelling.

� Attainments – education / experience.

� Aptitude & Qqalities –Communication skills and motivation level.

� Deposition – maturity and sense of responsibility

� Personal status / hobbies / interests

Job Description

� Title of the job – SR / SM

� Duties and responsibilities

� Reporting relationships

� Specific requirements –travel for 15 / 20 days

� Location of the job – place of work

� Degree of autonomy –limits of authority,

Sales Training & Evaluation

� The term ‘training’ relates to acquiring skills and knowledge

� Knowledge is the foundation and skills methodologies to perform

� In a fast changing world, new skills and new knowledge acquisition is imperative – ‘Degrees need to be renewed through MDPs & Executive MBAs

Learning is a life-time engagement – ‘Learning organisation’

How to go about training

Mechanism to assess - ROIEvaluation

Process of assignment of responsibility / venue / design / delivery

Execution

Who,When & Where

Effectiveness – Lecture / OTJ / Accountability through daily evaluation

Method

(How)

Specific aims of management, Organisational need-connect

Content (What)

Gap identification through competence mapping

Aim

(Why)

Training

Background:

After acquisition, it is necessary to raise the skill levels and increase the versatility and adaptability of employees.

In a changing world, it is imperative for an organisationto readapt the products and services produced

It is critical that organisations maintain a viable and knowledgeable work force.

What is Training

1. It is a learning experience for the sales force.

2. It is a sequence of programmed behaviour and the application of this knowledge to the work environment.

3. Helps in personal growth and prevents human obsolescence

4. It is a process of providing the sales force with specific skills required for their performance.

5. It seeks a relatively permanent change in an individual that will improve his or her ability to perform on the job.

6. Typically Training can involve the changing of skills, knowledge, attitudes, or social behaviour.

What is training process

Training and need assessment

Design and conduct training

Evaluation of a training programme

52

Training need assessment

Organisational level analysisStructure,Culture, Mission….

Task level analysisJob requirements, Task analysis…

Individual level analysisPerformance gaps

Objective of training

Survey approach: A study of customers to know

Where is the gap ?

� Behaviour – values and ethics

� Knowledge – content / product / general awareness

� Relationship – interpersonal sensitivity

� Communication skills…..

Objective of training Authors: William Berliner and William

McLarney

1. Listing the duties, responsibilities or tasks of the job under consideration the basis of the job description guide.

2. Listing the standards of work performance related to the job.

3. Comparing the actual performance against standards.

4. Determine the part of the job that creates the deviation of standard.

5. Determine the kind of input required to address specific needs.

Training and Learning

Learning as a result of experience – direct experience by doing or indirectly through observation.

It is difficult to measure learning per se but we can measure the changes in attitudes and behaviour that occur as a result of learning.

Principles of Learning

1. Learning is enhanced when the learner is motivated

2. Learning requires feedback

3. Reinforcement increases likelihood that learned behaviour will be repeated

4. Practice increases a learner’s performance

Break the job in parts and practice each part independently.

LEARNING MUST BE TRANSFERABLE ON THE JOB.

Determining Training Needs – Methods

Survey By Bureau of National Affairs, Washington DC

Method PercentageObservation & Analysis of job 49

performance

Mgmnt & Staff Conferences 24

Analysis of Job requirements 19

Consideration of changes 16

Surveys / Reports etc. 10

Interviews 6

Other 15

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Organisation’s Internal Environment - Transational Analysis

Adult / Child / Old States…..

“Let’s meet next week to begin your performance review for the past three months”

Effective: Certainly. And I will supply you with copies of major activities/accomplishments for the period. (ADULT)

Ineffective: Why now. We have just completed the last one. If you would leave me alone, I would get much more accomplished.(CHILD)

Sales Person’s Career Cycle

1. Preparation: New and learning environment

2. Development: Productive

3. Maturity: Leveling of productivity

4. Decline: Serious concern for re-orientation

Types & Methodologies

Types

� Cross-Functional – job enrichment and appreciation.

� Team training – high technology products / SAP

� Creative training – Mindset changes.

� Literacy training – Mastery of basic skills

Methodology depending on

� Training programme objectives

� Time available

� Participants level of understanding

� Financial resources and equipment required

� Size of the group – Group versus trainer.

Types of Training

1. Induction training

2. OTJ Training

Induction (Joining time)

� Company Profile

� Position in hierarchy and job responsibilities

� Introduction to the administrative staff and accounts staff.

� Reporting procedures and standards of reporting

� Knowledge of products, their features and benefits

� Knowledge of manufacturing units

� Handing over stationery and kit etc.

Types of Training

1. Induction training

2. OTJ Training

On the job Training

� Ongoing and continuous process.

� Improvements through mentorship

� Job related skill development – review of calls made

� Responsible behaviour versus irresponsible behaviour

� Inter-personal skill development

Skill development training

Steps to a call:

� Planning and preparation

� Approach

� Stock check

� Brand talk

� Objection handling

� Close

� Detail work

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Step 1 – Planning and preparation

1. Prepare day’s target in line with month’s target

2. Decide on route / market as per your route plan.

3. Check previous visit’s report and check if all complaints are addressed

4. Check available stock

5. If going with a van, check the condition of the vehicle, quality of accompanying staff, loading of stocks, POP materials.

6. Manufacturing dates / MRPs / Price Lists

7. Sales Kit / Samples / Weekly off of the market you are going.

8. Contingency plan

Step 2 – Approach

1. Peronality – Grooming / Dress code - How you wear it.“Loose-tie” versus “straight-jacketed”What does the customer expectWhat is the custom / precedent / practice

3. Method – Communication style (How close you are )Can you call by name – genuine acquaintanceRepeat your name to be remembered.

Greeting (How you say it ?)Sikh – Sat-Sri-AkalNorth – Namaste / Jai SiyaramMuslim – Salam / Adab-arz-eBengal – NamaskarSouth – NamaskaraMarathi – Ram RamGujrathi – Jai Sri Krishn Kem Choo

Step 3 – Stock-check at the point of sale

1. Know the shelf of your stocks – create one if not there,

2. What is his need – avoid underselling or overselling

3. Design your sales talk in keeping with the stock levels.

4. If all you sold during your last visit is still lying unsold – what will you do ?

5. If half of it has been sold ? And so on …..

Step 4 – Brand talk

1. Say something good about the product – not something which will lead to productive call.

2. Product feature reinforcement – “Milkmaid”

3. Convince him about your competitive advantage

4. Convince yourself about the product – ‘features’ and ‘benefits’.

5. Use Attention, Interest, Desire and Action rather than tricking for sale achievement.

Step 5 – Objection handling

Queries and objections are natural and need to be answered.

� Listen and do not interrupt

� Agree and counter

� Repeat the objection in the shape of a question (Do you mean to say…..)

� Hidden objection – the customer may not come out with the objection clearly – seek and probe.

� Straight denial – Sometimes necessary.

Step 6 – Closing the call

1. Seek opportunity to close the sale

2. Ask for the order after summarizing your sales talk.

3. The alternate sale – shall I send you ten units or five ?

4. Conditional – I will do this to send you so much of stock.

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Step 7 – Detail Work

1. Merchandising and displays

2. Execution of delivery.

3. Transaction listing.

4. Data bank analysis

5. Comparison with similar outlet-type

6. Corrective action, if any.

Follow the ACMEE

Mechanism to assess - ROIEvaluation

Process of assignment of responsibility / venue / design / delivery

Execution

Who,When & Where

Effectiveness – Lecture / OTJ / Accountability through daily evaluation

Method

(How)

Specific aims of management, Organisational need-connect

Content (What)

Gap identification through competence mapping

Aim

(Why)

Step I - AIM

Aim in terms of initial and continuous sales training need is identified after analysing job specifications, background and experience and sales related marketing policies.

Step II - Content

Content of training is derived from the specific aims of management. It mainly comprises product data, sales technique, markets and company information

Step III - Method

Method of training involves how to impart training to sales persons. Important methods are lecture, conference, demonstration, role playing, case discussion, gaming, programmed learning.

Step IV – Execution of training

Execution of training is basically the answers to the three questions.

What ?

When ?

Where ?

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Step V – Evaluation of Training

Evaluate for lasting impact ensuring that the effort placed in the training programme would pay off long after sessions ended.

Evaluation

� Performance-linked packages by trainers

� If jobs are at stake why not consultancies

� Deliverables can be determined prior to the commencement of training

� MS / Change Pre & Post Training

� Qualitative improvements can also be measured

Key Points

� Training imperative due to jobs becoming sophisticated

� Training seeks change through learning

� Effective training programme to be consistent with learning principles

� Study Organisation’s training needs

� Formal training methods: OTJ / Off-the-job

� Management Development: Coaching/ Understudy assignments/Job rotation/Committee assignments

Key Learning of the session

“I keep six honest serving-men (they taught all I know);

Their names are WHAT and WHY and WHEN and HOW and WHERE and WHO.

R.Kipling, “The Elephant’s Child”

Just-so Stories

Sales Management

Meeting &Contests

Key Concerns of Sales Managers

� Goal Setting – Audacious ? Achievement rare & Partisan Behaviour

� Quality Manpower being pouched, especially by Insurnace / Banking – before they join and get trained….

� Business goals & strategic framework unknown to frontline

� Do not know ! No one has ever told us !� Focused on ‘selling in’� Metamorphosing warfare with marketing battles – Not

understood� More informed teams were found dynamic and their

products moving faster off the shelf

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Expectations from people What will make sales personnel strive beyond a fair day’s work:

� Stretch

� Passion

� Self-starter

� Self-directed

They will meet expectations only if they have job satisfaction.

What brings people to sales ?

� Needs for personal growth

� Recognition

� Fast-track promotions

� Financial rewards

� Higher responsibilities

Needs fulfilled = Job Satisfaction

How do you stimulate these needs

� Sales Meetings

� Sales Contests

Job Satisfaction Vs Job Performance

� Does job performance lead to job

satisfaction

OR

� Does job satisfaction lead to job

performance

Well, there is a positive relationship –

Direction can be anyway.

Job Satisfaction

JobPerformance

Motivation & Performance

What is motivation ?

From above:

Unhappy with current performance leads to motivation

From self:

Can decreased job satisfaction stimulate job performance.

No simple answers here…..

� Concern for people vs Concern for work

� Leadership styles.

Leadership Roles

In successful team meetings the requirements for task performance and social satisfaction are met.

Roles Leaders Play:

1. Task Specialist Role: A role in which an individual devotes personal time and energy to helping the team accomplish its task.

Behaviours of a Task Specialist:

� Initiation – proposes new solutions.

� Give Opinions – Candid feedback to others

� Seek information – task-relevant facts

� Summarize – Pulls ideas together into a perspective

� Energize – Stimulates when interest drops.

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Leadership Roles

2. Socioemotional Role: Support team members’ social needs.

Socioemotional Behaviours:

� Encourage – Are warm and receptive to others’ ideas. Praise others for their ideas.

� Harmonize – Reconcile group conflicts.

� Reduce tension – Bring in humour. Jokes when the team is tense.

� Follow – Go along and agree to others ideas.

� Compromise – May shift own opinion to maintain team harmony.

Leaders are responsible for creating teams

What is a team ?

“A unit of two or more people who interact and coordinate their work to accomplish a specific goal.”

1. Two or more people are required. – Teams can be large consisting of about 15 people or even All India teams.

2. People in team have long interaction. – People standing in a queue or in an elevator do not interact and therefore do not qualify for a team-like interaction.

3. People in team share a performance goal – design a new software, build a car or students doing an assignment in groups

Difference between groups and teams

Discusses, decides, shares work.

Discusses, decides, delegates work to individuals.

Effectiveness measured directly by assessing collective work

Effectiveness measured indirectly – financial preformance

Meetings encourage open-ended discussion and problem-solving.

Runs efficient meetings

Specific team vision or purpose

Identical purpose for group and organization

Individual and mutual accountability (to each other)

Individual Accountability

Share or rotate leadership roles

Has a designated strong leader

TeamsGroups

Types of Teams

1. Formal Teams: Created by the organisation as part of the formal organisation structure.

2. Vertical Teams: A formal team composed of a manager and his subordinates through chain of command.

3. Horizontal Teams: A team consisting of same hierarchical level but from different areas of expertise.

Types of Teams

� Committee: A long lasting, sometimes permanent created to deal with tasks that recur regularly –CECs.

� Special Purpose teams: A project of special importance and creativity.

Greater autonomy to employees

The idea of a team meeting is to increase the participation

of low-level workers in decision making.

The ultimate objective is to improve performance.

� Problem-solving team Meet: People from the same department meet to find ways of improving performance.

� Self-Directed teams Meet: People multi-skilled who rotate jobs to produce an entire product or service often supervised by an elected member.

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Member Roles

In successful teams the requirements for task performance and social satisfaction are met.

Roles Members Play:

1. Task Specialist Role: A role in which an individual devotes personal time and energy to helping the team accomplish its task.

Behaviours of a Task Specialist:

� Initiation – proposes new solutions.

� Give Opinions – Candid feedback to others

� Seek information – task-relevant facts

� Summarize – Pulls ideas together into a perspective

� Energize – Stimulates when interest drops.

Member Roles

2. Socioemotional Role: Support team members’ social needs.

Socioemotional Behaviours:

� Encourage – Are warm and receptive to others’ ideas. Praise others for their ideas.

� Harmonize – Reconcile group conflicts.

� Reduce tension – Bring in humour. Jokes when the team is tense.

� Follow – Go along and agree to others ideas.

� Compromise – May shift own opinion to maintain team harmony.

Stages of Team Meetings

Forming: Characterized by orientation and acquaintance

� Possibilities of finding friendship – uncertainty

� Trying to know ground rules – “expectations” (Will I fit in, What is acceptable)

Storming: Individual personalities emerge

� People become assertive

� Conflict and disagreement

� Leadership – encourage participation and surface differences

Stages of Team Meetings

Norming: Conflicts developed during the storming stage are

resolved.

� Establishment of order and cohesion

� Clarifying team roles, norms and values (Leadership)

Performing: Focus on problem solving and team’s accomplishment

� Cooperation

� Facilitating task accomplishment (Leader)

Adjourning: Members prepare for ending the meeting

� Especially in the case of committees and task forces who have limited roles to perform.

� Emotional for some – Members may regret end of the meeting, especially if there are unresolved issues.

Managing Conflict


“Antagonistic interaction in which one party attempts to thwart the intentions or goals of another.”

What are the causes of Conflict ?

1. Scarce resources – Desire to achieve lead to seeking resources.

2. Jurisdictional Ambiguities – job boundaries and responsibilities are unclear

3. Communication Breakdown - misunderstandings

4. Personality Clashes – People do not see eye to eye.

5. Power and Status Differences – Hierarchy and status

6. Goal Differences – People pursuing conflicting goals.


Team members are either assertive or cooperative.







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Potential Costs of Meetings

Power Realignment:

If suggestions of one group prevails, the other group loose on power and resources.

Free Riders:

A person who benefits from realignment due to contiguous location.

Coordination Costs:

Groups need time getting ready to do work and loose on productive time in preparation, travel and subsequent brief-meets.

Field Sales Meetings are about getting

together

� Are for communication and motivational purposes.

� Sales People are out in the field

Without day-to-day supervision

No fixed hours

Own interests

� Sales Meetings are occasions to stimulate people and raise their standards.

� It is all about leadership and balancing of concern for task and concern for people.

How do you go about it ?

1. Defining the specific meeting aims

2. Deciding the meeting content

3. Determining methods of conducting the meeting

4. Deciding how to execute the meeting.

5. Deciding how to evaluate the meeting.

There cannot be an “excuse for holding a meeting”

Also important would be:

1. Minutes of the meetings

2. Action Plans

Purpose of Meeting - drive performanceWhat drives performance - Interaction

� Open environment

� Stimulate questioning

� Challenge the Leader

� Leadership task to provide the right environment

� Performance is a result of pushing for results within the organisation

� One employee demanding from the other

� No fiefdoms – Managers are possessive of information

� More aware person is a more educated – Economic Times reading………

Sales Meeting is a platform for

communication

� Brings about clarity and cohesion of action plans

� A tool for periodic review

� Team building exercise

� An effective tool to make information available to a large number of people

� Examples of ‘excellence’, ‘success stories’ and ‘failures’

� Take the example of a typical MBA class – “case studies” and the fear of failure in the class.

� In effect, a sales meeting can send strong signals and mesages

Communication prior to the Meeting is the

key� Why are we meeting ? – typical reactions….

� “Oh no, not again….”

� “How can I contribute” ?

Some frequently observed comments:

� “It is a bloody circus”,

� “It is a necessary evil…a ritual to be performed”

� “Boss has to save his job”

� “It is an eye-wash”

� “They are wasting my time !”

In most cases, communication or lack of communication is the fundamental issue.

61

Noble intentions are also there………

� Noble intentions are common…… Boss’s concern for work -professional approach.

� An employee essentially wants to learn and grow with the organisation.

� Both have common goals… Issue is knowing that they have common goals.

But does the boss know how to call for a meeting ?

� Communicate, Communicate and Communicate…..� Make terms of reference clear……..� In sale of goods - ‘conditions of sale’� In contracts – ‘The use of words Whereas’ and definitions� ‘DKDK’ phenomena

Grand Plan for the Meeting

Doing small things well

� Clarity on specific purpose to be achieved prior to the meeting.

� Sequencing – Brief by MD to add seriousness and setting-up the stage…..

� Contents – Priorities and schedule of time for each topic

� Presentations by field staff and HO staff – it is no performance appraisal.

� Theory of ‘Reciprocity’

� ‘Work-shops’ and Outside Speakers to address monotony but check ‘relevance’

Types of Meetings

Objective-Linked and Typical Meetings

� National Sales Conference – Annual

� Regional Sales Meetings – Quarterly Review

� Branch Sales Meetings – Monthly Review

� Local Sales Meetings – HQ Meetings

“Concept of Invitees”……….

On-line / Real Time Meetings

� Telephonic

� Dinner at home

� Traveling together and the list goes on

A-C-M-E-E approach

� Aims – Objectives e.g. new product launch / competitive reaction / sales promotion initiative / advertising campaign / New reporting systems etc.

� Content – An outline of agenda / Sets expectations.

Consider a Pricing Decisions – Content should seek forecasting with the new price, competitive reaction, “What-If” scenarios, Sales promotion to cushion the effect of price-hike etc.

� Method – Time-frame for each topic – “No free-wheel discussion

� Execution – Venue / Menu / Speakers / Trivia like seating arrangement

� Evaluation – Criteria / What shall be the outcome / Have we achieved the desired outcome / Feedback and improvement.

What gives rise to meetings ? - AIMS

� Uncovering of new insights

� Bosses tend to read… and get ideas.

� Competition bench-marking stimulated by marketing intelligence

Perfect reasons as far as we have our aims

1. Right

2. Realistic

3. Attainable

Questions to Ask:What will be the outcome ?

Will the outcome be profitable ?

Priorities of time ?

Justification

What is the agenda ? - Content

� List of things: - An outline e.g. “Competition launching a new product”

� Informational� Reduces Anxiety� Counter Moves for a competitive launch – when and

how.This requires research:� Why is competition launching� What is their strategy� How are they going to launch – “Noise levels”� React or Watch and react…. Over-reaction can be

dangerous and send wrong signals.

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How do I conduct a meeting ? - Method

� Methodology depending on the aim.

� Short meeting for a briefing – what else can be done.

� Interactive – “Brain-storming” – how long ?

� Planning – Pre-meet formats to be circulated.

� Time frame to be examined – wider content versus focused points.

� Mix of methods

Success dependent on Execution

� Speakers – who will initiate

� Day - by sessions

� Meeting site

� Room arrangement based on active participation or Listening, Noting

� Depending on number of people:

Round Table / Oval Shape / British Square / Inverted “U-shape” or Work-shop….

Pre & Pot Meeting - Evaluation

� Often neglected.

Boss: “My job is over; now it is for them to do it”

Subordinate: “It was the usual aimless, away from ground reality, jamboree event….boss had nothing to do”

Individual Interactions

Conferencing with each sales person

Inter-personal touch for commitment

� What are expectations

� Resources & Help critical for success

� How much independence

� How well they are doing – “Feedback”

� Basis for future rewards – incentives (Short-term)

� Annual appraisal (Progress to promotion)

CONTESTS

Contests

� A special campaign to achieve ‘focus’ e.g. “Operation Volume”

� Shift ‘comfort-zones’ of routine work

� To achieve ‘stretch’ – Do more rather than less ; To the limit and beyond

� To bring about a team-spirit and add excitement to the mundane job

The idea is to provide impetus “Shahbash Jawan”……….

Let’s get on with this……….

Let’s achieve a million cases today and so on

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Objectives of Contests

1. New Customers – New Geographies

2. Push slow-moving items from the portfolio or achieve a more profitable mix

3. Seasonal slump

4. Productivity of sales personnel – Own or Trade Partner’s

5. Improve top-of-mind salience during a TV Campaign

6. To involve trade-partners in the marketing process of the brand

7. Trade partners can fall in love with your brand only if you show the passion

Kinds of Prizes

� Cash Prizes – Incentives (Monthly & Cumulative)

Substantial amounts are effective

� Merchandise – Items of interest to the audience

Evidence of achievement to be shared with family

� Travel – Conferences / 5 star stays / Holiday resorts

� Travel – “Come fly with me contest”

� Special Honour – Letters of appreciation, Salesman of the year award etc.

Stimulating for progressive & mobile employees

Objections to Contests

� No preferential treatment to ‘sales function’

� High calibre people consider it undesirable because they are self motivated

� Short-term and customer focused and not consumer focused leading to over-stocking

� Generates disappointment in large number of losers versus small number of winners

� Narcotic effect – “I will sell when the contest is announced” – scheme-brands

The answer lies in a balanced view. There are no black and white answers.

Issues with Contests

Number of Prizes

� Can you make everyone win ?� Do Consolation prizes have adverse impact� Element of BiasDuration of Contest

� Interest levels go down with longer durations� Too short a duration will lead to temporary gains and

then proportionate decline� Series of promotions – pre-planned as a part of the

yearly calender but not cast in stone� Short-term and Long-term gains

…

Sales Management

Appraisals

People Management

“Our strength is the quality of our people”

“Our people are our most important resource”

� Increasing recognition of the value of human resources.

� Value lies in the “strategic-fit”

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People Management - Goals

Attract an effective sales force

Number PlanningJob Analysis

Recruitment & Selection

Maintain an effective force

Compensation / BenefitsEmployee relations

Terminations

Develop an Effective force

TrainingDevelopment

Appriasals

Changing Social Contract

• Traditional compensation package

• Standard training programs

• Routine jobs

• Limited information

• Continuous learning, lateral career movement, incentive compensation.

• Creative development opportunities

• Challenging assignments

• Information and resources

Employer

• Job Security

• A cog in the machine

• Knowing

• Employability, personal responsibility.

• Partner in business improvement

• Learning

Employee

Old ContractNew Contract

Attracting an effective sales force

MATCH MODEL

Employee Contribution

•Ability•Education•Creativity •Commitment•Expertise

Company Inducements

•Pay and benefits•Meaningful work•Advancement•Training•Challenge

Performance Appraisal

The process of observing and evaluating a sales person’s performance, recording the assessment and providing feedback to the employee.

� Apprise concerned sales persons concerning the acceptable elements of his performance.

� And also describe performance areas that need improvement.

� It is about rewarding merit and reprimanding mediocre performance.

Performance Appraisal

Raise:

It is a transaction about how much money you or I can get.

Feedback:

It is a conversation about how much meaning you and I can create.

� Accurate assessment based on rating scale.

� Use of feedback that can reinforce good performance – training & development.

Assessing performance accurately

� We must acknowledge that most jobs and especially sales jobs are multidimensional.

Sports Broadcaster:

- Knowledge dimension (facts, figures, rules, players)

- Communication

- Colourful way of expression that interests the audience.

� It is indeed critical to assess each relevant performance dimension.

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Multi-dimensional form

“360-degree feedback”

A process that uses multiple raters, including self-rating, to appraise employee performance and guide development.

� Increase awareness of strengths and weaknesses.

� Guide employee development

Rating Sales people

Halo error:

A type of error that occurs when a sales person receives the same rating on all dimensions regardless of his or her performance on individual ones.

Homogeneity:

A type of rating error that occurs when a rater gives all employees a similar rating regardless of their individual performance.

Behaviourally anchored rating scale (BARS)

A rating technique that relates an employee’s performance to specific job-related incidents.

Behaviourally Anchored Rating Scale – Work

schedules

Comprehensive plans, Communicates &

and observes target dates.

Usually satisfy time constraints with minor problems

but time and cost overruns coming

up infrequently.

Has a sound plan but neglects to

keep track of target dates – frequently surprises.

Has no plan or schedule of work and

no concept of realistic due dates.

Fails consistently to complete work on time, lack

of interest and no planning at all.

9

6

4

3

1

Job Description & Personnel Specification

Personnel Specification

� Physical requirements –can withstand traveling.

� Attainments – education / experience.

� Aptitude & Qualities –Communication skills and motivation level.

� Deposition – maturity and sense of responsibility

� Personal status / hobbies / interests

Job Description

� Title of the job – SR / SM

� Duties and responsibilities

� Reporting relationships

� Specific requirements –travel for 15 / 20 days

� Location of the job – place of work

� Degree of autonomy –limits of authority,

Basis of Selection Basis of Training

Selecting People Identifying Gaps






(Soft Skills)


(Subject Knowledge)

About the Exercise

Do a self-appraisal

The forms shall be given to you.

Fill the entire form.

KRAs

Be specific and quantitative as far as possible.

Performance Achievement

Quantitative and use indicators.

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About the Exercise

Based on the narration of KRAs & Performance Achievement, rate on management skills and technical skills.

Justify rating:

� Listing strengths and weaknesses

� Listing areas of improvement

Development Plan

� Based on narration of areas of improvement.

Objectives of Next Year

� Which will become KRAs & Performance achievement for next year.

About the Exercise

Towards the end:

Appraisee / Appraiser Interview to appreciate dynamics.

About the Exercise

Appraiser and Appraisee have to prepare to the interview.

It is a personal interview between the two people who have worked together.

It has dynamics of behviour…..

Oh you have done a terrible job this year ……

About the Exercise

Oh…. This has been a very good year for me….

“I believe it should be very short interview.”

No…No… Let’s examine… this is a very important exercise for both of us….

About the Exercise

Both Appraiser and the Appraisee have agendas…

Both have an overall rating in their mind.

It is a negotiation that is taking place.

There is a possibility of a change in the overall rating depending on how the process goes.