The Art of Sales Management Lesson 1 to 10 Mind Map by HAZEL PUSHPARAGAM D/O NADARAJAH

Lesson 1

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What is Personal Selling?

Direct communication between the sales person and the prospect that lead to purchase orders, customer satisfaction and account development.

The importance of Personal Selling

- Help the company to earn revenue
- Represent the company to deliver a service
- Represent the company to carry out relationship marketing

Lesson 1

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Under Personal Selling, there is Sales Management. Sales Management branches out to planning, budgeting, recruitment, compensation, designing of territories and performance evaluation.

The Art of Sales Management

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Lesson 1

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Selling is noble.
Selling needs training and education.
Good salespersons are not born with it.
Good products will not sales themselves.
Sales is not Marketing.
Selling is moral as well.

Lesson 2 - Listening

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Active Listening -> Verbal and Non-verbal listening
-> Non-judgmental
-> Seek to understand speaker's POV
-> Seek to uncover explicit and implied needs

Lesson 2 - Listening

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Evaluative Listening -> More attention to speaker's words
-> Hear what they are saying but not understanding it
-> Focus on answering rather than accepting

Lesson 2 - Listening

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Marginal Listening -> Least concentration
-> Listener is distracted by own thoughts
-> blank stares, nervous mannerism, gestures that annoy the prospect

Lesson 2 - Listening

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Total Impact of a message

Verbal -> 7%
Vocal -> 38%
Visual -> 55%

Lesson 2 - USP

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USP must be relevant to the critical needs of customer
USP is not easily duplicated by competitors
USP can be extracts of the FAB of the product
Can be used in elevator pitch and answers to customer's Qns

Lesson 3 - Cold Calling

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Always prepare your phone script. Get to the point and tell the prospect what they want to know.
Who are you? Why are you calling? What's in it for me?

Lesson 3 - Lead Generation: Locating Prospects

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1. Understand the potential customers: What they want, what they buy, why, were, when and how they buy
2. Prospecting methods - advertising, direct mail, telemarketing, trade shows, buying data etc.
3. Prospecting Funnel

Lesson 3 - Understand the target market

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What they buy? - Food, Electronics?
When do they buy? - Yearly, Quarterly, after a raise?
Where do they buy? - Internet, Town, Trade shows?
Why do they buy? - For personal consumption, business, family?
Who are their influencer? - Business partner, family, customers?
Where they look for info? - Blogs, Forums, Social Media?

Lesson 3 - Four Criteria Sales people should use

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N -> Need or Want
A -> Authority to buy (Are they the decision maker?)
M -> Money or ability to buy (Do they have the budget?)
E - Eligibility to buy (For example, Singaporean or PR?)

Lesson 3 - Prospecting Funnel

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Generating sales leads -> Screening procedures for qualifying leads -> qualified prospects -> In Funnel -> Best few

The process of identifying, qualifying and prioritizing organizations and individuals that have the need for and potential to purchase the salesperson's market offering of products and services.

Lesson 3 - Personal Selling Process

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1. Prospecting
2. Plan Sales Call
3. Meet Prospect
4. Presentation
5. Overcome Objections
6. Make Sale
7. After Sales follow-up

Lesson 4 - Buying Influence Roles

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Economic Buying Influence -> The Economic Buyer
Gives final approval to buy, control expenditure and release of funds, has discretionary use of resources and has veto power.

Their focus -> Bottom line and impact on company
They ask about their ROI
We can show case studies, client examples and financial models of the ROI

Lesson 4 - Buying Influence Roles

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The User Buying Influence or the User Buyer
-> Judges the impact on job performance, uses the product, decision is personal as they will live with the solution

Their focus is the job to be done
They will ask how will this impact their job responsibilities
We can show hands-on aspects of the solution, like free trials demonstrations and user documentation etc.

Lesson 4 - Buying Influence Roles

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Technical Buying Influence or the Technical Buyer
-> Screens out or in, judges measurable, quantifiable aspects of your proposal and can reject based on specs

Their focus is to match to specs in their area of expertise.
They ask if it meets the specified criteria.
We can show contractual terms and conditions, trials, demonstrations and compliance.

Lesson 4 - Buying Influence Roles

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The Coach who acts as your guide. They can provide and interpret information about validity of opportunity, other buying influence and other elements of your strategic analysis.

Their focus -> Your success with this proposal
They ask about how we can make this happen.
We can show marketing and sales material that can be used for internal promotion of your offer.

Uncovering Customers' Needs: SPIN Technique

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Situation Questions

Limitations: It can be overused and often are by inexperienced sales people. Eg Do you need help? - Will bore the customer

SPIN Technique

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Problem Identification Questions

Limitations: Effectiveness of these questions is inversely proportional to the size of the sale under considerations. They are most effective in smaller-ticket transactions where problem is easier to pin point. Eg. What is your energy consumption like living in a 5-room flat

SPIN Technique

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Implication Questions -> It is about effects, consequences of the buyer's problem. Build up the customer's perception of seriousness of the problem. It is successful in larger and complex sales.

Limitations: The virtue of this question is the risk. They make the problem seem more acute to the buyer but making the buyer reflect may make him realize the problem is not a serious one. E.g. Do you really want to spend $50 on a NIKE Shirt?

SPIN Technique

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Need-Pay Off Questions -> About the value or usefulness of a proposed solution. Increase the acceptability of your solution and reduce objections. Effective with influencers who will present the case to the decision maker. Powerful in complex sales.

Limitations: While these questions both pre-empt objections and enlists customer buy-in, it is not always easy to get the right information from the customers. E.g. Sales assistant - Hi Sir this pair of shoes are the most comfortable. But customer will say that they are too expensive.

Features, Advantages and Benefits

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Features -> Physical Characteristics and Factual Descriptions of the product/service
Sell features when customer are technical and want to know facts

Advantages -> A performance characteristic
The characteristics that are better than others. Need to compare with others.
Sell Advantages to customers who want to compare product/service and want to know how good the product is

Benefit -> a result of features and advantages
Benefits of using the product/service in customer's perception
Consequence of the features and advantages -> What is in it for them?

Lesson 4 - Unique Selling Proposition

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- USP differentiates the company from its competitors

- USP must be relevant to the critical needs of the target customer

- It is not easily duplicated by competitors

- Can be extracts of the FABs of the product/service

- Usually used in Elevator Pitch

- Answers the customer’s burning questions

Lesson 4 - Putting FAB and USP Together

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A salesperson should match buyer's needs to the product's benefits and emphasize them in the sales presentation.

USP and FAB -> Important and Emphasize the needs of the buyer

Lesson 5 - Customer Objections

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Hidden Objection

Prospect are not straightforward in revealing their objection
They need to be uncover and addressed before sales can occur
Direct Questions can be asked

Lesson 5 - Customer Objections

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Product Objections

Objections related to product/ service

Product characteristics are less than ideal for the prospect

Product characteristics are not superior to the product currently in use

Product characteristics are not competitive

I don’t like the design, color or style

A maintenance agreement should be included

Lesson 5 - Customer Objections

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Source Objections

Objections related to the company/ reputation of company or the sales person themselves

Can reflect loyalty to a present supplier or salesperson

Your company is too small to meet my needs

I have never heard of your company

I think you are not suited to handle my account since XYZ knows me better

You don’t seemed to have sufficient product knowledge

Lesson 5 - Customer Objection

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Stalling -> Delaying the need to make a decision
Money -> Based on the specifications of the product, it is overpriced, Price isn’t competitive
No Need -> Objection based on product not being able to satisfy the needs of the company

Lesson 5 - Strategies to overcome objections

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1. The Dodge
2. Rephrase as Questions - E.g. “Your price is higher than your competitor”. “You want to know what particular benefits my product has that make it worth its slightly higher price. Is that correct?”
3. Postpone the Question to the end
4. Boomerang - Turn an argument not buy into a reason to buy
5. Ask Questions - What are your concerns?
6. Third Party - According to the MAS.... and supporting your answer with the reliable third party organisations
7. Denial
8. Compensation

Lesson 6 - Need for Closure

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Why sales person do not close?
- Fear of Rejection
- Feeling of imposition
- Presume Prospect to initiate

Lesson 6 - Guidelines for closing a deal

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- Understand buyer types and motivation
- Understand buying signals and implications
- Attempt a trial close strategically
- Match customer's profile with an appropriate closing technique based on the buying signal
- Ensure an ethical approach

Lesson 6 - Understanding Buyer Types

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Perception: What they pay attention to

Sensor(S): The 5 senses, practical and facts, present and what is real, using established skills, utility, step by step

Intuitor (N): Intuition (the 6th sense), theoretical and insights, future and what could be, learning new skills, novelty and radical change

Lesson 6 - Understanding Buyer Types

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EFFECTIVE INTERACTIONS WITH THE SENSOR (S)

- Use facts and common sense
- Emphasize your market leadership if it is a well-known fact
- Emphasize salesperson's qualification and value of products
- Show/demonstrate what products can do
- Explanation of options and probabilities

Lesson 6 - Understanding Buyer Types

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EFFECTIVE INTERACTIONS WITH INTUITORS (I)
- Emphasize our product is the next gen in its category
- Present a big picture
- Describe possibilities what your product offers to customers
- Interested in what salesperson thinks and whom he/she knows
- Show who has used the product
- Show testimonials

Lesson 6 - Understanding Buyer Types

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Thinker (T) - Head, reason, principles, logical system, objective, justice, critique, firm but fair

Effective Interactions with Thinker: Use logical argument or facts, show evidence with technical details, show how the product can solve the problem and interested in salespersons' technical expertise.

Understanding Buyer Types

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Feeler (F) - Heart, empathy, harmony, value system, subjective, mercy, compliment and compassionate

Effective interactions: display third-party endorsements from experts who look and sound real, evidence that salesperson is trustworthy and friendly, personal attention and interest, why the product is best to solve the problem, don't overload your message with too much details

When to close?

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Buying signal refers to visual or verbal cues indicating a readiness to buy.

Non-verbal communication - facial expression relaxed. mirrors your posture/open posture for more receptivity. Exchanges approving glances with other decision makers, playing with a pen

Increased involvement in presentation - asking favorable questions, making affirmative comments, positive voice tone, asking the names of other users

Increased interest in product - pick and study brochures, physically handling the products, testing the product, asking about the use, price or delivery of product

Closing Techniques

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Alternative option close -> choose between two conditions of the sale
Assumptive close -> salesperson assumes buyer wishes to buy
Compliment close -> appreciate buyer's better points and judgment
Summary of benefits close ->recap all major benefits of product that meet their needs
Continuous Yes close -> ask questions to elicit yes and last one being request to buy
special-deal close -> offer special incentive to buy now
Direct close -> sales person directly ask for a yes or no answer
Indirect close -> Indirectly ask for closure if they are comfortable with the terms and their opinion
Competition close ->let prospect know that HIS competitors use the solution giving them a competitive edge
Balance sheet close - listing pros and cons and logically convincing them with the pros outweighing the cons
Technology close - use technology to present information
Standing room only close - if they don't act now, they may not be able to buy in the future thus motivating prospect to act now.

Unethical Practices in Closing

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Bribes/Gifts
Misrepresentation of facts regarding the product - customer can sue if the product fails to perform as promised
Reciprocity - Buying a product from them if they buy from us
Cooling-off Laws - 3 days where buyer can contract and obtain full refund

Lesson 7 - Negotiation (Distributive Bargaining)

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Asking Price -> Initial price set by the seller
Initial Offer -> The first number that the buyer will quote to the seller
Target Point -> The point at which a negotiator would like to conclude negotiations - his/her optimal goal
Resistance Point / Walkaway Price -> The negotiator's bottom line or smallest amount they will settle for
Bargaining Range -> The range where actual bargaining takes place, as anything outside these points will be summarily rejected by one of the two negotiators
Concessions -> The action of conceding or granting something

Lesson 7 - Distributive Bargaining

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Example:

Seller is selling for $4000 (Asking price) and wants to close the deal at $3,800 (Seller target point)
Buyer can only offer $3,500 (Initial offer) He intends to spend $3,600 (Target point for buyer) as he only has $3,800 (Resistance point) in the bank account.
Seller - How about $3,900? (Concession of $100) Seller has another buyer willing to pay $3,600 (Resistance point)
Buyer - Tell you what, how about $3,700 (Concession of $200) and I'll pay cash right away.
Seller - Deal!

Lesson 7 - Distributive Negotiation

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Bargaining Range (Positive) - a buyer's resistance point is above the seller's.
Buyer is $3,800
Seller is $3,600

Bargaining Range (Negative) - a seller's resistance point is above the buyer's. Negotiations that begin with a negative bargaining range are likely to stalemate.
Seller is $3,800
Buyer is $3,600
They can be resolved if one or both parties are persuaded to change their resistance point.

Lesson 7 - Distributive Bargaining

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Bargaining Mix -> The package of issues for negotiation. Each item in the mix has its own starting, target and resistance points. Some items are of obvious importance to both parties; others are important only to one party. Negotiators need to understand what is important to them and to the other party, and they need to take these priorities into account during the planning process.

Examples of common bargaining mix items includes delivery terms, closing date of the sale, payment terms etc.

Lesson 7 - Distributive Bargaining

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4 Fundamental Strategies in DB

1. Push for a settlement close to the other party's resistance point thereby yielding the largest part of the settlement range for themselves

2. To convince other party to change their resistance point by influencing their beliefs about the value, increasing the bargaining range.

3. If a negative range exists, to convince the other party to reduce/increase their resistance point or to change their own resistance point, to create a positive settlement range.

4. To convince the other part to believe that this settlement is the best - rather than having them think it it all they can get or that they are incapable of getting more or that one party is winning the negotiation.

Lesson 7 - Integrative Negotiation

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The goals of parties are not mutually exclusive. Both sides achieve their objectives. Discussion and mutual exploration will often suggest alternative where both can gain.

For example, seller is selling $4,000 but buyer can only offer $3,500.
Seller ask why they are buying this massage chair and who is it for.
Buyer says that mom has chronic stiff neck, message chair works well but has a problem forking out a lump sum because they are ex.
Seller says to buy the shoulder massage pads instead since it is the upper body. It is a fraction of the cost and the seller can recommend some deferred payment plans that don't require lump sum payment.

Steps of Negotiation

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Step 1: Identify and define the problem - provides initial framework before approaching the discussion

Step 2: Understand the problem, interests, needs, desires or fears that motivate the negotiator. Key word to understand interest is "Why?"

Step 3: Generate alternative solutions to the problem

Step 4: Evaluate those alternative and select among them based on clear criteria. Decision making process in which they debate the relative merits of each negotiator's preferred options and come to agreement on the best options.

Lesson 7 - Strategies of Integrative Negotiation

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1. Focus on commonalities rather than differences
2. Attempt to address needs and interests, not positions
3. Commit to meeting the needs of all involved parties
4. Exchange information and ideas
5. Invent options for mutual gain
6. Use objective criteria for standards of performance

Lesson 8 - After sales follow up

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5 phases of Relationship development with customers:

Awareness, Exploration, Expansion, Commitment and Dissolution -> Involved testing and consistent performance of each stage

1. Awareness - This stage covers the first 1-6 stages of the sales cycle in which the sales person pursues the prospect to close a deal. (Prospecting, Plan sales call, meet prospect, presentation, overcome objection, makes sales)

Lesson 8 - Follow up

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2. Exploration

An initial test, manage expectations, monitor order processing, ensure initial satisfaction, handle complaints.

3. Expansion -> A more detailed testing period, be present at buying times, opportunities to generate reorders, do full-line selling, upselling and cross selling, service is key, provide expert knowledge, provide special assistance, manage quality of the experience

Lesson 8 - Follow up

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3. Expansion - Strategies to increase sales / Generate repeat orders

- Be present at buying time - know how often they make decisions, need to track their purchase cycle and be at the top of mind
- Help to service product - reflect interest in their maintenance and repair concerns
- Provide expert guidance - team up with product specialist to advise the customer
- Provide special assistance - going the extra mile

Lesson 8 - Follow up

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3. Expansion - Strategies to increase sales

Up selling - convince customer to use a higher quality or new product to improve their efficiency at work
- Opportunity to sell more quantity / sell more premium versions

Cross selling - convince customer to purchase and additional or complimentary product after purchasing the product

- Sell unrelated products, sell products sequentially, sell an integrated solution.

Lesson 8 - Follow up

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3 types of cross selling opportunities

1. Cross selling to an unrelated need - difficult and there is an inability to leverage on one's existing expertise. CK tangs Selling interior decor consulting of its lifestyle positioning

2. Cross selling sequentially (upstream or downstream) - easier to sell due to close and logical links that exist between current and new one (book air tickets and hotels online)

3. Cross selling an integrated solution - Starhub offering broadband, cable TV and mobile plans. (5 star hotels sell booking of flights, car rental, room service, F&B, conventions and leisure packages like golf etc.)

Lesson 8 - Follow up

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4. Commitment -> capability, organisation, financial health, culture, willingness to commit resources, ethics

5. Dissolution -> To avoid dissolution, salesperson should be a change agent, enhance personal relationships, develop internal champions in customer firms, monitor competitors, avoid complacency

Lesson 8 - Follow up

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Customer care means how they are treated when they interact with a brand. This includes experience with the company and employees before, during and after a purchase. Customer case is an important aspect of customer service as it fosters an emotional connection with the brand's community.

Lesson 8 - Follow up

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6 Types of customers based on their satisfaction levels

1. Apostles - extremely satisfied, exceed their exceptions and share their strong feelings with others

2. Loyalists - completely satisfied and keep returning

3. Mercenaries - Customers are totally satisfied but no loyalty. They want low prices, buy on impulse, look for fashion trends, chase something new for the sake of change. They do not stay long enough in the relationship to return for profit. They are butterflies as flutter from supplier to supplier.

4. Defectors - satisfied previously but encounter failures left uncorrected by the firm

5. Vigilantes - bad experience and are eager to tell others about their anger and frustrations.

6. Hostages - trapped customers. These buyers experience the worst the seller has to offer but must just grin and bear it.

Lesson 9 - Sales Forecasting

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Sales Forecasting - Predicting the expected sales, how is the market, when should we sell, what resources do we need?

Purpose of Sales Forecasting - Determining the salesforce size, designing territories, establishing sales quotas and selling budgets, evaluating prospective accounts

Leson 9

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If Forecast too high:
Excess output, unsold products
overstock, idle cash, wasted expenditure, costly, insufficient to sell excess products (Distribution)
Reductions in price to sell excess products, too many selling people, high selling costs, money wasted on unneeded activities, resulting in lower profits (customer relations)
Lower unit profits since expenses are high

If forecast too low:
Inadequate output to meet customer demand
Understock, shortage of cash, insufficient expenditure to cover the market (promotion)
Price increase to allocate scarce products
Too few selling people, market not covered
Unsatisfactory customer relations due to out-of-stock products
Lower total profits because market not covered

Lesson 9 - Sales Forecasting Methods

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Quantitative Forecast
1. Naive Approach - simply using past data to predict future data
Strengths: simplest, inexpensive, works well if there is not apparent upward or downward trend
Weaknesses: historical trend omitted, prone to high error if trend is eivident

2. Moving averages - taking past data to predict trend and future data
Strengths: most effective if trend is evident e.g. emerging products, fluctuations are smoothened
Weaknesses: Prone to errors if trend is not evident, rigid and highly dependent on past x data points

3. Exponential Smoothing - Taking past data with flexibility to adjust weightage of past data to predict future data
Strengths: Most rigorous and generally most accurate
Flexibility to adjust weightage of most recent data
Weaknesses: Most complex and expensive, needs ample historical data to be effective

Lesson 9 - Sales Forecasting Method

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Quantitative Forecast - Time series analysis: Moving averages
Forecast based on average of actual sales of the past period's data
Forecast for month m = Actual sales of past n months / n
Three months moving average = (sales of previous 3 months)/3

Exponential Smoothing:
Produces an exponentially weighted moving average in which each smoothing calculation of forecast is dependent on all previously observed values.

Forecast(t+1) = a(Actual t) + (1-a)(Forecast t)
a is known as a smoothing / adjustment factor with a range 0
a closer to 0 - more weightage on distant past figures
a closer to 1 - more weightage on recent figures
Since there is no forecast for the first period, assume Forecast 1 = Actual 1

Lesson 9 - Sales Forecasting Methods

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Qualitative Forecast -

1. Survey of buyer intentions - asking target customers about future purchase plans
Strengths: customer centric, company gathers valuable feedback of products
Weaknesses: customers not willing to disclose buying intentions, intentions may not culminate in actual purchase

2. Jury of Executive Opinion: Top management and the sales executives use their respective expert knowledge to forecast sales of individual accounts. Team-based discussion and averaging is involved.
Strengths: Fastest way to forecast, Sales executives have solid understanding of accounts, Inputs from sales managers are considered
Weaknesses: Executives removed from marketplace may not understand sales situation, One or two people may dominate the process

3. Sales Composite:
Sales person provides forecasts for their assigned accounts with relevant details for management consolidation.

Strengths: Sales person is closest to actual market to provide valid forecast, Breakdown of forecast known, e.g. by product, customer, territory, Sales team morale and empowerment is increased.
Weaknesses: Sales person may underestimate forecasts when they are used to set sales targets, Lack of holistic assessment, check and balance.
For example, see what is each sales person's forecast for D2, D4, D24, DS. Then total all of them up together.

Lesson 2 - Understanding Body Language

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•Bored body language

•Sign – distraction, repetition & tiredness

•Reason – disinterest, readiness

•Closed body language

•Sign – arms / legs across, looking down/away

•Reason - defending, hiding, cold, relaxing, anxiety

•Evaluating body language

•Sign – hand movement & relaxed intensity

•Reason – deciding, judging, thinking

•Open body language

•Sign - arms / legs relaxed, looking at the other person

•Reason – accepting, passive threat, relaxing

Total Impact of a message - Visual - body language, posture, facial expressions (55%), Vocal - tone, inflection (38%), Verbal (7%)