Sales and Distribution Management

Session 2
23rd Jan,2020
The Changing Environment-Sales Management
 Is the change changing?

Rackham and DeVincentis (1999)

“ Sales force are caught in the middle. On one side, their customers have changed dramatically in terms of how
they purchase and what they expect. On the other side, their own corporations have shifted, going through
downsizing, restructuring and cost cutting. Traditional boundaries such as those between sales and marketing have
crumbled.Salespeople have to cope with more products, introduced faster with shorter life cycles, and less
competitive differentiation”.
 Is the change changing?

Kahn and Schuchman (1961)

The 1960s promise to be a period of more intense competition that current managements have yet experienced.
The signal are now clearly discernable:
• A rising tide of new products and imports
• A growing saturation for markets for older products
• An increasing invasion of markets by firms formerly regarded as noncompetitive
• The spread of automation with its enormous output potential
 Is the change changing?

• Dynamism in selling environment , to a large extent , remained consistent over time

• The types of changes that we confront today will present challenges for managers,
20 or more years of now!

Dimensions of Change
-Customers
-Competition
-Technology
-Ethical/Legal
 Customers

• Salesperson Knowledge - Cognitive Demands

- Customer information
- Pre-call preparation
- Information overload
• Speed of Response ( Role overload )
• Breadth of communication ( Role of orchestrator within the firm)
• Depth of communication ( Complexities of buying decisions, buying process)
• Customization
• Customers as co-producers ( Customer education – ERP ?)
 Competitors

• A hypercompetitive environment
• Salespeople are required to perform under intense pressure
- lower margins
-high cost of sales
 Technology

• “Knowledge Brokers”
• Real time communication ( Role overload)
• CRM and SFA – Technology adaption
 Ethical/Legal Environment

• Channel management- Associations

• Handling competition - CCI
• Customer oriented or Selling oriented – Consumer activism
• Getting ‘right’ salespeople on-board
 Evolution of Role –Sales Force

Production Sales Marketing Partnering

Sales force Satisfying
Making sales Making Sales
objectives customer needs Build relationships
Sales force Short-term seller Short-term seller Short-term Long-term customer
orientation needs needs customer needs and seller needs
Matching Creating new
Taking Convincing available alternatives by
Critical Tasks
orders/Delivering buyers offerings to matching buyer needs
buyer needs with seller capabilities
Influencing
Make calls-inform Influence-hard customers by Building and
Activities
about offerings sell practising maintaining customer
adaptive selling relationships
Role Provider Persuader Problem solver Value creator
 Sales Management Function

• Selling process and sales force sizing

• Selecting and adequately training sales personnel
• Devising salesperson’s compensation schemes and reward structures
• Determining the most profitable allocation of the firm’s sales force in forming sales territories, and allocate
sales quota.
• Information and communication systems for monitoring a salesperson’s activities and obtaining feedback
from the market for planning and control.
• Channel Management
 Sales Management Challenges

• Sales Technology
• Sales Force Diversity
• Selling Teams
• Increased complexities of channel
• International perspective
• Ethics and Responsible Selling
 Selling Styles: The Evolution

• 1940’s and 50’s : Sell ( Show, explain, lead to benefit and let them talk);
ADAPT(Assessment, Discovery, Activation, Projection, Transition);ARC(Ask,
recommend, cross-sell and close);AIDA(Attention, Interest, Desire and Action)
• 1960s : Needs satisfaction selling ( Xerox – ODPEC )
• 1980’s: Spin Selling ( Neil Rackham’s Book,1988 – four types of questions :
Situational questions, problem questions, implication questions ; Needs payoff
questions)
• 2000’s: Solution Selling ( Value co-creation ) ; Value based Selling ( Understanding
customer value, crafting value proposition and communicating value)
 A great salesperson: The essentials

• Ego
• Empathy

The fallacy of experience

Training

Overall, Customer engagement, internal networks, and Energy are the key drivers!
 Selling Skills and Behaviors

• Technical skills
• Inter-personal skills
• Salesmanship skills

• Adaptive selling behaviour

• Customer – oriented behaviour
Sales Strategy and Personal Selling
 Sales Strategy

Who is the customer?

What is the value proposition?
How the selling is done ?
Sales Strategy – A General Framework
 Buying Situation

• A new task buying situation ( Extensive problem solving )

• A modified rebuy buying situation ( Limited problem solving)
• A straight rebuy buying situation ( Routinized buying behavior)
 Buying Center

• Initiators
• Users
• Gatekeepers
• Influencers
• Deciders
• Purchasers
 Buying Process

• Recognition of needs/problems
• Determine characteristics of items
• Description of the characteristics of the items and quantity required
• Search for potential sources
• Acquisition and Analysis of proposals
• Evaluation of proposals and selection of suppliers
• Selection of order routine
• Performance feedback/evaluation
 Buying Needs

• Cost reduction ( Want a feeling of power )

• Few breakdowns ( Build personal equity )
• Dependable delivery for repeat purchase ( Job security )
• Adequate supply ( Want to be well liked )
• Cost within budget ( Want Respect )
 Sales Strategy

• Account Targeting Strategy- Key accounts, target accounts, maintenance accounts

and “why bother” accounts.

• Relationship Strategy – Transaction, solution, partnership, collaborative

• Selling strategy – Stimulus response, Need satisfaction/problem solving,

consultative, value-based selling

• Sales Channel strategy – Independent reps, internet, distributors, Trade shows

Complexities and The Salesperson : Handling the Process
“Happy losers”
 Personal Selling Process

1. Prospecting
– Identify Leads ( Referrals, Published material, Cold calling )
– Qualify leads ( Need , Capacity to pay, willingness to meet, profitable?)

• Pre Approach – Customer research, Presentation Planning

• Approach
• Need Assessment – Questions ( Discover Problem, Assess the value and Confirm)
• Presentation ( Feature, Advantage, Benefits)
• Handling Objection ( Price, Product, Procrastination, Hidden)
• Obtaining Order ( Closing hints )
• Follow up
Managing the Sales Funnel