Month: September 2020

When salespeople believe that closing is their top priority no matter how they get there they earn your brand labels like “obnoxious” and “rude.” The days of “Glengarry Glen Ross” are over. Consumers today are too wary of being manipulated to be won over by pushy tactics.

But people appreciate finding solutions to their problems. Consumers may not always be able to pinpoint their own stress points, but they love a company that makes their lives easier or more exciting.

Traditional sales tactics focus solely on the product, but a better strategy is to understand consumers’ problems first and then provide solutions through the company’s offerings. This is a relational and empathetic approach. Rather than turn people off, you build trust. This is especially true when selling solutions extends beyond closing deals and into managing problems customers encounter after they’ve made a purchase with your company.

Forming your business around helping consumers disrupts industries and earns customer loyalty, which means more reliable and consistent revenue streams. In “Reorganize for Resilience,” Ranjay Gulati explains that the customer-centric companies he tracked delivered shareholder returns of 150 percent over six years. This is in stark contrast to the S&P 500’s 14 percent.

Small interventions applied at the right time and to the right issues can improve customer experiences disproportionately. But turning complaints into happy customers requires appropriate resources and strategies. Here are four ways to turn your sales team members into problem solvers:

1. Open doors across silos

Perhaps the biggest obstacles sales teams face are their own companies. Suffocating parameters, outdated compensation systems, and tension between departments all hold salespeople back.

Everyone has to rise above internal politics or arguments over resources and recognize that each department plays an important role in the customer experience. Your salespeople need insights from marketing and R&D, among others, to better understand how your brand can solve people’s problems.

One of the things we’ve implemented within my team is a “work backward” approach. Start with what the customer experiences (or should experience), and work backward to improve that experience. This has allowed us to work through silos, competing agendas, and conflicting opinions to focus on what matters most for the customers and, by extension, the company.

Best Buy broke down silos to improve its customer experience and survive Amazon’s and Walmart’s lowered prices. The company did some research and found that women who made up 55 percent of its customer base, according to research in Gulati’s book didn’t actually enjoy shopping there.

So Best Buy adjusted its layout, trained its store staff to help more women in the ways they preferred to be helped, and introduced the Geek Squad so women who were seeking installation assistance were no longer turned away. These changes went far beyond a training session for sales reps, but they helped the business survive changes in the industry and even expand its services while competitors faded into oblivion.

2. Focus on the relationship between sales and marketing

Silos and tensions are notoriously problematic between sales and marketing departments. When a marketing strategy produces poor leads, sales teams often simply get angry because there isn’t a system in place to communicate effectively. Yet marketing can’t adjust its strategy without insights from sales.

These teams should be entwined in a dance not a street fight. The people on both teams must understand how a lead is defined and when a lead is ready for a sales call. A liaison can help communicate preferences between departments and help both teams move forward as a united front.

3. Develop customer intelligence

You can and should use data and hard facts to guide strategies. But salespeople need more they need valuable insights into their audience’s world from a thorough analysis of data. The shift for sales teams to think more like business advisors can be intimidating, especially when current tactics were effective in the past. But becoming solution-based often means changing up some job descriptions.

Strategic collaboration is a huge portion of our sales managers’ responsibilities. They constantly pull team members to their whiteboards, developing strategies together, challenging each other, encouraging creative thinking, and reviewing outcomes. This results in knowledgeable reps who can offer helpful insights and work together to solve each other’s problems and customers’ issues as well.

4. Don’t be afraid to educate consumers

When marketing and sales work together to produce quality leads and salespeople help shape strategic decisions, they’ll know more about the challenges customers face than the customers themselves. Don’t be afraid to use that knowledge to educate consumers and teach them new perspectives.

In the past, many companies believed that educating consumers gave them leverage and would empower consumers to find solutions with competitors. In reality, sharing information builds trust. Consumers want companies to be transparent, and receiving information about why a product will genuinely solve their problem is a pleasant and desirable experience. This approach makes sales reps into partners in a customer’s pursuit of satisfaction.

Today’s volatile, high-speed markets make innovative strategies essential. A problem-solving approach to sales can give you a competitive edge by creating loyal and appreciative customers.

The rep then needs to shift gears from consultant to negotiator in order to engineer an agreement that’s a win-win for both their own and their prospect’s companies.

While negotiations can go in a seemingly infinite number of directions, salespeople with the following negotiation skills will be well-equipped to roll with the punches.

Sales Negotiation Skills to Develop

The most important negotiation skills in sales are:

1. Define the concessions you’re willing to accept in advance

In the heat of the moment, a 30% discount or additional six months of support might seem perfectly acceptable. It’s only when you get back to your desk and start drafting up the contract that you realize you agreed to terms you can’t or shouldn’t accept. Clearly defining the limits on price discounts, freebies, or other add-ons before you meet with your prospect will ensure you come to a mutually beneficial agreement.

2. Let the prospect go first

You’ve presented the terms of the deal, and the prospect would like to negotiate them, so let them start the conversation. In the spirit of being accommodating, salespeople are often tempted to offer a discount or an adjustment before the prospect even opens their mouth. But you don’t know what they’re going to say! Just as in other areas of sales, it pays to listen first, and then speak.

3. Don’t give a range

If the customer would like money knocked off your product’s price tag, don’t say, “Well, I could probably reduce the cost by 15 or 20%.” Who would accept 15% when 20% has been offered? Always quote one specific number or figure and then go higher or lower as necessary. The word “between” should be avoided at all costs.

4. Avoid splitting the difference

According to sales expert Art Sobczak, offering to split the difference can do more harm than good. For example, if the product or service costs $100 and the prospect wants a 50% discount, the salesperson shouldn’t counter with $75 although it seems logical to do so. If the salesperson offers a slight discount but still keeps the number in the neighborhood of the original price, the prospect will likely accept, and the margin takes less of a hit.

5. Don’t put anything in writing until the conversation is over

Negotiations can swing back and forth and around again. Many ideas will be proposed, and while some will be accepted, others will be shot down. A salesperson would be wise not to revise the contract until the meeting has ended, and all parties have verbally agreed to the terms.

6. Negotiate with the decision maker

This tip might seem obvious, but according to John Holland, many salespeople make the mistake of negotiating with the wrong person. And this means that when talks begin with the true decision maker, they’ll likely start at the already discounted price quoted in the first meeting. A great outcome for the prospect, but a poor outcome for the seller.

7. Get something in return for concessions

Healthy salesperson-customer relationships are borne out of mutual respect and trust. With this in mind, salespeople shouldn’t accept every single one of a prospect’s demands without making some requests of their own. By keeping the negotiation a win-win for both sides, salesperson and client remain on equal footing, which lays the groundwork for a mutually beneficial relationship.

8. Expand the conversation beyond money

The most commonly negotiated aspect of a sales deal is price, so salespeople should be prepared to talk discounts. However, since price is tied to value, and value tied to a customer’s perception of and satisfaction with a product, salespeople might consider offering other add-ons or freebies in lieu of a smaller price tag. But bear in mind that this is not a hard and fast rule the specific concessions a salesperson can offer depends on the situation.

9. Keep the conversation light

Although prospect and salesperson sit on opposite sides of the table during a negotiation, they will be partners if the deal is signed. Keep the talk light and jovial to avoid creating bad blood.

10. Walk away if necessary

Salespeople shouldn’t be willing to accept any curveball a prospect throws at them. If demands become unreasonable or unprofitable for the company, don’t be afraid to walk away from the deal. A customer who only agreed to sign if the contract was radically amended or the price was drastically dropped is bound to cause problems down the road. And since they clearly don’t see much value in the offering, it’s only a matter of time before they become dissatisfied. Get out for your and your prospect’s sake.

Sales skills training builds a sustainable competitive advantage because it differentiates your team in an increasingly commoditized market.

The best sales teams are a lot like great schools: They care about results, but the way they achieve them is by being relentless about developing the inside sales skills of their reps. In fact, the best sales teams are most often led by someone who is more like a sales coach than a sales manager. This dedication to developing inside sales skills ultimately creates a sales team that not only hits its short-term goals, but instills a culture of learning and self-improvement in order to achieve its long-term goals as well.

1. Communication Skill

On the phone, the tone of voice, volume and pace of a sales rep’s speech are surprisingly important sales skills. In sales, how you say things to a prospect matters more than what you say. According to Sandler Sales Training, only 7% of communication relies on the content of what you say, whereas 38% of communication is about other attributes of communication such as tonality, etc. As you may have heard before, it’s not what you say but how you say it. Reps should try to subtly mirror a prospect’s tone of voice and style of talking – if a prospect is more formal and polite, speak similarly; if they’re more informal and joke around, do the same. This helps prospects feel familiar with you, and relate to you more easily to create rapport. Reps also need to speak clearly, not too quietly, and not in a monotone. You need to let your emotion and personality shine through, so that the person on the phone knows you’re a human, and is interested in talking to you.

2. Listening Skill

Every great salesperson knows that listening is the most important of all sales skills. Most people think it’s the smooth talkers who make the best salespeople, but in reality it’s those who have mastered listening and identifying people’s true motivations who are most successful. Listening isn’t just something you should do when your sales manager is screaming at you; it’s also what will help you become the top salesperson at your company.

Why is listening so important in sales? There are several reasons. The first is that most people want someone to listen to them. In today’s fast-paced world, however, few of us get someone’s undivided attention for very long. The second reason listening is so important in sales is that since there are so few good listeners these days, those who are will stand out in the customer’s mind.

3. Trust Building Skill

Selling is a people-oriented business requiring a customer-focused sales approach. Sales are made in the dialogue, person-to-person. The conversation may be face-to-face or over the phone, but the very essence of a successful outcome is based on the ability of the seller to build trust in client relationships.

This means that salespeople must be at their very best, bringing value to the table and to their customers. If instead, they just push products, they sacrifice goodwill and trust. Their sales success is likely to be short-lived, not the basis of a long and mutually productive relationship.

Building Trust with Your Customers

Building and maintaining trust across the full lifespan of a customer relationship takes attention and focus in the following areas:

• Prepare with the customer in mind.
• Ask great questions not bad ones during sales conversations.
• Create value proactively, not reactively.
• Be honest about what you can and can’t do.
• Make your value explicit, not implicit.
• Always maintain a collaborative tone, even when you don’t see eye to eye

Importance of Rebuilding Trust

It can be a difficult task to build trust and credibility with prospects and customers. It is even harder when attempting to rebuild trust after it has been damaged by scandal or misstep. It doesn’t matter which company or sector is making headlines for bad decisions, unethical or illegal practices, or individuals who displayed bad behavior. There will always be some event that triggers a crisis in trust.

During difficult periods, especially when daily headlines keep bad news front and center, you may find yourself spending more time explaining, defending, and deflecting. Most people think of “fight-or-flight” reactions when faced with stressful situations. These natural reactions protected your ancestors back in the day, when conflict meant life or death, but all are ineffective for regaining the trust, respect, and confidence of customers, and in turn, growing sales.

So, what does work? If executed with authenticity, patience, and skill, the following four-step process is straightforward and effective in rebuilding trust with clients and customers:

• Empathize: Expressing empathy will help you to coax out and reduce negative emotions.
• Question: Open-ended questions and effective listening take courage and a strong stomach when trying to rebuild fractured trust. The payoff: the customer is allowed to vent and feels heard, while you show depth of caring and a greater understanding of the customer’s perspective on the issue.
• Position: If you’re like most competitive salespeople, your first reaction when presented with customer anger may be to explain and defend. While accurate, your comments will not be persuasive and may sound defensive, triggering in customers their own fight, flight, or freeze reactions. Instead, maintain a customer-focused selling approach: after empathizing and questioning, your solutions or ideas should be linked to what you learned from the customer’s responses to your questions.
• Elicit Feedback: Only by checking and using open-ended questions can you elicit sufficient feedback to know if the proposed ideas hit or missed their marks.

The theories of selling implies to the behaviour of the salesperson towards the prospect or the customer, which ensures the active sale of goods or services. The selling theories gained significance due to the emerging role of the salesperson in marketing since a seller acts as a marketer too.

Building a strong relationship with the customers is essential for the salesperson to create the brand image since he/she is the face of the company.

Terminologies Used

• Selling: Selling is the exchange activity carried by the organizations and individuals to fulfil the needs of the consumers to earn profit in return.
• Salesperson: The one who represents the company in front of the customers and is responsible for the sales of goods or services, is known as a salesperson.
• Prospect: The prospect refers to the lead or prospective customer whom the salesperson needs to convince for closing a sales deal.

1. Stimulus-Response Theory

The salesperson’s application of the correct stimulus with the appropriate efforts for acquiring the desired response from the prospect is defined as the stimulus-response theory.

Given below is the diagram, which clearly explains how this model functions:

Functioning of Stimulus Response Theory

Following are the four essential actions or stimuli over which the salesperson holds a command and can modify according to the situation, are as follows:

• Self: The salesperson can groom oneself to be presentable; in terms of body language, physical appearance, communication skills, mannerism, voice pitch and tone.
• Price Concession: The salespeople have limited control over the discount or price concession provided to the prospects who are considered to be valuable for the organization.
• Price Change Proclamation: The change in product price can be declared by the salesperson anytime, according to his/her convenience.
• Preferential Treatment to Valuable Customers: The buyers who usually procure goods in bulk quantity and make instant payments on their purchase, are offered various price concessions and other privileges by the salesperson.

Shortcomings of Stimulus-Response Theory

There are certain limitations due to which this theory was criticized. Some of these are as follows:

• The prospect has no say in the whole selling process and plays a passive role, where he/she only needs to follow the salesperson blindly.
• In a case where the prospect is not fully assured with his/her purchase, may even face the situation of post-purchase disagreement.
• At times, a manipulative salesperson cheats on the prospect, by using the consumer’s weakness as a stimulus for selling a product.
• The application of this approach is limited to the selling oriented organizations, which has a primary motive of increasing the sales volume.
• This theory ignored the role of relationship management in carrying out selling activities.
• It emphasized the presentability and interactive skills of the sales personnel, along with giving liberty to take decisions for closing the sales deals, which adversely affects the profitability. Since the salespeople tremendously decreased the price and increased the credit period.

In simple terms, the stimulus-response theory enlightens the repetitive actions of a salesperson which initiates the customer’s positive response towards the product or service.

2. Product-Oriented Selling Theory

In this theory, it is assumed that the prospect or buyer has no idea about the new product and scientific or technological advancement. Neither they know about the benefits or impact which the new products or technology can create for the prospects.

Therefore, in such a situation, the product-oriented selling style is adopted, where the salespeople need to spread awareness about the product by specifying its features, advantages, benefits and usage, to the prospects.

It is believed that this strategy will not only make the prospect familiar to the new product but may also motivate or pursue him/her to purchase the product.

Here, the customer is targeted indirectly with slight influence through motivation. This theory is usually applied in organizations dealing in software projects, computers, machinery, pharmaceutical, etc.

The following image represents the working of product-oriented selling theory:

In the above diagram, the maximum i.e., almost 85% of the time, interaction is carried out by the salesperson, where he/she explains and presents the product features in front of the prospect.

The only drawback of this theory is that, if the salesperson fails to understand the present need of the prospect, or is unable to associate this requirement with the benefits of the new product; then the buyer won’t show any interest in purchasing the product.

3. Need Satisfaction Theory

The need satisfaction theory brings forward an interactive approach or a win-win assumption, where the prospect and the salesperson communicate with each other to ensure mutual satisfaction of both the parties.

The salesperson enquires and understands the requirements, wants and expectations of the prospect and then presents a suitable product to achieve consumer satisfaction.

Here, the salesperson gets a chance to associate the product features with the prospect’s needs and desires. The salesperson has the power to convince the buyer by highlighting the benefits the product will generate to satisfy his/her specific requirements. In this approach, even the prospect feels valued and listened.

Stages of Need Satisfaction Theory

The process of need satisfaction theory can be identified through the following three steps:

(i) Need Development

The initial phase of this theory emphasizes on generating the need for the product. The salesperson interacts with the prospects to take feedback about their contentment with the former products along with proactive enquiry of their present needs and requirements.

This step helps to gather sufficient information on what the consumer wants and past product performance.

(ii) Need Identification

In the next step, the salesperson sums up the information collected in the development stage and thoroughly analyzes the needs of the prospect. Then he/she confirms this requirement with the buyer, to ensure complete understanding and clarification.

(iii) Need Satisfaction

The last stage is all about meeting the buyer’s needs appropriately. The salesperson prepares a complete presentation on the product offering and its features which have the potential of meeting the identified needs and wants of the prospect.

The salesperson also exhibits his/her interpersonal skills by resolving the queries and doubts of the buyer. Thus, finally convincing him/her to purchase the product.

It is a customer-oriented approach where the priority is given to building a long-term relationship with the consumers rather than just selling the products.

• Some may say that selling was a traditional concept, but in reality, it is an inseparable part of marketing management. Understanding its different theories provide the power of healthy market acquisition to the organizations.

All steps of the selling process ultimately lead to the closing of the sale since it provides the tangible result for the salesman in the form of purchases made by the prospects. Therefore, every salesman aims at closing the sale successfully.

However, not all selling propositions meet their logical consequences. Some of them are unsuccessful due to some reason or the other. Some of the important reasons of failure or unsuccessful closing are as follows:

1. Wrong Attitude

Most often, the mental attitude of the salesman considerably dictates the success or failure of the salesman in closing sales. If a salesman is determined and has enough faith and confidence, he can persuade the prospects in favour of a purchase and thereby, close the sale successfully. Some salesmen have the pre-conceived desire of hearing ‘Yes, I’ will buy’, from the prospects, at this stage.

Once the prospect expresses his feelings in negation, some salesmen develop the negative attitude immediately about the sales proposition. However, negative replies by the prospects should never deter the salesmen from making continuous efforts in winning the confidence and conviction of such prospects. Therefore, the fear of failure should never override the salesmen’s confidence.

2. Inadequate Presentation

The earlier steps of the selling process like prospecting, pre-approach, approach, presentation, demonstration and overcoming objections are to be covered carefully and step-by-step. Once a small mistake is committed and a lapse creeps into any of these stages, the selling process develops vital snags.

As a result, the salesman is bound to meet failure at the time of closing the sale. Therefore, each and every stage of the selling process has to be carefully built up in order to ensure success at the time of closing the sale.

3. Wrong Interpretation

Some of the salesmen are of the opinion that the prospects need not be convinced and persuaded to buy a particular product or service. They argue that since the prospect has a need, and has moved through the early stages of the selling process, he will be automatically purchasing the product or service offered for sale.

Therefore, the prospects need not be persuaded to say ‘yes’ at the time of closing the sale. However, such an impression is totally wrong. Prospects, as such, need to be convinced and persuaded at the closing stage also. A successful coverage of the earlier stages of the sales process cannot ensure a favourable response of the prospect at the closing stage also.

4. Interruption

At times, it may so happen that the salesman might have brought the prospect to the point of closing a sale successfully. At this very juncture, a friend or a relative or an acquaintance may interrupt and for that reason the prospect may withdraw from closing the sale for the salesman.

In other words, third party interference may mar the sale transaction leading to the slip between the cup and the lips. In such cases, prospective sales transactions fail to meet their natural and logical consequence of sale.

5. A Trial Close

As the name implies, trial close is not the final close. A trial close is a question or a set of questions asked by the salesman to the prospects at different stages of the sales talk, in order to get buying signals. Through the trial close, the salesman tries to determine whether the prospect is ready to buy. In fact, it is an attempt to see whether the prospect is on his way to say ‘yes’ to the selling proposition.

If the salesman gets clear signals from the prospect regarding the buying decision, he (the salesman) need not continue his sales talk any more. On the other hand, if the prospect does not provide any indication of his buying decision, the salesman can proceed along with his sales talk.

For example, a trial close can be attempted by asking questions like, ‘Do you prefer home delivery of the refrigerator by our transport or will you like to carry the same by a hired vehicle?’ ‘Here an attempt is made by the salesman to trial close the sales of a refrigerator.

Once the prospect says, ‘I would like to have the same delivered at my residence’, the sale can easily be considered as closed. It is not necessary for the salesman to go through the rest of the sales talk.

Closing is a make-or-break moment in sales. Choosing the right phrases to seal a sales deal is crucial. And this moment is likely the final verdict determining whether or not your efforts will amount to anything at all.

You’re not the only salesperson who feels apprehensive about the close. However, without that feeling of risk, successfully closing a sale wouldn’t be so thrilling which drives salespeople to continually strive for more.

Traditional Sales Closing Techniques

Traditional sales closing techniques usually employ some psychological tricks designed to give that final nudge. Here are two of the most common.

1. Now or Never Closes

This is where salespeople make an offer that includes a special benefit that prompts immediate purchase. For example:

• “This is the last one at this price.”
• “We’ve got a 20% discount just for customers who sign up today.”
• “If you commit to buy now, I can fast track you to the front of the implementation queue.”

This technique works because it creates a sense of urgency and can help overcome inertia when a prospect wants to buy — but for some reason isn’t pulling the trigger. Of course, you should always establish value before offering a discount or promotion.

2. Summary Closes

Salespeople who use this closing technique reiterate the items the customer is hopefully purchasing (stressing the value and benefits) in an effort to get the prospect to sign. For example:

“So we have the Centrifab washing machine with brushless motor, the 10-year comprehensive guarantee, and our free delivery and installation service. When would be a good time to deliver?”

By summarizing previously agreed-upon points into one impressive package, you’re helping prospects visualize what they’re truly getting out of the deal.

3. Sharp Angle Closes

Prospects often ask for price reductions or ad-ons because they know they have the upper hand and they also know you expect it. If you have approval from your sales manager to do so, try the sharp angle close technique to catch these prospects by surprise.

When they ask, “Could you add on a few extra hours of onboarding at a discounted rate?” reply, “Sure. But if I do that for you, will you sign the contract today?” It’s likely they won’t be expecting this response — first, because you agreed to their request, and second, because you’ve proposed closing today.

Modern Sales Closing Techniques

These canned closing techniques probably seem a little old-fashioned. Perhaps they strike you as a little too “salesy,” particularly in light of the rise of inbound sales.

In particular, the idea of closing itself needs to encompass any and all incremental agreements you secure throughout a sales process not just the moment of final purchase.

In a sales engagement, reps should endeavor to:

• Discover the customer’s needs
• Effectively communicate how specific products or services offer an affordable and satisfactory solution to those needs

If these two requirements are properly achieved, then there should be no barrier to closure. The closing question can be asked directly at that point.

4. Question Closes

To achieve these two foundational goals, it’s imperative that reps ask prospects probing questions. Effective salespeople focus on closing a sale as soon as a conversation with a prospect begins. Through a series of questions, they develop desire in the client and eliminate every objection to purchase.

One can even close the sale in the form of a question, which allows the rep to address outstanding objections while gaining a commitment at the same time.

For example: “In your opinion, does what I am offering solve your problem?”

The question allows you to discover whether the prospect is sold on your product while keeping the door open for further selling. If the answer is ‘no’ it remains their opinion (not yet the truth), thereby allowing you to continue to sell. If the answer is ‘yes,’ then signing on the dotted line is the next step.

Here’s another question close: “Is there any reason why we can’t proceed with the shipment?”

This question asks either for closure or more information as to why the customer isn’t quite convinced. It’s win-win.

5. Assumptive Closes

This closing technique draws on the power of positive thinking. If you believe, from the first piece of email outreach, you will close this deal, it can have an incredible effect on the rest of the sales process.

What’s important here is to closely monitor your prospect’s interest, engagement, and objections throughout. After a call or meeting, ask, “Did this presentation align with your expectations?” If you’ve just provided them with new information about your product or service, ask, “Does this sound like something that would be valuable to your company? Does this meet a specific need or pain point?”

By keeping your ear to the ground — and assuming good intent from the start — you’ll bring an authority and direction to your sales process that wouldn’t be there otherwise.

6. Take Away Closes

If you have kids, you’ve likely noticed if you take a toy away from them they’ll want it more than ever. Use this similar psychological practice on your prospects.

If they’re balking on price, remove a feature or service and present the discounted offer to them. It’s likely, they’ll be thinking about the part you removed rather than the discounted price.

7. Soft Closes

The soft close is a way to show your prospect the benefit of your product and then ask a low-impact question to ascertain whether they’d be open to learning more.

For example, “If I could reduce widget maintenance by 25% and increase widget productivity by 15%, would you be interested in learning more?”

You’ve clearly stated the benefits without making any demands or sudden requests.

If the example above still seems too direct, you could ask, “If I told you I could reduce widget maintenance by 25% and increase widget productivity by 15%, would that align with your company goals?”

This removes their need to commit to you in the slightest, and gives you more time to learn about their business needs.

Being skilled at closing is arguably one of the most important techniques a salesperson can master. Find a mentor or fellow salesperson who excels at it and learn from them.

The actual selling process starts with prospecting and qualifying. However before this step, there is something called pre-sale preparation which identifies prospects and makes sales presentations where sales people attempt at convincing customers that a specific product can satisfy their needs.

There are many sales people who believe in following this step after the prospecting process which has to be done in a planned and scientific manner. Actually the pre-sale preparation phase is a phase of selling process-where sales people are found to prepare themselves with adequate knowledge about the products they are supposed to sell.

They are supposed to be aware of the competition and the category and profile of customers they are supposed to target. It is this phase that helps sales people present a credible picture of the product to the customer.

It is generally observed that sales people who are well prepared and have understood the complexity of the product and consumer buying behavior do have stronger communication ability than those who do not possess adequate understanding on the above.

Customers as such are low on knowledge quotient about a particular product and it is supposed that sales people with knowledge about products, technology and markets will be enabling the customer to make an informed choice. To a large extent, customers depend upon sales people for product related information.

When sales people fail to provide relevant information, it gives an opportunity to sales people of competitors to cash in on the opportunity. Talking about sales people’s knowledge base, there are three areas on which sales people should have adequate knowledge and those areas are product, company and competitor.

In the context of product knowledge, history of the company, finances, size of the company and policies and procedures of the company are some of the information that sales people of a company should possess.

In the context of product, the features, benefits, styles, origin and price of the products should be well understood by sales people. In competitor’s context, it is the industry structure, market share, market behavior that sales people should be aware of.

Process of Selling

The process of selling involves the following steps:

1. Pre-Sale Preparations

A salesman has to serve the customer and must identify a customer’s problems and prescribe a suitable solution. For this, a salesman must be familiar with the product characteristics, the market, the organization and the techniques of selling. Also he must know the customer, himself and the company. He must know buying motives and buying behaviour of the customers or prospects. He should be aware of current competition and market environment.

2. Prospecting

A salesman has to seek potential customers who are his prospects i.e., probable buyers. A prospect has unsatisfied need, ability to buy and willingness to buy. Prospecting relates to locating prospects. They can be through present customers, other salesman, phone directories, or by direct cold canvassing. These prospects must, of course, be accessible to salesman. Thus, prospecting is similar to the seeking function for the total marketing activities.

3. Pre-Approach

After locating a prospect, salesman should find out his needs and problems, his preferences and behaviour etc. The product may have to be tailored to the specific requirement of customer. On the basis of adequate information of the customer’s wants and desires, salesman can prepare his plan of sales presentation or interview. The sales presentation should match to the needs of the individual prospect. It should enable the salesman to handle his prospect smoothly through the buying process, i.e., during, the sales talk.

4. Approach

The next step is approach where the salesman comes face to face with the prospect. The approach has two parts, i.e., obtaining an interview, the first contact. He may use for this, telephone, reference or an introduction from another customer; and his business card. The salesman must be able to attract the prospect’s attention and get him interested in the product. It is very important to avoid being dismissed before he is able to present his product.

5. Sales Presentation

After the salesman has found a prospect and he has matched the customer’s wants with his product, he becomes ready to make a sales presentation. The sales presentations is closely related to the buying process of customers. The sales interview should generally go according to AIDA theory (i.e., Attention, Interest, Desire and Action).

Attention is attracted and interest is gained. The salesman at this point can increase the interest through smart and lively sales talk together with proper demonstration. Sometimes, visual aids are used in sales demonstration. These are common for capital goods or machineries.

After explaining the product characteristics and expected benefits, the salesman should find out customer’s reactions. The prospective customer’s all queries and doubts must be clearly answered. The salesman should find the customer satisfied. A satisfied sales presentation must be clear, complete, assertive about product’s superior performance and be able to gain the confidence of the prospect.

6. Objections

At any stage of sales interview, the prospect may attempt to postpone the purchase or resist purchase. A good salesman must consider an objection as an indication of how the prospect’s mind is working. The clever salesman should welcome an objection, interpret it correctly and will avoid it tactfully, without arguing with the customer.

7. Close

The close is the act of actually getting the prospects’ consent to buy. It is culmination of the efforts so far made by the salesman and is the climax of the entire sales process.

It is very important for salesman to be alert and find out the right moment for closing the deal. This is the “Psychological or reaction movement”, at which the minds of salesman and prospect are tuned together.

The salesman watches every sign of prospect willing to buy and shall apply “the close”. A sale is never complete until the product is finally in the hands of a satisfied customer.

8. The Follow-up

This stage is the post sale contacts. The salesman after obtaining the order, arranges for despatch and delivery of the product, facilitate grant of credit, reassure the customer on the wisdom of his purchase decision, and minimize dissatisfaction, if any.

The salesman should contact the customer periodically to maintain his goodwill. A sale is made not in the mind of salesman, nor over the counter, but in the mind of the buyer. A salesman should have the quality of empathy, i.e., reading customer’s mind. This will provide the salesman accurate information of buyer’s motives, feelings, emotions, and attitude etc.

The idea behind the creation of sales territories is to match the sales opportunities with the selling effort. A salesman is given a group of similar customers and prospects for servicing. This assignment by itself facilitates the planning and control of the sales operations.

Each territory has its own strong and weak points and management can use these strategically. Sales planning is with respect to the territories created. In a heterogeneous market, a territory is comparatively more homogenous. A territorial division also brings out an element of effectiveness in the sales operations. It also helps the appraisal of the sales effort.

Conceptually, a territory may represent:

(a) A particular geographical area mostly.

(b) A group of customer accounts or prospects, e.g., hospitals and institutions.

(c) A market

(d) An industry, i.e. pharma-central formulation units are a territory of bulk doing manufacturers.

Considered operationally, a territory represents a customer grouping. Though most of the companies emphasize geographical territories, some companies with technical style of selling ignore this basis and assign salespersons to a particular customer grouping.

Even in geographic territories, ultimately a salesman deals with a customer grouping. Geographical territories also do not matter much in insurance selling, property selling, selling in shares and securities and automobiles. In all situations when the salespersons are internal order takers, geographical territorial division does not matter. Only when the salespersons are external order getters, there is scope of geographical territorial division.

Specialized salespersons also call for non-geographical territorial division. Small companies and companies with innovative products also avoid geographical division.

Majority of companies, however, have adopted geographical territorial division. While assigning a territory, we have to consider the service requirements and cost of providing the service to the customers. Geography influences both of these. Even within a geographical division, there are groupings of customers and the division just for the sake of administrative convenience.

Companies deal directly from their headquarters with some important customers providing bulk of business. Such accounts are not assigned to any salesmen. These accounts are called house accounts.

Sales territories are established to achieve the following goals:

(i) To cover the market properly.

(ii) To deploy the salespeople effectively.

(iii) To service the customer grouping efficiently.

(iv) To evaluate the sales representatives.

(v) To facilitate higher productivity in selling and marketing effort.

(vi) To control selling expenses.

(vii) To coordinate personal selling and advertising.

Sales Territories: Meaning and Definitions

It is a geographical area including the customer group or groups that is assigned to a particular salesperson or the sales team. All the activities of the salesman or the sales team needs to be conducted within that area. In the same way, various geographical areas will be assigned to different sales people or sales team.

Sales territory planning and management is an important task, the sales team along with the top management in the sales department should spend time and plan the sales territories and provide guidelines for the management of the sales territories.

A sales territory is defined as a group of present and potential customers assigned to an individual salesperson, a group of salesperson, a branch, a dealer, a distributor, or a marketing organization at a given period of time. For a firm, a profitable sales territory is one which has a number of potential customers that are willing to buy the category of products sold under the firm’s brand name.

Territories are defined on the basis of geographical boundaries in many organizations. Though the geographic market may have a heterogeneous mix of both existing and potential customers, a decision on the basis of geographic coverage has distinctive advantages.

A well-planned territorial design, for example, helps in matching the selling efforts with the sales opportunities in that market. Sales managers assign their sales force the responsibility of serving particular groups of both present and potential customers and serve as a contact point within these markets. This helps to give a direction to the process of sales planning and control.

According to Still and Cundiff (2004), a sales territory is a grouping of customers and prospects assigned to an individual salesperson. Maynard and Davis (1957) are of the opinion that a sales territory is the basic unit of sales planning and control. According to Cranfield (1987), a sales territory is a geographical area containing the present and potential customers who can be effec­tively and economically served by a single salesperson, branch, dealer, or distributor.

An analysis of the above definitions indicates that a sales territory is a geographical area that identifies and serves a category and a certain number of customers. A sales territory helps in better sales planning and effective operational control. However, in some instances, companies do not follow geographic designs for sales territories.

For example, a small firm catering to a small niche market may not go in for a geographic design because sales planning and control can be more effectively planned from the corporate office itself.

There are some situations where companies decide to build sales territories on the basis of the urgency and frequency of customer requirements rather than geographic coverage.

These include situations where products are highly technical and complex in design, when organizations prefer either a technical sales force or a system-selling approach, and where a set of people with varied knowledge levels are grouped together to provide solutions to customers’ problems and queries. The problem with such a method is that the same customer may get calls from multiple salespeople from the same organization.

An alternative method is to make a single salesperson accountable for one set of clients only and if required, call technical specialists for assistance. Also, in situations where personal relation­ships and acquaintances have a bearing on sales, organizations do not prefer territorial designs for salespeople.

In the case of knowledge and investment products, for example, a customer may prefer to deal with the salespeople he is comfortable with. To respond to this preference, an organization may need to call upon a salesperson serving in another territory.

In the words of B. R. Canfield, “A sales territory is a geographical area containing present and potential customers who can be effectively and economically served by a single salesman, branch dealer or distributor.”

According to Stiff and Cundiff, “A sales territory is a grouping of customers and prospects assigned to an individual salesperson.”

According to Mynard and Davis, “Sales territory is the basic unit of sales planning and sales control.”

In the words of Stanton and Buskrik, “A sales territory is a number of present and potential customers located within a geographical area, and assigned to a sales person, branch or middlemen (retailers or wholesaler).”

Characteristics of Sales Territories

1. Sales territory is a geographical area containing a number of present and potential customers.
2. Different groups of customers are formed by a firm through allotment of territories.
3. It is a group of customers or geographical area assigned to a salesman.
4. It is the area that can be effectively and economically served by a single salesman.

Sales Territory Planning and Management:

1. Research the geographical area
2. Divide the area on the basis of population, accessibility, potential etc.
3. Study the consumer behaviour of the territory
4. Assess the revenue potential from the respective territories
5. Analyze the hurdles that may be present in the territories
6. Define the products suitable for the territory
7. Probe further to find out specific needs and wants of the people within the territory
8. Prepare a plan for each territory with quotas and tasks to be accomplished
9. Appoint sales people or sales team for each territory
10. Monitor and track the performance of each territory
11. Review sales people performance for each territory, and
12. Avoid overlapping territory because it causes conflict among the sales people.

Size of Sales Territories

There are various factors that influence the size of a sales territory. For a sales manager, an understanding of these factors will aid in deciding on the size of the sales territory. These factors include the nature and demand of the product, mode of physical distribution, the selling process, and transport and communication facilities in the overall market and territory.

Other factors that influence the size of the territory are government regulations, density of population and population spread within the territory, and market potential and growth rates. The level of competition, firms’ sales policy, ability of the salesperson, and the overall economic conditions prevailing in the country are other factors influencing the size of sales territories.

If a product is a consumer durable with a longer shelf life, the company may prefer to have a larger territory compared to smaller territories for the perishable commodities. Territories can be established on the basis of the nature of the product, namely consumer, industrial, durable, or non-durable.

Only when there is a huge demand in the market for the product, the companies decide on designing smaller territories so that the salespeople can cater to the customers and provide adequate service to them within a limited geographic area.

When companies decide to go through intermediaries such as wholesalers, who manage distribution to the retailers, they prefer to have a larger territory. On the other hand, in industrial buying, where bulk order booking is done by a salesperson or in situations where a company also handles the retailers, the size of the territory is kept small.

Organizations where a higher allotment is made towards selling expenses go in for larger territories as the outlays permit them to cover a wider area through their own salesforce.

Similarly, a better, cheaper, efficient, and faster transportation and communication facility makes companies decide whether or not the territories of the salespeople are large enough to take advantage of these facilities.

Territories in rural markets in India are smaller in comparison to the urban markets as transportation and communication is a problem in these markets. Government restrictions and regulations of taxes and the movements of the goods also influence the decisions of a firm in regard to the size of the territory.

In a market with a high density of population and market potential, companies decide in favour of smaller territories. In a highly competitive market, where the success of the enterprise largely depends on the close relationship that one firm has with customers, the size of the territory should be small.

If a company has experienced, well trained, and competent salespeople, it may go for a larger territorial cover, as compared to the organizations with novice salespeople who need to make more calls to realize a sale.

If a firm with a limited number of products wants to earn higher profits, the size of the territory will be larger, as here profit goals decide the size of the territory and the sales are derived out of fewer products. The overall condition of the economy also affects the size of the territory.

For example, a small-size territory is suitable for a firm during recession when prices have stabilized and customers are not willing to spend spontaneously. During a boom condition, however, firms can increase the size of the territory so that salespeople can cover a larger market with a higher demand due to an upturn in the economy.

Sales quotas are targets set for individual sales reps and teams to measure performance, incentivize salespeople, and increase company revenue. Sales quotas are typically tied to sales volume, costs, profit, or specific sales activities like appointments or calls, and effective quotas are ones in which 80% of your staff on average should be able to meet.

A number of factors are used for establishing sales quota for salesmen. The quota may be based on past sales records, buying power of customers, company policies, total production for the year, competition, etc.

1. Past sales records

Past sales of established organisations form a good index for future performance. Thus, while setting sales quota, past sales may be taken into account. Otherwise stated, the future sales quota is fixed keeping in view the past sales. New companies can fix their sales quota by observing and going through the past sales of the competing firms.

2. Buying power of customers

A manufacturer can have a rough estimate of the buying powers of customers of a particular area. The buying power of a particular area can be known by the economic status, income of the customers living in the area, living habits, etc. Accordingly, the manufacturer can estimate sales quota for that particular area.

3. Company’s policies

Company’s policies regarding credit, quality of goods, discount, selling terms have a direct impact while estimating sales quota for the salesman. In case the company has a liberal credit policy, high quality goods, offers higher rate of discount and facilitates installment selling, larger sales quota can be set for the individual salesman. These policies help to increase the demand for goods and services and as such increase the sales quota of each salesman.

4. Total production for the year

A company’s total production in a particular year also plays an important role in determining the size of the sales quota. If, in a particular year, the production is high then higher sales quota can be set for the salesmen because goods which are produced need to be sold. On the other hand, if the production is normal in a particular year, moderate sales quota for each salesman is fixed.

5. Extent of competition

If the company in question is facing higher competition, the sales quota fixed is usually lower. In other words, the intensity of competition is inversely proportional to the size of the sales quota. It means that companies enjoying lesser competition or near monopoly can have larger sales quota fixed for each salesman as there is every possibility of larger volume of sales.

6. Opinions of experts

Experts in the sales field are of immense help in determining the sales quota. Dealers, agents, consultancy firms and other agencies which are closer to the market are in a position to know the kind and quantity of goods that can be sold in a particular area. Companies can take the help of such agencies or persons in fixing sales quota for each salesman.

Methods of Setting Sales Quotas

The sales quota is determined in many ways.

4 important methods of setting sales quotas are discussed as follows:

1. Top Management Downward method

In this method, the management and executives, with their experience and judgement, estimate the total sales for the next year. Sales executives having enough experience in the sales are given the responsibility of setting such sales quotas. This method is sometimes called guess work quota method because it is estimated on the basis of executives’ guess work.

2. Territorial Estimate Upward method

This method is known as grassroots approach. In this method, the salesmen are asked to make estimation of sales of their territories for the coming years. The branch managers make adjustments in the salesman’s estimates. The district and divisional sales managers make further adjustments of salesman’s estimates with the cooperation of sales force. Finally, all such sales estimates are grouped and the sales estimate of the entire sales field is prepared.

3. Combination of Top Management-Downward and Territorial Estimate-Upward method

In this method, the above two methods of estimating sales quotas are combined. At the headquarters, the management by their past experience and judgement estimate the sales quota. At the grassroots level, the salesmen are asked to make their own estimates. Next, an overall estimate for the entire sales operations of the company is prepared based upon both the estimates. Then the estimate is divided into territories, products and salesmen.

4. Past Performance Method

Under this method, sales estimates are made keeping in view the past sales performance and the total sales estimate for the future is made by increasing the sales by a certain percentage. The increase is also made keeping in view of the competition, advertisement, economic condition, price of the product, etc. Then this total estimate is divided into sales quotas for each division, district, branch and individual salesman.

Besides, there are several methods of estimating sales quotas like survey of buyers’ intention, industry forecast and market share. While a company has the freedom to choose any method that suits it best, the basic criterion for choosing a particular method of sales quota estimation is that the method should be quick, less costly and more accurate.