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BUYER SELLER DYADS

The term dyad is used for interactions between people. Thus buyer seller
interactions can also be said as buyer seller dyads. The seller can either be a
personal salesman, or an advertisement, or any such combination of a pull or
push strategy. However, this interaction between buyer and seller is known as
buyer seller dyad.
The objective of a marketers is to optimally utilize buyer seller dyads or in
other words to have interactions in such a manner that the customer buys our
products. That is why so much market research is put into developing an ad
copy or into training a sales executive. Because they are the main interaction
point.
Example Research has shown that in the Insurance industry, people are
more ready to buy insurance from a representative they know personally
rather than from a company representative. Thus insurance companies took a
stand of making sales agents rather than hiring them because these agents
through their contacts are able to sell insurance much better.
Marketing implications of buyer seller dyads

Sales personnel should be matched with the customer so as to increase


interaction. Do not hire a sales executive in one demography to represent the
company in another demography altogether.

A factor majorly affecting buyer seller dyads is the impression brought


on from childhood that sales and marketing involves tricking the customer
into buying the product. This too affects the interaction process

Sales people are stereotyped even before their pitch. Thus they need to
be trained in such a manner that they overcome the resistance so as to have a
positive interaction.
Selling is a two way process involving both the consumer and the marketer, a
buyer and a seller. Hence the study of buyer seller dyads is extremely
important.

CLASSIFICATION OF SALES JOBS


Whether applying to sales jobs for the first time or re-entering the
market (see our article on resume writing to update your CV), it is
important to understand the types of sales jobs that are available,
and to know what your responsibilities will be. There are many
different industry terms for sales jobs, and the job that you are
applying for may not be the kind of job that you want; use this list to
decide whether or not a job is the right one for you:
1. Hunters and Farmers
The most common distinction you will see for a sales job at any level
will be between "hunter" and "farmer". Hunters are salespeople
whose main responsibility is to bring in new business for a company,
be it by cold-calling over the phone or by going door to door to bring
in new accounts, or by any other means. Hunters are usually
measured by the amount of new sales they bring to their company.
Farmers focus solely on existing accounts, ensuring their needs are
being met and often finding new ways to sell their company's
services to their clients. Farmers are usually measured by their rate
of client retention, as well as by how much they can increase their
company's share of a client's purchasing budget. Both kinds of
salespeople are crucial to a business, and a sales job will often
require a mix of both hunting and farming responsibilities.
2. Inside and Outside Sales
Inside salespeople work entirely from an office, managing the entire
sales cycle over the phone and through email. While much of their
time is spent cold-calling prospects, inside salespeople are not
telemarketers. They must build strong relationships with their clients
over the telephone, as well as intelligently nurture leads and
structure deals; It takes skill and persistence to close a sale without
ever meeting a prospect.
Outside salespeople, as you might guess, spend a lot of time outside
their offices visiting their clients in their territories and only entering
the office for sales meetings. Outside salespeople thrive on face-toface interaction with their customers, and often become regular
faces around the offices of their clients. Outside salespeople need to
be well-organized and self-motivated to meet all of their objectives
with little supervision.

3. Business Development Managers and Account Managers


Business Development Managers and Account Managers often have
different meanings in different organizations but as a general rule,
Business Development Managers spend more time hunting and
Account Managers spend more time farming. Business Development
Managers and Account Managers could work 100% inside or outside,
or split their time between the office and the road.
Whatever kind of position you apply for, make sure that your new
responsibilities fit with your career goals, and always try to improve
your skills to become a top performer in your new role. If you enjoy
your job and continually build upon your skills you will be sure to
succeed.

SALES PLANNING

A sales plan is a strategy that sets out sales targets and tactics for your business, and
identifies the steps you will take to meet your targets.
A sales plan will help you:

define a set of sales targets for your business

choose sales strategies that are suited to your target market

identify sales tactics for your sales team

activate, motivate and focus your sales team

budget and clarify steps you'll take to achieve your targets

review your goals periodically and improve your approaches to sales.


A sales plan sits within, or alongside, a marketing plan to direct the efforts of your sales
team.
Most businesses develop or update sales plans periodically - every 6 or 12 months. Treat
your sales plan as a 'living' document that you can revise regularly.
This guide explains the importance of having a sales plan, and will help you develop,
implement and review your business's sales plan.

PROCESS OF SALES PLANNING


The sales planning process is very important for an organization as success
cannot be achieved by haphazard actions. Sales planning process is usually

done in the second stage of planning and can be carried out only when the
company has a strategic marketing plan in place.
The first thing that an organization does is make a strategic marketing plan.
Once the strategic marketing plan is made, the organization knows the
segment that has to be targeted, and also, the consumer buying behaviour for
that segment. Accordingly sales planning is done.
Let us go through the sales planning process with the example of Air
conditioners
1) Setting objectives Your sales planning is going to start only when you
have defined the objectives for the sales team. For example The objective of
an air conditioning company might be to increase the market share of the
company. For this, it will have to penetrate a new geographic market. Thus the
objective of sales planning is to penetrate a new market to increase market
share.
2) Determine the actions necessary Once you know the objectives of
your sales plan, you have to forecast what actions you need to take and the
operations which are needed in effect before you implement the sales plan.
This is a crucial step in the sales planning process because if you do not
forecast the correct operations strategy, then in future you will face
operational difficulties which will hamper you in meeting your sales objectives.
For example The air conditioning company needs to penetrate a new
geographic territory to increase market share. Thus it needs Sales as well as
service operation backup in this territory. The marketing department should
also know the new territory so that they can come up with aggressive
marketing tactics to target that territory.
3) Organize your actions Coming back to the first point haphazard
actions will never bring results. Once you know the operations that are
necessary, you need to organize your sales planning. For example The first
priority of the air conditioning company in new territory will be to have a
service setup. Than to have a sales setup and the necessary channel in place.
Once that happens, they will have to bombard the new territory with

aggressive marketing tactics. Thus an organized action plan needs to be made


during the sales planning process.
4) Implement Once you have your actions planned and organized,
implementing them is the next step. Although it may sound easy, there are
many real time and real world problems you may face while implementing a
sales plan. For example The customers of the new territory might not
respond to the new air conditioners entering the market. On the other hand,
the product might be picked up readily by the customers and you might not be
able to adapt with the unexpected demand which can make your brand lose
face from the start.

5) Measure results As in any planning process, the fifth and very


important step in the sales planning process is to measure the results. Unlike
advertising, sales results are very easy to measure because everything is
documented and recorded. For example the air conditioning company will
measure the total sales of the geographic territory in study. At the same time it
will find out the competitors sales as well for record keeping.
6) Re evaluate When you have the sales records in hand, ensure that you
analyse the sales records to know whether or not the sales planning process
has succeeded. The analysis will tell you what you did right and what went
wrong. Thus, based on the analysis you can know the good work that has to be
repeated as well as the bad work which has to be avoided.
For example Your sales report shows that you have succeeded in penetrating
the new geographic territory. This stage will help you set your objectives for
the next year and you will plan increasing your brand equity through quality of
sales and service. If on the other hand, you have failed to penetrate the
market, then you need to study the reasons which caused the failure and in the
next year, sales planning should be done taking these negative results into
account and the sales objectives should be re planned.
Remember that sales is a dynamic process and your competitors are
themselves watching you all the time. In the above example, the air
conditioning segment is one of the vigorously growing segments across the

world and it comes with its own share of challenges. Thus your sales planning
will go a long way in implementing your organizations visions as well as in
implementing the strategic marketing plan.

Sales Forecasting

Sales forecasting is the process of a company predicting what its future sales will be.
This forecast is done for a particular period of a time in the near future, usually the
next fiscal year. Accurate sales forecasting enables a company to make informed
business decisions. Sales forecasting is easier for established companies that have
been operating for a few years than for newer companies. Established companies
have years of sales records and can base their forecasts on that past sales data.
Newly founded companies have to base their forecasts on less verified information,
such as market research andcompetition analysis to forecast their future business.

Factors influencing a Sales Forecasting:


A sales manager should consider all the factors affecting the sales, while
predicting the firms sales in the market.
An accurate sales forecast can be made, if the following factors are
considered carefully:
1. General Economic Condition:
It is essential to consider all economic conditions relating to the firm and
the consumers. The forecaster must see the general economic trendinflation or deflation, which affect the business favourably or adversely. A
thorough knowledge of the economic, political and the general trend of the
business facilitate to build a forecast more accurately. Past behaviour of
market, national income, disposable personal income, consuming habits of
the customers etc., affect the estimation to a great extent.
2. Consumers:

Products like, wearing apparel, luxurious goods, furniture, vehicles; the size
of population by its composition-customers by age, sex, type, economic
condition etc., have an important role. And trend of fashions, religious
habits, social group influences etc., also carry weights.
3. Industrial Behaviours:
Markets are full of similar products manufactured by different firms, which
compete among themselves to increase the sales. As such, the pricing
policy, design, advanced technological improvements, promotional
activities etc., of similar industries must be carefully observed. A new firm
may come up with products to the markets and naturally affect the market
share of the existing firms. Unstable conditionsindustrial unrest,
government control through rules and regulations, improper availability of
raw materials etc., directly affect the production, sales and profits.
4. Changes within Firm:
Future sales are greatly affected by the changes in pricing, advertising
policy, quality of products etc. A careful study in relation to the changes on
the sales volume may be studied carefully. Sales can be increased by price
cut, enhancing advertising policies, increased sales promotions,
concessions to customers etc.
5. Period:
The required information must be collected on the basis of periodshort
run, medium run or long run forecasts.

Importance of Sales Forecasting:


1. Supply and demand for the products can easily be adjusted, by
overcoming temporary demand, in the light of the anticipated estimate; and
regular supply is facilitated.
2. A good inventory control is advantageously benefited by avoiding the
weakness of under stocking and overstocking.
3. Allocation and reallocation of sales territories are facilitated.
4. It is a forward planner as all other requirements of raw materials, labour,
plant layout, financial needs, warehousing, transport facility etc., depend in
accordance with the sales volume expected in advance.
5. Sales opportunities are searched out on the basis of forecast; mid thus
discovery of selling success is made.
6. It is a gear, by which all other activities are controlled as a basis of
forecasting.
7. Advertisement programmes are beneficially adjusted with full advantage
to the firm.
8. It is an indicator to the department of finance as to how much and when
finance is needed; and it helps to overcome difficult situations.
9. It is a measuring rod by which the efficiency of the sales personnel or the
sales department, as a whole, can be measured.
10. Sales personnel and sales quotas are also regularized-increasing or
decreasing-by knowing the sales volume, in advance.

11. It regularizes productions through the vision of sales forecast and


avoids overtime at high premium rates. It also reduces idle time in
manufacturing.
12. As is the sales forecast, so is the progress of the firm. The master plan
or budget of a firm is based on forecasts. The act of forecasting is of great
benefit to all who take part in the process, and is the best means of
ensuring adaptability to changing circumstances. The collaboration of all
concerned leads to a unified front, an understanding of the reasons for
decisions, and a broadened outlook.

Types of Sales Forecasting:


The Economic Forecast:
This type of forecast is important to understand the general economic trend
through a careful study of Five Year Plans, Gross national products.
National income, Government expenditure, Unemployment, Consumer
spending habits etc. This is in order to have an accurate forecast. Big
companies, in India, adopt this method.
The Industry Forecast:
The future market demand is calculated through industrial forecast or
market forecast. The expected sales forecasts of all the industries, in the
same line of business are combined. Market demand may be affected by
controllable-price, distribution, promotion, etc., and uncontrollabledemographic, economic, political, technological development, cultural
activities etc. The executive must take into account all these conditions
while forecasting.

The Company Forecast:


The third step goes to the firm concerned to look into the market share, for
which forecast is to be made. By considering both controllable and
uncontrollable, based on chosen marketing plans within the firm, with that
of other industries, steps are taken in formulating forecasts.
There are three classes of sales forecasts:
1. Short-run Forecast:
It is also known as operating forecast, covering a maximum of one year or
it may be half-yearly, quarterly, monthly and even weekly. This type of
forecasting can be advantageously utilized for estimating stock
requirements, providing working capital, establishing sales quotas, fast
moving factors. It facilitates the management to improve and co-ordinate
the policies and practice of marketing-production, inventory, purchasing,
financing etc. Short-run forecast is preferred to all types and brings more
benefits than other types.
2. Medium-run Forecast:
This type of forecast may cover from more than one year to two or four
years. This helps the management to estimate probable profit and control
over budgets, expenditure, production etc. Factors-price trend, tax policies,
institutional credit etc., are specially considered for a good forecast.
3. Long-run Forecast:
This type of forecast may cover one year to five years, depending on the
nature of the firm. Seasonal changes are not considered. The forecaster
takes into account the population changes, competition changes, economic

depression or boom, inventions etc. This type is good for adding new
products and dropping old ones.

Limitations of Sales Forecast:


In certain cases forecast may become inaccurate. The failure may be
due to the following factors:
1. Fashion:
Changes are throughout. Present style may change any time. It is difficult
to say as to when a new fashion will be adopted by the consumers and how
long it will be accepted by the buyers. If our product is similar to the fashion
and is popular, we are able to have the best result; and if our products are
not in accordance with the fashion, then sales will be affected.
2. Lack of Sales History:
A sales history or past records are essential for a sound forecast plan. If the
past data are not available, then forecast is made on guess-work, without a
base. Mainly a new product has no sales history and forecast made on
guess may be a failure.
3. Psychological Factors:
Consumers attitude may change at any time. The forecaster may not be
able to predict exactly the behaviour of consumers. Certain market
environments are quick in action. Even rumours can affect market
variables. For instance, when we use a particular brand of soap, it may
generate itching feeling on a few people and if the news spread among the
public, sales will be seriously affected.
4. Other Reasons:

It is possible that the growth may not remain uniform. It may decline or be
stationary. The economic condition of a country may not be favourable to
the business activities-policies of the government, imposition of controls
etc. It may affect the sales.
The methods of forecasting discussed above have respective merits and
demerits. No single method may be suitable. Therefore, a combination
method is suitable and may give a good result. The forecaster must be
cautious while drawing decisions on sales forecast. Periodical review and
revision of sales forecast may be done, in the light of performance. A
method which is quick, less costly and more accurate may be adopted.

SALES BUDGET
MEANING AND IMPORTANCE OF SALES BUDGETING
A sales budget is a financial plan depicting how resources should best be allocated to
achieve the forecasted sales. The purpose of sales budgeting is to plan for and control the
expenditure of resources (money, material, people and facilities) necessary to achieve the
desired sales objectives. Sales forecast and sales budget are therefore 1 intimately related
as much as that if the sales budget is inadequate, the sales forecast 'I will not be achieved,
or if the sales forecast is increased the sales budget must be increased accordingly. Sales
budget by relating sales obtained and resources deployed also acts as a means for
evaluating sales planning and sales effort. It aims at attaining maximum profits by directing
the emphasis on most profitable segments, customers and products.
4.3 PURPOSE OF THE SALES BUDGET
1) A Planning Tool: In order to achieve goals and objective of the sales department, sales
manager must outline essential tasks to be performed and compute the estimated costs
required for their performance. Sales budgeting therefore, help in profit planning and
provide a guide for action towards achieving the organizational objectives.
2) An Instrument of Coordination: As we all know selling is only one of the important
functions of marketing. To be effective it needs support from other elements of the
marketing mix. The process of developing realistic sales budget draws upon backward and
forward linkages of selling with marketing and in turn brings about necessary integration
within the various selling and marketing functions, and co- ordination between sales,
finance, production and purchase function.
3) A Tool or Control: The sales budget on adoption becomes the mark against which
actual results are compared.

METHODS OF SALES BUDGETING


A variety of methods ranging from the sales manager's gut feeling to application of management science
models are used for determining the sales budgets. The popular methods are as under:
- What is affordable: This method is generally used by firms dealing in capital industrial goods.
Also, companies giving low emphasis to sales and marketing function or having small size of
operation make use of this judgemental method.

Rules of Thumb: Such as a given percentage of sales. Mass selling goods and companies
dominated by finance function are major users of this method.
- Competitive parity: Large sized companies whose products face tough competitions and need
effective marketing to maintain profits make use of this method. The use of this method
presumes knowledge of the competitors activities and resource allocation.
- Objective and Task Method: systematic method help in determination of the sales budget by
identifying the objective of sales function, and then ascertaining the selling and related tasks
required to achieve each objective. Later, the cost of each task/activity is calculated to arrive :It
the total budget. The finalisation of the budget may require adjustment both in the objectives as
well as in the way the task. may be performed
- Zero based budgeting: It is relatively a new approach to budgeting. It involves a process in
which the sales budget for each year is initiated from Zero base thus justifying all expenditure
and discarding the continuation of conventions and rules of thumb. The method suffers from
practical limitations which relate to a very elaborate and time consuming process required by it
In practice, companies make use of a combination of the above methods and depending upon the
experience gained sales .budgeting approach stands refined. The status of the sales and marketing
function within the organisation determines the extent of sophistication used in the approach to sales
budgeting.

DEFINITION of 'Sales Meeting'


A gathering in which a product or service is being discussed, and the benefits are
outlined to the potential buyer. The sales meeting is not always a presentation format; it
can sometimes be an informal conversation, phone call or online affair. The parties
involved have this meeting between the initial contact and final purchase, in order to
entice the customer.
Also known as a sales conference.
A sales meeting is designed to sell the product, build relationships, identify needs and
outline benefits of the product. Personal financial planners would use a sales meeting to
discuss retirement goals, build rapport and explain how the investment products and
fund management will meet the goals of the potential client.

Objectives for a Sales Meeting


An effective sales meeting has clear, attainable objectives that everyone
on the team can understand. Sales meetings should motivate, set goals,
recognize top performers and present possible sales strategies. Plan
follow-up meetings to review the objectives and determine the status of
each item. Give your sales team a copy of printed objectives along with
follow-up dates and important notes from the meeting.

Introduce New Products


Many companies use the sales meeting to introduce new products to their
sales teams. During this time, associates are given the opportunity to
review the product, learn about its benefits and discuss any known issues.
Have a clear objective of introducing new products regularly or
rediscovering the benefits and success of current ones. To cut down on
product confusion, limit the number of new products or services you
introduce per meeting. Rolling out too many at once may be exciting but
can be confusing.

Ideas for Higher Sales


Sales meetings should include ideas for reaching higher sales goals. Make
sharing sales pitches and promotional ideas an objective at your
meetings. This objective should include team participation through role
playing and rehearsing sales scripts. You can discuss other methods for
reaching higher sales like upselling and selling sets too. Give each team
member an equal amount of time to share what sales methods have
worked best for her.

Recognition and Prizes


Recognition is a prime motivator for selling more, second only to receiving
praise, according to a Loyola University publication called "The
Fundamentals of Employee Recognition." Discuss requirements for earning
current prizes, bonuses and recognition. This important objective will
excite and motivate the group, possibly pushing toward meeting higher,
tougher goals. If your team receives commissions on sold products, give
illustrations of the earnings potential associated with the latest sales
campaign.

Sales Skill Development


Lead practice sessions during the sales meeting to hone the team's sales
skills. Brushing up on techniques for overcoming objections or leading the
customer will pay off during the selling campaign. Place these skilltightening objectives near the bottom of your agenda. This is a good time
to allow successful members of the team to teach others their favorite tips
and methods. Sales skill development should be personal and fun for
team members.

IMPORTANCE OF SALES MEETING


We only have 24 hours in a day to take care of our family, our clients, our job, and ourselves.
Given the value of our time, why waste it on meetings that dont always appear to benefit us
personally? Here is the short list of reasons why sales meetings are critical to your success.
1. Culture: A Total Agency Sales Culture (TASC) is the cornerstone of every high performance
agency. The underpinnings for TASC are activities that build, support and sustain organic
growth. Effective sales meetings are one of these critical activities. Sales meetings nurture esprit
de corps. They serve as a catalyst and binding agent for shared goals and objectives. They
serve to reinforce and remind us that we are a team, and we share a higher purpose other than
our own personal benefit. Sales meetings bring us together to accomplish much more than we
could alone. We are a sales driven industry. Sales meetings are part of the foundation that
supports a thriving sales culture.
2. Communication: Many agencies are plagued by poor communication. One reason is
producers are a very independent group. The nature of our job requires us to operate like sole
proprietors who mange our personal books. Sales meetings require us to come together for 1
hour as a team and communicate. They foster teamwork and bring to light opportunities for us to
help each other. Sales meetings serve as the one consistent forum for communication and
connection as producers.
3. Synergy: Sales meetings create synergy. If we are not pulling together, then we are pulling
apart. They create like-minded thinking and get us pulling together in the same direction.

4. Direction & Numbers: Sales meetings serve as our compass. They influence direction and
indicate when course correction is required. Numbers are a direct reflection of results. Numbers
are the only true, impartial measurement of success. Numbers are a true ally and friend to
producers. They never lie, they are brutally honest. Numbers give us hope, determination,
incentive and recognition for our successes. They also give us a kick in the rear when we need
it. Sales meetings are all about the numbers, and we need to fall in love with numbers.
5. Motivation: We are all motivated by different factors. For some its the pursuit of excellence,
for others its money, and still others are motivated by competition. We all have personal forms of
internal motivation, but peer pressure and competition are a powerful form of external motivation
that gives us that extra spark to jump start our engines. External motivation stirs our competitive
spirit. Sales meetings touch on many forms of motivation both positive and negative. Sales
meetings create needed competition and pressure.
6. Skill set development and reinforcement: Selling isnt winning. Winning is winning. We win
business from the competition by being better. Sales meetings test and hone our abilities, and
force us to learn and apply new skills and processes that are good for us, and make us better
than our competition.
7. Talent development & perpetuation: Agencies that have expired or been consumed by
larger shops all share one thing in common; they failed to groom new talent to grow and
perpetuate the agency. Experienced producers can have a huge impact on the careers of new
producers by shortening their learning curve. The opportunity for a new producer to participate in
meetings where experienced producers discuss numbers, business plans, account strategies
and selling skills is invaluable. Who will provide for your retirement? The new talent you groom to
take your place. Sales meetings serve as an opportunity for seasoned agents to help grow new
talent.
8. NOBs: All highly performing companies embrace Non Optional Behaviors. Every fortune 500
company, subscribes to NOB s that drive sales cultures based on excellence and exceptional
results. Sales meetings are one specific change we can make to produces immediate results.
The Agencies and Producers I work with experience exceptional results. Why, one reason is they
all run excellent sales meetings. Producers and managers who participate in sales meetings gain
significant personal and financial benefits. Increased opportunities and improved performance
are the product of these sales meetings. They result in significant revenue that benefits
everyone in the organization and secures the future of the agency. All believe that Sales
meetings are Non Optional Behaviors.
Over my 30-year career in insurance I have participated in, and run thousands of sales
meetings. Good, bad and ugly sales meetings. What Ive learned is that sales leaders must
prepare for, and practice running productive sales meetings. Effective sales meetings governed
by rules of conduct that apply to everyone. There must be a results driven agenda that creates
opportunity and a desire to attend.
Here is what I consider the optimal structure, agenda and rules for running the very best sales
meetings in the business.

Meanings
Sales contests are taken as one of the measures of sales promotion. A sales contest is a special
selling campaign offering salesman incentives in the form of prizes or awards above and beyond
those provided by the compensation plan. Sales contests are most popular with firms specializing
in consumer products like food and drugs etc. The main object of sales contests is to provide
sales personnel with extra incentives to increase sales volume and also bring more profits to the
company. Sales contests aim at fulfilling the needs of individuals for achievement and
recognition. If they are well-organized, they can be used to counter off-season decline in sales
and bring in new customers. They also generate team spirit among the salesmen and foster a
sense of co-operation. These sales contests bring out the talented and more intelligent salesmen
to the forefront.
Objectives of the Sales Contests
Sales contests motivate salesman to increase sales volume along with higher profits. The main
objectives of sales contests are as follows:
1. To risen the sales.
2. To make new customers attracted.
3. To arrest seasonal sales slumps.
4. To push new products, high margin goods and slow moving goods.
5. To get repeated orders from present and former customers.
6. To improve sales personnel performance.
7. To bring a spirit of competition among the salesman.
8. To improve customers services.
9. To achieve the sales targets.
10. To increase incentives to sales force.
11. To make the products of the company popular.
12. To bring talented and intelligent salesman to the forefront.
13. To generate team spirit among the salesmen and foster a sense of cooperation.
Precautions for Planning Sales contests
Sales contests, if all they are to be a success, must be properly planned by the sales manager. In
this connection the following precautions should be kept in mind before finalizing any scheme of
sales contests:
1. The purpose or result aimed at should be very clearly defined and published.
2. Conditions, rules and regulations etc should be quite simple and easily understandable by all.
3. The time and date of the sales contest should be chosen with great care.

4. The sales contests should be such in which everybody can participate and have equal
chances of winning the prizes etc.
5. Interest of the participants should be maintained throughout the contests.
6. Both the employer and the sales force must be benefited by the sales contests.
7. The sales contest must motivate the sales force to expand increased efforts.
8. Extra prizes should be given for the first order, the biggest order, the greatest number of
orders and so on.
9. Prizes that may have a permanent value, such as watches, cycles, scooters, books etc should
be given so that they my keep a salesman enthusiastic after the contest.
10 The members of the contest committee should be impartial and acceptable sales personnel.
Advantages of Sales contests
The main advantages of sales contests are as follows:
1. The sales contests increase the sales volume along with increase in profits of the company.
2. Sales contest stimulate salesmans efforts more vigorously to attain the sales targets.
3. The possibility of winning the prizes attracts young, talented and efficient salesmen to offer
their services more effectively.
4. During slump period, sales contest are the best means of not only arresting the decline in
sales but also raising the volume of sales.
5. Sales contest generate team spirit among the salesmen and foster a sense of cooperation.
6. The sales contests are helpful in bringing out the talented and more intelligent salesmen to the
forefront for promotion purposes.
7. Sales contests raise the morale of the sales force and develop the spirit of competition.
8. Sales contests increase the goodwill and the reputation of the company.
9. New customers are attracted on account f sales contests.
10. Consumers are also benefited by sales contests.
Disadvantages, Limitations or Objectives of Sales contests
The disadvantages, limitations or objectives of sales contests are as follows:
1. Sales contests do not really increase and sales over the long run, but they merely provide a
short-term sales expansion.
2. High caliber and more experience sales personnel look upon the sales contests as juvenile
and silly.
3. Sales contests cause sales personnel to launch their sales efforts during the competition and
thus sales slump occurs bothbefore and after the sales contests.

4. The disappointment suffered by sales contest losers causes a general decline in sales force
morale and enthusiasm.
5. Sales contests distract salesmen from the main job of selling and encourage them only to
concentrate on winning prizes by fair or foul means.
6. Sales contests lead to unanticipated and undesirable results, such as, increased returns and
adjustments, higher credit losses and overshocking by dealers.
7. Sales contests are temporary devices for motivating sales force, and if used too frequently
have a narcotic effect. No greater results in the aggregate are obtained with such contests.
8. When the product is in short supply, it is ridiculous to encourage sales contests.
9. It is argued that the sales force is regularly paid for their services under the basic
comprehension plan. Hence there is no necessity of organizing sales contests.
10. The competition atmosphere generated by sales contest weakens team spirit.

Sales Force Control: Controlling


Process and Methods
Sales force control involves measuring sales force performance,
comparing it with standards, detecting deviations and causes, and, if
necessary, taking corrective actions so that performance takes place as per
plan.
Effectiveness of sales force Management, to a large extent, depends on
controlling mechanism practiced by the company. Control keeps sales
people alert, active, creative, and regular in their efforts. Suitable controlling
system is essential to both, company and salesmen. It is to be mentioned
that very strict or very liberal controlling system is not advisable. After
analysis of nature of sales people, type of work, degree of cooperation, and
other relevant variables, an appropriate controlling system should be
designed.
Note that control is not for fault-finding or punishing others, but is meant for
keeping them right. Its purpose is not to keep unnecessary watch on them,
but to prevent them make mistakes, and, if necessary, to take suitable
corrective actions.
Sales force control includes verifying sale force performance and taking
corrective actions, if needed. It can be defined as: Sales force control
involves measuring sales force performance, comparing it with standards,
detecting deviations and causes, and, if necessary, taking corrective
actions so that performance takes place as per plan. For exercising control
over sales force, mostly, sales volume, time, expenses, discipline,

activities, etc., are used as bases for measuring and comparing


performance.

Controlling Process:
Sales force controlling process involves four steps:
1. Setting Sales Force Standards
2. Measuring Actual Sales Force Performance
3. Comparing Actual Performance with Standards
4. Correcting Deviations and Taking Follow-up Actions

Sales Force Controlling Methods:


Several methods are used for controlling sales force efforts. Methods
depend on areas, criteria, or aspects used for measuring and comparing. In
every method, the same steps are followed.
Widely practiced methods include:
1. Establishing sales territories
2. Allocating of sales quota
3. Maintaining continuous contact with salesmen
4. Determining authorities and rights of salesmen
5. Routing and scheduling sales personnel
6. Salesmens reporting
7. Complaint and objection notes

8. Analyzing sales expenses


9. Observation and visits or field trips
10. Providing materials and literature such as sales literature, sales
manuals, visiting cards, order forms, showing small-shorts films to teach
the way to work and behave.

SALES VOLUME ANALYSIS

Your sales are rising but your profits arent, even though youve been
controlling your overhead costs. Your accountant tells you its possible to
decrease your sales and increase profits. A bit of number crunching can
explain why. Both of these scenarios require an analysis of your sales
volumes to determine how youre generating revenue and expenses.

Sales Volume
Many business owners use the terms sales, revenues and income
interchangeably, but they each have separate meanings. In some
instances, sales refers to the number of units of a product or service you
sell, rather than the money you receive from selling them. Tracking your
sales by volume, or number of units sold, can help you identify what is
affecting your revenues, expenses and profits.

Types of Sales
One of the first steps in analyzing your sales volume is to differentiate
among the different types of sales you have. Start by counting the
number of units of each different product you sell, rather than your total
sales. Next, calculate how many units and how much of your sales
revenue comes from each different distribution channel you use. For
example, if you sell shoes, determine how many you sell in retail stores,
how many you sell online and how many you sell in print catalogs. If you
analyze your volumes by customer demographic, you might find that older
women are buying most of your product. Other factors to evaluate include
sales volumes by geographic territory, sales rep and price.

Profit Margin Analysis


Once you know how many units youre selling and where youre selling
them, sort your sales volumes by profit margin. This will require that you
work with an accountant to accurately determine your production and
overhead expenses. Production expenses relate to making your product,
while overhead costs refer to running your business and selling your
product. You might find that your largest-selling item produces the lowest
profit margin and that you might be better off dropping it and using that
money to concentrate on making and selling products with higher
margins. Alternately, you might look for ways to make and sell this
product cheaper. This might include using different materials or choosing
distribution channels. Evaluate your sales volumes by gross profits. You
might find that your products with the lowest margins have such high
sales, they generate the biggest gross profit for you.

Cost of Goods Sold


In addition to production and overhead costs, businesses determine their
cost of goods sold to learn the total costs to sell a product that are not
related to administrative overhead. For example, administrative overhead
such as rent, insurance and office supplies dont change with your sales
volumes. Costs of goods sold such as marketing, sales rep salaries,
wholesaler commissions, materials to make your product and
manufacturing labor all relate directly to making and selling your product.
Knowing the total cost of the goods you sell help you better target costreductions if you cant trim administrative overhead. You might find that
selling another 1,000 units of your product might require expenses such
as a second shift, more delivery runs, extra commissions or additional
marketing that dont justify selling these extra 1,000 units.

Break Even
Knowing your overhead and production expenses and costs of goods sold
helps you determine at what sales volume each product breaks even.
Knowing your break-even point can help you determine whether to launch
a new product, when to drop one and the effect of your sales beyond
break-even on your profits and taxes. This can help you better set pricing
strategies.

MANAGING SELLING EXPENSE


In the song Cheaper to Keep Her, the words spell out the trials and tribulations of whether to
stay in a bad relationship or make the painful decision to cut ties.
Well its the end of the year and companies are looking for a big finish; then the analysis begins.
The bottom line seems to get all the attention. Did we make more money than we did last year?
Every expense gets the once over. And the biggest expense in selling is walking around on two
legs: the sales force. The compensation, training, travel and entertainment and benefits all add
up to the overall expense. How can companies rationalize the investment in sales people?
When do Managers make the decision to stick with an average contributor, or move them out of
the organization?
The three quantitative measurements in relation to expenses that Management needs to look at
are total revenue produced, margin on sales, and the mix of products sold. There are also

important qualitative measurements that should be considered, and they will be addressed in the
next article.
1. Revenue Production: The most common quantitative analysis done on sales people is at
the macro level; did they hit their revenue number for the year? The challenge is that some of the
sellers who drive revenue have huge salaries and some do not. In sports, the salary (expense)
does not necessarily correlate to how well the athlete performs. In business, the total expense
associated with the revenue production must make sense.
2. Margin: A week after Q4 ends, most management teams can see what the net effect of last
minute discounting when the reps buckle to pressure to close year end business. The exercise to
protect margins should be built into a coaching formula that includes opportunity review. Once
this is embedded, the mechanism should allow managers to know the profit that reps can obtain
in closing situations.
3. Product (and Service) Mix: Product mix will show if the sales person is selling the right
products to the correct customers. Lets say a sales person consistently sells low on a medical
device but the consumables for the device are sold at full price. It will take twice the volume in
consumables to make up for a discounted sale of the device. These numbers tell a story and will
point dramatically to drags to the bottom line.
After watching Moneyball, the movie that documented the notion that winning in baseball boils
down to how many players get on base during a game, you would think there is a scientific
formula that could provide the answers to controlling selling expenses. The good news is, for our
customers that mechanism is in place.
Once fully implemented, a well created sales process can provide managers with a lens to look
at these, and the related qualitative measurements, to determine if they should invest more time
in developing sales people. In this capacity, Cheaper to Keep Her means continuously
developing the skills with the seller to bring their performance up to speed in relation to the 3
areas mentioned above. Otherwise, it may be time to part ways with that employee, and begin
the arduous task of replacing them with new talent.

SALES TERRITORY
A sales territory is the customer group or geographical area for which an individual salesperson
or a sales team holds responsibility. Territories can be defined on the basis of geography, sales
potential, history, or a combination of factors. Companies strive to balance their territories
because this can reduce costs and increase sales.

[1]

Purpose[edit]
The purpose of a sales force coverage (or sales territory) metric is to create balanced sales
territories.[1] There are a number of ways to analyze territories.[2]"Most commonly, territories are
compared on the basis of their potential or size. This is an important exercise. If territories differ
sharply or slip out of balance, sales personnel may be given too much or too little work. This can
lead to under- or over-servicing of customers."[1]
"When sales personnel are stretched too thin, the result can be an under-servicing of customers.
This can cost a firm business because over-taxed salespeople engage in sub-optimal levels of
activity in a number of areas. They seek out too few leads, identify too few prospects, and spend
too little time with current customers. Those customers, in turn, may take their business to
alternate providers."[1]
"Over-servicing, by contrast, may raise costs and prices and therefore indirectly reduce sales.
Over-servicing in some territories may also lead to under-servicing in others." [1]
"Unbalanced territories also raise the problem of unfair distribution of sales potential among
members of a sales force. This may result in distorted compensation and cause talented
salespeople to leave a company, seeking superior balance and compensation."

[1]

"Achieving an appropriate balance among territories is an important factor in maintaining


satisfaction among customers, salespeople, and the company as a whole." [1]
"Sales potential forecast" can be used to determine sales targets and to help identify territories
worthy of an allocation of limited resources. A sales potential forecast is a forecast of the number
of prospects and their buying power. It does not assess the likelihood of converting "potential"
accounts. Sales potential can be represented in a number of ways. Of these, the most basic is
population, i.e., the number of potential accounts in a territory. In a survey of nearly 200 senior
marketing managers, 62 percent responded that they found the "sales potential forecast" metric
very useful.[1]

Construction[edit]