Topic 1: Sales Management

Sales Management is a business discipline which is focused on the practical

application of sales techniques and the management of a firm's sales operations.
It is an important business function as net sales through the sale of products and
services and resulting profit drive most commercial business. These are also
typically the goals and performance indicators of sales management.

The art of meeting and exceeding the sales goals of an organization through
effective planning, controlling, budgeting and leadership refers to sales
management.Sales Management helps the organization to achieve the sales
targets efficiently.
The planning, direction and control of personal selling including recruiting,
selecting, equipping, assigning, routing, supervising, paying and motivating as
these tasks apply to the personal sales force.

Topic 2: Process of Sales Management

1. Sales Planning

Marketers must plan things well in advance for the best results. It is
essential to have concrete plans. Mere guess works do not help in
business.
Know your product well. Sales professionals must know the USPs
and benefits of the product for the consumers to believe them.
Identify your target market.
Sales Planning makes the products available to the end users at the
right time and at the right place.
Sales Planning helps the marketers to analyze the customer
demands and respond efficiently to fluctuations in the market.
Devise appropriate strategies to increase the sales of the products.

2. Sales Reporting

Sales strategies are implemented in this stage.

Check the effectiveness of the various strategies. Find out whether
they are bringing the desired results or not.
The sales representatives should be aware of their roles and
responsibilities in the organization.
It is essential for the organization to evaluate the outcome of
proposed strategies for any particular department. Organizations
depend on KPI also called Key Performance Indicator or simply

1
 Performance Indicator to measure the effectiveness of implemented
strategies.
Ask the sales team to submit reports of what all they have done
throughout the week. The management must sit with the sales team
frequently to assess their performance and chalk out future course
of actions.
Mapping individual performance over time is essential.

3. Sales Process

Sales representatives should work as a single unit for maximum

productivity. A systematic approach results in error free work.
The management must make sure sales managers follow a proper
channel to reach out to the customers. It pays to adopt a step by
step approach.

Sales professionals should follow the below mentioned steps for maximum
sales and better output.

i. Initial Contact/Lead

Collect necessary data of potential customers once the target

market is decided.

ii. Information Exchange

Inform the customers about various product offerings.

Make the customers aware of your brand and its benefits.

The information exchange can be either:

(a) Over the telephone or

(b) Face to face interaction with the potential customer.

iii. Lead Generation

Make a list of the people who show inclination towards purchasing

your organizations products or services.
The sales representatives must identify those who have the
potential to buy their products.

iv. Need Identification

Fix a meeting with the prospective buyers. Sit with the client and
try to find out more about his needs and expectations.
2
 Suggest them various options which would fulfill their demands.

v. Qualified Prospect

Identify individuals who are keen on purchasing your companys

products or services.

vi. Proposal

Once the buyer agrees to purchase particular products, the seller

presents a written proposal to him quoting the rates as well as
other necessary terms and conditions. Such a document is often
called a proposal.

vii. Negotiation

Negotiation is a stage where two parties (buyer and seller) discuss

and negotiate for the best deal beneficial to all.

viii. Closing of Deal

This is the stage where the transaction between the seller and buyer
takes place. The selling happens in this stage.

ix. After Sales Service

Keep in touch with the customers even after the purchase for
higher customer retention.

Sales Manager is the typical title of someone whose role is sales management.
The role typically involves talent development and leadership.

The three recruitment tasks used in sales management are Job analysis; Job
description and Job qualifications.

Job analysis is performed to specify the certain tasks that a salesperson would
be responsible for on a daily basis. It should identify what activities are deemed
as being vital to the success of the company. Any person associated with the
sales organization or the human resources department could carry out the
analysis as well as an outside specialist. The person that is responsible for
completing a job analysis should have an in-depth comprehension of the daily
activities of the salespeople.

This job analysis is then written in an explicit manner as a job description. The
general information consists ofthe following:
3
 1. Title of job
2. Organizational relationship
3. Types of products and services sold
4. Types of customers called on
5. Duties and responsibilities related to the job
6. Job demands.

An effective job description will identify compensation plans, size of workload,

and the salespeoples duties. It is also primarily responsible for hiring tools such
as application forms and psychological tests.

The most difficult part of this process would be the determination of job
qualifications. A reason for this difficulty is because hiring affects a companys
competitive advantage in the market as well as the amount of revenue.
Additionally, there should be a set of hiring attributes that is associated with
each sales job that is within a company. If an individual does not excel in their
assigned territory, it could be due to external factors relating to that persons
environment.

The sales reporting includes the key performance indicators of the sales force.

The Key Performance Indicators indicate whether or not the sales process is
being operated effectively and achieves the results as set forth in sales planning.
It should enable the sales managers to take timely corrective action deviate from
projected values. It also allows senior management to evaluate the sales
manager.

More "results related" than "process related" are information regarding the sales
funnel and the hit rate. Sales reporting can provide metrics for sales
management compensation. Rewarding the best managers without accurate and
reliable sales reports is not objective.

Also, sales reports are made for internal use for top management. If other
divisions compensation plan depends on final results, it is needed to present
results of sales departments work to other departments. Finally, sales reports
are required for investors, partners and government, so the sales management
system should have advanced reporting capabilities to satisfy the needs of
different stakeholders.

8 Steps of Sales Process

Sales process is presented as consisting of eight steps. These are:

(i) Prospecting / initial contact

4
 (ii) Preapproach - planning the sale
(iii) Identifying and cross questioning
(iv) Need assessment
(v) Presentation
(vi) Meeting objections
(vii) Gaining commitment
(viii) Follow-up

7 Phases of Sales Process

One common sales process is divided into seven phases including:

(i) Awareness Phase in which prospects become aware of the existence of

a solution.
(ii) Interest Phase in which prospects demonstrate interest in a product by
conducting product research.
(iii) Evaluation Phase in which prospects or prospect companies examine
competitors solutions as they inch toward a final buying decision.
(iv) Decision Phase In which a final decision is reached and negotiation
begins.
(v) Purchase Phase in which goods or services are purchased.
(vi) Reevaluation Phase in B2B sales its common for offerings to involve
contracts that need to be renewed. As a customer becomes familiar with
an offering, and especially as a contract draws to a close, a customer will
enter a reevaluation phase during which theyll decide whether or not to
renew their contract.
(vii) Repurchase Phase in which a customer repurchases a product or
service.

Inside sales managers commonly adopt strategies, tools and tactics aimed at
optimizing each stage of their sales process.

Topic 3: Sales Operation

Sales Operation refers to various activities which help in the timely
achievement of sales targets for the successful functioning of an
organization.Sales Operation includes various strategies and techniques
employed by an individual to achieve sales goals within the stipulated time
frame.

Need for Sales Operation

5
 Sales Operation activities help the sales professionals to meet the sales
targets in a systematic and the best possible way.
Sales Operation activities help to devise relevant strategies and plans
(both long term as well as short term) to achieve the sales goals.
In simpler words sales operation activities help in generating revenues for
the organization through meticulous planning, better budgeting and
adopting a methodical approach.

10 Steps in Sales Operation

1. Sales representatives should prepare their own database. Make sure

you have a long list of potential customers. Mere sitting at office doesnt
help in sales. Go out in the field, meet people and gather as much
information as you can. Put canopies at strategic locations. Networking
helps in sales.
2. The next step is to segregate the data according to age, sex, income
and so on. Classify the data under various sub heads like working/non
working, middle class/upper class, employed/unemployed etc. Such
classifications help you to understand the customers better and identify
your target audience.
3. Sales strategies ought to be different for every segment. The needs and
interests of a female would be different as compared to a male. Similar
products would not excite a youngster and an individual who is 50 years
old. Create relevant strategies for different segments as per their needs,
interests and demands. The promotional plans must excite the customers
and attract them towards the organization.
4. Speak to the customers and seek for appointment. Fix up a time as per
their convenience. One should never call a customer more than twice in a
single day. It irritates him and he tends to avoid you in future. Give him
time to think and decide. Avoid being pushy. One can also send a soft
reminder through email to the customer.
5. Once you get an appointment, make sure you reach the venue on
time. Dont expect the customer to wait for you. Remember the customer
can ask you anything related to the product. Make sure you know
everything about the product and its offerings.
6. Understand the needs and expectations of the customers. Try to make
him understand how your product would benefit him? Make him realize
how your product is better than the competitors. Dont oversell.
7. Attend sales deal with an open mind. Dont be too rigid on price and
other terms and conditions. Give the best deal to the customers for them
to come back again to your organization.
8. Sign a written agreement with the buyer. The agreement should have
the description of the product, model no, date of purchase, warranty

6
 details and other necessary terms and conditions. Some organizations also
give bills to the customers. Bills are required when the customer comes
for an exchange.
9. Make sure products are delivered in good and working condition to
the customers. It is the duty of the sales representatives to assist the
customers in installing, using or maintaining the products.
10.Make sure you are in touch with the clients even after the deal for
higher customer satisfaction, higher customer retention and eventually
higher revenues.

Topic 4: Sales Funnel

The definition of the Sales Funnel (also known as a revenue funnel or sales
process) refers to the buying process that companies lead customers through
when purchasing products. A sales funnel is divided into several steps, which
differ depending on the particular sales model.

The Sales Funnel, which is sometimes referred to as a Sales Grinder, illustrates

the idea that every sale begins with a large number of prospective customers
and ends with a much smaller number of people who actually make a purchase.
The number of levels assigned to a sales funnel will vary by company but
generally, sales funnels are divided into four sections -- those who are aware of
a company, those who have had contact with a company, those who have
repeated contact with a company and those who have made a purchase.

Companies use various metrics to analyze and score leads and prospects in the
funnel in order to evaluate the success of their sales team. Examples include
quantifying the value of every sales opportunity in the funnel, determining the
optimal flow rate -- which refers to the average amount of time leads are in each
stage of the funnel -- and evaluating the average percentage of deal closings,
also known as the win rate.

In today's Age of the Customer, the journey a customer takes is less likely to be
linear. For that reason, some experts maintain that the traditional sales funnel is
obsolete. Others contend that the sales funnel is still a valuable tool as long as
marketing and sales teams understand two things -- that today's qualified sales
lead may enter the funnel closer to the bottom than they would have ten years
ago and that marketing's role is changing. In the past, finding leads (the top --
and broadest part of the funnel) was typically the responsibility of marketing

7
departments while sales was responsible for nurturing leads and guiding
prospects through the sales funnel. Today, a successful company relies on both
sales and marketing to guide the customer through the sales funnel and build
customer loyalty, taking advantage of content marketing, customer data
analytics and the two-way communication that social media marketing provides.

Hit Rate is a metric or measure of business performance traditionally associated

with sales It is defined as the number of sales of a product divided by the
number of customers who go online, call, or visit a company to find out about
the product.

Sales can be measured either as the sum of dollars pursued or the number of
deals pursued. Accurate calculation requires clear definition of when a sales
opportunity is firm enough to be included in the metric, as well as firm
disposition of the opportunity (i.e. the deal has reached a point where it is
considered won, lost or abandoned).

The hit rate may be measured for the whole sales force or by sales region, sales
person or product group. It may be used to benchmark the different sales
periods and to benchmark the effectiveness of the own sales force with other
companies of the same sector.

Due to the high costs involved with making proposals the hit rate is a very
useful tool especially for companies in industrial marketing.

Hit Rate is the percentage of successes in sales to the number of attempts. The
higher the hit rate, the better a salesperson is at making a sale. The lower the hit
rate, the fewer sales a salesperson closes. It is important to determine the hit rate
to measure how efficient salespeople are. A company should reward and retain
salespeople with high hit rates as they are efficient in closing sales and may
look to trim salespeople with low hit rates.

Calculation of Hit Rate

Step 1

Determine the salesperson's total number of sales. As an example, let's say one
salesperson had 50 sales for the month.

Step 2

Determine the total number of attempted sales. These include calls by the
salesperson to various potential accounts, calls received by the salesperson and

8
any other situation in which the salesperson would have a chance of obtaining a
sale. In our example, during the month, the salesperson had 75 chances to make
a sale.

Step 3

Divide the number of completed sales by the number of sales attempts to

calculate the hit rate. In the example, 50 sales divided by 75 sales attempts
equals a hit rate of 0.667, or 66.7 percent.

Topic 5: Nature of Sales Management

(i) Integration with marketing management
(ii) Relationship selling
(iii) Varying sales responsibilities

Topic 6: Importance of Sales Management

Revenue generator
Impact on financial results

Topic 7: Roles and Duties of Sales Manager

(i) Involvement in strategy
(ii) Member of corporate team
(iii) Team Leader
(iv) Manage multi channels
(v) Using latest technologies
(vi) Supervising buyer seller relationship
(vii) Updating information
(viii) Understanding the competition
(ix) Understanding regulations
(x) Understanding the latest technological advancements
(xi) Supervising sales force
(xii) Mentoring and motivating sales force
(xiii) Provide leads to sales force

9
 Topic 8: Duties and Responsibilities of
Salespeople
The primary responsibility of a sales person is to conclude the sale successfully.
The secondary responsibilities of a sales people are as follows:
1. Prospecting
2. Database and knowledge management
3. Self-management
4. Handling complaints
5. Providing service
6. Implementing sales and marketing strategies

Topic 9: Sales Career

(i) What are the perceptions of general public about a sales career?
(ii) What are the challenges in a sales career?
(iii) What are the advantages in a sales career?
(iv) What are the sources of education and training in selling?

Topic 10: Selling Process

Step 1: Prospecting and qualifying
Step 2: Pre-approach
Step 3: Approach
Step 4: Presentation and demonstration
Step 5: Overcoming objections
Step 6: Trail Close/ Closing the sale
Step 7: Follow-up and Service

10
Step 1: Prospecting and qualifying
What are the various methods used for prospecting?
Referrals (from existing customers, internal company sources, external
sources)
Networking by salespersons
Industrial Directories
Cold canvassing
Standard Industrial Classification (SIC) system
What are the different categories of prospects?
Hot Prospects good requirements of companys products & services,
financially sound
Warm Prospects medium or average requirements of companys
products & services, financially sound
Cool Prospects low requirements of companys products & services,
financial capacity may or may not be good.
What are the criteria to get qualified?
Need
Ability
Step 2: Pre-approach
What is Pre-approach?
Why is pre-approach important in the selling process?
Step 3: Approach
What is approach?
What are the various approach techniques commonly used?
1. Introductory Approach,
2. Customer Benefit Approach
11
 3. Product Approach,
4. Question Approach
5. Praise Approach
Step 4: Presentation and Demonstration
What is Presentation and Demonstration?
What are the different types of questions that salespeople should ask the
prospects?
Situational questions
Problem identification questions
Problem impact questions
Solution value questions
Confirmations questions
What are the various methods used for making a sales presentation?
1. Stimulus Response Method
2. Formula Method
3. Need Satisfaction Method
4. Team Selling Method
5. Consultative Selling Method
Step 5: Overcoming objections
1. What are objections?
2. What are the common types of objections that happen?
Psychological and Logical
3. How do you overcome objections?
Asking questions
Turn objection into a benefit
Deny objections tactfully
Third party certificate and compensation
Step 6: Trail Close/ Closing the sale

12
 What is trial close?
What is closing?
What are the various closing techniques?
(i) Alternative-choice Close
(ii) Minor Points Close
(iii) Assumptive Close
(iv) Summary of- benefit close
(v) T-Account close (or balance sheet close)
(vi) Special offer close
(vii) Probability close
(viii) Negotiation close.
Step 7: Follow-up and Service
What is Follow-up and Service?
What are the important sales related tasks that come under Follow-up and
Service?
Check customer order
Follow up visit at the time of delivery
Account penetration
Relationship marketing

Topic 11: Universal Principles in Selling

1. Know your product
2. Believe in your product
3. Sell with Enthusiasm
4. Know your Competition

Topic 12: Tip in Selling

In any segment, first sell through connections
Among customers first sell to women
Among organisations sell in the following order:
Government

13
 NGOs
SMEs and Start-ups
Large Companies
Help customers and develop relationship with them even if they dont
give orders
For every customers who reject ask whether they can suggest any
prospect.
Read Motivational Books
Relax as much as possible

Topic 13: Theories of Selling

1. AIDAS Theory of Selling
2. Right Set of Circumstances Theory
3. Buying Formula Theory
4. Behavioral Equation Theory
AIDAS Theory of Selling
One of the most widely used theories
It is a seller oriented theory
Attention, Interest, Desire, Action, Satisfaction
AIDAS theory of selling states that a prospect goes through five different stages
before finally responding satisfactorily to our product and thus he or she should
be led comfortably through all five stages.
Right Set of Circumstances Theory
Right Set of Circumstances Theory is a seller oriented theory.
Holds that the particular circumstances prevailing in a given selling
situation cause the prospect to respond in a particular way.
This theory suggests that the more skilled the sales person in handling the
situation, the better will be the response.
Buying Formula Theory

14
 Buying Formula Theory emphasizes the buyers side of Buyer Seller
dyad.
The mental processes used are Need (or problem), Solution and Purchase

Behavioral Equation Theory

This is a refined and advanced version of the Right Set of circumstances
theory
B=P*D*K*V
B= Response
P= Pre-disposition
D=Present Drive Level
K=Incentive Potential
V = Intensity of all cues: triggering, product or informational.

Topic 14: Sales Organisation

Sales Organization is a group of individuals either working together for the
marketing of products and services manufactured by a firm or for product and
services that are procured by the firm for the purpose of reselling.
A Sales Organisation gives framework showing what tasks are performed by
whom.
Basic concepts of SalesOrganisation
(i) Degree of Centralisation
(ii) Degree of Specialisation
(iii) Line and Staff positions
(iv) Marketing Orientation
(v) Effective Coordination
(vi) Span of Control.

15
Degree of Centralisation
A centralised structure has authority and responsibility placed at higher levels of
management. In a decentralised organisation, the responsibility and authority
for carrying out tasks are delegated to lower level managers. No company is
totally centralised or decentralised. In some companies a mixture of both is
used.
Degree of Specialisation
General approach salesperson carries out selling activities
Sales managers carry out management tasks
Generalist approach is problematic as size of the organisation grows
Specialisation can help enhance performance by focusing on a few tasks
The question is: should companies go for product, geographic and
customer specialisation?
Line or Staff Sales Position
Sales management positions are grouped into Line or staff.
Line sales managers have authority to direct and control subordinates
reporting to them.
Staff Management positions have staff authority advising and
recommending roles in their respective areas
Market Orientation
When markets are varied and complex, the company gives adequate
response by having a market orientation organisation structure.
Each sales team develops sales strategy for the segment it serves ranging
from first meeting to delivery and payment to after sales service.
Effective Coordination
In reality harmony does not exist between various departments
Rivalries and distrust
Regular meetings are essential to get other persons point of view
Span of Control

16
 It refers to the number of people who report to each sales manager.
General guideline is that span of control should be six or eight.
Span of Control depends upon the job description of subordinates as well
as abilities of subordinates and sales managers
Classification of SalesOrganisations
Line Sales Organisation
Line and Staff Organisation
Functional Sales Organisation
Horizontal Organisation

Line Sales Organisation

It is the simplest Sales Organisation Structure.
All sales managers from top to bottom have line authority
It is widely used in small firms.
The advantages are clear authority, responsibility, quick decision making
and low cost.
The disadvantages are that too much depends on the head of sales.
The head of sales does not have adequate time to do planning and
analysis.
Line and Staff Sales Organisation
In this type of organisation structure, a group of specialists are made available
to the top sales or marketing executive.
These specialists are experts in certain support activities
Advantages are :
Better marketing decisions due to assistance from experts
Better sales performance, as sales managers can focus their efforts on
selling function
Top sales managers can concentrate on planning, coordination, human
resources and control aspects, as their detailed work is lessened

17
Disadvantages:
Higher cost and coordination work
Slow decision making.
Conflict may arise if line authority for staff managers is not clear.
Functional Sales Organisation
Advantages of Functional Sales Organisation:
Administrative Simplicity
Disadvantages of Functional Sales Organisation:
Marketing head has a very difficult task of coordination of competing
functional heads reporting to him.
Horizontal Sales Organisation
Horizontal Sales Organisation structure removes management levels and
also departmental boundaries.
The support functions like strategic planning, human resources and
finance are looked after by a small teams of senior executives.
All other people in the organisation are the members of cross-functional
teams, which perform many core processes like product design, sales,
and production or operations.
These teams also work with customer teams to solve customers
problems.
Motorola and GE are adopting horizontal organisation
Specialisation within Organisations
1. Geography
2. Product
3. Market
4. Functional
5. Combination of these
Criteria for Selection of Specialisation

18
 1. Meeting Customer Needs
2. Nature and Number of Products
3. Abilities of Sales Force
4. Sales Cost
Effectiveness of a Sales Organisation
Four factors or types of analysis needed for the evaluation of effectiveness of a
sales organisation
1. Sales Analysis
2. Cost Analysis
3. Profitability Analysis
4. Productivity Analysis

Topic 15: Sales Force Training

Three phase process of Sales Force Training
1. Assess sales training needs
2. Design and execute sales training program
3. Evaluation and reinforcement of sales training program
Sales Training Needs
1. Product Knowledge
2. Customer Knowledge
3. Competition Knowledge
4. Sales Technique (or Selling Skills)
5. Company Knowledge
Sales Force Training Methods
1. Class room /Conference Training
2. Behavioral Learning
3. Absorption Training/Self-study
4. Online training

19
 Topic 16: Salesforce Compensation
Compensation Methods for Sales Force
(i) Straight Salary
(ii) Straight Commission
(iii) Salary, Commission and/or Bonus

Topic 17: Size of Sales Force

Workload Method
Formula is as follows:
Number of salespeople needed= Total workload/Total selling time available
Types of Expense Plans
1. The salesperson pays all expenses
2. The company pays all expenses
3. The company partially pays all expenses
4. Combination plan (expense-quota plan)

Topic 18: Sales Force Evaluation

Quantitative Criteria
Qualitative Criteria

Topic 19: Major Types of Sales Promotions

(i) Consumer
(ii) Trade
(iii) Business Customers
(iv) Sales Force
Consumer Promotions
1. Samples
2. Coupons
3. Premiums

20
 4. Contests and Sweepstakes
5. Refunds and rebates
6. Price-offs, Bonus Packs
7. Frequency Programs
8. Event Marketing
9. Point-of-Purchase (POP)
Trade Promotions
1. Trade Allowances
2. Trade Contests
3. Trade Incentives
4. Training Programs
5. Trade Shows
6. Cooperative Advertising
Business Promotions
1. Trade Shows
2. Promotional Novelties (or gifts)
3. Seminars
4. Demonstration
5. Catalogues
Sales Force Promotions
1. Sales Contests
2. Incentive Schemes
3. Sales Meetings
4. Training Programs
5. Sales Manuals

21
 Topic 20: Classification of Buyers
Classification 1
Buyers can be classified as follows:
(i) Habitual shoppers
(ii) High value deal seekers
(iii) Variety-loving shoppers
(iv) High-involvement shoppers

Classification 2
(i) Tightwads
(ii) Spendthrifts
(iii) Average Spenders

Tightwads anticipate spending pain and respond by not buying.

Tightwads are controlled by the amount that they think a product
should cost. The attitude of a tightwad toward and expenditure
depends upon how much he or she thinks it should cost.
However, this amount is usually skewed low in keeping with the
budget-sensitive nature of the tightwad. Tightwads are unable to
indulge. Economic research has shown that certain types of
people those who fall into the tightwad category refuse to
indulge themselves in luxuries or expenditures.

Spendthrifts experience no buyers remorse.

The sensation of buyers remorse that many of us feel is foreign to the
spendthrift. They are oblivious to such pain. In fact, they actually get
their good feelings from being able to spend money. The more money
they spend, the better they feel. Spendthrifts do not anticipate spending
pain.
Since spendthrifts dont experience buyers remorse, they dont anticipate
the remorse, either. Their brain operates in such a way that the idea of
spending money actually causes the brains pleasure centers to light up.
This is in complete contrast to the tightwad who experiences the opposite
sensation.

22
Spendthrifts are not regulated by a premeditated budget or spending
plan.
Budget is not part of the spendthrifts vocabulary. Very few controlling
factors influence the spendthrift spending patterns. The only controls
are those that create positive feelings.Spendthrifts experience price
blindness, or a favorable high-price bias.

Average Spenders

Spendthrifts and tightwards represent polar opposites in buyer behavior.

The best way to sum up the attitudes and actions of average spenders is
simply to say that they fall somewhere in between the two extremes.

Here are some specific characteristics:

Average spenders have a rough idea of their budget.

While most Americans dont have a strict budget, they do have a basic
idea of how much money is coming in vs. how much is going out. What
more is a budget, but a guide that tells you income vs. expenditures?
With these rough figures in mind, the average spender knows if they can
afford something, and acts accordingly.

Average spenders occasionally impulse buy or overbuy.

Few people can completely control their spending in every single area.
Maybe youre excellent at controlling your spending on going out to eat or
buying snacks, but you simply cant resist the luxury cars.

In other words, average spenders are able to look at a purchase

rationally. They read through the bullet lists of benefits. They follow
along the comparison charts that you created comparing your services
with the competitors. They consider the variety on Netflix before deciding
on a subscription. They even read those small numbers in the grocery
store that say price per ounce.

Average spenders are influenced by facts and data, even if they arent
completely controlled by this information.
Facts and data have an affect on the average buyer. But they are also

23
influenced by messaging. Both the emotional and the analytical
messaging should be present in order to fully persuade the average
spender.

Average spenders think about their decision for a while.

Most people dont make a purchase on their first visit to a website.
Instead, they come back after theyve thought about it, looked at
comparison products, or searched for coupon codes. Basically, they think
about it.

Selling to a Tightwad
As a large percentage of your potential customer base, you need
to spend some time trying to sell to these guys.

A tightwad probably wont spend money on something unless it

is within his or her budget.
Sell using negative emotional signals, not positive or indulgent
ones. In other words, dont use messaging like You deserve or
this is the best for you. Instead, use messaging like Losing
money hurts or Save your money and secure the best future for
your family.
They will respond to value propositions more than they will
respond to clever emotional tricks, slogans, or appeals.
Use numbers, data, charts, and metrics. The decision-making
process of a tightwad is analytical, precise, and straightforward.
He can smell BS a mile away, and doesnt have the time of day for
it. To truly persuade, youre going to have to address this
analytical style of thinking with honest claims, detailed numbers,
and well-researched information.
Selling to a Spendthrift
They dont require much convincing if they are in your target
market. Nonetheless, heres what works best:

They will respond to emotional advertising. The spendthrift

dispenses with analytics processing, and acts from the heart.
They will respond to pictures. In keeping with the emotional
power of spendthrifts, keep your visual marketing high. They will
respond. Remember, pictures of babies and dogs are always
appealing.

24
 They will respond to colors. Color psychology plays an important
role in the behavior of spendthrifts. Use it strategically.
Selling to Average Buyers
As the largest slice of the pie graph, you need to focus the
majority of your marketing on this population. Average buyers
are smart, but they share, in moderation, some of the
characteristics of the previous two groups:

They respond to a mix of emotion-driven and metric-driven

marketing messages. True to their nature as between-the-
extreme buyers, your average customer base is going to respond
to some of the numbers in your marketing, and some of the
emotional appeal in your marketing. Use both.
They like guarantees, returns, warranties, and free shipping.
Most average buyers are suckers for the extra. Most average
people are just looking for a good deal. All the extra stuff like
guarantees, free shipping, etc. this could tip them in favor of a
purchase.

Topic 21: Levels of Distribution

The three levels of distribution intensity are intensive, selective
and exclusive.

Intensive Distribution: Intensive distribution (also called Mass

Distribution) is where a company supplies their product to all
markets (essentially they are found everywhere). These products
can be found in almost every place a person shops (grocery
stores, gas stations, supermarkets, etc.). These are also the type
of product a person can buy both at home and abroad. Examples
of products which use intensive distribution are Soft Drinks,
Milk, Biscuts etc.

Selective Distribution: Selective distribution pays attention to

very specific geographical locations regarding the availability of a
specific product. Companies who want to maintain a specific
quality store for their product will use selective distribution. An
example would be apparel, sports goods, shoes etc.

25
Exclusive Distribution: Exclusive distribution is, essentially, an
extreme modification of selective distribution. Companies are far
more selective with where their product can be purchased at.
Exclusive distribution uses one distributor for entire regions. An
example of a product which falls under exclusive distribution is
high-end products like luxury cars, designer clothing, designer
jewellery etc.

Topic 22: Channel Management Strategies

The various channel management strategies are as follows:
a) Adoption of superordinate goals
b) Exchange of employees
c) Joint membership in trade associations
d) Cooptation
e) Diplomacy
f) Mediation
g) Arbitration
h) Legal recourse

Topic 23: Push and Pull Strategy

Push Strategy
A push promotional strategy involves taking the product directly
to the customer via whatever means, ensuring the customer is
aware of your brand at the point of purchase.
"Taking the product to the customer"

Examples of push tactics

Trade show promotions to encourage retailer demand

Direct selling to customers in showrooms or face to face
Negotiation with retailers to stock your product
Efficient supply chain allowing retailers an efficient supply
26
 Packaging design to encourage purchase
Point of sale displays

Pull Strategy
A pull strategy involves motivating customers to seek out your
brand in an active process.
"Getting the customer to come to you"

Examples of pull tactics

Advertising and mass media promotion

Word of mouth referrals
Customer relationship management
Sales promotions and discounts

Topic 24: Decision Making in the Context of

Channel Management
The major decisions associated with Channel Management
involves:
(i) Selecting channel members
Selecting channel members involves determining the
characteristics that distinguish the better ones by evaluating
channel members
Years in business
Lines carried
Profit record
Selecting intermediaries that are sales agents involves evaluating:
Number and character of other lines carried
Size and quality of sales force
Selecting intermediaries that are retail stores that want exclusive
or selective distribution involves evaluating:
Stores customers
Locations

27
 Growth potential
(ii) Managing channel members and (iii) Motivating channel
members
Partner relationship management (PRM) and supply chain
management (SCM) software are used to forge long-term
partnerships with channel members and to recruit, train,
organize, manage, motivate, and evaluate channel members
(iii) Evaluating channel members
Sales performance
Inventory maintenance
Selling capabilities
How competitive product lines and competitors are handled
Attitudes
General growth prospects
Other

Topic 25: Channel Conflict

Channel conflict is a situation in which channel partners have to
compete against one another or the vendor's internal sales
department. Channel conflict can cost a company and its
partners money as partners try to undercut one another.

Horizontal and vertical marketing conflicts involve disagreements

among businesses in a marketing channel. A marketing channel
is how a product moves from its manufacturer to the consumer.
Channels have different stages, or levels. Typically, the first level
of a channel is a factory. The second level is the wholesaler who
buys a large number of products to sell to retail stores, which
occupy the third and final level. When members of a channel
disagree about methods or goals, conflicts ensue.

Horizontal Conflicts
A horizontal conflict refers to a disagreement among two or more
channel members at the same level. For example, suppose a toy
manufacturer has deals with two wholesalers, each contracted to
sell products to retailers in different regions. If one wholesaler
decides to branch its operations into the other wholesalers
region, a conflict will result. If the toy manufacturer doesn't help

28
solve the problem, its business dealings with both the
wholesalers -- and the downstream retailers, as well -- might be
in jeopardy.

Vertical Conflicts
Vertical conflicts involve a disagreement between two channel
members on consecutive levels. For example, if the toy
manufacturer discovers its products are arriving at retail stores
later than scheduled, a conflict might develop between the
manufacturer and the wholesaler responsible for shipping to
retailers. At the same time, the retail stores might be in conflict
with the wholesaler due to its inability to ship products on time.

Multichannel Conflicts
Multichannel conflicts refer to disagreements among members in
separate marketing channels. While neither strictly horizontal
nor vertical, these conflicts can affect all members of every
channel. For instance, suppose the toy manufacturer participates
in two marketing channels. In the first channel, the
manufacturer sells its products directly to consumers via its
official website. In the second channel, the manufacturer sells its
products to wholesalers for resale to retailers. If the toy
manufacturers website sells the products for much lower prices
than retail stores, sales in the second channel will plummet. The
resulting conflict will require some solution that works for both
channels.
The various causes for channel conflict are as follows:
a) Goal incompatibility
b) Unclear roles and rights
c) Differences in perception
d) Intermediaries dependence on the manufacturer

Topic 26: Function of Channel Members

The functions of channel members are as follows:
(i) Risk taking
(ii) Financing
(iii) Physical distribution of goods
(iv) Negotiations
(v) Inventory management

29
 (vi) Contacts
(vii) Promotions
(viii) Gather information
(ix) Develop and disseminate persuasive communications
(x) Reach agreements on price and terms

Topic 27: Factors that influence Channel

Objectives
(i) The desired service level of target customers
(ii) Nature of its products,
(iii) Company policies
(iv) Marketing intermediaries
(v) Competitors
(vi) Environment.

Topic 28: Steps in Channel Design

Step 1: Analyze customer needs
Step 2: Establish channel objectives
Step 3: Identify major channel alternatives
Step 4: Evaluate major channel alternatives

30
 Topic 29: Marketing Channel Flows
Diagram of Marketing Channel Flows

One traditional framework that has been used to express the channel mechanism
is the concept of flow. These flows, touched upon in Figure 10.2, reflect the
many linkages that tie channel members and other agencies together in the
distribution of goods and services. From the perspective of the channel
manager, there are five important flows.

Product flow

Negotiation flow

Ownership flow

Information flow

Promotion flow

31
 Topic 30: Sales Development
Sales Development is one of the most important processes an organization can
build to deliver a seamless, efficient revenue machine. Sales development is a
phone-based team that identifies, connects with, and qualifies leads. When a
lead is qualified, they then pass the qualified lead to a sales person who takes
over for the rest of the sales process. Put simply, SDRs (Sales Development
Reps) pass the baton between marketing and sales.

There are eight compelling reasons to build a sales development organization.

1. Connecting with prospects requires time and resources
To understand how much effort it takes to reach a prospect by phone, look at
these numbers provided by the demand generation firm Vorsight:

Dials-to-connects It takes 12.73 dials to get a connect when calling a

list of prospects with direct phone numbers and 18.83 when calling
switchboard numbers.
Dials to Conversation 22.5 dials to meaningful conversation is the
industry average, but if youre calling highly solicited divisions, such as
IT or marketing, or very senior executives the number is closer to 30 dials
to 1 conversation.
Conversation to Appointment 3 meaningful conversations are required
to get 1 appointment.

To sum it up: it can take 60-90 dials to get an appointment with a prospect
which is not an efficient use of a quota-carrying sales persons time.
2. A fast, standardized lead follow-up process is the key to conversion
If we continue to use the numbers provided by Vorsight in bullet #1, then you
can also assume that it takes more than 12 touches to reach an individual
prospect. Furthermore, Sales Benchmark Indexresearch finds that 70% of
buyers prefer to work digitally. In other words, a sales person will not only have
to make a lot of dials, but will also need to incorporate email and potentially
social touches. As a matter of fact, we have found that combining digital
touches with the phone generates higher touch-to-connect conversion rates.
Quota-carrying sales reps do not have the bandwidth to manage the multi-

32
channel campaign necessary to reach leads. Another factor to consider is your
lead response time.
3. Converting a lead to an opportunity requires its own playbook and
subsequent training and coaching
Sales development is fundamentally different than the rest of the sales cycle.
The science of connecting with someone is hard enough, but when you connect,
you have a few seconds to generate interest and a couple minutes to handle
objections and close for a meeting. Effective sales development requires full-
time management, specific training, and constant coaching.
4. Sales Development means a higher lead to opportunity conversion
Converting a lead takes time and effort. The best revenue machines have a sales
development group to reach leads, overcome objections, make sure they are a
fit, and get them connected to sales teams. From 2005-2011, the principals of
TOPO founded and operated a company called Tippit. At Tippit we would use a
variety of digital marketing tactics to generate leads for 100s of clients. When
we looked across all our clients, the organizations with sales development teams
converted leads to opportunities at an exponentially higher rate than those that
did not. For example, we had two technology clients who sold competitive
solutions to the same type of buyer. The company with an optimized sales
development converted these leads at 40%. The other organization passed leads
directly to quota-carrying sales reps and converted leads at less than 5%.
5. Marketing and contact data is vastly improved with sales development
Marketing can only optimize programs if they have the data they need to be
successful. Sales reps are notoriously bad at maintaining good data and sales
leadership cares about sales forecast data (with good reason). On the other hand,
well managed sales development teams are remarkably good at providing data.
Sales development teams literally live in the CRM application all day and are
incented to get good data to marketing to make their lives easier.
6. Sales and marketing alignment
The biggest grievance from marketing is the fact that sales doesnt follow up on
their leads. Meanwhile the single biggest complaint from sales is that marketing
leads are terrible. Sales development teams help bridge the gap between sales
and marketing. When managed correctly, sales development solves lead follow-
up issues. As for the issue of marketings leads sucking, this problem often

33
happens when unqualified leads are sent directly to quota-carrying sales reps.
The truth is that the vast majority of leads do suck. A very good conversion
rate is 30% from lead-to-opportunity which means that 70% of the leads
contacted wont turn into anything. Quota-carrying sales reps dont have the
time to expend the effort needed to reach these leads only to find that 70% will
turn into nothing. Sales development solves this problem by sending sales only
qualified leads ready to talk.
7. Increased productivity and efficiency from quota-carrying sales reps =
more revenue
Sales reps are expensive resources that you pay to close business you have to
free up their time to focus on the effort needed to achieve their goals. A great
quota-carrying sales person is spending the majority of their day working the
rest of the sales cycle: pitching, proposing, negotiating, trying to get buyers
back on the phone, meeting with internal stakeholders, etc We increase the
odds of closing more business by allowing sales to begin their sales process
with qualified leads who are ready to speak to sales.
The Marketo Definitive Guide to Leads Qualification and Sales Development
provides compelling data highlighting the benefits of sales development to sales
reps including a:

5% increase in selling time that can yield a 20% increase in revenue;

1% increase in pipeline value that can yield a 25% increase in revenue;
and
15% decrease in sales cycle length that can yield a 30% increase in
revenue.

8. Your buyer wants you to follow-up

In our research, we will often find buyers who filled out forms on vendor
websites and then will actually complain that no one followed up with them.
When we look at the data, the vendor actually had followed up. The problem
was the sales rep sent one unremarkable email as follow-up and never reached
back out. Believe it or not, well messaged, thoughtful yet persistent follow-up is
part of a great buying experience. Buyers are extremely busy. They arent
always ignoring your phone calls because they arent interested. Recently, I
finally connected with a prospect I had been calling and emailing for three

34
weeks who said: Thanks for staying on top of this, I have been meaning to get
back to you.
A couple years ago I listened to a panel that featured IT leaders talking about
what they expected from sales people. Andrew Baker, at the time a Director of
IT Operations, said: I want you to qualify me well so we both know whether
we are wasting each others time. If its something relevant to me, I will want to
know about it. Some people may find this surprising, but proper qualification
is actually an important point in the buying experience.

DESIGNING THE SALES DEVELOPMENT ORGANIZATION

The case for sales development is extremely compelling. The next step is to
build your SDR function. This involves specifying your qualified definition,
organizational design, compensation guidelines, training and enablement,
metrics, and technology.
The importance of the qualified lead definition
We mention the qualified lead definition first because its what defines the
success of an SDR team. Once you define a qualified lead, you can build the
team, processes, methodology to deliver on a quota for qualified leads. The
qualified lead definition is the point at which marketing is ready to hand a lead
to sales. Once a qualified lead has been specifically defined, then sales must
sign off and agree to follow up. The important factors for a qualified lead
definition include:
Demographic qualifiers demographic qualifiers need to be very specific and
can include:

Company variables these include company size, industry, geography.

The contacts role emphasize what the person does, as opposed to their
title.

Behavioral qualifiers behavioral qualifiers depend on your target market. For

some companies, there is a large quantity of leads and SDRs act as gatekeepers
trying to only send sales the very best ones. For other organizations where there
is not as much lead flow, sales will accept anyone who fits the demographic
qualifiers and is willing to take a meeting with sales. Here are some examples of
common behavioral qualifiers:

35
 Willing to meet with sales this is a mandatory requirement and we
recommend the definition states that the meeting between the prospect
and sales must happen to be defined as a qualified lead.
Pain and need does the prospect have a problem your product or service
can solve?
Timing is there enough urgency that the buyer is willing work on this
right now?
Budget most sales development processes have moved away from
asking about budget on the first call and qualify leads on demographic
qualifiers, need, timing, and a willingness to meet.

Depending on your companys target market, you may want to create two lead
definitions. For example, sales development groups generating demand from a
constrained list of companies such as the Fortune 1000 or specific industries
may want to pass leads to sales based on the following parameters: right
company, right role, and willingness to meet with sales. Sales operations
expert Lars Nilsson calls these leads meaningful interactions or MIs.
Whatever definition is right for your business, the qualified lead definition is the
first step to success and the number one factor in sales and marketing alignment.

Topic 31: Sales development organizational design

There are three critical factors to consider when designing the sales
development organization: the number of SDRs, lead assignment, and
management structure.
The number of SDRs The best way to determine the number of SDRs needed
is to decide on your ratio of SDRs to sales reps. We believe the optimal number
is 1 SDR to 3 sales reps. The lowest ratio we recommend is 1:2 and the highest
ratio is 1:5. The ratio of 1:5 (or more) typically fails because sales reps wont
get a meaningful number of qualified leads and the program struggles to get
wide-spread support. The other factor to consider is to determine the number of
raw leads an SDR can handle in a month and still be able to perform the
required number of touches. The typical number of inbound leads an SDR can
handle is 200-500, depending on the level of qualification.
Lead assignment There are a number of models to consider when segmenting
the SDR team. The most important thing to consider in designing your SDR

36
lead assignments is conversion. Answer the question: How will set up our team
to optimize for conversion? Here are some models to consider:

Random assignment Leads are randomly assigned to SDRs.

First-come/first serve Leads will be assigned to a queue where SDRs
are can pick them up to follow-up on.
Sales rep alignment SDRs are teamed with quota-carrying sales reps
and only work on leads in their territory. The territories can be
geographic or industry-specific depending on your sales process.
Inbound versus outbound In this scenario, the team is split between
SDRs who qualify only inbound leads and SDRs that are responsible for
outbound prospecting.
Buyer persona type SDRs might be assigned to leads by company size
such as SMB, mid-market, or enterprise.

When you decide on your lead assignment rules, make sure you have the proper
time zone coverage. For example, if your sales development team is based on
the west coast, then you will want to have SDRs on the phones at 6AM.
Management Experienced, dedicated sales development management is
absolutely essential to the success of the team. While you may require a
manager/contributor in the early days of the group, there must be a dedicated
manager in place once there are three or more SDRs. The biggest mistake
organizations make is to have the SDRs report to a VP of Sales or Marketing
who has other duties. SDRs require coaching and management. As you will see
in the training section of this post, we believe that SDRs should receive at least
6 hours of coaching per month. In order to achieve this goal, there needs to be a
manager and the SDR:Manager ratioshould not exceed 8:1.
Ownership According to research from Bridge Group Inc, 70% of sales
development teams reported to sales in 2012. We prefer marketing to own sales
development because we want marketing to be responsible for delivering the
highest quality leads possible. This keeps the sales organization wholly focused
on closing business. That being said, we support sales development reporting to
sales as well. The most important factor is that the sales development team is
well-managed, supported, and focused on identifying and qualifying leads, no
matter who owns it.

37
Insourcing versus outsourcing While the vast majority of information in this
post is used to build internal teams, we still support outsourced sales
development. Many companies dont want to deal with the hiring, headcount,
management, and training challenges of an internal group. The two most
important factors are that a sales development function exists and that there is
an internal owner who owns the success of the program. An unmanaged process
whether insourced or outsourced will fail.

38