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Sales Strategy

- Again is linked into the notion of the 'Promotion Plan'
- Sales objectives are perhaps the most quantified and time-scaled of any objectives within the marketing mix. This is perhaps due to the fact that sales bring in revenue and hence linked to the survival of the organisation.
Major Quantified Sales objectives
Overall objectives Split down by
1 Total annual volume of products > A Quarter, month and weeks
2 Total annual value of products > B Product line
3 Total annual selling costs > C Region and sales area
4 Total annual profit contribution > D Type of customer
This reveals some of the strategies to be employed. For example, overall sales revenue objectives might be reached by concentrating on particular areas or on particular types of customers with particular product lines.
- Sales forces are a means of obtaining sales (Wilson, Gilligan, 1997)
- It is becoming more widely accepted that personal interfaces with customers and potential customers present an important opportunity for which a clearly defined strategy is required.
- Sales strategies need to be linked to overall marketing objectives, which are in turn linked to corporate goals. An increased market share could be translated into a market penetration strategy, which would then become a sales objective of selling more of Product X to existing customers
- The sales audit goes beyond the simple checking, targeting and geographical analysis of sales person's targets. The organisation needs to identify the sales force's effectiveness in carrying out sales strategies and as an element of the marketing mix. Fore example determining the numbers of new customers gained or the proportion of sales achieved for new products. Selling costs need to be involved
- The organisation needs to "determine sales force effectiveness" (Wilson and Gilligan, 1997)
- The sales audit may seek to establish customer/non-customer attitudes towards the sales force, and in turn the sales force attitude to the organisation. This would involve comparisons with competitors, on many factors, in an effort to determine relative effectiveness and form a basis for improvement
Aspects to determine its relative effectiveness and helps to form a basis for improvement
- relative size of the sales force
- reward systems and levels of earnings
- rate of sales force turnover
- sales per sales person
- sales force support systems
- relative level of training
- recruitment system
- control systems
- relative images of sales forces
- ORGANISATIONAL APPROACH, to selling as a means achieving sales objectives. Some organisations organise their sales forces on levels which reflect those of their major customers
- In industrial marketing, the sales organisation can be tailored to better represent its market segment customers. Thus there is flexibility with the sales force and the type of approach used
Sales Force
- Prospecting for new customers and markets
- Communicating with customers and distributors
- Providing technical advice and servicing distributors and customers
- Gathering market information
- Types of sales force influenced by:
- nature of products
- technical complexity
- types of customer and their needs
- geographic location of its markets
- number of customers and their relative importance
- breadth of product range
- scope for cross-selling
3 Structures of Sales force
Territorial Structures Each member has an exclusive territory and is expected to represent the company's full product line
Product Structured Responsibility for a particular product/product line to sell across a wider geographic area (technically complex/specialised buyer's needs)
Market Structured Concentrate upon specific types of end user, e.g. computer firms; many sell to banks, industry etc. (computer firm IBM practises this)
3 Types of Sales force
- Order getters (prospecting)
- Order takers (repeat orders)
- Support personnel (facilitate)
Hard sell versus Soft sell strategies
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Hard Sell |
Soft Sell |
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Concern for self |
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Canned presentation |
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Talking |
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Pushing product |
- Providing buying opportunities
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Presenting features |
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Advocating without acknowledging |
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Sales force remuneration options
There are five basic forms of this. The chosen method is to some extent conditioned by custom and practice in the sale setting concerned. Evaluation can take place considering the advantages and disadvantages. It is clear that different companies see particular benefits in the various methods. This may well be due to considerations of image and product positioning and whether a hard sell o soft sell approach is being adopted. Depending on the remuneration method used can sometimes determine if either hard or soft sell is used.
- For example a well-established company, positioning its product up-market, using exclusive distribution and using prestigious communication methods, may reward its sales force with an high salary, in order to discourage hard selling techniques and gain a higher level of staff turnover
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Sales force remuneration options |
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1) Salary only |
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2) Commission only |
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3) Salary plus commission |
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4) Salary plus bonus |
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5) Salary plus commission plus bonus |
If commission is only offered hard selling tactics will be generally used to gain personal income for the sales person. If salary only is offered, soft sell tactics will generally to employed, as the sales force are guaranteed income
Management of the Sales force
Establishing Sales force objectives
- what they have to accomplish to give them direction and purpose
- stated in precise, measurable terms and should be time-bound
- stated for both the total sales force and individual salespeople
Compensating Sales people
(Compensation plan should:)
- attract, motivate and retain the most effective individuals
- be designed to give sales management the desired level of control and provide salespeople with acceptable levels of freedom, income and incentive
- be flexible, equitable, easy to administer and easy to understand
- facilitate ands encourage proper treatment of customer
Motivating Sales people
(To obtain high productivity)
- satisfy non-financial productivity
- enjoyable working conditions
- power and authority
- job security
- opportunity to excel
- sales contests and other incentive programmes
- training, which can be a means of direction and motivation, and is often the prime reason for someone taking the job (self-development is important, poor management of this can de-motivate)
Managing Sales territories
(Creating sales territories)
- similar sales, potential/same amount of work
- balance territorial workload and earnings potential by employing differential commission rates
- territory's size and shape should be designed to provide the best customers costs
Evaluating the Sales force
- levels of sales against targets
- number of new accounts opened
- sales calls per day
- average time per sales call
- average costs per sales call
- cost per sale
- number of lost customers
- sales person to sales person comparisons
- comparisons with previous time periods
- customer feedback and evaluation
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