Sales Management Strategies

Abstract

The paper discusses three sales management strategies that are currently used. Each of the strategy is analyzed in details. The entity advantages, disadvantages and practical application are discussed for each of the strategies.

Introduction

Nowadays the world economy becomes more and more complicated because it becomes more and more global. As a result this leads to the development of an unparalleled competitiveness. Naturally in such a situation it is extremely important for survival in the market to remain competitive that demands to use the most advanced technologies, including not only technical aspect but managerial as well. It means that a company that uses the most advanced and most effective management strategies can be more competitive and has more chances for success. It is especially important when the company deals with the sales management.
The sales management is one of the most significant part of any company’s work since it is due to sales management the company can finally sell its products or services to customers and the general success of the company greatly depends on the effectiveness of the sales management. Consequently, it is absolutely necessary to know well recent trends and strategies that are used nowadays by the most successful companies that would permit to realize what strategies are the most perspective what are their advantages and disadvantages and finally it would be possible to define what strategies may be used in the future or in what way the current strategies should be modified in order to be the most effective. In terms of this paper three sales management strategies would be basically analyzed and discussed. These strategies are: Establish a Never-Before Sales Quota, Establish and Build a Team Selling Program, Employ Advanced Prospecting Technologies.

Establish a Never-Before Sales Quota

This sales management strategy deals with the market visibility problem since very often companies have problems at this respect and consequently they cannot afford competitiveness and their sales rates would gradually decrease, as the company is not well known or recognizable among the consumers. Traditionally it is said that if the company’s percentage rate of new equipment sales to customers who have never done business with this particular company and with its dealership is 20-23% or even lower than the company obviously has market visibility problems. As a result, in such a situation the circle of the company influence is not expanded as well as the rate of sales does and probably will not increase if certain measures are not undertaken. Basically such companies can work about three years than they have to retire.

However, if a company is planning to work in a long-term perspective than the company should set 30-35% rate as a ‘never-before’ goal for each of its equipment and product support sales reps. For instance, 30-35% should be with accounts that have never before done business with the company’s dealership and may even not know it exists. As a result such an increase of the company’s visibility in the market would proportionally increase its sales rate.

By the way it should be pointed out that if the company just starts some business in a new area the rate should be even higher. Basically specialists indicate that it should be about 45-50% (George 2002) only on such conditions the company sales and influence would gradually expand.

Nonetheless, it is only theory and the advantages of this strategy are obvious since the growing visibility is vitally important for increase of company sales but in real life the company that use this strategy may face certain problems that may be treated as disadvantages of the strategy. It should be mentioned that the Establish a Never-Before Sales Quota strategy is based on the never-before customer’s motivation and practically always the customers feel fear. They are fearful of the company’s reliability, its equipment, which, as they afraid, would not work as promised, and the list may be continued.

Naturally the question arises: how the company can best overcome the fear of customers in the never-before account? Basically specialists (Reilly 2000 and Goerge 2002) single out two main ways in overcoming this problem. So, the problem may be solved through short-term rentals and product support.

Obviously the two ways mentioned above are not the only one but they are probably the easiest ones. Using short-term rentals and product support it is relatively easy to penetrate never-before accounts for “by demonstrating strong dealer customer care capabilities with an aggressive, short-term rentals program and highly responsive parts and service programs, a company can quickly build a positive relationship in the new account” (Reilly 2001, p.184).

Furthermore, a very effective parts and service support tool is the planned maintenance contract. For instance, nowadays planned maintenance and full-maintenance leases are quickly gaining acceptance in North America in the construction equipment and heavy-duty truck industries.

Finally, among other advantages of this strategy may be named the fact that short-term rentals and product support capabilities eventually can eliminate fear and sales reluctance in the never before account. Thus, summarizing the Establish a Never-Before Sales Quota strategy it is possible to say that on the one hand, it may be quite effective and increasing the company’s visibility, on the other hand, there is still the risk that the customers’ fear won’t be overcome.

Establish and Build a Team Selling Program

This is another strategy that may enhance the company sales rate and its general position in the market. Traditionally dealers have three or four different employees working in the same territory. Traditionally they are: a capital equipment sales rep, a full-time customer parts and service sales rep, one or more field service technicians and, as a rule, a rental and used equipment sales rep.

However, the problem is that in some cases team selling does not work. But the root of the problems lies in the fact that the equipment sales rep is at odds with these other dealer representatives and does not consider them allies or partners in development activities. Nowadays such a situation is not affordable anymore and such type of reps should be eliminated, or, it would be better to say, changed.

Establish and Build a Team Selling Program strategy implies quite the contrary role of all representatives of the company. Nowadays this strategy becomes more and more widely used. This is why in some very successful dealer organizations prefer the thoughtful formation of territory sales teams but it should be pointed out that this is not just the assembly of field employees to grovel and provide the equipment sales rep with leads (McBride 2001, p.311). Team selling requires enlightened leadership. Consequently in order to unite all the reps as a team it is necessary to organize team activity.

Practically it means that sales team activity is a frequent meeting of specialists to share insights, establish strategies, set information gathering goals, etc that would eventually complement one another’s strengths and work together to foster the overall business development of the dealership in that given market area.

Also it should be said that this strategy demands to provide team selling recognition awards that would stimulate the work of the whole team but not its separate participants. It is also especially effective in account management and penetrating, new account development, problem solving success, market share gain.

A very important positive feature of team selling is the fact that it offers the possibility of utilizing of all of the resources. Team selling captures the mind and spirit of the company’s business and can present total solutions to customers (McBride 2001, p.349). An effective sales team is generating the highest possible revenue and profit for the business.

Summarizing the strategy, it is only should be pointed out that its main disadvantages are the problems of organizing all the reps in an effective sales team with a strong leader.

Employ Advanced Prospecting Technologies

This strategy implies the usage of the advanced and prospecting technologies as tools in achieving better results in sales rates. The most effective technology that can be used nowadays is teleprospecting. It is quite effective and inexpensive. The objective of teleprospecting program is to contact, profile and identify short-term needs, problems and opportunities of a large number of inactive and prospective customers.

To achieve such a goal it is necessary to train a teleprospector by having him/her update the company’s current customer mailing list for correct contacts for promo mailings. It is also important to train a teleprospector for ‘cold calling’ by having him/her first test a survey questionnaire or interview guide on five very friendly customers for constructive feedback. Furthermore, proper facilities and resources should be set up.

However, this strategy also has its own disadvantages. To be effective the prospecting program will require intensive administrative support to avoid wasted, non-productive time. Otherwise, the effectiveness of the program would be low.

Finally, it is necessary to provide challenging incentives. For instance, it is possible to set three completion level goals for the week and to offer a 20% base hourly rate increase for entire week if the goal is reached. It may be done as follows:

Survival Tips for the New Sales Manager

Survival Tips for the New Sales Manager

When I was a young, sales manager it was not really that hard to be good—even great. The recipe for “good” back then was fairly simple: work long hours, teach some type of sales strategy (by example) and occasionally have a pep talk with your team. If you wanted to be “crazy good” you held a sales meeting once a week, worked individually with reps and devised some type of incentive for getting people to do pretty much whatever you wanted. Sure there were challenges and competition and the need to get traffic through the door but somehow we overcame it all and were able to succeed and prosper with a fairly uncomplicated process. That was a long time ago.

Being great in today’s market comes with many of the same challenges as before—but they are challenges on steroids. Today’s sales manager must contend with tough competition, generational issues, a much more sophisticated buyer, a volatile economy and deal with major management and corporate office changes with regularity. Today’s sales manager must be a disciplinarian, a therapist and a recruiter–not to mention a stickler for managing by the numbers.

Can it Be Done?

So is it impossible to be a great sales manager? Absolutely not! There are definite strategies that can be employed to ease the challenges facing today’s managers. The modern-day sales managers must learn to be supreme sorters among the endless to-do lists that threaten to overwhelm them and must also learn to embrace change—to name a few. While we cannot cover ALL of strategies in the scope of this article—we can certainly hit on a few that might make an immediate difference.

Coping With Change-Whoever said “Change is Good” was on crack. (Actually I think it was President JFK –so no disrespect intended). Change is great until it happens to you. Departmental reorganizations, budget cuts, mergers, acquisitions and new bosses can rattle even the most solid among us. Even seemingly “smaller” changes like delays in a promised promotion, or a change in comp plan we have to sell to our team, or even a marketing strategy we completely disagree with, can be rattling because they have a direct effect on our jobs. It can feel like gut-punch and frankly being punched can elicit all kinds of inappropriate responses from us. So the next time you get hit by an email or piece of news you do not like do three things:

First: Do nothing. That’s right. Do nothing at all. Don’t send the email, the announcement, the letter or have that conversation. Just take it in. Do nothing. You need a day to think about this if you don’t have a day, take an hour a minute or a walk. But do nothing with your first impulse.

Second: De-personalize the situation. While this dramatically affects you; it is not necessarily about you. Chances are this change is part of a much bigger issue that you may not have the details about—and likely never will. Try and imagine what those issues might be. Your next move will be a lot smarter, more tactical and strategically beneficial to you if you can take your personal feelings out of the equation.

Third: Make a list of what you believe in. Not what you think or do—what you believe. And not just work beliefs—true, deep down, life beliefs. What do you believe about adversity? About change? About integrity? Now is your chance to live by those beliefs and make your next move.

The bottom line with change is that you need to get yourself into a state of mind where you expect it, deal with it and even welcome it. To accomplish this you must have a strategy for coping–otherwise the stress will kill you or will certainly impair your ability to succeed.

Combating the Overwhelm-If you have been staring through your computer or wandering around aimlessly lately you might be in a state of overwhelm. Check your Thesaurus for other words to describe the feeling and you will find: confounded, dismayed, dumbfounded, shocked, and thunderstruck among them. Anyone who as ever been overwhelmed knows that overwhelm leads to paralysis and paralysis in sales equals failure. Try these 3 steps:

1. One of the best strategies for dealing with overwhelm is to start by making the longest to-do list known to man. When I am overwhelmed I write down literally any item floating in my mind. If I am particularly breathless with To-dos I will take out several note pads (or Word documents) and categorize them by month or department or client or whatever. Just get it down on paper.

2. Next prioritize the list by writing down the top 5 things you MUST accomplish to be a success right now. The truth is that we all have way too much to do and telling ourselves that everything is of equal importance only makes things worse. Look closely at that list and ferret out the items that will directly affect sales, client or employee retention, morale, reporting and profitability. Chances are, if you succeed at the critical items on your list the other things will fall into place or fall away.

3. Once you have your list it is time to ORGANIZE your world. There is almost no chance that you are totally overwhelmed and working at a clean desk with organized files, a tidy home and a clean car. What is more likely is that you have fallen way behind on these items and the disorganization is adding to your sense of overwhelm. Take your anger out on your office. Clean it up, organize it and rearrange it and THEN attack that to do list.

Much of what it takes to survive and thrive in today’s workforce falls under the category of perspective. You need perspective to remind yourself that not every change is about you. You need perspective to sort through the increasing number of things that are now “your job” and do what really, really matters first and you need the perspective to know that you got this job by succeeding at something and you can succeed at this too.

Sales Managers Must be Good Coaches

If you’re not satisfied with your sales status look to the coach of your team – your sales managers. Here’s a way to check how good they are.

1. Does your sales manager know where his/her sales will come from by account, by product / service for 2008? Or is it about, “Here is my number. Let get out there and sell, sell, sell.” Ask each one to explain where the sales for 2008 will come from.

2. Does your sales manager know how to motivate each of his sales people? Yes, money is key, but money goes to the family. Money is about survival. But what really get the sales person going. See if your sales manager can answer this question about his sales people.

3. Does you sales manager coach and mentor. Coaching is telling his people what to do, i.e. get to the ultimate decision maker. Mentoring is showing them how to do it, i.e. show how to use your main contact to network you to the ultimate decision maker.

This requires discussing sales call plans and pursuit strategies. Then making sales calls together – not for the sales manager to sell, but to observe, give feedback and lay-out a behavior modification plan. How often does you manager do this with each sales person.

4. Does you sales manager turn-over and recruit effectively and timely. In other words does he purge the bottom 10% each year and constantly seek new recruits. Most managers are reactive. When someone leaves, they then seek a replacement. Unfortunately, because of 1-3 above, the better people (maybe not the best) leave and then the manager starts recruiting. This leaves you with the poorer performers and the new hire becomes what ever was available.

Like a college football coach, your sales manager must be good at recruiting good talent and then showing this raw talent what to do and how to do it. Don’t ever get sucked into the “experienced sales person”. Experience only means someone has been doing it before. It says nothing about how good one is, especially selling your products and services. That’s where the coaching and mentoring becomes critical. As in football and all sports, coaching and practice is critical and ongoing.

5. Finally does your sales manager hold your sales people accountable? That is when a forecasted sale isn’t made, is there a discussion that holds the sales person’s feet to the fire? Are there consequences as well as rewards? As my old football coach use to say, “I don’t want excuses, I want results or else you don’t start.”

Now it’s your call. Is the person responsible for the most important element of your business – sales – capable and doing what it takes to get you where you want to be? Or do you need to step up and take actions of training your managers or hiring new ones – and then training them. If professionals like Tiger Woods and every other athlete needs coaching, your sales managers do as well.