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The Personal Selling Process The sales process itself plays an increasing role in creating customer value. Neil Rackham
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Page 1: The Selling Process

The Personal Selling Process

The sales process itself plays an increasing role in creating customer value.

Neil Rackham

Page 2: The Selling Process

Principles of Personal Selling

• Personal Selling is an ancient art.• Effective salespersons have more than instinct;

they are trained in methods of analysis and customer management.

• Dale Carneige’s book “How to win friends and influence people”

Page 3: The Selling Process

Sales Training Approaches

Order Taker• Operate on the assumption

that customers know their own needs,resent attempts to influence them, and prefer courteous and self effacing salespersons.

Order Getter• Sales Oriented Approach• Customer oriented Approach

Page 4: The Selling Process

Sales Oriented Approach

• Trains the person in the stereotyped high pressure techniques used in selling encyclopedias or automobiles.

• This form of selling assumes that customers are not likely to buy except under pressure,that they are influenced by a slick presentation, and that they will not be sorry after signing the order.

Customer Oriented Approach

• Trains salespeople in customer problem solving.

• The salesperson learns how to listen and question in order to identify customer needs and come up with sound product solutions.

• Presentation skills are secondary to customer need analysis skills.

Page 5: The Selling Process

THE EIGHT STEPS OF THE SALES PROCESS

8. Follow-up

7. Gaining Commitment

6. Meeting objections

5. Presentation

4. Need Assessment

3. Approach

2. Preapproach

1. Prospecting

Page 6: The Selling Process

Challenges in Personal Selling

• Inability to hard-sell• Manager resistance• Priority dilution• Irregular reporting• Poor data quality • Employee turnover• Loss of interest over a period

Page 7: The Selling Process

1) Prospecting

• Leads can be identified through…– Referrals from customers– Referrals from internal company sources

• Sales manager; Marketing dept.; Telemarketing dept.

– Referrals from external agencies• Trade Associations,Industry Associations,Internet,Online Information

services

– Published directories• Yellow Pages

– Networking by the Salesperson– Cold canvassing

The method or system by which sales-people learn the names of people who need the product and can afford it.

Page 8: The Selling Process

Prospecting Activities for Residential Real Estate

• Property Exhibitions• Customer References• Corporate Tie Ups (Discount

of Rs 25-50/sft)

Page 9: The Selling Process

Prospecting Activities for Commercial Vehicles

• Financier• Demo Caravans• Advertisements in local

newspapers• Visit to Competition

customers• Tenders/Contracts• Brokers• Vehicle Clinic• Promotional Offers/Schemes

Page 10: The Selling Process

Prospecting (Mutual Funds)Existing Sources

• Bank Customers,mostly salary account holders

• Customer Referrals• Directories of Industrial zones • NASSCOM,CII,FICCI,ASSOCHM

Activities

• Local Advertisements(Leaflets)• Kiosks in Apartment Complex• Corporate PPT • Financial Trade Fairs• Retailers of High end goods

(Cold Canvassing)• Spreading Financial literacy in

Kitty parties• Meeting Celebrities in

Bangalore– Rahul Dravid– Puneet Rajkumar

Page 11: The Selling Process
Page 12: The Selling Process

Lead Management Tools

Page 13: The Selling Process

Activity Prospect Stack Up Tracker

Page 14: The Selling Process

Prospect Customer Form• Name of the Customer along with address & contact details.• End use application of the product for each segment.• Product/Brand currently used• Type of customer• Standardised or Customised• Mode of Enquiry• Model Description & Quantity• Enquiry Status• Follow up Details• Reason for loss of sale

Page 15: The Selling Process

Qualifying Leads

• A qualified prospect…–Has a need for the products being sold.–Can afford to buy the products.–Is receptive to being called on by the

salesperson.

Page 16: The Selling Process

Prospect Management Puzzle

Cold Prospect?

Cold Prospect?

Prospect?Prospect?

Warm Prospect?

Warm Prospect?

Hot Prospect?Hot Prospect?

Page 17: The Selling Process

The Answer!

To improve availability and predictability of prospect data and complete control over prospect management cycle

Page 18: The Selling Process

Defining prospect categories

Months

0 1 2 3

Hot ProspectHot Prospect

Warm ProspectWarm Prospect

Cold ProspectCold Prospect

Point of

Contact

Intension to purchase

Page 19: The Selling Process

Our Prospects

Retailed:•Goods delivered after invoicing

Retailed:•Goods delivered after invoicing

Full Payment:•DO / Payment Received•Commercial transaction complete•Can be skipped if credit offered

Full Payment:•DO / Payment Received•Commercial transaction complete•Can be skipped if credit offered

Cold Prospect:•Expected Purchase < 3 months•Suspect contacted from CDB

Cold Prospect:•Expected Purchase < 3 months•Suspect contacted from CDB

Warm Prospect:•Expected Purchase <2 months•Taken quotation

Warm Prospect:•Expected Purchase <2 months•Taken quotation Hot Prospect:

•Expected Purchase- within the month•PO / Token money taken

Hot Prospect:•Expected Purchase- within the month•PO / Token money taken

Page 20: The Selling Process

Checklist to Qualify Hot Prospects

• Check Compliance to the following activities when Qualifying Hot Prospects– 1. SE aware of the specific requirements of prospect.– 2. Product related discussion (demo) has happened.– 3. Quotation given to prospect.– 4. Price agreement reached.– 5. Applied for loan from a financier.– 6. Indicated a specific date by which prospect needs to have

the vehicle.– 7. Prospect gives positive & assuring reply to SE on every call.

• Out of 7 points mentioned above, minimum of 5 points should be applicable for a prospect to be categorized as “Hot”.

Page 21: The Selling Process

Hot Prospect Tracking Sheet

Page 22: The Selling Process

Prospect Funnel

Understanding prospect funnel is essential for

effective Prospect Management

How is a prospect funnel different from a prospect pipeline or are

they the same?

Page 23: The Selling Process

Prospect Funnel vs. Pipeline

Prospects

Cold

Warm

Hot

FP

RFP Full Payment

R Retailed

Page 24: The Selling Process

Conversion Ratios

Hot to Retailed = R Hot + FP + R

100

54

7

2

1973%

Cold

Warm

Hot

FP

R

Measure of :• Deal closing skills• Financier relationships

Page 25: The Selling Process

Conversion Ratios

Warm to Hot = R + FP + Hot R + FP + Hot + Warm

Measure of :• Quality of coverage in previous and this month• Selling skills and product / market knowledge

100

54

7

2

19

32%

Cold

Warm

Hot

FP

R

Page 26: The Selling Process

Conversion Ratios

Warm to Retailed = R R + FP + Hot + Warm

Measure of :• Quality of coverage in previous and this month• Selling skills and product / market knowledge

100

54

7

2

19

23%

Cold

Warm

Hot

FP

R

Page 27: The Selling Process

Conversion Ratios

Cold to Warm = R + FP + Hot + Warm R + FP +Hot + Warm + Cold

Measure of :• Quality of coverage in previous and this month• Quality of prospect, segment selection• Availability of a comprehensive CDB• Competition knowledge

100

54

7

2

19

40%

Cold

Warm

Hot

FP

R

Page 28: The Selling Process

Conversion Ratios

Cold to Retailed = R R + H + FP+ W + C

100

54

7

2

19

10.5%

Cold

Warm

Hot

FP

R

Measure of :• Quality of coverage in previous and this month• Quality of prospect, segment selection• Availability of a comprehensive CDB• Competition knowledge

Page 29: The Selling Process

Month Closing Funnel

Cold

Warm

Hot

FP

R

Conversion Ratios

Cold to warm=(W+H+FP+R)/(C+W+H+FP+R))×100 =

Warm to Hot = ((H+F+P+R)/(W+H+FP+R))× 100 =

Warm to Retailed = (R/(W+H+FP+R)) × 100 =

Hot to Retailed = (R/(H+FP+R)) × 100 =

Page 30: The Selling Process

• Cold = 600• Warm = 250• Hot = 50

• Out of 600 cold prospects, suppose 500 become suspects or they do not meet the criteria for cold prospect classification, then these 500 people will go to back end master database.

• Out of 250 Warm prospects, 150 shift to cold status.• Out of 50 Hot prospects, 25 shift to warm status.

Then the final classification would be:• Cold = 600-500+150 = 250• Warm = 250-150+25 = 125• Hot = 50-25 = 25

Page 31: The Selling Process

Estimating Prospect Funnel

Sales target: 50

Conversion factors are as:Cold to Warm 40%Warm to Retailed 23%Hot to Retailed73%

Calculate: Target Cold, Warm, Hot prospects for the month (Cp, Wp, Hp)

Cold

Warm

Hot

FP

R

Page 32: The Selling Process

• Hot to Retailed = Retail/(Hot + FP+ Retail)(0.27/0.73) x 50 = 18

• Warm to Retailed = Retail/(Warm + Hot + FP+ Retail)0.23 x 18 + 0.23 x W + 0.23 x 50 = 50

= 149• Cold to Warm = (Warm+Hot+FP+Retail)/(Cold+Warm+Hot+FP+Retail)

(50+149+18)/ (50+149+18+C) = 0.4= 326

• Balance Hot for the Month = 18 - 8 = 10• Balance Warm for the Month = 149 - 75 = 74• Balance Cold for the Month = 326 - 150 = 176

• This gives a visibility in the system in terms of the number of prospects you need to generate to achieve the planned results.

• Now you have to make an action plan to generate the required number of prospects.

Page 33: The Selling Process

• At the end of the month, you need to calculate these ratios to see your performance vis-à-vis industry benchmarks.

• If the ratios are lower than the industry benchmarks, then take the ratios achieved in previous month as the benchmark. i.e.If IB>CR,then use CR of the previous month

• If they are higher than the industry benchmarks then use the industry benchmarks for the next month.If IB<CR,then use IB

Page 34: The Selling Process

TARGET FUNNELSALES TARGET =50

MONTH OPENING FUNNEL

SHORTFALL FUNNEL

Conversion Ratios

Prospect Target

Cold

Warm

HotFPR

Prospect Target

Cold

Warm

HotFPR

Prospect Target

Cold

Warm

HotFPR

C TO W =

W TO H =

W TO R =

H TO R =

Use conversion ratios to calculate the prospect targets required to achieve the given vehicle target

Use fig. from previous month closing funnel and update the

status of the prospects

Calculate shortfall by subtracting balance prospect requirement from target no of prospects

= 326

= 149

= 18

= 0

= 50

= 150

= 75

= 8

= 0

= 0

=176

=74

=10

=

=

(A) (B) (C)= (A) – (B)

Page 35: The Selling Process

Sales Executive

• Tap new prospects and build pipeline/Funnel.• Keep feeding the sales funnel at the top• Classify prospects• Fill Prospect Forms• Update prospect status• Implement Activity plan finalized with DSM.• Daily reporting to SM/ MIS Operator.

Page 36: The Selling Process

Daily Prospect Call Tracker Format

Page 37: The Selling Process

MIS Operator

• Receive daily prospect report from all DSE• Compile daily reports from DSE in the given

format/ tool• Submit the report to DSM• Send a daily status of reports received from SE to

SM

Page 38: The Selling Process

Daily Prospect Monitoring Sheet

Page 39: The Selling Process

Area Sales Manager• Month Planning• Prospect target calculation• Activity Planning• Review Meetings• Prospect position analysis• Review & corrective action for each SE• Inventory Planning• Analyze daily compiled report from MIS operator and

highlight problem areas• Daily reporting to RSM

Page 40: The Selling Process

Lead Conversion Ratio: Inquiry to Decision 12 Months After Inquiring

Purchased

No longer inmarket

Plan to buy

Plan to buy 25% Purchased

45%No longer in market 30%

*SOURCE: Bob Donath, James K. Obermayer, Carolyn K. Dixon, and Richard A. Crocker, “When Your Prospect Calls,” Marketing Management, Vol. 3, No. 2, 1994.

Page 41: The Selling Process

The Value of Inquiry Follow-Up

Share of buyer’s

business if not followed up

40%

Share of buyer’s business if followed up

83%

*SOURCE: Bob Donath, James K. Obermayer, Carolyn K. Dixon, and Richard A. Crocker, “When Your Prospect Calls,” Marketing Management, Vol. 3, No. 2, 1994.

Page 42: The Selling Process

2) Preapproach: Planning the Sale

• Includes all the information-gathering activities salespeople perform to learn relevant facts about the prospects, their needs, and their overall situation.

• Adaptive selling: – When a salesperson alters the initial objectives or

plans of the sales process because of new information gained from the customer during the actual call.

Page 43: The Selling Process

Customer Research• Size• Present purchasing practices• The location of its HQ,Branch offices & location of

manufacturing plants• The names of people who make the buying decisions as

well as those who influence the purchase.• Buyer’s background – Education,social affiliations &

personalities.• Become familiar with the problems of prospective buyers.• Read the company files from customer database-sales

records,correspondence,past sales calls.

Page 44: The Selling Process

Planning the Sales Presentation

• It takes 4-5 calls to close a sale.• The salesperson must obtain from the buyer

some type of commitment for action that moves the sales process forward.e.g.– Vendor Selection Criteria– Meeting with other decision makers

• Salespeople recognize differences across selling situations & adapt their presentations accordingly.

Page 45: The Selling Process

3) The Approach: The first minute or so of the call.(Icebreak)

• A good approach makes a favorable impression and establishes some degree of rapport between the salesperson and the buyer.

• Salespeople can draw attention of the buyer by– Handing over a sample– Highlighting some benefit in which the buyer will likely be interested

• Expectations in India:– Greeting in the local language– Professional attire– Body Gestures & eye contact.

Page 46: The Selling Process

4) Need Assessment

• The stage in which the salesperson must discover, clarify, and understand the buyer’s needs.• The best way to uncover and

understand needs is by asking questions.

Page 47: The Selling Process

NEED ASSESSMENT• Situational questions

How often do you change the cutting oil in your drill presses?

In addition to the hospital administrator, who else has an influence on the decision?

• Problem discovery questions

Have you experienced any delays in getting repair parts?

In which part of the production process is quality control the most important?

• Problem Impact questions

How do these delays in getting parts affect your production costs?

What impact do the quality consistency problems have on your production costs?

• Solution value question

If your inventories could be reduced by 20%, how much would that save you?

If your rejection rate on final inspection was reduced to under one percent, how much would that save you?

• Confirmatory questions

So, you would be interested in an inventory control system that reduced your inventories by 20%?

If I can provide evidence to you that our products would lower your rejection rate to under one

percent, would you be interested?

Page 48: The Selling Process

Situations to Sell Hand Sanitizer

Page 49: The Selling Process

5) The Presentation

• A discussion of those product and/or service features, advantages, and benefits that the customer has indicated are important.

• Built around a forceful product demonstration

• Prepared presentation vs. Adaptive selling

• Tips for effective presentations– Keep it simple– Talk the prospects language– Stress the application of the product/service to the

prospects situation– Seek credibility at every turn.

Page 50: The Selling Process

Presentation of Product, Features, Benefits, Advantages

Product Features Benefits Advantages

Camera Telephoto lens Take pictures Able to capturefrom longer images of animals

distances. or people from a distance.

Bicycle Attached water Can hold a water Don’t get dehydrated. bottle. bottle holder Don’t have to stop

for water. Feel more refreshed.

Drill Press Multiple drill Can change bits Saves time. bits attached without shutting Saves money.

down the machine.

Motor Oil Rust inhibitor Oil and engine Saves money.have longer life.

Page 51: The Selling Process

PEN ELECTRIC SWITCH POTATO OB BOOKWATCH CELLO TAPE SHOE TISSUE PAPERLIGHTER SCISSOR VISION SPECTACLES PERFUMEPEN DRIVE STAPLER SOAP TILELAPTOP PUNCH DUSTBIN WALLETMOBILE PHONE CHOCLATE MINERAL WATER BELTRING CHEWING GUM BRACELET PAPER WEIGHTNECKLACE TIE MOUSECHAIR SHIRT EGGSFAN KPL STEEL GLASS

Use the FAB Model to sell following Products

Page 52: The Selling Process

6) Meeting Objections

• Objections should be welcomed because they indicate that the prospect has some interest in the proposition.

• In responding to an objection…– Listen to the buyer– Clarify the objection– Respect the buyer’s concern– Respond to the objection

• Common types of objections– Price or value objections– Product/service objections– Procastinating objections– Hidden objections

Page 53: The Selling Process

7) Gaining Commitment

• Asking the buyer to commit to some action that moves the sale forward.

• Common Sales Closes– The Assumptive Close

• “Now what size do you want?”– Special Offer Close

• “If you buy this product today, we’ll double the length of the warranty.”– Summary Close

• “You have agreed that our product is the best on the market. Correct? Then I suggest that you place your first order today so we can have it to you by the end of the week.”

Page 54: The Selling Process

8) Follow-Up

• Reps must learn that the sale is not over when they get the order.

• It is much more expensive to acquire new customers than it is to retain existing customers.

• Following up to ensure that the customer is fully satisfied builds trust and is consistent with the concepts of Relationship Marketing.

Page 55: The Selling Process

Benefits to Company

• Higher internal efficiency

• Lower and active inventory

• Higher productivity of working capital

• Higher productivity of manpower

• Prediction accuracy of monthly retail

• Lesser product shortages

• Reduced seasonality effect on retail

• Higher retails and market shares

• Financiers performance measures