Sales: An Overview, a Perspective

Sales, one of the most crucial functions of any business is the principal, and often, the only revenue generating function in the organization. It has formed an important part of business throughout history and will continue to do so.

In addition to helping a business achieve its goals, the selling function performs various other roles such as enhancing knowledge pertaining to the internal and external environments, developing positive relationships with customers, suppliers and distributors, and negotiating with customers to sell the products profitably. Despite the crucial role the selling plays in the growth of an organization, Sales has a rather negative image associated with it which is attributable more to the misconceptions in the minds of the people rather than actual knowledge of the profession.

The major objectives of Sales are to increase Sales volume, contribute to profits, and attain long-term growth. For a business to be successful it is essential to integrate the Sales and Marketing functions so that coordination of activities can be achieved.

Over the years, substantial changes have taken place in the selling environment, sparking a change in the Sales function too. The various trends that have shaped the Sales function include shorter product lifecycle, longer and more complex Sales cycle, reduced customer loyalty, intense competition among manufacturing firms, rising customer expectations, increasing buyer experience, electronic revolution in communications, and the entry of women into the Salesforce.

Owing to intense global competition, slow growth in markets and different customer expectations, organizations reengineer their structures and streamline their processes. An inefficient organizational structure can frustrate top managers as it may result in strategic plans going astray due to absence of clearly defined responsibilities and reporting relationships. Developing customer-centric organizations, building strong relationships within and outside the organization, modifying the traditional top-down hierarchical structure and introducing cross-functional teams are some steps companies are taking to improve their efficiency and profitability.

The organizational structure should fulfill the purpose for which it has been designed. The role of Sales is to achieve organizational objectives, streamline reporting relationships, facilitate effective coordination and control and develop an efficient Salesforce structure to ensure effective selling strategy.

Designing the Sales division plays a crucial role in an organization’s overall success and one must consider the influence of external and internal factors in it. External factors include the markets targeted and the technology prevailing in the target market. Internal factors include the business objectives, the size of the Salesforce, core competency of the organization, compensation system, reporting relationships, etc.

Based on the span of control, authority, hierarchical levels and departmentalization, four basic structures are possible. These are formal and informal, centralized and decentralized, vertical and horizontal, and, line and
staff structure. To efficiently serve the ever-changing needs of the customers in the best possible manner, an organization can have a product-based, geography-based, customer-based, or a combination-based Salesforce structure. The type of customers, the market size and its potential, the type of industry, levels of Sales desired, size of Salesforce, width and depth of the product-mix are some factors that influence the decision on the type of Salesforce structure to be adopted.

Sales culture is a collective impression of the values, attitudes and personality of top management in an organization and plays an important role in the success. It pervades down to the lower levels of hierarchy over time. Sales culture has a significant influence on Salesforce activities and attitudes. Its various components include symbols, language, ceremonies, rites and rituals, role models, tales and stories, and, values and beliefs. The strength and direction or fit of the Sales culture also plays a crucial role in developing a sound Sales division.

A Salesperson’s professional life is characterized by various highs and lows. At times he may clinch a deal, close a sale, at others he may face the customer’s rejection. Thus, the life of a Salesperson is certainly not an easy one. What differentiates a successful business from a not-so-successful one is its Salesforce.

The Salesperson’s job is also a demanding one. He has to play the role of a persuader, service provider, information-gatherer and reporter, an advocate, traveler, coordinator, scheduler, problem-definer, customer-ego builder, display arranger for the wholesaler / retailer, a merchandiser as well as an ombudsman. Thus, a Salesperson has own set of responsibilities to fulfill.

The operations and functioning of Sales division is governed by certain policies which fall into three categories, namely, product-related, distribution-related and product-related.

Product-related policies determine the products and product lines the organization should be involved in, and whether to add or drop a particular product or product line. These help specify organizational standing regarding product design and quality, after-Sales service, product recall, warranties and repair.

Distribution-related policies deal with how the distribution of a product affects its Sales. These also highlight the relationship between various factors such as product quality, its positioning, the marketer’s reputation, marketing efforts, product promotion and Sales, and the need for coordination among these factors.

Price-related policies relate to the relationship between product or service pricing and its impact on Sales.

The process of selling goods and services directly to customers is Personal Selling. It is far more significant than other forms of promotion as it allows the Salesperson to describe the product in detail to the customer in-person. Personal selling is therefore a highly interactive tool of promotion and is best suited for products or services that are complex in nature.

The effectiveness of communication between the Salesperson and the customer during the Sales process decides the success of the Sales call. The interaction between a buyer and a seller comprises a buyer-seller
dyad. The likelihood of a Salesperson making a sale to a customer is higher if he shares some characteristics with the customer.

As a part of the selling process, Salesperson performs two entirely different tasks; Sales development and Sales maintenance. These tasks require different skill sets and different approaches, making it tough for Salespeople. As most businesses require the same Salesperson to carry out both tasks simultaneously, Salesperson often tends to ignore the more difficult of the two, i.e., Sales development. Sales management has to differentiate between the two for the organization to be successful.

The objectives of the Salesforce are of two kinds, qualitative and quantitative. Qualitative relates to the methods of Sales force operations while quantitative objectives are the measurable actions of the Salesforce.

The Salesforce strategies of a business fall into two categories – strategies for gaining market access and account relationship strategies. Market access can be gained by using distributors, telemarketing, independent Sales agents, the internet, developing hybrid marketing systems and by establishing strategic alliances. Account relationship strategy deals with ways to manage Sales accounts in an organizational set-up and individual Sales accounts. It is essential for the Salesforce to develop and manage long-term customer relationships. This is especially important in case of an industrial Salesforce, because there is a continuous transaction between the Salesperson and the customer. The customer buys the same type of products from the Salesperson at frequent intervals of time. Maintaining strong relationships with customers definitely boost repeat purchases. Offering discounts occasionally significantly improves the chances of repeat purchases.

Personal selling includes the AIDAS, the Buying Formula of Selling, the Behavioral Equation, and the Right Set of Circumstances theories. AIDAS stands for Attention, Interest, Desire, Action and Satisfaction. This states that a prospective customer’s mind passes through these 5 stages before he makes the actual purchase. The Buying Formula states that the purchase process is characterized by a psychological sequence of events i.e., Need RecognitionSolutionPurchaseSatisfaction, that take place in the prospect’s mind. The Behavioral Equation states that decision-making by a customer comprises stages of the learning process and consists of drives, cues, response and reinforcement. The Right Set of Circumstances hypothesis assumes that creating the right set of circumstances makes the buyer respond positively and results in a sale. Further, in order to develop and maintain account relationships, a Salesperson can adopt any of 3 approaches – Stimulus ResponseNeed SatisfactionProblem Situation. The selling process consists of a series of 7 steps – Prospecting, Pre-approach, Approach, Presentation, Objection Handling, Closure, and Post-Sales follow-up.

Organizations should devote significant attention to customer satisfaction, so that customers remain loyal for a long time. Some critical customer-related issues in personal selling include understanding customer-
type through different styles of selling, finding customers, researching customers, communicating effectively, providing customer service and finally, creating customer satisfaction.

Over the years, Sales personnel are being increasingly exposed to a number of advanced technology tools. Today, Salespeople have a number of tools and techniques available to them that have made their jobs easier, and at the same time challenging. Salesforce automation tools have made it possible for Sales representatives to remain connected to their office and with their customers at all times. Connectivity not only provides the Salesforce with a competitive edge in selling but also improves their effectiveness and productivity.

Globalization has opened up markets and provided untapped opportunities to organizations across the world. With increasing competition, changing customer needs and stagnation of demand in domestic markets, many organizations have started looking at international opportunities. International Sales plays an important role in implementing the marketing policies and selling programs of the organization in the foreign market at the ground level. A thorough understanding of the overall operations of the organization in the global context, an open approach to multicultural differences and the ability to implement both the basic and advanced levels of Sales management functions is necessary to succeed.

Organizations enter foreign markets in search of opportunities. The chances of diversifying the market base, attaining low costs of labor, economies of scale, first-mover advantage and faster growth rate of the economy in comparison to the home market, are some of the attractions to enter these markets. An awareness of pitfalls in the form of economic, socio-cultural and legal factors while entering foreign markets is also necessary to fully reap the benefits.

The decision to enter and operate in international markets is a strategic one and pertains to the marketing-mix, sources of information, mode of entry, timing, scale, long-distance selling, direct or indirect exporting, franchising, licensing agreements, strategic alliances, turnkey contracts, Greenfield investments, joint ventures and subsidiaries.

Variations in economic, socio-cultural and political conditions across countries make selling in international markets a challenging task. It requires a great deal of sensitivity to local customer needs, expectations, business approach and personal philosophy.

Organizations adopt different structures while operating in foreign markets which include long-distance selling, piggybacking with local distributors, using intermediaries or operating independently by establishing a direct Salesforce.

Finally, due to differences in culture and traditions and associated problems, most organizations employ local people to sell their products. An awareness of the recruitment, selection, training and compensation procedures for the Salesforce appropriate for the host country is necessary to successfully operate in different regions of the world.