Sales Management

Lesson 1: introduction to salesman qualities; different selling techniques -

“It is all about sales. If I have sales, I can create profit”.

There are 2 contradictory views on sales: a positive one (Franklin, Buffet, Walton, Carnegie), and a negative one (Miller “death of a salesman”, Thompson).

Human attributes required to sell

Credibility

The quality of being believable or worth of trust. An effective salesman builds over time an esteem. You can’t sell a product quality, if the quality itself doesn’t exist; you can’t sell a lie, so just focus on the good qualities of the product. A good salesman brings clients’ requests into his company.

“A sale is a “truth well told””.

Sometimes you have to say no if something is not good; credibility is a long-term goal.

Feedback: listen, understand if it’s right or wrong and then react.

Likability

Someone who is genial, attractive, winsome, engaging; that has boundless energy, enthusiasm and self-confidence (perception that the product you’re selling is perfect for the customer). You want to create empathy with your client.

“We have a better product than soap or automobile. We have eternal life”.

Resilience

Ability to maintain an emotional equilibrium in the face of bad events; you can learn more from bad experiences than good ones. Never excite and depress when there’s triumph or disaster.

Belief that one can influence one’s surroundings and outcome of events.

“Meet triumph and disaster and treat those two impostors just the same”.

Conviction

The feeling of being certain of what you sell. You need to believe in the qualities of you product. A strong opinion or belief, deeply rooted in you. The ability to select and build a strong opinion on the positive aspect of the product/service you sell.

“You can be a star in selling only if you strongly believe in the qualities of you product or service”.

Persistence

Never give up. Do not care for the nos, but fight for a yes.

“In selling the more NOs a salesperson receives, the more successful a salesperson will be in the long-term, because it builds effort and creativity.

Some of these attributes are related to the character, others no (it doesn’t really matter if you’re not outgoing or ).

On-premise (es. you take the bottle and drink in the bar. The infrastructure is owned by the company and she manages it), off-premise/trade (es. you take the bottle and drink at home. The infrastructure is given and managed by a third party)9.

Success consist of going from failure to failure with no loss of enthusiasm (Churchill).

The basic selling process: understanding customers’ needs and deliver a product to meet them

There are 3 moments:

Seduction. Positive imagination about the benefits of the product.
Logical. Cost-benefit
“Ego drive”. You must close.

Phases:

Salesforce plays an active role in the value creation process, but there are basically 2 ways to create value: improving benefits (customized products; linking products to support activities) and reducing costs (offering a more economic price). In order to satisfy customers it is necessary to analyze and segment them based on their evaluation criteria.

Contingent factors:

Customers are more informed than in the past.
Products and services are becoming commodities.
Globalization and liberalization improved and increased competition.

Different selling techniques for different client needs

Transactional sale.

Objective: maximize turnover.

Intrinsic need: the need starts and ends with the product. I buy it, and that’s it. The salesman is “only useful” in the buying phase, customers know the product. Product is standard. There is a single purchase. Trust: in the product, its performance, relationship based on cost, supply reliable and low costs. How to add value: increase visibility, add services, reduce transaction costs.

Consultative sale (important)

Objective: maximize profit.

Extrinsic need: the need is not only limited to the product, is also linked to its use.

Product is differentiated, customized and has hidden functionalities. Customers are looking for solutions. Salesforce are useful if they deeply understand customers’ needs (useful in the needs recognition phase), so there’s no need of any additional support. Timing: repetitive purchase.

Trust: in people (relationship customer and consultant). It’s based on the ability to solve problems. Core reasons to trust are comprehension and problem solving. Trust is based on trade-off between price and performance.

Enterprise sale

Objective: optimize company value

Strategic need: partners share the company mission.

Clients look for a partnership in which they can join forces to develop products, processes and services. Product is highly strategic and with limited replacement. Customers ask to Salesforce more than simple advices. Customers want to take advantage of suppliers’ key competences. Timing: long-term relationship.

Trust: it in the institution, based on institution’s values and key competences. Core reason to trust is strategy sharing. Equal relationship.

How to add value in a partner-client relationship:

Define strategy and agenda
Identify execution gap
Analyze relationship’s feasibility (fattibilità)
Build a common vision
Start the relationship within the company

Lecture 2: managing modern trade in F&B - spin selling technique - Salesforce organization

Opposite opponent (one that takes an opposite position?).

Most of FB companies start managing 2/3 point of sales.

Modern trade Salesforce organization

A national key account is the position of the company (?). National buyers are the opposite opponents. What do they do when they meet?

Listed products portfolio management. List: create, in the information system of the modern trade, the record (es pasta fusilli 500). Listing is the process of convincing the modern trade to introduce the item that I want to distribute. Modern trade (ipermarkets, supermarkets all belonging to the same name, they are chains, like Esselunga). (Without it no one can buy it. It’s the prerequisite to create the order. NON IL LISTING, CERCA). The national key account explains to the buyer the reasons why they should put in their listing file my new product.
New product listing. Listing: inserimento nel sistema, una volta inserito può essere ordinato ad esempio dai negozi locali
National contracts. It’s the framework of the yearly activities between the stores and the brand. Everything needs to be agreed in the national contracts (it doesn’t mean handled, it’s just the frame, the overall agreement that helps every store to do what’s been decided at national level). Budget is always a percentage of the expected turnover.
National promotions
National coop advertising. Out of shelf display, media, tastings, giving little gifts

All this is framed at the national level. It’s the written framework.

Logistic management. They are logistic points, logistic flow must flow well.
Regional listings. If we have a product with specifically regional tastes (es in Campania bevono il caffe come vogliono loro, e devi farlo cosi), you just distribute it there.
Regional promotional activities. Not that common.

The opposite opponents are the regional key account and the regional buyers. LOGISTICS but also if you have regional products.

The most common way to start as a FB. You apply at the local level the national contracts, you have to decide how to place your money starting from those limits.

The interest is return per linear squared meter (like real estate: unit return x rotation).

Shelf management. Sometimes even orders are handled by the local key account.
Promotional activities
Market research and studies.

The most practical, within the frame of the national agreement, you adapt your local strategy.

Consultative sale: “spin selling” sales model

In the consultive sale, the value is added at the beginning (needs recognition). The old way of selling is displaying products and benefits and the client has to say yes or not, the actor is the salesman. Today we, as customers, don’t accept salesmen who sell like this; the new way of selling it’s never saying anything and just ask questions (invert the relationship client-supplier). By asking questions he becomes the main actor (client). Goal: through these question discover implicit and explicit needs of the client, and then “by the way, I have the product that you need”. If the need is not solved, you do not have to sell. (Credibility).

It is necessary to identify the right person to each area of interest.

The process of spin selling.

The spin selling model offers an efficient guideline, which allows to get to know the client, investigate his implicit needs and identify the explicit ones.

Seller:

Questions about the situation. Generic questions to establish client-supplier relationship. The protagonist is the client.
Question about problems. We try to dig into the implicit needs.
Implicit needs. Said by the client. Through the implicit needs we do question about implications.
Questions about implications. They allow the client to perceive the problem in a clear and deeper way.
Question about the advantages. Introduce the benefits of my product, only as advantages good for the need. So the client will declare its explicit needs.
Explicit needs.
And then benefits. Linked with the sale success.

Questions about the situation. I’m not there to sell, but to help. But is the counterpart really interested in my needs? Or do I feel like they’re lying. They are useful to break the ice, provide basic information, and reveal the areas which can conduct to implicit needs/problems.

Question about the problem. Asking questions about the client’s problems to make emerge needs. If we don’t ask enough questions the client may not highlight all the potential need areas.

We make questions about the situation and problems in order to understand implicit needs. 4 reasons in a missed/low obtaining of implicit needs:

Absence of client’s needs.
Wrong or not enough question about the problem.
Client denial of his needs.
Too much attention to few needs.

Focus on the presentation of our offer strengths

In the middle of the purchase cycle, client’s interest on decisional criteria will be higher: this is the moment in which the company is compared to competitors.

Practical advices:

- Identify decisional criteria. It’s critical to understand the criteria of the decision. Based on those criteria I will choose what to offer them.

The more I go to the contract moment, the more I will do the practical aspects.

Understand how the client evaluates
Analyzing criteria
Create needs in areas where the company owns competitive advantages
Do not complain on client’s criteria. Feedbacks are good, never complain about them; listen and react.

The right answer to a price question it’s about value, not about the costs, value.

Price is often an “acceptable” excuse, but researches demonstrate that 2 out of 3 times price is not the real concern.

Practical advices:

concerns emerge particularly during the late stage of the purchase cycle
Prevention is better than cure
Do not ignore concerns
Concerns have to be managed with 3 actions: find out, clarify, help to solve.

Salesforce organization

When I want to sell in a foreign country (international sales) I have some models, each of them has pros and cons.

Sales model: agents

Most companies begin their sales organization and expansion with sales agents Salesforce and only later they switch to another model to sell to national or international markets.

Sales agents are independent professionals who represent different companies/brands.

Agent: independent (alternative to the salesman, salesman is an employee and gets paid through a salary), he pays everything and gets money through commissions. The agent is an entrepreneur for himself. If you are in a situation of zero business, he’s great to create it, otherwise he won’t get paid, so they’re perfect if it’s a new territory. The key to “control” them is to align their interests and their clients’ interests with the ones of the company.

Pros:

Being the contracts commissions based with no expenses reimbursements, the fixed selling costs are minimal. No fixed costs (at least not high). If he sells he’s paid, otherwise not.
Because he’s independent, it’s easier to quit the agency and also exit cost is lower

Cons:

Level of control on agents work. There’s a low level of control on agents work. Agents will always chose a client over a company, managers don’t get it. Working with an agency company it’s complicated. They’re independent, they work their own way, you can’t give them orders.
Agents follow their short term interest, and hardly support medium-long term strategies
Their equity is their clients portfolio
They usually support “their” clients sometimes against the company/brand interest.

Direct Salesforce

It’s made of company employees. I use salesmen when the value of the orders is very big (like millions) because if I have commissions I will have to pay them too much. But with a fixed salary no. Perfect when you’re well established.

Pros:

full control of Salesforce activity both in strategic direction and in daily planning
Low (fixed) cost on turnover when portfolio made by big clients

Cons:

high fixed and variable costs
Low flexibility from a contractual standpoint

Importer

Most manufacturing firms begin their international sales expansion as exporters and only later switch to other models to sell to national or international markets. Importers have the right to buy products at their risk, and sell in their “territory” through an owned Salesforce (direct or indirect). It’s an agent for a country? It’s always based on commissions even though they work with salesmen.

More or less he has pros and cons of the agents.

Pros:

avoid the substantial cost of establishing selling operations in the host country
May also help a firm achieve experience curve location economies

Cons:

level of control on importer’s policies can be low
Agents in a foreign country may not act in exporter’s best interest

Licensing

A licensing agreement is an arrangement whereby a licensor grants the rights to intangible property to another entity (licensee) for a specified time period, and in return, the licensor receives a royalty fee from the licensee.

I produce for you and you pay me a royalty. Roels: the licensor and the licensee (the one that pays). The minimum royalty amount is zero.

Pros:

the firm avoids barriers to investment
Faster access to the market, the 7 does’n’t have to bear the development costs and risks associated with with opening a foreign country.
Rapid penetration of the global markets.

Cons:

no high control over manufacturing, marketing and strategy
Licensee may not be committed
Lack of enthusiasm on the part of a licensee
Biggest danger is the risk of opportunism
Licensee may become a future competitor

Franchising

Franchising is basically a specialized form of licensing in which the franchisor not only sells intangible property to the franchisee, but also insists that the franchisee agrees to abide by strict rules as to how it does business.

Giving marketing tools to an entrepreneur. Even if the company is losing money, they will have money (which is a problem if the network is losing money). Audi is doing a franchising with building architectures.

Pros:

Overseas expansion with a minimum investment
Franchisees’ profits tied to their efforts
Availability of local franchisees’ knowledge

Cons:

revenues may be inadequate
Availability of a master franchisee
Limited franchising opportunities overseas
Lack of control
Problem in performance standards
Cultural problems
Physical proximity

Joint ventures

A sales joint venture is the establishment of a sales unit that is jointly owned by two or more otherwise independent firms.

Sharing shares. They are more relevant in the industrial world, but less in the food and beverage (?). They can be useful for specific areas of business.

Coca Cola with bottlers for example. You can do JV for part of the business or the whole company (very complex, cultural issues…).

Pros:

higher rate of return
Creation of synergy
Sharing resources
Access to distribution network
Contact with local suppliers and government officials

Cons:

Lack of control
Lack of trust
Conflicts arising over matter such as strategies…

Drivers for successful international ventures: pick the right partner, bridge cultural gaps, gain top managerial commitment and respect, use incremental approach.

Create a launch team during the launch phase: build and maintain strategic alignment; create a governance system; manage the economic interdependencies; build the organization for the joint venture.

Wholly owned subsidiaries

In a wholly owned subsidiary, the firm owns 100% of the stock. Establishing a wholly owned subsidiary in a foreign market can be done in 2 ways: acquisition and greenfield operations (impianto di un nuovo stabilimento all’estero).

Establish a local company with a local legislation. It’s the one with the highest fixed costs.

Pros:

greater control and higher profits
Strong commitment to the local market
Allows the investors to manage and control marketing, production and sourcing decisions.

Cons:

risks and cost of full ownership and overseas operation set-up
Developing a foreign presence without the support of a third party
Risk of nationalization
Issues of culture and economy

Do not consider jack daniels. You start from alcohol, scotch, whiskey and bourbon. Total market, relevant market. Group! I have to imagine myself in 1973. Start with legislation

Lecture 3: introduction to negotiation methodologies

To know how to negotiate is a vital ingredient for business success.

Effective negotiators work hard to prepare the negotiation and establish clear goals.

Once you’ve got both those elements, you can cleanse a successful deal.

Negotiation is about preparation, the more you prepare the more you get results, predicting moves is essential (chess game ).

Negotiation is different in each country, cultural differences (for example, in South Korea if you don’t negotiate you offend; in Greece if you do it it’s negative).

ZOPA: Zone Of Possible Agreement

It’s the area between the minimum selling price and the maximum buying price. It’s our battlefield (es from 10 to 30, if everything is balanced, you close at 20). So negotiation will directly impact the parties margins.

Approach: friendly or hostile

Type of product: when you buy something unique the problem is not the price, but to have it or not.

Each negotiation has its own HARP.

HARP: number of dimensions that are part of the negotiation (es I want two identical things that have a different price, commodities -> “one cord” harp); we can also have “pluri-cord” HARP, es I have to buy a car, sell mine, do assurance (price, delivery time, invested amount, content of the service…).

The HARP depends on the typologies of negotiation.

BATNA: Best Alternative to Negotiation Agreement

When you go to negotiation you need to have alternatives that make you strong. Bad negotiators are just bluffing, unless they are very good at it.

BATNA is related to the Reservation Value (RV = walk-away point in the negotiation), all strategies are discussed before.

BATNA determines the negotiation space.

Perception is critical.

If you are a good negotiator you need to have alternatives (your BATNA), but also think about the other’s; no guess is the biggest mistake.

Pre-negotiation assessment:

Assess your BATNA
Calculate your reservation value
Assess the other party’s BATNA
Calculate the other party reservation value
Evaluate the ZOPA (guessing if I don’t have numbers it’s better than nothing).

Negotiation space: area within which it is in both the customer’s and seller’s interest to strike a deal.

Lecture 4: key F&B sales processes: sales funnel - canvas motivation techniques - dev. and mng. sales channels

The sales funnel

“Sales is all about referrals: when you get the referrals rolling, you keep meeting people and you keep selling”.

In the sales funnel there are some operative activities that allow the transition from one phase to another.

Analyze every activity, taking into consideration: implementation time and impact on sales “success rate“.
Insert every process in the prioritization matrix
Identify high priority processes to be implemented immediately, because key to the transition from one phase to the next one in the sales funnel.

Effective organization of sales: the Canvas model CHIEDI

In F&B companies the Canvas model is a tool based on interaction between sales and marketing, which define intermediate sales periods and gives rhythm/pace to the selling process.

Why to introduce the Canvas:

Tool to integrate marketing and sales
Tool to structure meetings
Training moment on products
Occasion to reward best salesman
Tool to collect market feedback

It has 3 phases

The canvas has to cover the whole year, in order to create continuous sales motivation and involve all products.

The planning gives a rhythm to the sales function.

It is a support tool to reach the objectives, because it offers sales arguments to cover the whole product portfolio.

Motivation techniques

Motivation is the process that produces goal-directed behavior in an individual. It helps to initiate a desired behavior in an individual and direct it towards the attainment of an organizational goal.

To motivate sales people effectively, sales managers must have a through understanding of human needs and the concept of motivation. Most common needs are money and status, but as relevant are accomplishment among peers and respect.

High relevance of Salesforce behaviors

In a modern sales model, based on trust between people, Salesforce behaviors are as important as final results.

Examples of when to incentivize on results and when on behaviors.

“The buyer is to be convinced to make purchasing decision” -> results

“Company needs to defend its own brand -> behaviors

Behaviors’ evaluation system: management role

The future of selling: introduction to e-commerce/e-sales

E-commerce: businesses vs consumers

Definitions

E-commerce traditional definition: “is the trading or facilitation of trading in products or services using computer networks, and internet platforms”.

People definition: “you sell online and 99% of the people think that if you open an e-commerce you’re: reach, famous, the next google or amazon”.

The real e-commerce definition: “we find new customers through new unconventional channels and we convince them to buy and be engaged to our brand/product”.

E-commerce trends worldwide

Retail e-commerce sales are increasing from 18.9% (2021) to 23% (2027). US ( ≈ $1.2 bn in 2023)and China (≈ $3 bn in 2023) count for more than 50% of the transactions; Europe is still far away.

In Western Europe there have been a low peak in 2022 (-4.5%), now around 6%.

The highest product bought online is clothing/footwear.

In Europe big countries like Spain and Italy are still far away from their peers (UK, DE, FR). Hungary and Poland are the most promising countries in terms of growth rate.

Top e-commerce brands: Amazon, Apple, eBay (USA); Zalando, Tesco (EU); Subito, Esselunga (Italy).

Lecture 5: e-commerce, growth hacking/selling techniques, the future of sales in F&B

The future of selling: introduction to growth hacking

Definition: “Growth hacking is a process of rapid experimentation across marketing channels and product development to identify the most and efficient ways to grow sales”.

Growth hacking is about how to engage, activate and win new clients. It’s about adapting to their changing needs and turn them into passionate ambassadors and an engine of word-of-mouth growth for your brand and product (and revenues).

Growth hacking provides a rigorous methodology for driving the discovery of sales opportunities through collaboration across functions at a rapid-fire pace, insisting upon data-driven analysis and experimentation.

It is a process to quickly transform customer feedbacks in actions.

We could say that it is the marketing & sales adaptation of the extreme programming (XP) in software development.

Key methodologies:

Determining if your product is a must-have
Identifying your growth levers: finding relevant metrics/choosing a North Star
Testing a high tempo
Roll-out product-process improvements and digital campaigns

Growth hacking process is designed to help discover the most cost-effective ways to acquire new customer, and then optimize those effort to drive growth.

The new frontier: e-commerce for everyone

The Shopify success is changing the e-commerce world.

Funded in 2003, more than 4.8M online shops worldwide, no internet competences requires, 29/299/2000 monthly subscription…

Many career opportunities:

It has a long-term global growth outlook.
E-commerce gives you a feel for customer.
It exposes all aspects of a business.
Through e-commerce you can learn fast by instant feedbacks.

Working in e-commerce companies presents lots of learning opportunities. You get instant feedbacks and you are expected to respond. If you can handle the pressure, your hands and soft skills will improve in the short time.

Skills and attitudes requires: selling experiences, market understanding, IT/technical attitude, e-commerce SEO competences copywriting, data analysis, creativity, adaptability.

New/future jobs/career paths: performance e-commerce manager, retention specialist, user experience designer, community builder, digital operations manager, customer satisfaction manager, digital marketing managers, director of e-commerce.