basics of sales management
02 Salespeople
What is selling?
SELLING is providing a service or exchanging a good for an amount of money, which can be negotiated along with other details of the delivery process such as the date, the quantity and format, the product characteristics, and the payment terms and conditions, among other things.
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This is a transactional and commercial definition.
Limiting the definition of selling to its strictly financial and transactional aspects limits its scope because selling is much more than exchanging goods and services.
This myopia creates a tunnel vision that prevents us from properly managing sales activity at companies, regardless of their size.
In other words, selling is INFLUENCING.
As individuals and professionals, we are selling 24/7, 365 days per year, no matter our department.
Why?
Because we are influencing those around us to take our position and to accept our proposal or advice to achieve our goals.
For example
1. When an NGO asks for a monthly donation, it is selling the honorability of its cause, its corporate mission, and its values.
2. When an entrepreneur makes a pitch or a speech to an investment fund or a business angel, they are selling the potential of their project.
3. When a group of students gives a presentation in class, they are selling their work to the audience and to the teacher to get a good grade.
4. When a user signs up for a dating app, they are selling their personal brand.
All of these examples, and many others, have a something in common: INFLUENCING.
Influencing another person to make a decision in line with our interests.
To influence more, we must create a favorable environment for our sale.
Selling is about motivating other people to make decisions that support a brand, a project, or an idea.
Who can be a salesperson?
A good salesperson is someone who solves their customers’ problems.
Potential customers
Everyone is a potential customer; however, not all customers have the same needs.
To identify potential customers, we must understand what motivates them. In other words, why do they make a purchase?'
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Why do customers make a purchase?
Are they trying to solve a problem?
What is the root of their problem?
Do they want to meet a need?
Why do they have this need?
Once you can answer these questions, you can then move on to the following ones:
Why are they going to buy something from you?
What added value do you offer them over other options?
What additional problems can you solve if they decide on your offer?
What is the differential added value or unique selling proposition (USP)?
Shopping is something enjoyable that makes consumers feel powerful thanks to endorphins released during the process.
When a salesperson aggressively approaches a potential customer, they feel like the salesperson is trying to sell them something, i.e., that they are a victim of a process.
In this situation, the enjoyable aspect of shopping disappears and closing the sale becomes complicated.
The relationship between salespeople and potential customers
From an operational point of view, salespeople are the link that connects a brand with customers and represents customers within the brand.
In other words, they are the image of the brand in the market.
For example
If Ana is a salesperson for a brand called ACME, and she visits Juan at the Cristal Perfumes company (a potential customer), Ana IS ACME in the eyes of Juan
However, there is the opposite effect within the company.
When ACME is creating its marketing plan for its new product, Ana will share Juan’s opinions within the company. She can say that a certain price or format isn’t what Perfumerías Cristal is looking to buy.
We consider salespeople to have a boundary role or to be a link between customers and the brand. This is why salespeople are the “owners” of customers within a company.
Sales activity
Salespeople’s role and tasks
Salespeople’s role and tasks change depending on the industry, their proactiveness when interacting with customers, and the length of the process.
The easiest sales are ones where salespeople have a reactive approach. In other words, they intervene when they are asked to do so by the customer.
Progressively, a salesperson’s tasks increase and the skills they need grow in line with the complexity of the problem they need to solve or the need they must meet.
In the past, it was common to classify sales as either transactional or consultative (car salesperson).
These approaches are part of the myths of selling because they approach selling from the perspective of the internal process carried about the company.
For example
A transactional salesperson or “seller” is the one who delivers what the customer requests.
For example, a barista who prepares coffee at a coffee shop.
A consultative salesperson is the one who advises the customer on the product or service when they are making a purchase.
For example, an account manager advising a customer on the different operating systems that are best for their business needs.
This internal sales process or approach is myopic because the sale revolves around the company instead of around the consumer and the problem that they need solved.
That being said, we can conclude that there are two types of salespeople:
THE SELLER AND PROBLEM-SOLVER.
The problem-solver
A salesperson is like Mr. Wolf in the movie Pulp Fiction (1994), directed by Quentin Tarantino. They are a “problem-solver.”
Depending on the industry, the size of the company, and their skills as a salesperson, they will be able to solve problems to a greater or lesser degree.
In the essence of business philosophy, an electrician is the same as a criminal lawyer or a civil engineer; they all solve problems, albeit of a different nature and for different customers.
Segmentation of sales activity
From a theoretical perspective, sales activity can be separated into two large groups:
B2C sales
B2B sales
While the same philosophy and sales management principles apply to both groups, they require different skills and methodologies for their sales and operational tactics.
Selling to the B2C sector (business to consumer)
B2C sales are defined as sales where customers buy the products or services for themselves, i.e., for their own consumption.
Motivations and objectives in B2C sales
The purchasing process and motivations are affected by personal interests. The aims of a purchase, the problems that need to be solved, and the needs that must be met are personal. This means they are unique to the user and/or buyer.
Examples
In general, products and services are grouped into various categories for B2C sales:
Fast-moving consumer goods (FMCG): these are low-cost products that are purchased regularly and frequently. They are relatively cheap; for example, products in your shopping basket at a corner store or a cup of coffee at a coffee shop.
Semi-durable goods: they are products that are bought less frequently than fast-moving consumer goods. For example, a toaster for your kitchen. For these products, we tend to think about our purchase more compared to fast-moving consumer goods. We make our purchase with few sales interactions and a relatively fast decision-making process.
Durable goods: these are products that we don’t buy frequently (we buy them once per year or even less frequently) and they are expensive (sometimes they are financed with consumer credit or a mortgage loan). For these items, our decision-making process is slow and rational.
Selling to the B2B sector (business to business)
B2B sales, as opposed to selling to individuals or B2C sales, involves selling to organizations or in business-to-business markets.
These organizational buyers do not purchase products for themselves but play a role in the supply chain of an organization that incorporates the products or services into its production process.
These buyers not only have to meet specific objectives and/or solve specific problems with said purchase, but they must also achieve or contribute to the goals that the organization has defined for a specific period.
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This change regarding the role and user also means that there are several people involved in the purchase, i.e., there are several customers.
In addition, these interlocutors have different responsibilities throughout the purchasing process and apply decision-making criteria with a less emotional and a more quantitative approach.
NOTE: Regardless of the industry and the number of buyers, B2B sales always involve at least six interlocutors, as we will see later on.
The transaction amount is higher than in B2C sales and the process can take several weeks, months, or even years.
Examples
In general, B2B sales are grouped into three categories:
Utilities and non-durable goods: products and services with little differentiation such as office material, utilities (water, electricity), raw materials (cement, flour, aluminum), and other intermediate goods to incorporate into their production processes.
Capital goods: trucks, vans, excavators, overhead cranes, gas and fluid tanks, manufacturing plants, electrical transformers, etc. These products are more differentiated, more expensive, and last longer (years) compared to non-durable goods. These goods are often financed through leasing or renting.
Services: tax and financial consulting, engineering, business consultancy, and financial activities. We can contract these types of B2B activities per project or pay for them with a monthly fee, but, in general, they are strategic for the company due to how they impact the development of its operations in the long term.
These categories aren’t silos, although there are often combinations such as the sale of a capital good that is financed by the supplier or distributor of the brand or a financial entity with a service contract (preventive maintenance), among others.
These general segmentations of B2B or B2C sales are the first criteria that define how a sales organization is defined: its profile and methodology and the tasks of its sales team.
Below is a list of key variables to help us understand sales management as a whole:
Vertical axis: although there are exceptions, B2B markets will have the largest number of interlocutors and buying centers, with at least six roles. In B2C markets, a priori, sellers encounter fewer interlocutors who perform the roles of the buying center in an informal and unprofessional manner.
Horizontal axis: this is where the correlation (but not causation) between the increase in the amount of the transaction and the length of the sales cycle is shown, which, even in B2C markets, results in an increase in interlocutors when the amount of the sale increases. For example, when we purchase a car or a house. In these cases, family and friends informally take on the roles of influencers, experts, initiators, and users (since family members will also live in the house or will use the new vehicle).
Bisector: it shows examples of sales activities and how the variables described (markets, number of interlocutors, amount of the transaction, and length of the sales process) progressively increase as the sale becomes more complex.
We can detect organizations that design their sales structure based on these premises because they have customers who enjoy buying and actively recommend the brand.
Some of these most cutting-edge organizations have positions such as chief revenue officer or chief customer officer instead of business manager or sales manager, among others.
Although this detail may seem irrelevant, names of a position and the concepts we associate with the terms we have chosen to name them strongly determine a company’s philosophy and its approach to customers and its internal processes.
What are the main differences between a B2C salesperson and a B2B salesperson?
Complex sales
A complex sale occurs when a number of specific circumstances come together, all in the same transaction.
These circumstances can occur in B2C sales when it comes to durable goods, but they are more characteristic of commercial activity in the B2B environment.
Complex sales
A sale is complex when the decision-making process is long. In general, it can last weeks, months, or years. There are several interlocutors with different roles and responsibilities, and the final decision isn’t made by just one person; several decision-makers are involved and the decision must be authorized by someone at the top of the organization that is purchasing the product or service.
In addition, the characteristics of the products or services themselves can add complexity to the sales process.
A common factor that makes a sale complex is its strategic character.
A sale is strategic when:
It impacts a company’s operations in the long term.
It is a transaction that is hard to undo.
It involves an opportunity cost. That is, we have invested (limited) resources in this operation instead of another.
It alters the balance or status quo before the purchase is made.
Examples
1. Purchasing a home: this is a complex sales process for families as it involves a significant amount of money. This is why real estate agents’ work is key; their work and knowledge of the property are key during the decision-making process so that the decision-maker will decide in their favor.
2. Deciding to do a master’s degree is a complex decision-making process that involves assessing options, tuition costs, its length, its location, etc. Also, once you have earned a master’s degree, you can’t “return” it. This is why the role of the academic advisor (salesperson) is key during the decision-making process.
Strategic and complex sales are closely interrelated and require salespeople to have a different approach than with B2C sales.
There are two keys to adapting our sales approach to complex sales:
Identifying members of the purchasing team and their roles, motivations, and objectives.
Adapting how you communicate the differential added value of a brand’s product or service based on the role and priorities of each member of the buying center.
These two keys result in three tactical actions that salespeople must include in their complex sales management roadmap.
Identifying the decider
As you will see later on in this tutorial, it is important to know that there can be up to six different roles in a buying process. Each interlocutor can play several roles.
The roles are initiator, user, influencer, buyer, decider, and gatekeeper.
It is important to note that each role impacts and influences the decider differently, so you need to make sure that the right interlocutor is involved so that the information reaches the decider and the decision regarding the purchase is made in your favor.
IMPORTANT: We mustn’t confuse roles with the number of people in a purchasing department because the roles are always there. A single team member could have more than one role or their role may evolve as the sales process evolves or as the sale is closed.
Figuring out motivation
After identifying the roles involved in the decision-making process, it is important to try to figure out each one’s motivation and how the organization behaves.
In other words, we must know how the final buying decision will be made and how each role contributes to this decision.
Using psychology and emotional intelligence (EQ)
Human beings themselves are complex and so are their needs. This is why sales must be personalized to reach the required level of influence and thus close the sale. To do so, using psychology and emotional intelligence can open many doors for salespeople.
A detail that can help us connect with the interlocutor is to have a positive first impression to create a favorable atmosphere. A positive first impression is made up of three aspects: appearance, non-verbal language, and your opening statement.
A positive first impression and techniques to approach customers.
The examples in the shaded area draw our attention to a set of sales operations that illustrate, a priori, complex sales situations due to:
(1) the amount of the sale, (2) the length of the negotiation process, (3) the analysis of product benefits and the technical characteristics that support it, (4) the number of interlocutors on both sides, and (5) the length the operation due to the variables described above.
The buying center, procurement unit, or purchasing department is a team of people responsible for acquiring a product or service in accordance with a set of detailed characteristics and constraints such as quality, time, budget, quantity, performance, operating costs, after-sales service, warranty, financing, or integration with other applications, among others.
In addition to the specific objectives stated by the purchasing department, salespeople should be aware that we are also seeking additional results. These secondary goals and hidden objectives involve the organization’s metrics and KPIs, which may be out of the scope of the RFQ.
RFQ
RFQ stands for request for quotation, where a group of suppliers (usually finalists in a selection process) is asked to submit their best quotation for supplying products and/or service based on a set of financial and technical conditions.
Salespeople involved in a complex sale must discover the points on this hidden agenda because knowing them will help them define their value proposition. To this end, their sources of information are the members of the purchasing team or, in other words, the different roles involved in the purchasing process.
Salespeople’s social skills and level of empathy are key for obtaining information.
Roles involved in the decision-making process at a buying center
As we mentioned before, salespeople need to know how to identify different roles involved in the decision-making process when making the sale.
All the roles are not always involved and the roles may or may not be handled by several people; nonetheless, some of these roles will be involved in the decision-making process.
The initiator
The first role is the initiator.
This is the person within the organization who has detected the problem or mobilized the organization to initiate the process. They can be a department manager, an operator, a buyer, the general manager or any member of the organization.
The influencer
The role of the influencer is played by members of the purchasing department who people tend to turn to due to their technical knowledge and/or experience at the company. They are employees who are known for their expertise and knowledge and who are involved in negotiations in a consultative capacity; that is, they do not have the power to approve a solution but generally do have the power to rule out a supplier.
This role is often played by external consultants when it comes to construction sites; architects and engineers involved in the process; or IT consultants when we are acquiring software (CRM or ERP).
The gatekeeper
The gatekeeper regulates the process internally, determines the timing, and chooses the suppliers that participate in the bidding process and might be an expert in certain product categories.
The gatekeeper can be a buyer within the company and also decides which other members of the organization are part of the process. This role is often played by project managers.
The buyer
This role is often played by the same person who plays the role of the gatekeeper; that is, the person in charge of managing documentation and certificates, exchanging technical and financial information in the RFQ, and preparing contracts when required.
They can be a buyer but also an intern, an administrative assistant, or even a third party from a company with which our customer has outsourced certain purchasing activities.
The decider
The decider is usually the person who is responsible for implementing the purchasing decision made by another member of the purchasing department.
The decider is the member of an organization who makes the final decision. In other words, they decide whether to buy or not and from whom and accept the terms of the agreement. The decider is the member of an organization who makes the final decision. In other words, they decide whether to buy or not and from whom and accept the terms of the agreement. This role is generally played by the purchasing manager or the director of the department that will be using the product or service in the production process.
The decider doesn’t necessarily have to be responsible for signing the contract but does give the final okay to the process within the company.
The user
The sixth and last role in a purchasing process is the user.
The user is involved in the process since they share their opinions on the benefits the company will obtain by purchasing a product and its impacts on operations.
The same person might take on both the initiator and user roles.
For example, when it comes to sales for the supply chain and manufacturing process.
These roles are fluid because our reality requires them to be; each role’s scope of responsibility and contributions vary within each buying team, even within the same company.
The personal selling process
Steps for the personal selling process
The personal selling process is much less tactical and much more strategic than we might think.
The personal selling process describes the set of stages that the sales activity is broken into, starting with defining the number of face-to-face visits to find new business (a hunter), portfolio management (a farmer), and a mix of them both.
This process takes place when a company’s salesperson interacts with a prospect (potential customer) to thoroughly define the problem that must be solved with the company’s commercial offer.
The personal selling process varies depending on the product marketed by the company, the complexity of the buying process, and the length of its sales cycle.
Consequently, although the personal selling process varies, it always has—at least—these four stages: planning, preparation, meeting, and follow-up.
Depending on these peculiarities, some of these stages (mainly the meeting and follow-up) will be divided into other stages such as product demonstrations, negotiation, and objection management.
The Chinese strategist Sun Tzu said:
Strategy without tactics is the slowest route to victory and (...) tactics without strategy is the noise before defeat.
1. Planning
The first stage of the personal selling process at any company is planning sales visits, i.e., which customers you will visit and how often.
In this first stage of the process, a number of critical decisions must be made both for the company (due to the impact on sales and P&L results) and for the salesperson (to achieve results):
CRM
Customer Relationship Management (CRM) systems are tools that will provide us with a number of visits or telephone calls with our assigned clients based on the scoring of our client portfolio and our estimated annual visits target.
Balance of visits to new customers (hunter who carries out business development) and customers who are already part of our portfolio (farmer who builds our customers’ loyalty).
Frequency of visits to customers in our portfolio; in other words, planning how often we will visit our customers (annually, quarterly, monthly, biweekly, etc.). The salesperson must also leave some time available for meeting up with customers when they request to do so.
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When determining the frequency, the salesperson must consider the sales volume and profitability of each account to calculate the cost of providing service to that account.
The profitability of the customer should cover the costs (taking into account travel expenses and opportunity cost) of providing service to that customer instead of another one.
2. Preparation
The first stage of the personal selling process, planning, is carried out at the customer portfolio level by the salesperson and the subsequent stages focus on a specific customer.
Thus, the second stage is preparation, where we focus on a particular customer; we carefully prepare to achieve successful sales and to reach our sales targets for that customer or prospect. There are two key points of this stage:
Collecting and organizing all the information that is available about the interlocutor, i.e., sales intelligence, whether it be in our CRM, on their website or social media, or information available from inbound marketing or other sources such as other customers, distributors, specialized publications, or databases.
Preparing the objectives of the visit and the guidelines we will follow to achieve them.
Miguel de Cervantes, a veteran soldier of the Battle of Lepanto and a famous Spanish writer who wrote Don Quixote, said that:
To be prepared is half the victory.
GAIN guidelines for preparation.
3. An in-person meeting with our customer
An in-person meeting is the third stage of the process and it happens when we directly interact with our customer. Well-prepared, we should approach this meeting with the following milestones:
Positive opening: we must begin the meeting by creating positive feelings towards the business (with a neutral, generic comment or by mentioning company news on social media, a previous interaction such as an email exchange, or something personal about the interlocutor, like their birthday, family, etc.).
Exploring needs and detecting problems: through a combination of open-ended (to explore starting with what, when, how why, who, etc.) and closed-ended questions (to confirm information).
Proposing a solution: how the offer can solve their problem, especially emphasizing the benefits and advantages that the customer will obtain (and not the technical characteristics of the product).
Managing objections: clarifying doubts, exploring why the customer might reject our proposal, and negotiating supply details.
Closing: by interpreting the interlocutor’s behavioral cues, we propose signing the supply agreement.
The German composer Ludwig Van Beethoven said that:
Genius is composed of 2% talent and 98% persevering application.
The art and science of knowing how to ask
Active listening is key in the personal selling process, especially in the stage when we are identifying needs.
In addition to identifying unmet needs and problems that need to be solved, the combination of active listening with open-ended questions (how, when, what, why, who) shows that we are interested in our interlocutor while allowing us to explore business opportunities and their implications, obtain key information for the consulting phase, and show the added value of our offer.
Open-ended questions allow our conversation to flow better and, combined with close-ended questions, they show that we are interested and that we are following the conversation. After the close-ended questions, it is important to enrich the conversation by offering our perspective and providing content that interests the customer; we must prevent our questions from being perceived as an interrogation.
The major benefit for the salesperson of knowing how to ask goes beyond what we have mentioned; it allows them to “rate” the prospect in key areas to know if they really plan on and are able to make the purchase; when they plan on going through with the sale; and who the final decider is.
4. Follow up
A sale isn’t over until we collect payment. Assuming we are charging for the products and services we provide, following up after our in-person meeting is of utmost importance.
This follow up is especially important when we haven’t closed a sale or when we haven’t met the objective of a meeting (for example, a price increase, presenting a new product, etc.).
We learn the most from analyzing and taking into consideration the lessons we have learned from our failures. In addition, following up after a meeting allows us to continue to develop a prospect, and, if we have failed, we can analyze why to prevent this problem from happening again.
During the follow-up process, we can also implement contingency plans by incorporating other collaborators or managers to redirect the situation with the prospect or customer.
As Nelson Mandela, the former president of South Africa, said: