Selling and Sales Management - Literature review Example

Selling and Sales Management Personal sales and making personal presentations are the most expensive and most important for a company’s sales and profits (Robert & Ralph 1993). They require each person be involved and trained on the company’s products as well as presentation skills. Any sales strategy must listen to and address the needs of the customer so that they can sell. It is no longer successful to sell through being pushy or making grandiose claims (Robert&Ralph1993). While talent and personality can be important factors making sales, they are not enough; selling requires full understanding of a company’s products, services and how they can meet the needs of clients and customers. A task of selling is not an easy one. It becomes even harder as customers become more knowledgeable and informed and during decision making in buying decisions which requires interaction at various levels of the buying process. According to Robert &Ralph (2008), a successful salesperson combines innate ability and acquired skills as customers appreciate a salesperson that is reliable, knowledgeable of the product and service as well as a credible salesperson. It is imperative for a salesperson to know that they are a personification of the company and they carry the company’s image. Salespersons use different tactics to sell their products. Some use the traditional hard sale tactics that often involves placing pressure on the customer to purchase a product through relentless convincing while some use the soft sale tactics that are guided by the philosophy of knowing the needs of the customers and satisfying them. Hard sale tactics have been used widely in boiler room scams. Boiler rooms describe the exploits of a pump-and-dump operation. Gabriel (2004, p.6) described pump-and-dump as the practice of buying low-priced shares of usually illegitimate companies. Sales people then go ahead and apply high pressure sales tactics to unload these worthless stocks on retire folks in Florida and farmers in Iowa (Gabriel 2004). As the shares price begins to go up, the unscrupulous broker then dumps the shares with higher prices to unsuspecting buyers. Boiler rooms are busy centres of activity usually selling questionable goods (Fater 2010). Fater (2010 p. 158) describes boiler rooms as a room where sales people work using unfair, dishonest sales tactics sometimes selling penny stocks or committing outright stock fraud. The term caries a negative connotation and is used to imply high pressure sales tactics (Fater 2010). The unscrupulous brokers use telemarketing operations usually broker firms which are legally licensed only that they exist on the wrong side of business ethics divide. In Canada, a 1937 article entitled “swindlers on rampage”; on the financial post cited “some of the high pressure selling was being conducted from Toronto” and they capitalized on the mining industry boom. These shady stock brokers operated on some of the most unethical ways selling non-existent ‘shares’ of mining companies to unsuspecting customers leading to unhealthy business and a lot of financial loss that came to be known as boiler room operations. Owners of the boiler rooms are men of high intelligence who manipulate the prices of shares in the market due to their sharp financial training and a clear perception of human cupidity (Schneider 2009). They use deceitful marketing which is the range of activities in which the telephone, fax machines, internet and e-mails are used to swindle victims of money through deceit, high pressure sales tactics and false hoods carried out in boiler rooms and it is a form of organized crime. What they do is that they approach a company having difficulty in raising capital and they offer to raise capital for them using their extensive network base but what they really have are a series of boiler rooms that are meant to fleece people off money. Some of the common telemarketing scams in the world are sweepstakes, internet marketing and targeted mailing. Telemarketers traditionally use cold calling tactics from high pressured offices called boiler shops. The term ‘boiler-shops’ originated in the 1920s and is used to describe highly charged atmosphere generated by sales staff with banks of telephone calls (Groucutt 2004). The sales people include first-time callers, closers of the deals and verifiers who pitch investment offers to unsuspecting customers and often encourage the customer to “act now or risk losing out” in the once-in-a-lifetime offers and clients out of pressure send huge payments to the scheme only for them to turn out to be frauds. The operators rarely stay in one location and they move overnight if a formal complaint about their operation is lodged this is why most are based in small hotel rooms, private homes or even as mobile offices. They only need local telephone service and computers and they are good to go and their objective being to collect a lot of money as fast as possible and in a short period of time and they relocate before being identified. The brokers use hard sale tactics to reach their quota. Hard sale is an aggressive method of advertising or selling that is direct, forceful and insistent; high pressure salesmanship that relies on fear and intimidation to push buyers to a preselected decision. Unfortunately, this strategy works most times since most buyers succumb to the pressure of buying something they don’t really want. Preferred customers are often retires and middle aged investors and the brokers don’t’ stop at the first rejection, rather, they continue persuading the potential client who is not given the opportunity to examine the deal well thus the decision to invest in the proposal is given little time for consideration and is made at the end of the phone call. Boiler room scams are on the rise on the rise in the U.K, Canada and the U.S.A. Today the dealers are getting clever and turning to phishing where credit card holders and other financial consumers are the victims. They receive calls from people claiming to be representatives of their financial institutions, after the introduction, they are told that they are victims of fraud and that it is imperative that they verify their credit card information and the result is victimization by those claiming to be protecting them. They fraud stars make unauthorized charges from their cards usually mysterious monthly charges that can go undetected for months (Philip & Thomas 2004). Interestingly customers do not report partly due to shame, embarrassment and self-blame making the business to persist and thrive. In Britain’s last rash of scams, unsuspecting customers wired money to offshore banks in order to buy ‘shares’ only to lose money. It is estimated that in 2010, complainants lost more than $1.8 billion to fraud with a median loss of $440 per complaint according to a report by Consumer Sentinel. According to the National Fraud Information Centre, the average reported dollar loss is $1507 and anticipates an increase. Hard sale tactics are used today although they are outlawed in many countries; they are used as a short-term strategy to increase sales performance rather than the long-term-relationship building one (Groucutt 2004). A sales person sold me some cutlery in the streets some days ago and he was so convincing that I bought the cutlery not because I needed but because he told me soon I would need one and all he was doing is to save me the trouble of still shopping around for cutlery in the near future and it was convincing enough. These tactics are used so as to make quick sales and maximize profit. The problem is that there is too much aggressiveness to purchase a product so that the product may lose credibility. According to Robert & Ralph (1993), this can also cause annoyance on the part of the consumers making them question the products so no matter how good the products may be, they may sound like a scam since the salesperson is in no way whatsoever tending to the needs of the client rather to selling the product alone and making money. There exists therefore a growing demand for customer-focused sales approach where you demonstrate to customers that you have the solutions they need (Robert &Ralph 1993) and build a good relationship with them. Clients like to learn about products either online on blogs, company websites or through materials like brochures and flyers so that they make the decisions on what to buy based on their needs. This gives them the autonomy to make decisions on what they want based on their needs and this brings customer satisfaction and helps build on the company-client relationship. This is a whole new strategic approach to sales organization that is aimed at helping customers get solutions to their problems so that they achieve their objectives. It is an approach that does not focus on your ‘good products and services’ but on the customers’ needs. It involves the strategic management of the link between a company and its customers with the core responsibility being consumer satisfaction placing the consumer needs at the centre of business strategy. Consumers have unique needs and it is rare to find two consumers with exactly the same needs. For instance you may come across two customers who both want to buy a fridge but each one has their own preferences in terms of appearance, quality, affordability and even the brand. These are the needs customer-focused is all about; placing the customers’ needs first (Robert & Ralph 1993). The major issues behind the need for a customer focused selling strategy are:- i. Consumers are no longer interested in how good your products are or how big your company but how their concerns are answered. It does not matter how well your products on presentation appear, it is how these products and services will serve their specific needs. ii. Clients have varied needs and the seller must put themselves in the shoes of the customer and offer solutions. It’s only logical if a sales person tells you how their products will solve your problems rather than stalk you with calls to buy their products without a tinge of idea on your problems and what you really need. Take a health insurance policy for instance, isn’t it logical to close a deal with an insurance agent who explores your health needs and risks with you and then goes ahead to explore the different packages on offer? Or is it logical to close a deal with the one who pushes you into closing a deal prematurely without your health needs in mind? Wouldn’t you rather deal with the former than the latter? The answer to this is in affirmative. Take career counselling for instance, you wouldn’t want a career counsellor whose main concern is to take you through the process of career choice only to make from you, rather you would want one who listens to your passions, interests, career goals, your strengths and weaknesses before advising and helping you settle on a career of your choice rather than the imposing one. The same applies for sales. Achieving customer-focus is not a one-cut-fits-all solution; it is a process and is built on the company-client relationship. In today’s hypercompetitive environment of the business world, first-hand contact and knowledge of customer’s needs and attitudes is essential to the overall marketing effort (Robert &Ralph 1993). Some steps that can arrive at customer-focused sales include:- i. Use of customer feedback to get to know your customers’ and what they like or what appeals to them. Getting information from your clients beforehand helps you adapt arrangements and products or services that are attractive to the people you are trying to reach. This is some form of market research that can be arrived at using questionnaires for instance. ii. Another aspect is train your employees on customer focus. This includes elements of customer service but at its core is keeping focus to customers, anticipating their needs and valuing their input. iii. Another strategy is the use of incentives, once you have identified what customers like, and then you can use these items to reach out to their base. iv. Ask questions to diagnose your customer’s discontent and uncover their needs and also diagnose what ails your own prospects that make buyers not to get what they want. v. Arrive at a commitment to open a relationship with your customers, not hammer-close-the-sale relationship but a mutually supportive where you invite your buyers into negotiations where you share some interests. Quantify their expectations and once you sell a product follow up to find out whether the buyer’s needs have been met to make sure what you promised your product or service would offer actually does so. vi. Satisfaction. Today, customer satisfaction and retention is the corner stone of any business strategy. Listening to and understanding the customer and then delivering a product or service can result in customer satisfaction (Robert&Ralph1993). To survive and strive, you must get closer to your customer not just during the sale process but after it as well. Customers form a perception of satisfaction based on four factors: value achieved, product quality, service quality and price. In light of this, is the fact that today’s customers will not just allow you to sell. The salesperson should with the prospect customer and provide more personal touch than other aspects of the marketing effort: good products, attractive packaging and informative advertising (Robert &Ralph 1993). Customers are becoming more learned and gone are the days when hard sell tactics could be used otherwise your products or services will be more of nuisance than useful. Buyers are more sophisticated, more knowledgeable, more cautious and less loyal. Today, the effective sales person understands how to shepherd buyers through each stage of a buying process to encourage them to make a purchase. As customers become increasingly sophisticated, successful salespeople need to modify their sale strategy where they immerse themselves into the customer’s needs, find out what they are thinking and why, and get the sale process in sync with these needs and this is what is called customer-focused selling. According to Tyagi & Kumar (2004), factors that are critical in development of a sale strategy include the sales people involved, sales management, profit making and the market itself. Sales management has three objectives namely: increase in sales volume, contribution to profits and growth. Thus, sales management functions to formulate objectives based on data collected on the customer’s needs, planning on sales which include forecasting on the product and the target market and budgeting and strategy. In conclusion, the essence of business strategy is competitive advantage (Ingram et al 2012) while that of a sale strategy is to develop a specific approach for selling to customers within a target market and it is based on the buyer behaviour or customer behaviour. List of References: David H. Fater, 2010, Essentials of corporate and capital formation. USA: John willy & sons inc. Gabriel Kim, 2004, Vault career guide to sales and trading, 1st edn. USA: Vault Inc Groucutt J, Leadley P, Patrick O., 2004, marketing: essential principles new realities. London: Kogan page publishers. Robert D. Hisrich and Ralph Jackson 1993, Selling and sales management, Baron’s business library, Italy. Thomas n. Ingram, Raymond W. Forge, Ramon A. Avila, Michael A. Williams 2004, Sales management: analysis and decision making. New Delhi: Atlantic publishers Tyagi C. L and Kumar A., 2004, Sales management, New Delhi: Atlantic publishers. Read More