-Sales management -Customer relationship management and the selling process [SLIDE 1] Individual sales relationships are important, but they must be organized and oriented towards organizational goals. Just as selling is a personal relationship, so is management. The key responsibilities of sales management are: -Defining sales goals and the sales process -Determining the sales force structure -Recruiting and training the sales force -Compensating and motivating the sales force -Evaluating the sales force [SLIDE 2] Effective sales management begins with an understanding of the sales goals and the creation of the sales process. The goals are usually set at the executive suite (CxO) level. The goal is typically defined in terms of revenue to earn or market share to gain over a period of time (yearly or quarterly). The quota is the statement of an individual salesperson’s sales goals needed to meet the overall goal. While the goal is set at the CxO level, sales management is usually the group to set the process by which the sales personnel will work to achieve the goal. [SLIDE 3] There are many ways to create a sales force structure; some are differences in the sales force and some are aimed at market segmentation. One of the key ways to split sales teams is the question of direct or indirect sales. Direct sales involves individual salespeople contacting the prospects and making sales. Indirect marketing typically means working through value added resellers (VARs), systems integrators, and other types of firms that directly talk with the prospects to build a large solution, who will in turn team up with the individual product or solution vendors to build an offer and make a sale. When it comes to sales force structure to address markets, one differentiation is between geographic and industry segments as territories. Some companies will focus on regions, such as the Northeast and Northwest of the U.S., while others will focus salespeople in industries such as consumer packaged goods (CPG), oil & gas, and other sectors where a sales team can build up a specific skill. Another area that can differentiate sales teams is between public (government), private (companies), and non-governmental organizations (NGO). The later are usually charities and foundations. [SLIDE 4] Sales has a unique position in the organization. While some other positions are outward facing, such as customer support, sales is tasked with bringing in the revenue that is necessary for the entire organization to operate. That adds significant pressure to the position. Along with the knowledge necessary to understand specifics about a company, there are key traits that most sales managers look for in sales personnel: -Ego strength: healthy self-esteem is necessary to bounce back from regular rejection. -Sense of urgency: the drive needed to push sales through to completion in a timely manner. -Assertiveness: firmness in negotiations, the ability to get points across without being overbearing or aggressive, the capacity to move a sales process forward. -Sociable: must be interested in interacting with a wide variety of people. -Risk takers: work in less than assured situations in order to close unlikely sales. -Capable of understanding complex concepts: quickly grasp and sell new products or enter new sales areas. -Creativity: develop innovative client solutions and find novel ways around objections or roadblocks. -Empathy: the ability to place themselves in the position of the client, in order to better address requirements and objections. As with other positions in a firm, that complex mix of skills means that constant training is necessary for optimal sales performance. That training can be on-the-job, classroom, coaching, online, and more. [SLIDE 5] Compensation matters in all positions, but as sales drives corporate revenue, it is in a special category. The previous slide pointed to the complexity of the position and the constant training. Lower compensation than the market average usually means higher turnover, and that leads to wasted money and time. Compensation must be high enough to attract and motivate the sales team. While much compensation talk focuses on the commission earned by sales, and while that commission is often the vast majority of the compensation, it is not the only component. Often sales begins with a higher fixed salary and lower commission rate in order to partially subsidize the learning process. In addition, the focus on commissions and quotas is not the sole component of compensation. In order to help build relationships, some companies add customer satisfaction as part of a bonus structure, helping sales teams to focus on the relationship. Due to the pressure of the position, non-cash rewards are often used as thanks and motivating factors. Plaques, merchandise, paid vacations, and other perks are ways that salespeople are compensated beyond the standard direct monetary options. [SLIDE 6] The most basic method of evaluating the sales force is whether they made the quota. Quotas are set based on corporate revenue plans, so the core of sales is to meet the goal. However, there are other metrics that help sales management improve the sales process. Contribution to profit, profit per call, and other measures further break down the financial details of sales and provide management the opportunities to find improvements. There are also metrics that are not directly tied to revenue. The percentage of leads closed can not only help sales analyze how well personnel handle leads; the information can be used for marketing to improve lead quality. Most sales organizations define a sales funnel, the idea that prospects move down a narrowing funnel towards a close. Unlike a physical funnel, where all water, for instance, eventually moves to the bottom, the sales funnel acknowledges that each stage of the process will lose prospects. By evaluating sales performance at each stage of the funnel, sales and marketing management can improve sales training, provide different content to the team, change messaging, and otherwise work to improve the retention of prospects to increase the number who convert to sales. [SLIDE 7] Previous lessons have described how customer relationship management (CRM) systems can help marketing improve the marketing mix, but CRM is a tool that extends past marketing. As modern sales focuses increasingly on long-term relationships, CRM is a valuable tool in that challenge. There are four key areas where CRM can provide an impact on sales: -Identify customer relationships -Understand interactions of the current customer base -Capture customer data -Leverage customer information [SLIDE 8] In the past, each department and organization focused on their own tasks and only dealt with the customer based on those tasks. Sales, invoicing, support, and other groups had their own information and those were kept in silos that they did not necessarily share. The customer-centric approach is a philosophy under which the company customizes its product and service offerings based on data generated through interaction between the customer and the company. That means integrated services where all the information is shared so the company has a clear picture of customer relationships. That customer-centric approach, therefore, is not possible without knowledge management: the sharing of customer information in order to enhance the relationship between customers and the organization. That management allows, as mentioned in a previous lesson, a salesperson to know that customer service is dealing with a problem at the customer site, providing the salesperson the necessary information to effectively communicate with the customer. Part of knowledge management in a CRM system is the tracking of every customer interaction, every point at which a customer and a company representative exchange information. [SLIDE 9] The core of a CRM system is the tracking of all interactions. Every time someone in the company interacts with someone in the market, whether a prospect or a customer, that information needs to be tracked. There are a number of ways that businesses communicate with the market. The general categories are called touch points, areas of a business where customers have contact with the company and where data may be gathered. Touch points include customer service calls, customers registering a product, a prospect signing up for a demonstration, and even when products are installed. Technology has added three key touch points that sales and marketing must focus on and track: -Web: prospects and customers can use the web from initial product investigation, through the sales cycle, into customer support. -Social: Social CRM is a growing field of focus, using social media as a key method of communicating with the market. -Point of sales: systems are becoming more complex and capable of tracking more information about customer interactions. [SLIDE 10] The previous examples show that data is now available from a wide variety of sources. Given that, often the question is not how to find data but rather what data should be captured. That question is partially answered by looking at channel interactions. There is minimal information available about someone visiting a corporate web site. Asking for the basics of name, email address, and phone number to download product information adds more information. However, a CRM system might gain far more data by accessing the customer support records containing all the people talked to by a customer. Each channel has its own levels of data that can be captured. It helps to think of data as an asset, as something that can help a business increase revenue. One proof of that is that companies from dot coms to large retailers are valuing their data as assets to be purchased during bankruptcy liquidations. [SLIDE 11] There is no use capturing data unless there is some way to turn it into information and use it to improve business performance. Some of the key applications for CRM systems are: -Campaign management: developing product or service offerings customized to specific target segments. -Retaining loyal customers: identifying loyal customers and creating programs to reward them to increase retention rates. -Cross-selling: finding goods and services a number of customers like can help aim sales at customers who are missing some of those products. -Designing targeted communications: using purchase, and even browsing, history to target customers with tightly aimed marketing communications. -Reinforcing customer purchase decisions: long-term relationship building includes communicating with purchasers to improve customer satisfaction that leads to future purchases. -Inducing product trial by new customers: Information about customers can lead to campaigns focusing on getting new customers to try additional products (similar to cross selling). -Increasing effectiveness of distribution channel marketing: understanding how customers purchased products can help the manufacturer focus on strengthening or abandoning channels as appropriate. -Improving customer service: more knowledge about the customer means better ways to address customer service.