1. Introduction

"Nothing happens until somebody sells something!"

— Arthur "Red" Motley

Sales as a function in all businesses are pervasive throughout an organization. Although there are functional departments with a primary responsibility for sales, it is the goal of a business to sell and report revenue and profit.

"Salesmanship is the practice of investigating and satisfying customer needs through a process that is efficient, fair, sincere, and mutually beneficial, aimed at long-term productive relationship" (www.businessdictionary.com).

It is no longer enough to hire salespeople with sales and marketing qualifications. The salespeople usually have to be recruited from the technical department and trained to do sales. This will enable a sales manager to engage a customer's technical team with a degree of competency. This will ensure that a proposal put forth will be first technically sound and second commercially viable.

There is a shift in the sales process from a transaction-only buyer–seller relationship to a collaboration on framing a problem and then making a proposal for a solution. In this collaborative sales approach, unlike in the past, a sales manager has to interact with a customer's team quite intensively over a longer period of presales cycle. The envelope of participation in a customer's team by a sales manager is broadened and goes beyond the transaction-type-sales process. Further, this interaction will continue after the sales and into the delivery process and beyond.

This guide is an attempt to structure the sales function of a commercial enterprise toward the paradigm shift — from a buyer–seller relationship to a collaborative relationship of doing business. This shift dictates that the old style of sales will no longer be productive in sustaining sales and securing new customers.

This text is intended for the business managers and executives having sales and nonsales roles to give them a better understanding and appreciation of the challenges of sale making in the information age.

This text should also provide good guidance in the development of new hires for sales, marketing, and management roles.

For the experienced sales manager, this text will be a good revisit to the mind-set, methods, and means of the sales trade.

The guide should also provide a good text for students learning about sales, marketing, and management.

2. Landscape of the Business

I have found in the course of my career that an awareness and study of people, history, and political issues, social and technological trends all lead to a better understanding of the dynamics of the marketplace.

— Regis McKenna

The concepts of supply chain and value chain are fundamental to the understanding of the landscape in which a business is operating. Once he has mapped the supply chain (i.e., external-facing) and value chain (i.e., internal-facing), a sales manager can start making sense of the operating environment of a business. This approach enables the players and factors to be identified (i.e., partners, competitors, legal issues, compliance, safety, and others).

The sales manager needs a situational awareness of the business-operating environment before any attempt at problem solving can be initiated. One common approach to creating this situational awareness is by means of a SWOT analysis. The strengths and weaknesses of an organization are internal-facing and identify what are working and what need attention. The opportunities and threats are external-facing and alert the organization on what to focus its resources on and what risks need to be mitigated. During a SWOT analysis, the focus is always the prospective customer.

The sales manager needs to know his competition. What is the competition doing? What are their price points? What are their strengths and weaknesses? These will be useful during the lobby process to position products and services to the customer. The sales manager must always keep in mind that the competition is also not sleeping. They are also engaging in SWOT analyses and strategic marketing efforts. They will harness their network to get competitive data on you as you are doing on them. In the end, the key competition comes down to data or data processed to become information. When such information is used for competitive advantage, it is called intelligence. This is one reason why business intelligence and OLAP (online analytical processing) software have become significant.

Time is of key importance. Competitive information becomes obsolete and outdated in a short span of time. When decisions are based on obsolete and outdated information, the results can be detrimental to the business. Checks and balances need to be put in place to filter, segment, and authenticate the data being processed for sales decision-making. The sales manager must, on a daily basis, scan the landscape to see the movements/shifts in the activities of the competition.

The sales manager must also be aware of the people movement. When a sales manager moves from one competitor to another, what is the likely consequence, and will it provide an opportunity or create a threat to the sales pipeline? People are a key element in the network of business transactions. Relationships are important in maintaining and servicing accounts. Likewise, if we lose a team member to the competition, what will be the consequence?

The sales manager needs a good appreciation of the industry factors in which the customer's business is operating. This is an extension of the business landscape. This is knowledge about the macroeconomics that affects the business operations. The business is affected by the supply and demand and needs to remain viable as shifts in the industry put pressure on the business to drive further efficiency and reduce cost.

One possible way to acquire such knowledge is through the subscription to industry journals. Another is through participating in networking sessions. Take shipping as a simple example; on the demand side, it is affected by, for example, cargo (electronic-manufacturing industry), and on the supply side, it is affected by, for example, fuel (e.g., oil and gas industry). An increase in the price of bunker fuel will drive the need for higher efficiency and cost saving. The industry dynamics do not stay constant; a shift in one related industry will indirectly affect the industry in which the business operates.

Government initiatives to support the industry coupled with supportive legislation can provide the impetus for growth. For example, Singapore is a maritime hub resulting from government initiatives and supportive legislation. Many shipping companies have shifted their regional headquarters from Hong Kong to Singapore. Grants are available for companies operating in Singapore to defray the cost for investment to drive efficiency, productivity, and safety.

The sales manager also has to be familiar with knowledge of industry practices such as ISO (International Standards Organisation) to raise the standard of delivery whilst improving efficiency and productivity. Industry-regulation compliance and environmental standards, for example, emission control.

The product or services sales are not only about the product or service but also about the seven P's (i.e., product, price, promotion, place, physical evidence, people, and process). There is voluminous literature on this 7P's of the marketing mix on the web. Therefore it adds no value to indulge in a detail elaboration of the 7P's. The sales manager needs to start thinking about the product or service in terms of the 7P's. The 7P's, individually or in a mix, can offer the sales manager several different perspectives of the product or service that fit the customer selection criteria at the different stages of the sales cycle.

By defining a product or service in this broader scope, i.e. the 7P's against a backdrop of the "SLEPT factors" and studying the "supply chain" of the product or service, a picture of cross industry learning emerges. This cross industry learning ensures the survival of the sales manager in the current market conditions of intense competition and selling price decline.

3. Intense Market Competition

To be successful, you have to have your heart in your business, and your business in your heart.

— Thomas Watson Sr.

Sales is no longer simply selling products or services (i.e., as long as you have a good product, people will make a purchase). Today, there is intense market competition; chances are that you are one among several vendors competing to supply the same product or service. As markets mature, chances are also that you will encounter replacement/retrofit deals more than first-time installations.

Under the current market environment, prices (product prices, service rates, etc.) are always dropping and with them are the margin and profit levels. Competition drives the price down; therefore, one has to find new ways to become efficient and effective in delivery to try and bring the cost down as well to record a small margin and therefore profit for the sale.

It is not only the local competition that causes the price slide. Competition from emerging economics — like India, China, and other Asian countries — is even more worrying. Their cost of production and service delivery are much lower than, for example, in Singapore. New initiatives for the subdivision of production toward these lower-cost economies may become necessary to ensure the survival of the enterprise. Such decisions are sometimes beyond the scope of a sales manager. Mobilizing government grants/subsidies where applicable could be a good way to defray the cost of the project for the customer.

Quality is no longer a differentiator for sales. Quality is a given, and even products coming out of emerging economies are no longer of inferior quality. In fact, given their lower-cost model, competition from these economies can offer more in terms of service bundling.

However, local support and presence can be good sales arguments against this type of competition — provided they do not have a local operation. This has an impact on response time (due to the time difference or geography) and also communication (native language may not be English).

Developing payment terms and new financing initiatives for product/project financing can be a good differentiator. For example, converting CAPEX (capital expense) to OPEX (operational expense) allows flexibility to the customer. However, not all customers prefer OPEX. It depends on who is the budget owner (e.g., IT department) and who is the end user (i.e., operations department). In this case, the operations department will push for CAPEX.

Sales is no longer simply selling, and the sales manager can also no longer be just a sales manager. The sales manager has to transform himself into an entrepreneur.

How should the sales manager transform himself into an entrepreneur? The sales manager can start by thinking like an entrepreneur. The transformation can be achieved by "practice" on a daily basis. The sales manager must endeavor to deliver value, i.e. to exceed the customer's expectations. Og Mandino put it best, "Always render more and better service than is expected of you, no matter what your task may be." This is by no means an easy task and not all sales managers are able to make this leap (More on entrepreneurship in Chapter 28).

4. Conflict in the Organization

Life's problems wouldn't be called "hurdles" if there wasn't a way to get over them.

— Anonymous

Sales as a function is pervasive throughout an organization. A commercial enterprise is set up to fulfill a customer need. The start of this fulfillment process is the identification of the customer and his needs, and then you sell your product or service to satisfy those needs. The sales process does not end with the securing of a purchase order. It continues until the product or service is delivered and payment has been collected.

Therefore, multiple departments are involved at different stages of the sales process. Usually, the organization setup is function-oriented (i.e., accounts, sales, operations, etc.). These departments have their respective KPIs for performance measurement and rewards. During the sales process, this setup often creates a conflict of KPIs in the organization. It is common practice in most organizations to have a set of the following objectives:

a) Reduce product cost
b) Increase customer service
c) Reduce inventory
d) Increase asset utilization

These goals are obviously valid. However, this apparently innocent-looking set of goals creates a considerable set of conflicts within four major functional areas of the organization: production/delivery, sales, finance, and costing/controlling. Figure 1 illustrates these conflicting objectives.

A closer look at the enterprise's production/delivery-function performance toward the objectives would reveal that it is actually the ability to make long runs without breaking setups that is the primary requirement for the department to reduce product cost and increase resource/machine utilization. Naturally, this will require raw-material inventories in front of those long-running machines. However, as demands for customer service change, these long runs inhibit the ability of the company to provide all products to the customer when needed. Also, inventory is being built at the same time.

The sales function has the responsibility to maximize customer service, but in order to do so, they must have more finished inventory whenever required. This means shorter runs for the production department, along with higher product costs and even lower facility utilization.

The general accounting group in the finance department has a goal to reduce costs throughout the company. This requires an overall reduction of inventories from every department. It is easy to see the conflict this produces. Within the same finance department is another group (i.e., cost controlling) that is at direct odds with the general accounting group.

The goal of the cost controlling group is to reduce product cost, which inevitably forces the purchasing department to buy larger lots in order to get favourable discounts, which then reduces the unit- purchase cost for the inventory. At the same time, they want long runs from the manufacturing department for the same reason. Thus, if cost accounting was to have its way, product cost would drop and facility utilization would go up, but the inventory level would increase and the customer service would go down.

Sales managers need to appreciate the causes of potential conflicts and be able to foresee and manage the pushback or uncooperative behavior of people from the other functions in the organization. Sales managers have to protect their customers from these negative experiences that may arise from their enterprises' other functional areas.

This is a balancing act to be performed by the sales manager as he keeps in mind the interest of the company and keeping the customers' demands harmonized with the constraints of the internal customers. The other functional teams are the internal customers of the sales manager. More often than not, the internal customers are more difficult to handle for the sales manager than the external paying customers.

5. Profile of a Sales Manager

Hire character. Train skill.

— Peter Schutz

Hard work is a given for the sales profession and is coupled with long hours. However, it is not working harder but working smarter that will give a winning edge in sales. The sales manager has to be willing to do things differently. In order to be successful in the application of the salesmanship based on the above definition, the sales manager will need to develop some prerequisite technical skills and behavioral traits.

Technical competency, among other skills, includes the following pertinent ones:

Effective Planner: The sales manager needs to be able to manage working with multiple customers whilst managing his own priorities. The sales manager needs to master the discipline of "starting with the end in mind" (i.e., thinking about what needs to be done before going ahead with it). Essentially, planning involves the competency to develop sales plans, identify potential customers, plan account strategies, and manage daily, weekly, monthly, and quarterly priorities and objectives.