Sales and Distribution

Management
 What we discussed so far..
• Sales Forecasting
• Segmentation
• Manpower dimensioning – Good morning cereal
• Sales Territory design
 Steps to the right sales strategy-

Value Creating a
Segmentation
proposition Sales Process
 On a continuum….

MASS MARKET SEGMENTED MARKET MICRO MARKET INDIVIDUAL CUSTOMER

WHAT IS THE RIGHT SALES STRATEGY FOR EACH MARKET?

 Why do customers buy?
• A product offered at low price.
• A product that offers higher benefits than price paid for. ( high
perceived value)
 FOR A SELLER

LOWEST HIGHEST
RS /UNIT RS /UNIT

PERCEIVE
COST PRICE
D VALUE
SALES PROCESS-
 Todays Coverage
• Go to market
• Sales force Structure
• Sales Force Performance
• Discussion of New age computers I and II
 Go to market strategy
It’s the Judicious mix of
• Company salesperson
• Distributor
• Company Website
• 3rd party websites
• Agency
• TeleSales
• Retail outlets
To serve a particular market segment
 A major software seller
MARKET SALES CHANNEL SERVICE CHANNEL

GOVERNMENT MARKET GOVERNMENT SELLING EXPERTS COMMON

TECHNOLOGY
BANKING AND FINANCIAL SERVICES BFSI SELLING EXPERTS SUPPORT TEAM

OIL AND NATURAL GAS OIL MARKET EXPERTS

 A BANK
MARKET/TASK LEAD GENERATION QUALIFICATION PRE-SALES SALES CLOSING FULFILMENT
/SUPPORT

MORTGAGES ONLINE TELESALES SALES EXECUTIVES DEDICATED LOAN

BRANCHES SALES EXECUTIVE SUPPORT TEAM
REAL ESTATE
BROKER
BUILDERS

CREDIT CARD ONLINE TELESALES SALES EXECUTIVES AUTOMATED CC SUPPORT TEAM

ATM PROCESS
BRANCH
 Amazon
MARKET/TASK INTEREST CREATION SALES CLOSING FULFILMENT/SUPPORT

ONLINE BUYER BUYER WEBSITE WEBSITE SUPPORT TEAM

ONLINE ADVERTISING MOBILE APP
TELESUPPORT
EMAIL
 Go to market- Big bazaar and amazon
MARKET/TASK INTEREST SALES CLOSING FULFILMENT/SUPP
CREATION ORT

VALUE BUYER STREET ACTIVITY AT THE SHOP SUPPORT TEAM

ADVERTISING MOBILE APP
MOBILE APP

MARKET/TASK INTEREST CREATION SALES CLOSING FULFILMENT/SUPPORT

ONLINE BUYER BUYER WEBSITE WEBSITE SUPPORT TEAM

ONLINE ADVERTISING MOBILE APP
TELESUPPORT
EMAIL
 PERFORMANCE OF CHANNELS BY
Activity/Channel OWN TEAM ACTIVITY
DISTRIBUTOR RETAIL TELESALES WEB/MOBILE

ASSESSING NEEDS HIGH HIGH LOW MODERATE – LOW

TEMPLATE

COMPLEX HIGH MODERATE LOW LOW VERY LOW

MESSAGE

SELF SERVICE LOW LOW HIGH LOW HIGH

LOCATION LOW HIGH HIGH NO MODERATE
24/7 AVAILABILITY LOW LOW MODERATE LOW HIGH

INFORMATION HIGH MODERATE LOW MODERATE HIGH

AVAILABILITY

RELATIONSHIP HIGH HIGH MODERATE MODERATE LOW

FOCUS

LOW PRICE LOW LOW MODERATE HIGH HIGH

 Efficiency and effectiveness
LOW COST ADVERTISING
MESSAGING
INTERNET

TELESALES

DSA

OWN SALES FORCE

HIGH COST
PER MESSAGE KEY ACCOUNT OR
TECHNICAL SALES

LOW SALE EFFECTIVENESS HIGH SALE

PER ACTIVITY PER ACTIVITY
Sales force structure
 Sales force structure, size and tasks
• Type of sales force task specialisation
• Roles of the team members
• Who reports to whom
• Control of the team and monitoring
• Number of people at each level of the team
• Matching sales team and customers ( setting the territory)
 Sales force Specialization
• Generalist – Selling the entire range of HUL products
• Market Based- Education / Oil and Gas/ Retail ( consulting company)
• Product based- Cardiology/ Oncology or Finacle sales team or post
paid team
• Activity based- Pre sales consultant, Telesales,
Types of reporting structures- Geographic
NATIONAL
SALES HEAD

SALES HEAD SALES HEAD SALES HEAD

NORTH WEST SOUTH

CITY MANAGER
- DELHI

SALES PEOPLE
Type of reporting- Product units
National sales
head

Head Head-
-Product Product line-2

Area head

Account
Executives
 Control of the team
Type of resource New sales people High performers Medium performers Low performers
Number of resources 20 20 40 20

Time to be spent with 2 days 1 day 3 days 2.5 days

resource in a month

Total time needed to 40 days 20 days 120 days 50 days

be spent in a month

230 days to be spent

A sales manager is available for 22 days in a month so, we need 230/22.

So we need ~11 sales managers to run the team
Performance monitoring
 What to do?
Ravi is a great salesperson when it comes to small accounts. He “owns”
the customers.
However, when he is facing a large account needing a solution
approach, he is losing out. He does not trust others in the company to
“help” him out…..
Performance is not matching. What to do??
 What to do?
Kumar is having serious personal issues. He is not able to focus on
work.
 What to do?
Amrit is doing his numbers every month. However, you are noticing
that his expense account is 0.75 times his monthly salary and he is
poaching customers from other territories.
 Performance management
• The bridge between the salesperson and the activities he needs to do
to succeed.

• Answer to the question- What activities should I do to get a

customer? And What will lead me to meet the revenue target?

• Needs to be articulated clearly so that everyone understands

PERFORMANCE MANAGEMENT PROCESS
Setting goals

Evaluation &
Plans
reward
REGULAR
FEEDBACK

Measuremen
Actions
t
PERFORMANCE MANAGEMENT PROCESS 5 Crore
DSA 40% business

Fair in business
2 Crore big, 3crore
target ( topline)
small clients
Good in process
Add 3 new DSA
( DSA)

4 Crore target met DSA & Customer

4 DSA added meetings
 A formal PMS
• Sitting with the sale person
• Coaching the salesperson
• Improve the performance by reminding the salesperson of the sales
process

• Lets go to the article

 How to evaluate the salesperson
High High 3 4
3 4 Sales
Growth
Attitude 2 1 2
1 Low
Low

Low Low High

High
Skill QUAL Target Achieved
QUAL/QUANT 1 2 3 4
1 SACK IMPROVE TRAIN SELF
Better territory DEVELOPMENT
TRAINING
2 IMPROVE - TRAIN COACH COACH ON
QUANT Better the skill ATTITUDE

3 TRAIN TRAIN COACH REWARD

4 TRAIN ON COACH ON SALES REWARD REWARD AND
SELLING SKILLS SKILLS RETENTION
 Evaluating using the Compentencies
Competencies Basic level Experienced Advanced level

Product knowledge

Sales process

Relationship management

Territory management
 Evaluating using score card
Score card parameters Indicators
Financial Meeting sales target and cross-sell target
Process Within TAT, appointment of channel partner
Customer Customer complaint handling,
Learning Sales training, process training
 Ratings
Parameter/ Very Poor Poor Average Good Very Good
Rating 1 2 3 4 5
Topline
Cross sell
Selling Skills

Loyalty
Customer focus
Willingness to
implement new
methods
Sales Trainings
A curve to remember
 Alternative approaches
• Continuous feedback
• Open ranking ( Compare against target achievement)
• Behavioral Diary
Sales Performance
Measures and designing
an incentive plan
Set KPIs and MOnitor
 Discussion Flow

What are we targeting

Lead measures

Process Measures

Result Measures

Externalities
Sales Performance
Measures
 ROLE OF SALES MANAGER
 Industry Key role of Sales Manager Deliverable Additional Role Support functions

Trial, sampling, below

Re-distribution and the line brand promotion
FMCG Availability and display Marketing
Merchandising Billing to distributors
Distributor ROI
Customer service for
Address
Telecom Identify prospect, present, Verfication(AV)/
Postpaid detail and convert Sales   Credit Verfication (CV),
activation, data entry
and service
Second Recharge by
Re-distribution and customer
Telecom Customer Service
Prepaid Merchandising; below the Availability and display Billing to and collection Marketing 
line brand promotion from distributor
Distributor ROI
Office Key Account Management, Revenue, Sales Billing and collection  
Automation Demonstrate and convert
Conversion of walk-in
Consumer Stock merchandising, enquiries Manage Billing and collection Installation and service
deals, Counter salesman
Durable franchisee to achieve Franchisee profit/ ROI team
training, targets,

45
Performance Evaluation
 Performance Measures

 Input Measures ( Effort)

 Process Measures ( Methods)
 Output Measures ( Results)
 Externalities
In
distribution
context
 Input Measures- Distribution Context

 Input Measures
 Number of calls
 Productive calls
 Sales Promotion activity conducted
 Training of company SE
 Training of Distributor DSE
 Distribution Vacant territories– time taken to fill Target Vs actual
 Distributors Appointed Vs planned
 Process Measures Distribution Context

 Process Measures
 Numerical Distribution %
 Presence in key outlets %
 Distributor ROI Target Vs achieved
 New Outlets opened Vs Target
 Sales Promotional activities conducted Vs planned
 Training/ Monitoring of Merchandiser/ Sales Promoter
 Sampling done
 Outlet-wise merchandising score– Target Vs actual
 Activity plan for Organised--- Planned vs actual
 Result Measures- Distribution

 Result Measures
 Primary sales achieved Vs. Target
 Secondary sales achieved Vs. Target
 Sales per SE
 Sales Growth
 Market share– from sample retail audit. Change over previous
period
 Secondary Sales Target Vs achievement
 Distribution Reach– Numerical and weighted %
 Cost related
 Selling expenses
 Selling expenses as a ratio of Sales
 Selling expenses as a ratio of calls
In direct
selling
context
 Input Measures- Direct Selling Context

 Input Measures
 Number of calls
 Leads Generated
 Leads Converted
 Number of repeat calls
 Average call duration
 Average time/Calls to Close
 Product and technical knowledge
 Process Measures- Direct Sales Context

 Process Measures
 Sales related
 Account planning
 Work Planning
 Organised sales kit
 Detailing in a structured manner
 Promoting the product relevant to customer
 Creating opportunities for selling high margin products
 Cross selling
 Using the right selling aids
 Customer related
 Relationship
 Service/after sales service
 Problem solving
 Cost/expense related
 Travel planning
 Result Measures- Direct Sales

 Result Measures
 Sales Vs target
 Sales per company SE
 Sales per DSA SE
 Sales Growth
 Market share
 Sales corresponding to BPI of territory
 Sales per Promo Rs Spent
 Gross Margin generated
 Active accounts
 Repeat accounts
 Product Penetration into account
 Cost related
 Selling expenses
 Selling expenses as a ratio of Sales
 Selling expenses as a ratio of calls
 Impact factors–
Other than Salesperson’s competence and application

 Size of the territory

 Number of accounts in the territory
 Potential of the market
 Competition index in that territory
 Cumulative equity and pull for the brand/product in the territory
 Past developmental efforts
 Ad/promo activities/spends
 Customer Satisfaction
Sales Techniques: Focus on process

https://youtu.be/9QxkgEKB1wM
 Sales Performance Measure

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Need to link INPUT-Process-Output performance measures

58
Designing an incentive
plan
 Design Parameters

 Simplicity
 Transparency
 Consistency
 Equity
 Flexible
 Motivating
 Rewarding higher order effort
 Measure variables in control
 Emphasise Hygiene variables
 Include methods and effort in assessment
 Crafting an incentive plan

 Method-1 Composite Target method

 Use contribution or long business priority to create relative

weightage for each product
 Create weightage for each KPI
 Convert the weightage to points with minimum for disqualification
or ceiling beyond which additional performance will not count
 Provide accelerator points for over achievement on desired
parameter, if required
 Create a composite score
 Crafting an incentive plan

 Method-2 Create independent targets and incentive for each set of

KPI

 Sales KPI and incentive

 Collection and cheque bounce KPI and incentive
 Qualitative target KPI and incentive
 Crafting an incentive plan

 Method-3 Flexi target based on relative performance

 Target based incentive at a base level Plus

 Top X% will win incentive Plus
 Company achievement incentive for all sales executives
 Crafting an incentive plan

 Method-4 Quarterly incentive and bonus annual incentive

 To ensure dynamic trends are factored

 Crafting an incentive plan

 Method-5 Competition benchmarked flexing of targets

 Limitation: Can work at a national/ regional level and not at a local

level
New age computers -1
New age computers -2
The end