Sales

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A Hollister Co. store in Leeds, England; the clothing retailing is a prominent sales market
Salesman -beach - bikini- sun-27Dec2008.jpg
A beach salesman showing necklaces to a tourist in Mexico
An ordianry fair in a rural village of sri lanka.jpg
A vegetable seller in a rural Sri Lankan village

Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.

Contents

The seller, or the provider of the goods or services, completes a sale in response to an acquisition, appropriation, [1] requisition, or a direct interaction with the buyer at the point of sale. There is a passing of title (property or ownership) of the item, and the settlement of a price, in which agreement is reached on a price for which transfer of ownership of the item will occur. The seller, not the purchaser, typically executes the sale and it may be completed prior to the obligation of payment. In the case of indirect interaction, a person who sells goods or service on behalf of the owner is known as a salesman or saleswoman or salesperson, but this often refers to someone selling goods in a store/shop, in which case other terms are also common, including salesclerk , shop assistant, and retail clerk.

In common law countries, sales are governed generally by the common law and commercial codes. In the United States, the laws governing sales of goods are somewhat uniform to the extent that most jurisdictions have adopted Article 2 of the Uniform Commercial Code, albeit with some non-uniform variations.

Definition

A person or organization expressing an interest in acquiring the offered item of value is referred to as a potential buyer, prospective customer, or prospect. Buying and selling are understood to be two sides of the same "coin" or transaction. Both seller and buyer engage in a process of negotiation to consummate the exchange of values. The exchange, or selling, process has implied rules and identifiable stages. It is implied that the selling process will proceed fairly and ethically so that the parties end up nearly equally rewarded. The stages of selling, and buying, involve getting acquainted, assessing each party's need for the other's item of value, and determining if the values to be exchanged are equivalent or nearly so, or, in buyer's terms, "worth the price". Sometimes, sellers have to use their own experiences when selling products with appropriate discounts. [2]

Although the skills required are different, from a management viewpoint, sales is a part of marketing. [3] Sales often form a separate grouping in a corporate structure, employing separate specialist operatives known as salespersons (singular: salesperson). Selling is considered by many to be a sort of persuading "art". Contrary to popular belief, the methodological approach of selling refers to a systematic process of repetitive and measurable milestones, by which a salesman relates his or her offering of a product or service in return enabling the buyer to achieve their goal in an economic way. [4]

According to a 2018 survey of salespeople, selling has become more difficult in recent years due to changes in technology and general access to prospects. [5] While the sales process refers to a systematic process of repetitive and measurable milestones, the definition of the selling is somewhat ambiguous due to the close nature of advertising, promotion, public relations, and direct marketing.

Selling is the profession-wide term, much like marketing defines a profession. Recently, attempts have been made to clearly understand who is in the sales profession, and who is not. There are many articles looking at marketing, advertising, promotions, and even public relations as ways to create a unique transaction.

Many believe that the focus of selling is on the human agents involved in the exchange between buyer and seller. Effective selling also requires a systems approach, at minimum involving roles that sell, enable selling, and develop sales capabilities. Selling also involves salespeople who possess a specific set of sales skills and the knowledge required to facilitate the exchange of value between buyers and sellers that is unique from marketing and advertising.

Within these three tenets, the following definition of professional selling is offered by the American Society for Training and Development (ASTD):

The holistic business system required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods or services for equitable value. [6]

Team selling is one way to influence sales. Team selling is "a group of people representing the sales department and other functional areas in the firm, such as finance, production, and research and development". (Spiro) Team selling came about in the 1990s through total quality management (TQM). TQM occurs when companies work to improve their customer satisfaction by constantly improving all their operations.

Relationships with marketing

Marketing and sales differ greatly, but they generally have the same goal. Selling is the final stage in marketing which puts the plan into effect. A marketing plan includes pricing, promotion, place, and product (the 4 P's). A marketing department in an organization has the goals of increasing the desirability and value of the products and services to the customer and increasing the number and engagement of successful interactions between potential customers and the organization. Achieving this goal may involve the sales team using promotional techniques such as advertising, sales promotion, publicity, and public relations, creating new sales channels, or creating new products. It can also include encouraging the potential customer to visit the organization's website, contact the organization for more information, or interact with the organization via social media channels such as Twitter, Facebook and blogs. Social values play a major role in consumer decision processes. Marketing is the whole of the work on persuasion made for the whole of the target people. Sales is the process of persuasion and effort from one person to one person (B2C), or one person to a corporation (B2B), in order to make a living resource enter the company. This may occur in person, over the phone or digitally.

The field of sales process engineering views "sales" as the output of a larger system, not just as the output of one department. The larger system includes many functional areas within an organization. From this perspective, the labels "sales" and "marketing" cover several processes whose inputs and outputs supply one another. In this context, improving an "output" (such as sales) involves studying and improving the broader sales process, since the component functional areas interact and are interdependent. [7]

Many large corporations structure their marketing departments, so they are integrated with all areas of the business. They create multiple teams with a singular focus, and the managers of these teams must coordinate efforts to drive profits and business success. For example, an "inbound" campaign seeks to drive more customers "through the door", giving the sales department a better chance of selling their product to the consumer. A good marketing program would address any potential downsides as well.

The sales department would aim to improve the interaction between the customer and the sales channel or salesperson. As sales is the forefront of any organization, this would always need to take place before any other business process may begin. Sales management involves breaking down the selling process and increasing the effectiveness of the discrete processes, as well as improving the interactions between processes. For example, in an outbound sales environment, the typical process includes outbound calling, the sales pitch, handling objections, opportunity identification, and the close. Each step of the process has sales-related issues, skills, and training needs, as well as marketing solutions to improve each discrete step.

One further common complication of marketing is the difficulty in measuring results for some marketing initiatives. Some marketing and advertising executives focus on creativity and innovation without concern for the top or bottom lines – a fundamental pitfall of marketing for marketing's sake.

Many companies find it challenging to get their marketing and sales teams to agree. [8] The two departments, although different in nature, handle very similar concepts and have to work together to achieve the business' goals. Building a good relationship between the two teams that encourages communication can be the key to success.

Industrial marketing

The idea that marketing can potentially eliminate the need for salespeople depends entirely on context. For example, this may be possible in some B2C situations; however, for many B2B transactions (for example, those involving industrial organizations) this is mostly impossible. [9] Another dimension is the value of the goods being sold. Fast-moving consumer-goods (FMCG) require no salespeople at the point of sale to get them to jump off the supermarket shelf and into the customer's trolley. However, the purchase of large mining equipment worth millions of dollars will require a salesperson to manage the sales process – particularly in the face of competitors. Small and medium businesses selling such large ticket items to a geographically-dispersed client base use manufacturers' representatives to provide this highly personal service while avoiding the large expense of a captive sales force.

Sales and marketing alignment and integration

Another area of discussion involves the need for alignment and integration of corporate sales and marketing functions. According to a report from the Chief Marketing Officer (CMO) Council, only 40 percent of companies have formal programs, systems or processes in place to align and integrate the two critical functions.

Sales, Digital Marketing and Automated Marketing campaigns With the rise of the use of the internet today, sales functions of several enterprises are finding traditional methods of marketing quite old fashioned and less efficient. So the use of automated Marketing Applications is on the rise ranging from Customer Relationship Management (CRM) to Sales Force Management.

Traditionally, these two functions, as referenced above, have operated separately, left in siloed areas of tactical responsibility. Glen Petersen's book The Profit Maximization Paradox [10] sees the changes in the competitive landscape between the 1950s and the time of writing as so dramatic that the complexity of choice, price, and opportunities for the customer forced this seemingly simple and integrated relationship between sales and marketing to change forever. Petersen goes on to highlight that salespeople spend approximately 40 percent of their time preparing customer-facing deliverables while leveraging less than 50 percent of the materials created by marketing, adding to perceptions that marketing is out of touch with the customer and that sales is resistant to messaging and strategy.

Methods

A sale can take place through: [11]

Sales agents

Agents in the sales process can represent either of two parties in the sales process; for example:

Inside sales vs. outside sales

In the United States, the Fair Labor Standards Act defines outside sales representatives as "employees [who] sell their employer's products, services, or facilities to customers away from their employer's place(s) of business, in general, either at the customer's place of business or by selling door-to-door at the customer's home" while defining those who work "from the employer's location" as inside sales. [14] Inside sales generally involves attempting to close business primarily over the phone via telemarketing, while outside sales (or "field" sales) will usually involve initial phone work to book sales calls at the potential buyer's location to attempt to close the deal in person. Some companies have an inside sales department that works with outside representatives and book their appointments for them. Inside sales sometimes refers to upselling to existing customers. [15]

See also

Related Research Articles

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. In 2017, The New York Times described it as "the art of telling stories so enthralling that people lose track of their wallets.

Bait-and-switch is a form of fraud used in retail sales but also employed in other contexts. First, customers are "baited" by merchants' advertising products or services at a low price, but when customers visit the store, they discover that the advertised goods are not available, or the customers are pressured by salespeople to consider similar, but higher-priced items ("switching").

A real estate broker, real estate agent or realtor is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency, and many states require written disclosures to be signed by all parties outlining the duties and obligations.

Personal selling

Personal selling occurs when a sales representative meets with a potential client for the purpose of transacting a sale. Many sales representatives rely on a sequential sales process that typically includes nine steps. Some sales representatives develop scripts for all or part of the sales process. The sales process can be used in face-to-face encounters and in telemarketing.

Business-to-business Commercial transaction between businesses

Business-to-business is a situation where one business makes a commercial transaction with another. This typically occurs when:

Complex sales, also known as Enterprise sales, can refer to a method of trading sometimes used by organizations when procuring large contracts for goods and/or services where the customer takes control of the selling process by issuing a Request for Proposal (RFP) and requiring a proposal response from previously identified or interested suppliers. Complex sales involve long sales cycles with multiple decision makers. Multiple stakeholders and stakeholder groups contribute to every complex sale.

Pricing strategies approach to selling a product or service

A business can use a variety of pricing strategies when selling a product or service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy.

B2B e-commerce, short for business-to-business electronic commerce, is the sale of goods or services between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of a company's sales efforts. Instead of receiving orders using human assets manually – by telephone or e-mail – orders are received digitally, reducing overhead costs.

Business marketing is a marketing practice of individuals or organizations. It allows them to sell products or services to other companies or organizations that resell them, use them in their products or services or use them to support their works. It is a way to promote business and improve profit too.

Upselling is a sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue. While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered. In practice, large businesses usually combine upselling and cross-selling to maximize revenue.

Retail marketing

Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation. The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.

Closing is a sales term which refers to the process of making a sale. The sales sense springs from real estate, where closing is the final step of a transaction. In sales, it is used more generally to mean achievement of the desired outcome, which may be an exchange of money or acquiring a signature. Salespeople are often taught to think of targets not as strangers, but rather as prospective customers who already want or need what is being sold. Such prospects need only be "closed".

Industrial marketing is the marketing of goods and services by one business to another. Industrial goods are those an industry of uses to produce an end product from one or more raw materials. The term, industrial marketing has largely been replaced by the term B2B marketing.

Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management.

In advertising, a hard sell is an advertisement or campaign that uses a more direct, forceful, and overt sales message, as opposed to a soft sell.

Solution selling is a type and style of sales and selling methodology. Solution selling has a salesperson or sales team use a sales process that is a problem-led approach to determine if and how a change in a product could bring specific improvements that are desired by the customer. The term "solution" implies that the proposed new product produces improved outcomes and successfully resolves the customer problem. Business-to-business sales (B2B) organizations are more likely to use solution selling and similar sales methodologies.

Sales process engineering is the engineering of better sales processes. It is intended to design better ways of selling, making salespeople's efforts more productive. It has been described as "the systematic application of scientific and mathematical principles to achieve the practical goals of a particular sales process". Paul Selden pointed out that in this context, sales referred to the output of a process involving a variety of functions across an organization, and not that of a "sales department" alone. Primary areas of application span functions including sales, marketing, and customer service.

Paul Cherry is an American author, professional speaker, and business trainer, who writes and lectures internationally on sales effectiveness, customer-relationship management, and sales leadership. His book, Questions That Sell – The Powerful Process for Discovering What Your Customer Really Wants, made it to BookAuthority’s “Best Sales Books of All Time.” He lives in Wilmington, Delaware, outside of Philadelphia.

Consumer to consumer (C2C) markets provide an innovative way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

There are several types of e-commerce models, based on market segmentation, that can be used to conducted business online. The 6 types of business models that can be used in e-commerce include: Business-to-Consumer (B2C), Consumer-to-Business (C2B), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A), and Consumer-to-Administration (C2A).

References

  1. Part III, effects of the contract, Rule 5. Sale of Goods Act 1979. Sale of Goods Act 1979
  2. Putthiwanit, C.; Ho, S.-H. (2011). "Buyer Success and Failure in Bargaining and Its Consequences". Australian Journal of Business and Management Research. 1 (5): 83–92.
  3. Philip Kotler, Principles of Marketing, Prentice -Hall, 1980
  4. Greening, Jack (1993). Selling Without Confrontation. The Haworth Press, Inc. p. 23. ISBN   1-56024-326-0. Page image
  5. "18 Sales Statistics You Need to Know About Right Now! [INFOGRAPHIC]". Sales Speaker Marc Wayshak. Retrieved 2018-07-20.
  6. "American Society for Training and Development (ASTD)". Sales Competency Project. Archived from the original on 2008-09-21. Retrieved 2017-03-07.
  7. Paul H. Selden (December 1998). "Sales Process Engineering: An Emerging Quality Application". Quality Progress: 59–63.
  8. "Ending The War Between Sales And Marketing". hbr.org. Harvard Business Review. Archived from the original on 19 August 2014. Retrieved 16 August 2014.
  9. "Sales Outsourcing vs In-house Sales development team". salesoutsourcingservice.com.
  10. Petersen, Glen S. (2008). The Profit Maximization Paradox: Cracking the Marketing/Sales Alignment Code. Booksurge in 1221. p. 176. ISBN   978-1-4196-9179-9.
  11. Compendium of Professional Selling. United Professional Sales Association. n.d. Archived from the original on 2007-06-26. Retrieved 2007-07-07.
  12. Peter, Cheverton (2008). Key Account Management 4th Edition. Kogan Page. pp. 90–104. ISBN   978-0-7494-5277-3.
  13. John, Bryson (10 Feb 2003). "What To Do When Stakeholders Matter: A Guide to Stakeholder Identification and Analysis Techniques" (PDF). London School of Economics and Political Science.
  14. "elaws - FLSA Overtime Security Advisor". United States Department of Labor. Archived from the original on 2011-10-06. Retrieved 2011-05-25.
  15. Low, Jerry. "Quick Tips For Upselling and Cross Selling". Business.com. Retrieved 28 January 2020.