The seller or the provider of the goods or services completes a sale in response to an acquisition, appropriation, 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 generally 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 salesman or saleswoman.
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 of sales
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.
From a management viewpoint it is thought of as a part of marketing, although the skills required are different. Sales often forms 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. 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.
Two common terms used to describe a salesperson are "Farmer" and "Hunter". The reality is that most professional sales people have a little of both. A hunter is often associated with aggressive personalities who use aggressive sales technique. In terms of sales methodology a hunter refers to a person whose focus is on bringing in and closing deals. This process is called “sales capturing”. An example is a commodity sale such as a long distance sales person, shoe sales person and to a degree a car sales person. Their job is to find and convert buyers. A sales farmer is someone who creates sales demand by activities that directly influence and alter the buying process.
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, advertising, etc.
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 and/or services for equitable value.||”|
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 of their operations.
The relationships between sales and marketing
Marketing and sales differ greatly, but generally have the same goal. Selling is the final stage in marketing, which also 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 to the customer and increasing the number and engagement of 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 (new product development), among other things. It can also include bringing the potential customer to visit the organization's website(s) for more information, or to contact the organization for more information, or to interact with the organization via social media such as Twitter, Facebook and blogs. Social values also play a major role in consumer decision processes.
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, "sales" and "marketing" (among others, such as "customer service") label for a number of processes whose inputs and outputs supply one another to varying degrees. In this context, improving an "output" (such as sales) involves studying and improving the broader sales process, as in any system, since the component functional areas interact and are interdependent.
Many large corporations structure their marketing departments so they are directly integrated with all lines of business. They create multiple teams with a singular focus and the managers of these teams must coordinate efforts in order to drive profits and business success. For example, an "inbound" focused 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 facility or mechanism (example, web site) and/or salesperson. Sales management would break down the selling process and then increase the effectiveness of the discrete processes as well as the interaction between processes. For example, in many out-bound sales environments, the typical process includes out-bound 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, as well as the whole process.
One further common complication of marketing involves the inability to measure results for a great deal of marketing initiatives. In essence, many marketing and advertising executives often lose sight of the objective of sales/revenue/profit, as they focus on establishing a creative/innovative program, without concern for the top or bottom lines - a fundamental pitfall of marketing for marketing's sake.
Many companies find it challenging to get marketing and sales on the same page. The two departments, although different in nature, handle very similar concepts and have to work together for sales to be successful. Building a good relationship between the two that encourages communication can be the key to success - even in a down economy.
The idea that marketing can potentially eliminate the need for sales people 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. Another dimension is the value of the goods being sold. Fast-moving consumer-goods (FMCG) require no sales people 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 sales person to manage the sales process - particularly in the face of competitors. Small and medium businesses selling such large ticket items to a geographically-disperse client base use manufacturers' representatives to provide these 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 between 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.
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 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.
List of sales methods
- Direct sales, involving person to person contact
- Channel sales, an indirect sales model, which differs from direct sales. Channel selling is a way for ("B2B") sellers to reach the ("B2B") and ("B2C") markets through distributors, re-sellers or value added re-sellers VARS.
- Pro forma sales
- Traveling salesman
- Request for proposal – An invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service. An RFP usually represents part of a complex sales process, also known as "enterprise sales".
- Business-to-business – Business-to-business ("B2B") sales are likely to be larger in terms of volume, economic value and complexity than business-to-consumer ("B2C") sales. Because of this complexity, there is a need to manage the relationships between the buying and selling organisations, for example using Peter Cheverton's relationship models and the stakeholder map by Anderson, Bryson and Crosby
- Indirect, human-mediated but with indirect contact
- Sales Techniques:
- Selling technique
- Consultative selling
- Sales enablement
- Solution selling
- Conceptual selling
- Strategic selling
- Transactional selling
- Sales Negotiation
- Reverse Selling
- take away
- Sales Habits
- Relationship Selling
- Sales outsourcing
- Cold calling
- Guaranteed sale
- Needs-based selling
- Professional Selling Skills
- Persuasive selling
- Hard Selling
- Price based selling
- Target account selling
- Sandler Selling System
- Challenger Sales
- Action Selling
- Social Selling
- Personal selling
Agents in the sales process can represent either of two parties in the sales process; for example:
- Sales broker, seller agency, seller agent, seller representative: This is a traditional role where the salesman represents a person or company on the selling end of a deal.
- Buyers broker or Buyer brokerage: This is where the salesman represents the consumer making the purchase. This is most often applied in large transactions.
- Disclosed dual agent:This is where the salesman represents both parties in the sale and acts as a mediator for the transaction. The role of the salesman here is to oversee that both parties receive an honest and fair deal, and is responsible to both.
- Transaction broker: This is where the salesperson represents neither party but handles the transaction only. The seller owes no responsibility to either party getting a fair or honest deal, just that all of the papers are handled properly.
- Sales outsourcing involves direct branded representation where the sales representatives are recruited, hired, and managed by an external entity but hold quotas, represent themselves as the brand of the client, and report all activities (through their own sales management channels) back to the client. It is akin to a virtual extension of a sales force (see sales outsourcing).
- Sales managers aim to implement various sales strategies and management techniques in order to facilitate improved profits and increased sales volume. They are also responsible for coordinating the sales and marketing department as well as oversight concerning the fair and honest execution of the sales process by their agents.
- Salesperson: The primary function of professional salespeople is to generate and close business resulting in revenue. The sales person will accomplish their primary function through a variety of means including phone calls, email, social media, networking, and cold calling. The primary objective of the successful salesperson is to find the consumers to sell to. Sales is often referred to as a "numbers game" because a general law of averages and pattern of successful closing of business will emerge through heightened sales activity. These activities include but are not limited to: locating prospects, fostering relationships with prospects, building trust with future clients, identifying and filling needs of consumers, and therefore turning prospective customers into actual ones. Many tools are used by successful salespeople, the most important of which is questioning which can be defined as a series of questions and resulting answers allowing the salesperson to understand a customer's goals and requirements relevant to the product. The creation of value or perceived value is the result of taking the information gathered, analyzing the goals and needs of the prospective customer and leveraging the products and/or services the salesperson's firm represents or sells in a way that most effectively achieves the prospective clients goals and/or suits their needs. Effective salespeople will package their offering and present their proposed solution in a way that leads the prospective customer to the conclusion that they acquire the solution, resulting in revenue and profit for the salesperson and the organization they represent.
- Internet Sales Professionals: These people are primarily responsible for ensuring immediate response to the leads generated via social media, website or email campaigns.
Inside sales vs. Outside sales
Since the advent of the telephone, a distinction has been made between "inside sales" and "outside sales" although it is generally agreed that those terms have no hard-and-fast definition. 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. 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.
- Choice architecture
- Demand chain
- Financial transaction
- Sales (accounting)
- Sales effectiveness
- Sales incentive plan
- Sales contest
- Sales territory
- Sales variance
- Part III, effects of the contract, Rule 5. Sale of Goods Act 1979. Sale of Goods Act 1979
- 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.
- Philip Kotler, Principles of Marketing, Prentice -Hall, 1980
- Greening, Jack (1993). Selling Without Confrontation. The Haworth Press, Inc. p. 23. ISBN 1-56024-326-0. Page image
- "American Society for Training and Development (ASTD)". Sales Competency Project. Retrieved April 2008. Check date values in:
- Paul H. Selden (December 1998). "Sales Process Engineering: An Emerging Quality Application". Quality Progress: 59–63.
- "How To Organize Your Marketing Department In The Digital Age". www.cmo.com. Retrieved 2016-01-27.
- "Ending The War Between Sales And Marketing". hbr.org. Harvard Business Review. Retrieved 16 August 2014.
- 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.
- Compendium of Professional Selling. United Professional Sales Association. n.d.
- Peter, Cheverton (2008). Key Account Management 4th Edition. Kogan Page. pp. 90–104. ISBN 978 0 7494 5277 3.
- 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.
- "What is Inside Sales? The Definition of Inside Sales". Forbes.com. 2013-02-26. Retrieved 2013-04-24.
- "What is Inside Sales?". The Bridge Group, Inc. 2009-07-14. Retrieved 2011-05-25.
- "elaws - FLSA Overtime Security Advisor". US Department of Labour. Archived from the original on 2011-05-25. Retrieved 2011-05-25.
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