If sales aren’t where they should be, start asking why.

All businesses at sometime or other are subject to variations in their volume of sales and level of income. Depending on the type of business undertaken, most commercial organisations would recognize that there are trading or sales cycles during the course of their trading year. In many consumer businesses, the run up to Christmas is a major trading period of high sales and income. However, January tends to be a slacker trading month, usually enlivened by “sales” which increase volume, but with discounted prices that reduce the level  of potential income.

Selling is the foundation of business. But some people have a wrong attitude about the process or profession of “selling”. There are those who consider that, to be a salesman,(male or female), is demeaning, that the process of “selling” makes people buy things they don’t want. But commerce and economic well-being depend on selling. When Governments want to grow the economy, they often forget that in order to generate national income, people have to work harder to be more successful at selling goods or services, in order to produce the income.

Selling is a business skill. To be successful in selling relies on the ability to identify a customer’s need, to understand their underlying problem and to provide a solution that overcomes the problem and satisfies the customer’s requirement. Successful sales executives also require a personal confidence to meet new customers, and not be put off by the  rejections that inevitably occur. Selling can be a lonely business, which requires careful management to ensure that sales staff are properly directed, trained and motivated, because the future of the business depends on their success. Sales executives often operate in a more isolated and exposed position than others in a company, and without sensitive and effective management, may tend to “Game the system” for their own benefits rather than that of the business.

The process of selling may be considered as either passive or active. Passive selling involves shops, the internet, or mail order, or anywhere where the customer comes to the point of sale, to meet the sales executive. Passive selling tends to be consumer related, although not exclusively so. Active selling, which generally tends to relate to industrial and business to business trading, involves sales people actively seeking out and making direct contact with the potential customer or buyer. Whether active of passive, usually the sale is confirmed by the actions of a sales executive “closing” the sale with the customer. Successful selling is a skill that not everyone can acquire, even with training. Ultimately, the ability to sell may well determine the success or failure of a business, as it is only the act of selling that brings in the necessary financial income.

Of all the management processes which produce sustainable profitable income, by anticipating and satisfying customer requirements, the effective management of the selling activity is potentially the most important.

Before targeting and directing sales staff, managers need to have a realistic expectancy of sales opportunities and ideally have accurate forecasting, as far as that is possible. Such sales forecasts, cash flow projections, market profiles, targets etc, should all be detailed in a Business Development or “marketing” plan. Managers need to be aware of the selling conditions that they can control, such as target customer selection, the product or service package offered, the pricing policy, all of which used to be collectively known as “the 4Ps of the Marketing Mix”. Selling conditions which they cannot control, but which may have a profound effect on their selling opportunities include, competitor activity, economic situation, new and competing technology, legislation and many others.

Having tasked, trained, equipped and directed the sales force with the resources that it needs, the task of the manager is to measure the results. Vigilance in comparing results against the planned forecast is essential. If sales aren’t where they should be, start asking why, because   it is important to identify and understand the reasons when income differs from that which was planned.

Managers should always have an alternative plan to put quickly into place, if sales and income perform in a markedly different way from that which was planned. It should be remembered that in terms of income and profits, it can be equally problematic if sales are above the forecast, as it can be if sales are below forecast. If sales are below their forecast, then income and hence profit, will be below that which is required. If sales are above the forecast, additional costs may be incurred which could reduce overall profits and lower profitability.

The continuous flow of income, which businesses need for their long-term future, is derived from sales. No sale,- no income. No income, – no business. Thus the ability to sell is of primary importance to the success or failure of a business.

Effective selling is fundamental to producing business income, but only effective management can make sustainable profits from that income, for the long-term future of the business.

© N.C.Watkis, Contract Marketing Service 08 Mar 12

Contract Marketing Service, (Marketing Performance Consultants)

March 21, 2012   Posted in: business development, business efficiency, Business Marketing, business performance improvement, business performance management, business performance measurement, marketing development, marketing management, marketing metrics, marketing performance measurement, marketing ROI, performance management, performance measurement indicators

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