Redefining Sales:
Conventionally salespersons are considered mere charmers: Charmers who have the innate talent of selling any product to anyone. It was assumed that these skills could not be learnt; only those persons who have the talent within them can excel in this field. They are considered to own the skills that cannot be leaned.
However, in the modern world, the same is not applicable. Complex process of decision-making, varied product categories, ever-changing consumer tastes, behavior and demand has resulted in a need for the companies to handle their sales activities with more reverence.
Owing to the same, Sales have become a subject of interest for both the academicians and the professionals dealing with it. They have formulated series of plans and designs to perform sales.
It is argued that in modern times, this Sales team should also include internal resources, ranging from accounting to customer service to executive management and thus the teams that are formed to perform sales should be designed to support both the customer’s need and selling company’s needs in the complex transaction.
Identifying the need of less privileged organizations mostly the small and medium sized companies that cannot hire and retain talented sales personnel, the concept of Sales Process Outsourcing is developed.
Sales Process Outsourcing allows the organizations to employ the best available talents and generate profits from their services at relatively lower costs.
The Company:
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The company believes in its core competencies of providing the services, cost effectively and most productively. Its emphasis is on training, selection and recruitment procedures, that aid in selecting and retaining the best talents in the market.
Value proposition:
We assure an increase in the efficiency of your sales, through both an increase in the volume of sales as well as a relative reduction in associated costs.
Strategy - Team Based Sales:
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The company provides expert teams lead by a team leader: Each product shall be assigned to a dedicated team: also, each team will be involved in selling more than one product, mostly the similar product category.
Since it is seen that many products (Contracts) sold by small & medium sized manufacturing companies do not require sales person to work 24X7. Thus, the sales are limited to few hand full conversions per week. In such circumstances, dedicated Sales team with a portfolio of similar products can work through the week with little idle time to spare. This allows the various companies to share the cost of commission to be paid to these teams.
This sharing of Commission heavily reduces the selling cost of the company making it more profitable.
The team thus selected shall be efficient in selling similar products. As the products will be assigned to the teams based on their experiences, the training cost is marginal. To ensure that there is no conflict of interest while selling similar products, we shall assure getting into contract with only one company per product.
In situations where each category is handled by a separate group, team selling is a way of joining forces to sell more and serve the customer and the client in a more unified way. When a single representative is responsible for selling multiple products lines, team selling can be a framework for the coordination of information and resources from the different product groups through the sales representatives and on to the customer.
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Team selling uses a multiple-contact approach to build new relationships at all levels of your customer’s organization. The result is a deeper and longer lasting bond between you and your customer, resulting in greater sales at lower costs.
Since we stockpile talents, teams designed to suit a product category can be created, upgraded and disbanded as per the requirements of the clients. Sales teams can also be hired for a specific purpose like gaining a major contract.
In addition, these teams can be hired to test newly launched and innovative products without incurring the huge initial fixed cost of recruiting and maintaining these sales force. These teams can be established quickly and informally to address a specific need or maintained over the lifetime of the project with new members added as needed. The teams thus formed can be as small as a group of two.
With limited capital and administrative problems, the SMEs cannot employ sufficient sales force that is productive and cost efficient. The cost of recruiting and maintaining efficient sales force is very high and thus they tend to compromise with it resulting in lower sales and hence lower growth prospects. In addition, they face the problem of regular absenteeism and attrition. Since the sales agents of these SME do not require being in the field all the time, most of their time is left unused and hence the company has to bear for this idle time too. .
By engaging our services, these SMEs can concentrate on their core competency of manufacturing and let us handle their sales. These SME shall reap the benefits of hiring efficient sales force at substantially low cost. Since we pile up talents, we barely suffer the problem of attrition and absenteeism. Since these groups can be rearranged instantaneously, the vacant positions can be filled immediately. This ensures constant sales and growth for the company. Since the teams handle a portfolio of products, the commission costs of these agents is borne by more than one company, thus reducing the commission cost for maintaining the same work force substantially.
To protect the client company’s interest, we shall provide the client company with an option of underwriting their sales. This option, which is offered at a premium, creates a responsibility on our behalf to provide the company with a minimum quantum of sales for a specified period. In case of default, the client will be compensated as per the terms of the contract.
Internal Functioning:
Database Cell:
Our efficient database and research team shall constantly analyse the market to figure out the trends, information regarding new product launch, and identifying the companies requiring our services. The information thus obtained will help us to grab new clients and expand our clientele base giving us the scope to grow.
In addition to this, it also collects information on the potential clients for products of our client companies that are then conveyed to our field representatives.
This is carried out by getting into an agreement with market research companies like AC Nielsen – ORG Marg, Blackstone Market Facts etc. that are engaged in collecting market statistics. Along with these research institutions, our network, consisting of satisfied clients and extensive salespersons in the field, regularly update the database and help in lead-generation.
The database division also collects the details (Brochures) of the various Associations of Manufacturers/Dealers and other Societies registered in that particular area.
This ensures maximum Market Information (not possible by companies with in-house sales force) that helps in lead generation. As we believe that lead generation is as important as converting the leads in to Sales. We aim at a high conversion ratio.
The market information accessed through Market Research companies and constant feedback from our own sales person help us in determining the potential capacity of the market in absorbing a given product during a specified period. This information is then conveyed to our clients.
The targets set for a particular period are a function of both the company’s internal targets as well as the output of the research that is undertaken by our company about the potential of the product in the market. In addition to this, a minimum sale is guaranteed to our client. This guarantees a minimum amount of sales from us. This service can be availed at a premium.
Human Resource Development Cell.
The Human Resource shall engage in the process of recruiting, training, productivity management and reward management.
The cell would constantly monitor the productivity of the employees and compare it with the standards sets. It would strive to upgrade the recruitment procedure to ensure the selection of the best and potentially the best sales personnel.
The HRD Cell also engages itself in identifying a potentially efficient sales person. This is done by constantly monitoring of the market and various organizations, outlets, roadside shops etc., by our sales representatives and out training faculty. The persons thus identified by referrals shall be given the required training and transformed into efficient sales personnel.
The Training cell that forms a part of the HRD cell would be leading the productivity management by regularly monitoring the sales personnel and to imparting them the required skills.
The faculty training the sales force shall be academicians and professionals engaged in improving the standards of sales people. The training shall focus on art of making sales, includes courses on Sales and Distribution management, Consumer Behavior, Negotiation skills, Anger management, Innovative thinking, Human Psychology, etiquette, personality development and related courses.
Regular training sessions shall be organized to transfer knowledge as regards the products and clients. The training shall also focus on legalities, taxation, accounting basics and related aptitude.
Finance/ Legal Cell:
This Cell will be involved in determining the amount to be charged to the clients. This includes the components of actual commission and various other costs like the cost of recruitment, cost of training, underwriting commission and other related cost along with appropriate profit margin.
It would also handle the legal issues of the company. It would be responsible for documenting contracts and other statutes.
This cell also undertakes the process of calculating the Underwriting Commission
A study will be undertaken to find the probability of not achieving the sales targets. Depending on this probability chart, the cost is determined and the Underwriting commission is charged.
The synergies provided by the working of these cells in tandem with each other would help the company achieve its and clients targets in the most efficient way.
Market:
The Market constitutes the vast organized and unorganized sectors comprising of small and medium sized companies. Market constitutes of many companies that require professionalized sales service providers. They have the option of getting into a contract with a dealer or distributor, but they provide no guarantee for efficient sales personnel.
This concept of outsourcing sales can help all these companies in hiring a professionalized sales force that is efficiently managed, is cost effective and whose productivity is unmatched.
The market is vast and the current trend makes them psychologically ready to outsource their business activities.
The industry is in nascent stage and never gets old. It is one industry that shall survive until the time commerce persists and until the time the service provided is cost effective and productive.
The company is set to have huge prospects if it sticks to its core strengths of Cost efficiency and productivity.
Target Market:
The service provided by the company is universally applicable to all the companies in SME segment.
The target company would be any company, Incurring sales commission cost above the industry average, With Sales force’s productive below the industry average, Administrative problems with its sales force like Absenteeism Finding, recruiting and retaining them.
In addition to this,
A company requiring testing market for an innovative or new product.
A Company temporarily requiring sales personnel to achieve targets, in order to match their growth strategies without incurring heavy cost on hiring and maintaining them.
A company that has seasonal demand
Any company that falls in any one of the above-mentioned categories is a potential client and the list of such companies is potentially exhaustive. The market can thus accommodate multiple players and every player shall have its share of the benefits.
Competition among the outsourcing agents, translates into competition among the companies selling similar products. Since there are multiple companies selling same products, healthy competition among the outsourcing agents shall provide equal opportunity to all the product companies to be exposed to the market.
Identifying Target:
It shall be the responsibility of the database cell to identify the target clients and potential customers. The database cells along with the field representative shall constantly vigil the entire market and upload the data in the central database that shall be scrutinized regularly.
The database cell shall gather the information by maintaining healthy relations with our clients and the customers.
Also by subscribing to the brochures, magazines distributed by the local business organization,
The Database cell shall also get in contact with the market research companies to track the current trends in the market, the changing consumer market facts, and required market facts and data that are required to identify potential source of income for the company.
Initial Phase:
The company works well if started on a large scale. Initially to test its survival, the company itself can hire the best available sales person. Nevertheless, it needs to develop all other functional areas, Viz., the database cell, finance cell and the HR cell. By hiring the sales person in earlier stages, the company shall considerably reduce its initial cost. This would also allow the company to test itself in the market with minimal risk.
Once the system is in place and operational, the company would go for an expansion by employing its own sales personnel. It can either hire new person or absorb the sales persons that were hired. Depending on the situations, the company can not only own its employees but also allow representatives to work part time on projects. Thus, they can be used to temporarily support the short falls in supply, if any.
Initial Marketing Strategy:
The company would set up its Functional departments prior to the very first sale. The database cell in consultation with experts would identify the target companies; the sales persons recruited and trained would be assigned the task of converting these target companies into clients. The newly recruited sales personnel would be grouped, lead by the faculty involved in training and selection of the sales persons. This team would negotiate with the different decision makers of potential clients and convert them to clients.
Tackling Hurdles.
The Initial and primary hurdle would be to convert the potential companies into clients. “Resistance to change” would be the most important factor restricting the companies from outsourcing their sales. This problem could be solved by explaining the benefits that accrue by availing the service.
Initially, the companies with very high administration cost would be identified and targeted. By successfully converting these companies into clients and by fulfilling our promises, these companies could be used as testimonial that would attract other companies.
This would attract not only other companies to avail our services but also competition. With the advent of competing companies, we believe the credibility of the model is proved.
The company would then rely on the competition and live testimonials to expand the market and would capitalize on its first mover advantage to be the market leader.
There persists a risk to the company if our sales persons are offered managerial positions by our clients or another company with much better remunerative packages. The sales representatives would naturally tend to attract and leave their current positions.
This drain of resource would be capitalized if presented as an opportunity for aspirants to join our company. This can be offered as a great opportunity to the freshers looking at making a career in Sales and Marketing.
Capital Required:
The Initial setup cost for the company does not require huge investments in fixed assets. It would require funds to set up the infrastructure, which includes an Office, furniture, Computers and its peripherals. It would require funds to subscribe to the market research organizations, for collecting brochures and other expenses related to database cell.
It would also require to fund the salaries and consultation fees for the recruiters and trainers and also selected sales representatives for the first few months till such time the company starts getting contracts and operational.
The exact amount of capital required would depend on the scale of initial operation.
Forecasting Income:
The income of the company constitutes the commission and the service charges charged to the client company. The commission charged depends on the sales carried for each client and the number of clients. The commission charged from each company in turn depends on the sales carried out for that company. Since the financials depend on this very pillar of income, it is difficult to predict the same
The sale achieved depends on the market potential and the targets set. Thus, it would be difficult to project the net income at least in the initial stages of the operations. Since the market is naive, it has huge potential to grow.
In addition, we believe that by fitting- in the numbers, the prospects are curtailed.
Hypothetical Situation:
A company X is involved in selling product Y. It currently has a work force of 10 sales person and recruitment cost of 800 per person including cost of advertisement, Cost of selection, cost of training etc. The sales commission given is Rs.4 per product for which the selling price is Rs. 100/-
The company has an average productivity of two sales per day per employee; suffers an average attrition of 12 employees per year and it takes 7.5 days on average to fill in the vacant positions.
The average of actual working days is 2 days less than the official working day; this is attributed to absenteeism by the employees. The Sales personal are required to report 25 days per months, however, the Sales persons report only for 23 days (average).
When outsourced the same job to us, the client requires increasing the work force by 10%. The contract ensures a cost reduction of 20% related to recruitment & training, and 10% reduction in commission. Since, we have ready work force and team based sales, there is no loss of sales because of absenteeism and attrition. The company is successful in increasing the sales quantity by around 29%, owing to the factors mentioned above and the most important factor of increase productivity by 20%.
This allows the client to enjoy a rise in bottom line of around 26% after paying a service charge of Rs. 10,000/- to us. This amount of Rs. 10,000/- contributes to our real income which is then utilized to incur the administrative expenses.
When full-fledged operational, we shall be in contract with many other companies and the real income would in multiple of above said income.
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Nikhil Garje
