Sales
Encyclopedia
A sale is the act of selling
Selling
Selling is offering to exchange something of value for something else. The something of value being offered may be tangible or intangible. The something else, usually money, is most often seen by the seller as being of equal or greater value than that being offered for sale.Another person or...

 a product or service in return for money or other compensation. It is an act of completion of a commercial activity.

The seller or salesperson – the provider of the goods or services – completes a sale in response to an acquisition
Acquisition
Acquisition may refer to:* Takeover, the acquisition of a company* Mergers and acquisitions, strategy of buying and selling of various companies to quickly grow a company...

 or to an appropriation
Appropriation
Appropriation is the act of taking possession of or assigning purpose to properties or ideas. The word appropriation was first used by a Russian theorist named Bakhtin to describe a holistic language theory. The Russian word for appropriation is prisvoenie, which directly translated means ‘to make...

or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay.

Sales techniques

A sale can take place through:
  • Direct sales, involving person to person contact
  • Pro forma
    Pro forma
    The term pro forma is a term applied to practices or documents that are done as a pure formality, perfunctory, or seek to satisfy the minimum requirements or to conform to a convention or doctrine...

     sales
  • Agency-based
    • Sales agents (for example in real estate or in manufacturing)
    • Sales outsourcing
      Sales outsourcing
      - Background :Full 'sales outsourcing' is observed where companies have an external third party sales force. It is differentiated from value added reselling or distribution in that the business model can be based on shared risk, although there are models where the outsourcer is paid for all of...

       through direct branded representation
    • Transaction sales
    • Consultative sales
      Consultant
      A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...

    • Complex sales
      Complex sales
      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 and requiring a proposal response from...

    • Consignment
      Consignment
      Consignment the act of consigning, which is placing any material in the hand of another, but retaining ownership until the goods are sold or person is transferred. This may be done for shipping, transfer of prisoners, to auction, or for sale in a store Consignment the act of consigning, which is...

    • Telemarketing
      Telemarketing
      Telemarketing is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequent face to face or Web conferencing appointment scheduled during the call.Telemarketing can also include recorded sales pitches...

       or telesales
    • Retail
      Retail
      Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

       or consumer
  • Traveling salesman
    • Door-to-door
      Door-to-door
      Door-to-door is a sales technique in which a salesperson walks from the door of one house to the door of another trying to sell a product or service to the general public. A variant of this involves cold calling first, when another sales representative attempts to gain agreement that a salesperson...

       methods
    • hawking
      Hawker (trade)
      A hawker is a vendor of merchandise that can be easily transported; the term is roughly synonymous with peddler or costermonger. In most places where the term is used, a hawker sells items or food that are native to the area...

  • Request for proposal
    Request for Proposal
    A request for proposal is issued at an early stage in a procurement process, where an invitation is presented for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. The RFP process brings structure to the procurement decision and is meant to...

     – 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
    Business-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...

     – Business-to-business sales are much more relationship-based owing to the lack of emotional attachment to the products in question. Industrial/professional sales involves selling from one business to another
  • Electronic
    • Web – Business-to-business and business-to-consumer
    • Electronic Data Interchange
      Electronic Data Interchange
      Electronic data interchange is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e...

       (EDI) – A set of standard for structuring information to be electronically exchanged between and within businesses
  • Indirect, human-mediated but with indirect contact
    • Mail-order
    • vending machine
      Vending machine
      A vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products and even gold and gems to customers automatically, after the customer inserts currency or credit into the machine....

  • Sales methods:
    • Selling technique
      Selling technique
      Selling technique is the body of methods used in the profession of sales, also often called personal selling.Techniques in use in selling interviews vary from the highly customer centric consultative selling to the heavily pressured "hard close"....

    • Consultative selling
    • Sales enablement
    • Solution selling
      Solution selling
      Solution selling is a sales methodology. Rather than just promoting an existing product, the salesperson focuses on the customer's pain and addresses the issue with his or her offerings . The resolution of the pain is what constitutes a true "solution"...

    • Conceptual Selling
    • Strategic Selling
    • Transactional Selling
    • Sales Negotiation
    • Reverse Selling
    • Paint-the-Picture
    • The take away
    • Sales Habits

Sales agents

Agents in the sales process can represent either of two parties in the sales process; for example:
  1. Sales broker or Seller agency or seller agent: This is a traditional role where the salesman represents a person or company on the selling end of a deal.
  2. Buyers broker or Buyer brokerage: This is where the salesman represents the consumer making the purchase. This is most often applied in large transactions.
  3. Disclosed dual agent:This is where the salesman represents both parties in the sale and acts as a mediator
    Mediator
    Mediator may refer to:*A neutral party who assists in negotiations and conflict resolution, the process being known as mediation*Mediator variable in statistics*The Mediator pattern in computer science...

     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.
  4. Transaction broker: This is where the salesperson represent 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.
  5. 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 outsourcing
    - Background :Full 'sales outsourcing' is observed where companies have an external third party sales force. It is differentiated from value added reselling or distribution in that the business model can be based on shared risk, although there are models where the outsourcer is paid for all of...

    ).
  6. Sales managers: qualified and talented sales managers aim to implement various sales strategies and management techniques in order to facilitate improved profits
    Profit (accounting)
    In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...

     and increased sales volume. They are also responsible for coordinating the sales and marketing department as well as oversight concerning the fair
    Justice
    Justice is a concept of moral rightness based on ethics, rationality, law, natural law, religion, or equity, along with the punishment of the breach of said ethics; justice is the act of being just and/or fair.-Concept of justice:...

     and honest execution of the sales process by their agents.
  7. Salesmen: The primary function of professional sales is to generate and close lead
    Sales lead
    A sales lead, or Sales Lead, is the identification of a person or entity that has the interest and authority to purchase a product or service. This step represents the first stage of a sales process. The lead may have a corporation or business associated with the person. Sales leads are generic...

    s, educate prospects, fill needs and satisfy wants of consumers appropriately, and therefore turn prospective customers into actual ones. Questioning – to understand a customer's goal and requirements relevant to the product – and the creation of a valuable solution by communicating the necessary information that encourages a buyer to achieve their goal at an economic cost comprise the functions of the salesperson or of the sales engine (for example, the Internet, a vending machine
    Vending machine
    A vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products and even gold and gems to customers automatically, after the customer inserts currency or credit into the machine....

    , etc). A good salesman should never mis-sell or over-evaluate the customer's requirements.

vs.

Since the advent of the telephone
Telephone
The telephone , colloquially referred to as a phone, is a telecommunications device that transmits and receives sounds, usually the human voice. Telephones are a point-to-point communication system whose most basic function is to allow two people separated by large distances to talk to each other...

, 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
Fair Labor Standards Act
The Fair Labor Standards Act of 1938 is a federal statute of the United States. The FLSA established a national minimum wage, guaranteed 'time-and-a-half' for overtime in certain jobs, and prohibited most employment of minors in "oppressive child labor," a term that is defined in the statute...

 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
Closing (sales)
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...

 primarily over the phone via cold calling
Cold calling
Cold calling is the marketing process of approaching prospective customers or clients, typically via telephone, who were not expecting such an interaction...

 or telemarketing
Telemarketing
Telemarketing is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequent face to face or Web conferencing appointment scheduled during the call.Telemarketing can also include recorded sales pitches...

, 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.

The relationships between sales and marketing

Marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

 and sales differ greatly, but have the same goal. Marketing improves the selling
Selling
Selling is offering to exchange something of value for something else. The something of value being offered may be tangible or intangible. The something else, usually money, is most often seen by the seller as being of equal or greater value than that being offered for sale.Another person or...

 environment and plays a very important role in sales. If the marketing department generates a list of potential customers, that can benefit sales. A marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

 department in an organization has the goal increasing the number of interactions between potential customers and the organization. Achieving this goal may involve the sales team using promotional techniques such as advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...

, sales promotion
Sales promotion
Sales promotion is one of the four aspects of promotional mix. Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability...

, publicity
Publicity
Publicity is the deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people , goods and services, organizations of all kinds, and works of art or entertainment.From a marketing perspective, publicity is one component of promotion which is one...

, and public relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....

, creating new sales channels, or creating new products (new product development
New product development
In business and engineering, new product development is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible or intangible...

), 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
Twitter
Twitter is an online social networking and microblogging service that enables its users to send and read text-based posts of up to 140 characters, informally known as "tweets".Twitter was created in March 2006 by Jack Dorsey and launched that July...

, Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...

 and blog
Blog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...

s.

The relatively new field of sales process engineering
Sales process engineering
Sales process engineering has been described as “the systematic application of scientific and mathematical principles to achieve the practical goals of a particular sales process". Selden pointed out that in this context, sales referred to the output of a process involving a variety of functions...

 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
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...

") 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.

Most large corporations structure their marketing departments in a similar fashion to sales departments 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 line
Bottom Line
The Bottom Line was a music venue at 15 West Fourth Street between Mercer Street and Greene Street in the Greenwich Village neighborhood of Manhattan, New York City...

s - 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.

Marketing potentially negates the need for sales

Some sales authors and consultants contend that an expertly planned and executed marketing strategy may negate the need for outside sales entirely. They suggest that by effectively bringing more customers "through the door" and enticing them into contact, sales organizations can dramatically improve their results, efficiency, profitability, and allow salespeople to provide a drastically higher level of customer service
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...

 and satisfaction, instead of spending the majority of their working hours searching for someone to sell to.

Industrial marketing

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
Business-to-business
Business-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...

 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
Fast Moving Consumer Goods
Fast moving consumer goods or Consumer Packaged Goods are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items...

 (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.

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
Marketing strategy
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.-Developing a marketing strategy:...

.

Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

 applications, commonly referred to as Sales 2.0 tools, have also increasingly been created to help align the goals and responsibilities of marketing and sales departments.

See also

  • buzzword
    Buzzword
    A buzzword is a term of art, salesmanship, politics, or technical jargon that is used in the media and wider society outside of its originally narrow technical context....

  • Choice architecture
    Choice architecture
    Choice architecture describes the way in which decisions are influenced by how the choices are presented , and is a term used by Cass Sunstein and economist Richard Thaler in the 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness...

  • Customer service
    Customer service
    Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...

  • Demand chain
    Demand chain
    -Concept:Analysing the firm's activities as a linked chain is a tried and tested way of revealing value creation opportunities. The business economist Michael Porter of Harvard Business School pioneered this value chain approach: "the value chain disaggregates the firm into its strategically...

  • Point of sale
    Point of sale
    Point of sale or checkout is the location where a transaction occurs...

  • Retailing
    Retailing
    Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

  • Sales (accounting)
    Sales (accounting)
    In bookkeeping, accounting, and finance, Net sales are operating revenues earned by a company when it sells its products. Revenue are reported directly on the income statement as Sales or Net sales....

  • Sales Effectiveness
    Sales Effectiveness
    Sales effectiveness refers to the ability of a company’s sales professionals to “win” at each stage of the customer’s buying process, and ultimately earn the business on the right terms and in the right timeframe....

  • Sales Incentive Plan
  • Sales process engineering
    Sales process engineering
    Sales process engineering has been described as “the systematic application of scientific and mathematical principles to achieve the practical goals of a particular sales process". Selden pointed out that in this context, sales referred to the output of a process involving a variety of functions...

  • Sales management
    Sales management
    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 servicess and resulting profit drive most commercial...

  • Sales territory
    Sales territory
    Sales territories are the customer groups or geographic districts for which individual salespeople or sales teams hold responsibility. Territories can be defined on the basis of geography, sales potential, history, or a combination of factors...

  • Sales variance
    Sales variance
    Sales variance is the difference between actual sales and budget sales. It is used to measure the performance of a sales function, and/or analyze business results to better understand market conditions....

  • Selling
    Selling
    Selling is offering to exchange something of value for something else. The something of value being offered may be tangible or intangible. The something else, usually money, is most often seen by the seller as being of equal or greater value than that being offered for sale.Another person or...

  • Trade
    Trade
    Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

  • Transaction
    Financial transaction
    A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...

  • Vendor
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