Cracking the Sales Code is an article that talks about the B2B Sales Process in detail. This covers Customer Identification, Customer Categorisation, Sales Funnel, Sales Planning, etc. This article has been published in MBA Skool 2013

1.
Cracking
the
Sales
Code!
Siddharth
Ravishankar

2. CRACKING THE SALES CODE!
Mary Kay Ash, an inspirational business leader and entrepreneur who founded Mary Kay Cosmetics Inc. once said, “
Pretend that every single person you meet has a sign around his or her neck that says, ‘Make me feel important’. Not only
will you succeed in sales, you will succeed in life.” The ‘make me feel important’ tag in sales lingo is called managing
customer relationships. It is the foundation on which all business deals happen in a Business-to-Business (B2B)
environment. Also, along the line a sales person needs to deal with various other key parameters such as identifying new,
potential customers, retaining existing customers, mapping organizations, tracking existing leads, etc.
The Sales Process
First, lets look at the sales process. The sales process can be
defined as a 4-stage process that begins from prospecting you
customer to eventually keeping or retaining your customer. Lets
look at every stage:
Prospect: This stage involves making initial contact with a
customer through cold callings and appointments to understand
their business requirements
Engage: This stage deals with engaging the customer through a
series of interactions to attract his trust and faith in your
capabilities.
Acquire: This stage sees the real action in terms of negotiating and closing deals. This is the stage where a sales person
would like to see most of his time spent. This stage is often the most critical as it is the deciding phase of the activities
done before.
Keep: This stage deals with all post purchase or post sales action in terms of being able to retain a customer through good
service and after sales support.
Customer Identification
Every sales person should aim to gracefully persuade his or her customer
into a win-win situation and not try to manipulate his or her thinking. Also,
I couldn’t agree more with Mr. W Clement Stone in his belief that those
sales are contingent upon the attitude of the salesman and not the attitude
of the prospect. Even in B2B sales, it is not an organization that buys from
another organization, but rather individuals that buy from individuals and
Keep
Acquire
Engage
Prospect

3. it is here that the skill and attitude of a sales person that come to the fore.
To better understand how to satisfy the needs of our customer and to able to match our capabilities to the prevailing
opportunities it is important o understand first who my potential customer is.
We can identify our customers as follows:
Existing Customer: To get a new deal closed from an
existing customer, we have focus more on the after sale
service and the bundling aspects of the solution. Here
the benchmark is our own old product and since we
already have an existing relation with the customer, and
in all possibility an existing solution or offering it is
this fact that helps create a preference in the minds of
the customer. This is also called ‘sticky solutions’
wherein the shifting cost is generally more of a
hindrance to the customer. This ensures that we
generally get the ‘last right of refusal’ on a deal.
Competitor’s Customer: Competitor’s customer or competitor’s account are generally the most difficult accounts to
break into. These are customers who already have a preference to a competitor or a competitor’s solution offering. Since,
the benchmark over here is generally the competitors offering, price is a critical factor to breakthrough. Strategic pricing
is generally used by a sales person to get a foot in the door in such an account. One needs to have a clear picture of the
competitor pricing and history of their acceptance and satisfaction in the eyes of the customer.
New Customer: These customers are the ones that have no previous history of using a similar solution from either you or
your competitors. For these customers, it is very important to focus on the “value” to be delivered. Value could be either
through cost savings, competitive advantage or both. If you are able to push through the value perspective, then pricing
becomes far less of a constraint.
Customer Categorization
The next step would be categorizing customers to be able to
track and treat them separately. We can categorize them as key
accounts, accounts of strategic importance and other accounts
that need to be catered to make up the numbers
Key Accounts: These are accounts that contribute the maximum
to your sales. One could employ the 80:20 rule here to filter the
Customers
Exis-ng
Customer
Compe-tor's
Customer
New
Customer
Key
Accounts
Strategic
Accounts
Other
Accounts

4. Top 20% customers that contribute the most. However, this list needs to be looked into on an annual basis as customer
spending and investment changes every year. A customer identified as a key account this year may not be one next year.
You should concentrate your resources on these accounts and ensure a strong relation with them.
Strategic Accounts: These are the customers that may not contribute significantly to your sales, but it is imperative to
follow and track these accounts due to their strategic nature. These could be accounts that have huge growth potential in
the years to come or may be a competitor’s account that you have managed to break into. Improving relations with them
will only ensure your long-term growth and sustainability.
Other Accounts: These are the customers that help you make up your sales numbers. They may not give you business on
a frequent basis or the business may not be of large value, but they help you attain your targets, what we call ‘book and
bill’ accounts. Business that you are able to book and bill (invoice) within the same quarter, half or year. These should not
end up using too many resources.
Finally, lets look at how does one go about setting a sales target. This needs to be done very accurately and with some
degree of estimation, as it is very difficult to get a clear idea of the business inflow at the very beginning of the year. We
may have a clear picture of the potential business inflow up to the 2nd
quarter; however, things beyond the 2nd
quarter
often are hazy and unclear. Many a times, it is forecasting of this number that puts sales people into trouble.
The Sales Funnel
The sales funnel is the most important concept when
it comes to forecasting sales. As shown in the
adjoining figure, depending on your hit rate or
conversion rate, it is advisable to have a funnel
consisting of sufficient leads or enquiries. For
example, if you have a conversion ratio of 20%,
meaning you convert every fifth lead into a
successful deal; you would require leads that at least
add up to 5 times your sales target. There are also
instances when deals get shelved at the last minute or
get shelved due to unforeseen circumstances.
Sometimes deals also get shifted to the next quarter, half or year for that matter. Hence, having a substantial prospect
pipeline is important. Once, you have a sufficient prospect funnel you then go about filtering the relevant ones and
concentrate on those engaging resources to the deals you believe you have a better chance of cracking. This also ensures
an optimum utilization of resources.

5. It should not come as a surprise to note that although you may have more prospects, these could belong to fewer
customers; as in a customer could be giving business through multiple deals or projects. This is also another way to
revalidate that it is the key accounts that are giving most of the business.
Sales Planning
This is the final step that goes into how you plan your business. Sales needs to be divided across all 4 quarters keeping in
mind the resources, invoicing and also the larger picture, i.e. the Income statement. Planning your sales throughout the
year will ensure steady cash inflow. For example, we can plan the sales as follows:
Time Frame Quarter 1 Quarter 2 Quarter 3 Quarter 4
Sales as a % of
the overall Sales
Target
15% 30% 35% 20%
This distribution is a random allocation based on the below assumptions:
a. Q1 sales will be less because company budgets are generally drafted in this period.
b. Also, Q1 also sees invoicing done from the order backlog of the previous year.
c. Sales people generally tend to go on vacation in Q1 after a hectic and busy Q4/ year ending.
d. Q2 and Q3 sales are generally considered to be higher, based on invoicing plans and general trends in the
industry.
e. Q4 sales are generally kept lower as a majority of sales done in this quarter are not billable and hence shift to the
next year resulting in an order backlog.
This kind of planning comes with a certain degree of experience, industry knowledge and forecasting skills.

6. About the Author:
Siddharth Ravishankar is a student of SP Jain School of Global Management majoring in Master of Business
Administration, specializing in Contemporary Marketing Management. He comes with a rich background of B2B Sales
serving one of India’s premier engineering companies in Larsen & Toubro Limited.
Email id: sidd.ravishankar@gmail.com