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Professional Diploma in Sales

The Role
of Sales
Lesson 2: Summary Notes

PROFESSIONAL DIPLOMA IN SALES

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Contents How a business is dependent on its sales team

Learning Outcomes

Building internal alliances and finding a mentor

Where does sales fit into the

typical business model?
So yes, even though we’re living in a digital era - building
relationships through online and face-toface interaction is
still vital to closing the sale in many businesses today.

Fred DeLuca said that there are only

2 ways to make money:
• Increase sales
• Decrease cost

“Nothing happens until someone sells something” -

Henry Ford

Today we’re looking at business models. This is important

as it enables us to determine what business model type
you currently work in, as well as what business models
your customers have - therein lies the opportunity.

I will be taking you through a few examples of the typical

business models today. There are over 50 types of
business models, many are similar with very small
differences - but the ones we’ll cover today are more
common and should give you a good idea.
Here is a quick overview of what goes into the “business
model design”. This term refers to the activity of designing
a new business model, as well as redesigning an existing
model in order to transform itself to meet their
customer’s needs. We all know that the world is
constantly changing, and businesses need to change along
with it to remain relevant.

The 3 main aspects that are

taken into account when designing
business models are:

• Economic consideration: how will the business make

money and sustain its profit streams?

• Component consideration: how does the business run, in terms of selecting its customer, defining and differentiating its

offering, defining the tasks it will perform and which it will outsource, etc.?
• Then, lastly, we look at strategic outcomes: how will the business differentiate itself from its competitors, and remain relevant?

A study by Mayo and Brown considered the business model as the design of key interdependent systems that create and sustain
a competitive business.

Another study by Masanell and Ricart explains a business model as a set of choices (policy, assets and governance) and
consequences (flexible and rigid) and underline the importance of considering how it interacts with models of other players in
the industry instead of thinking of it in isolation.

Choices

Policies Assets Governance

Consequences

Flexible Rigid
Another way of designing a business is by looking at a business model canvas. Here, an organisation identifies aspects such as:
• Value propositions
• Customer relationships
• Customer segments
• Revenue streams

Do you notice how many of these core aspects of a business all relate to the customer, and to sales or a sales force?

So let’s get back to the topic of the ever-changing business model. Here’s an example of a company who has adopted more than
1 business model:

According to Massa & Tucci when the tooling company, Hilti, shifted from selling its tools to a leasing model, they suggested that
the differences are so profound that it could be worthwhile to adopt a redefined spinoff from their existing business model as well
as crafting an entirely new business model through their transformation.
Business model types

But before we do, I’d like to challenge you all

to consider where sales fit into these business types, not
only from a sales employment perspective but also
to identify where there would be opportunities to sell
a product or service to a customer with that
particular business model.

• Manufacturer: this is a company that sources raw materials to create a product. Even within
this business type, there are different types of business models - whether the manufacturer
sells directly to the public, only to certain resellers or a combination of both.
• Distributor: this is a company that purchases directly from a manufacturer, for example, a
car dealership.
• Franchise: instead of creating a new product or service and designing a new business model, a franchisee is a person or
company that purchases an existing business.
• Brick & Clicks: These are businesses that do work both offline (bricks) and online (clicks). These are typically business with a
physical store and an online store, for example, Walmart.
• High touch: This business model requires human services and has been designed around a very person-centric business model.
Examples include consulting firms, wealth or financial management, and hair or beauty salons.
• Low touch: This business model requires minimal involvement from a human, due to the fact that as a customer, there is not
much explanation or education needed on the product, for example, Ikea.
• CCC - Cash conversion cycle: These businesses focus on how quickly they can convert cash to goods, and those goods back
into cash again (Cash → Product/Service → Cash). Typically, it is a business that is generating massive amounts of cash from
its online stores before it pays its suppliers. Examples of these include Amazon and Alibaba.
• Subscription model: This model allows a customer to obtain or make use of a variety of services or products by billing a fixed
amount per month. Examples of these include Netflix and Dollar Shave Club.
• Peer-to-peer: In this scenario, the company acts as a middleman between two individuals or parties. Examples of this model
include Uber and Airbnb.
• Agency: Here, we’re looking at a project-based business model, where an external company is hired to do a specific task. This
could entail a multitude of once-off, or recurring projects and tasks, such as PR, marketing and architecture. An example of
this would be Ogilvy (whom we mentioned in Lesson 1) and the Leo Burnett Company who does work for United Airlines,
McDonald’s, and Kellogg’s.
• Multi-brand strategy: this is when a company has multiple brands under the same organisation, and sometimes these brands
even appear to be competitive against each other. The typical objective of this business model is to gain market share.
Examples include Procter & Gamble, Unilever, Nestle.
• Vertically integrated: These businesses are quite the game-changers, and why I say this is because this business model is
defined as 1 organisation that owns, or has total control of their entire supply chain. Let’s take a look at what this means.
Let’s use Luxottica as an example. Some of their (eyewear) brands
include Dolce & Gabbana, Armani, Michael Kors, Prada, and even Ray-Ban.

In their business model, you will see that they cover:

• Product development (design and engineering)
• Manufacturing
• Logistics
• Distribution (wholesale, retail and e-Commerce)
• Leading to the entire value chain being in their control, right up until when the product reaches the customer.

Now let’s look at it from a sales perspective.

In this business model alone there are multiple opportunities for sales.
From the product development perspective, they require design software such as CAD.
Manufacturing is quite the beast on its own. Here, they need to consider multiple products and services. For example, MES
(Manufacturing Execution Systems), PLC’s (Programmable Logic Controller) and Robotics, and core manufacturing
equipment.

From a logistics and distribution perspective, they require intelligent software to appropriately map out their distribution, as well
as predict demand in order to manufacture accordingly.
Even from a customer perspective, this company would require data capturing and hosting functionality, as well as innovative
tools to analyse data and increase the overall customer experience, also known as “CX” - an exciting topic that we will cover later
on in our course.

So, as much as they are a powerhouse who have control of their entire value chain, they still require products and services to
function and be successful.
There are many business models, and sales is vital to each and every one of them.
You have:
• Aggregator models like Zillow
• Auction based models like eBay
• Brokerage models like Expedia
• Bundling models like a Happy Meal or MS Office

The list really goes on, but my intention is for you to think about the business model in a different way, and discover
opportunities by understanding your customer’s business model as well as your own. Could you identify the role of sales, from
an internal and external perspective, as we went through them all?

NOTES
How a business is dependent on its sales team
Let’s look at the core reason why sales is important to a business’ operations and its success.

• Is the lifeline of any business

Cash flow • Is
largely
dependant on new and return business
Both of the above is dependent on the sales the business generates

Balance

There needs to be a good balance between product or service development and sales, or else you may find yourself on either side
on the scales. A company’s sales team may have oversold a product that is not yet technically ready, or may have undersold and
the amazing product isn’t reaching the market. I am sure many of you have heard the term, always undersell and over-deliver
rather than oversell and under-deliver. Well, this comes down to balance. A business needs to ensure that they are able to deliver
on the product or service KPIs it gives its salesforce to achieve. And the sales force needs to ensure that it never makes empty
promises.

Pulse

It is also very important to understand how your product or service is performing in the market. A sales team is at the pulse of the
customer.
• Is your product or service meeting the customer’s needs?
• Is your marketing and messaging around your product effective, and clearly understood by the customer?
• Is your sales process too cumbersome for the customer?
Perhaps your company’s internal processes relating to the sale has become either too lengthy, or too technical - blocking the final
go-ahead of the customer saying “YES”. These are all very valuable aspects of what other roles sales teams play in an organisation.

Let’s touch on a few not-so-obvious aspects of the role that sales has in a business.

• Sales KPIs and Target: These are generally designed around the financial requirement of a business to keep running & become
profitable and sometimes, the salesperson’s conversion rate is also taken into account when setting KPIs. You will often find
 that your top performers have higher KPIs. Sales targets are also usually set quite high, to ensure that there’s a “cushion” for
any shortfalls.
• Sales forecasting: This is a vital part to any business, as it will have a tremendous impact on the rest of the business. Accurate
sales forecasting enables a business to prepare its product/services, the resources and costs associated to ensure that it is
able to deliver on what has been sold - without everything “breaking”. In most cases, the future planning for the entire
business is almost entirely dependent on the sales forecast.
• Customer retention: Once a salesperson has built that relationship with a customer, you usually have a customer for life. and
if they are taken care of. It is the salesperson who builds up a trust and it makes the promises that need to be delivered on. It
is also the salesperson who will be the first to know when that client is unhappy or ready to spend more money.

Building alliances and finding a mentor

Align yourself & take guidance

Building internal alliances will be highly beneficial to you, so take the time to consider your organisation’s business units, and their
inter-dependencies. That way, you have a clear understanding of how your organisation’s business units or departments interact
with each other.
Typically, there are:
• Sales & marketing departments
• Technical or operational departments
• Finance, HR and other departments
Most of the sales cycle is your responsibility as a salesperson, but there are many aspects to the cycle that can be influenced by
other departments.

In my experience, my team and I have made many customers happy by our company over delivering and exceeding expectations.
The secret? Back to what we learnt in the first lesson - reciprocity and likeability. Building alliances with your internal and inter-
departmental colleagues will be truly valuable in delivering on a promise to a customer.

Finding a mentor will be a game-changing aspect of your career and I highly recommend it.
According to a survey, more than 63% of employed millennials say their leadership skills are not being fully developed. And when
you look at this statistic (94% say that their mentor gives them good advice) then it is even more clear that you have taken this
upon yourself - you will not look back. It also ties back to loyalty to an employer, interestingly enough, as we want to feel that our
own goals for professional development are important to our employer. A mentor may mean different things to different people.
Over the years, I have had a variety of mentors, some I only spoke with once or twice a year, others I spoke with every 2 weeks.

Why:
• Perhaps you need a new perspective on a topic in particular, or just in general
• Perhaps you have a challenge or obstacle that you need to overcome
• It could be that you would value some external guidance when working toward your goals and building your brand What are
some traits of a good mentor? Someone that is:
• Successful, ideally recognised for their successes
• Generally positive

• A good listener
• Is willing to provide you with honest feedback and advise, and not try to spare your feelings

A few other tips I’d like to share:

• Avoid selecting a direct manager as your mentor, as you would want to discuss your professional goals as well as challenges
with your mentor
• Look at candidates in other industries, verticals or even business units to that of yours
• It’s OK, and perhaps even encouraged to have more than one mentor
• Try not to be intimidated. The candidate that you may want to approach, even though may be high-ranking in the company,
also started out in a junior position - looking for guidance in how to succeed and grow professionally.

Conclusion
A sign of a successful business is a business that employs professional salespeople, who are supported fully by the business, backed
by management, and are well compensated and rewarded for their successes. Salespeople who are motivated and recognized by
their peers, equipped with their own need to conquer, will most likely be very successful.
References