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4.2 Maximize your Sales
4.2(a) Selling
(i) Choose and manage a commercial agent
Commercial agents are intermediaries that sell your goods or services on your behalf in return for commission.
Businesses usually appoint agents because they need their specialist help in reaching markets in a particular sector or geographical location.
Agents can be particularly useful for new businesses that have yet to build up a substantial number of contacts or can't yet afford to employ a dedicated salesperson.
Many businesses use agents to access domestic markets - but they can be particularly useful in overseas markets where different customs, ways of doing business or language barriers come into play.
The set of activities described below will help you decide whether a commercial agent can help your business and explains how to find and choose a commercial agent and ensure the relationship works.
* Pros and cons
* How a commercial agent can help your business
* Find a commercial agent
* Making sure you select the right agent
* What to look for in an agent
* Drawing up a contract with an agent
* The law on self-employed agents
* Getting the most out of the relationship with your agent
* Handling problems and ending the relationship with your agent
(ii) Close a sale
You close a sale when you get a customer to commit to purchasing your product or service.
The set of activities described below explains the simple techniques you can use to get customers to agree to a deal and points out how you might negotiate in different ways with both existing and first-time customers.
Remember your commitment to the customer doesn't stop once you've closed a deal. Good after-sales care is essential if you want customers to return.
(iii) Forecast and plan your sales
Accurately forecasting your sales and building a sales plan can help you to avoid unforeseen cash-flow problems and manage your production, staff and financing needs more effectively.
A sales forecast is an essential tool for managing a business of any size. It is a month-by-month forecast of the level of sales you expect to achieve. Most businesses draw up a sales forecast once a year.
Armed with this information you can rapidly identify problems and opportunities - and do something about them.
While it's always wise to expect the unexpected, a well-constructed sales plan, combined with accurate sales forecasting, can allow you to spend more time developing your business rather than responding to day-to-day developments in sales and marketing.
The set of activities described below shows you how to put together a sales forecast and a sales plan.
* A basis for sales forecasts
* Your sales assumptions
* Developing your forecast
* Avoiding forecasting pitfalls
* Creating a sales plan
(iv) Identify and sell more to your most valuable customers
Being in a position to focus on your most valuable customers might sound like a luxury. After all, many small businesses are grateful for customers of any kind.
But every business finds that some customers are more valuable than others. This can be for a range of reasons, from the size of their purchases to the relative ease of managing their account. Successful businesses are generally those that identify these customers, build relationships with them and work to bring in new customers with a similar profile.
The set of activities described below outlines how to identify which of your customers are the most valuable to you. It also provides tips on selling more to them and attracting new high-value customers.
* The benefits of understanding your customers
* Learn about your customers
* Make customer information available
* Analyze your customers
* What makes your customers valuable?
* Enhance the customer experience
* Market more effectively
* Find new customers
(v) Identify potential sales channels
You've got a great product or service, but how do you sell it? Do you open a retail outlet, or go out knocking on doors? Should you recruit your own sales force or engage a sales agent? What about resellers? What about the Internet?
Choosing the right sales channel is one of the hardest, and most important, business decisions you will ever make. Getting it right increases your chances of success substantially.
There is also an interactive tool to that is designed to help you make that decision. It asks you a short series of questions about:
* Your product or service
* The target audience for that product or service
It directs you to guidance on the sales channels most likely to help you achieve your business objective. It should take you no more than five minutes to complete.
Note: this tool is intended to provide a starting point for further research and should not be regarded as a substitute for professional advice.
(vi) Overview of selling to government
Selling products or services to government bodies is an important opportunity for all businesses - local government alone spends £40 billion a year on goods and services.
The government is committed to helping small and medium-size businesses compete successfully for public sector contracts. Public-sector bodies ranging from central government departments, devolved authorities and the NHS to local authorities and the armed forces all place orders with businesses, so there may be contracts of interest to you.
Public-sector organizations can make good customers. They have to be fair and honest in the way they choose suppliers and pay promptly within agreed contract terms.
They also have to employ tendering processes that are transparent, provide essential information to potential suppliers and ensure a fair chance for small businesses.
The set of activities described below explains where you can find out about potential contracts, outlines the kind of procurement process you may have to undergo and tells you where to find out more.
* What opportunities are available?
* Where to find out about contracts
* The procurement process
* Procurement Regulations for public sector contracts
* The role of e-procurement
* Resolving public sector tendering problems
(vii) Recruit and manage sales staff
If you run a small business it's likely that one of the many hats that you wear is that of the salesperson - after all, it's very difficult to start a business without some ability to sell to people.
If you need to bring in specialist salespeople, it can be difficult to judge when to do this and how to recruit the right people for your business. If you already have a sales team, it's important to know how to motivate them and measure their performance.
The set of activities described below explains where to start the search for a salesperson, outlines the importance of the recruitment interview and explains how to set up a payment structure to encourage high sales.
* Manage your sales team
* When do I need to hire a salesperson?
* Start the search for new salespeople
* What to look for in a sales recruitment interview
* The induction process for new salespeople
* Set sales targets for your salespeople
* Set activity targets for your salespeople
* Measure the performance of your salespeople
* The right pay package for your salespeople
(viii) Sales methods
The basic rules of selling are always the same, whether you're dealing with customers in person, by phone, or whether it's in a business-to-business or retail environment. You need to engage the customer, pitch your product or service to them and then take action to close the sale. Careful preparation on your part is key.
The set of activities described below explains basic techniques, presentations, negotiations and other things to consider when selling to customers.
* Basic sales techniques
* Talk to your customers
* Successful sales presentations
* Using presentation technology
* Handling objections
* Negotiating a sale
* Dealing with sales nerves
* Retail sales
(ix) Sell the benefits, not the features
Businesses and consumers don't buy on price alone. Your customers want to know what your product or service can do for them, not just how it works.
They want value for money and they may be prepared to pay more for your product if they gain significant benefits or advantages.
The set of activities described below explains how to sell the benefits of your product or service in order to maximize your sales.
* How to analyze your product's benefits
* Matching benefits to the customers' needs
(x) Target the right people in an organization
When you're selling to other businesses, you need to pinpoint and then target the decision makers. Don't waste time selling to someone who doesn't have the power to buy your product or service.
The main decision maker is often the individual who signs the cheque - but this won't always be the only person you need to convince. Others may also play an important role in the buying process.
The set of activities described below will tell you how to identify and make contact with the key decision makers you need to sell your goods or services to.
* People involved in the buying process
* Find out who to talk to
* Make that crucial first contact
* Get the appointment
* Deal with common brush-offs
(xi) Tender for a contract
Submitting a tender is common for businesses supplying goods or services to other businesses or the public sector.
At a basic level you expect to quote for a job or write a letter saying why you should be given the business.
But more formal tenders often apply to bigger jobs or for supply contracts spread over time. Public-sector work in particular has specific tendering processes. This applies to customers ranging from your local council or hospital to a central government department.
Even if you don't win the work this time, writing a tender can clarify your aims, strengths and weaknesses and you can learn for next time by asking for feedback on your bid. It raises your profile with the customer and helps you learn about customers' needs.
The set of activities described below explains how to identify potential contracts, what to include in your tender and how to write it for the best chance of success.
* Finding out about contracts
* Should you bid for a tender?
4.2(b) Online Selling
(i) Accepting online payments
For many small businesses, accepting payments online provides some major benefits. Customers increasingly expect this facility and it can improve your cash flow significantly.
It's easy to accept cheques or invoices for your online sales and to process payments in the traditional way. However, because buyers often use the Internet for a speedy service, most sales are paid for with credit and debit cards. To accept cards online, you will have to make special banking arrangements.
Online payments using cards are "card-not-present" or CNP transactions. There are higher risks of fraud with this type of payment and banks require you to operate within a well-defined set of rules and accept a higher level of commercial risk than a conventional swiped card transaction in a shop.
The set of activities described below will help you to understand these requirements and look at the options available for taking advantage of online payments.
* Online payment jargon
* Selecting the best online payment option
* Setting up a merchant account
* Find a bank to process your online payments
* Checklist: applying for an internet merchant account
* Using a payment-processing company
* Selling through an online shopping mall
(ii) Create an online shop
Selling products and services online can have major advantages for businesses, leading to increased profitability and lower costs.
The set of activities described below tells you about the advantages of selling online, what you need to consider when creating an online shop and the pitfalls of getting it wrong. If you choose to work with a third party to build your online shop, this guide will help ensure you ask them the right questions.
The guide also explains some legal requirements and the traps that you should be aware of, as well as how to make sure that customers can find your shop on the web.
* Benefits of selling online
* A basic online shop
* An intermediate online shop
* A sophisticated online shop
* Planning your online shop
* Regulations and selling online
* Helping customers find your website
* Avoid online pitfalls
(iii) Distance selling and online trading
All businesses that supply goods or services must comply with a wide range of regulations on their quality and suitability.
But there are a number of extra rules if you sell at a distance or online. This includes selling by mail order including catalogues, phone, fax, Internet and digital TV.
Understanding and complying with the distance selling regulations puts you on a firm footing when dealing with consumers, and can help you to avoid disputes.
The set of activities described below gives an overview of the rules on distance selling and online trading and tells you where you can find out more.
* The basics of distance selling and online trading
* Provide consumers with clear information
* The cooling-off period and cancellations
* Additional rules if you sell or market electronically
(iv) Fulfilling customer orders
Once a customer purchases a product from your e-commerce site, you need to ensure delivery in a timely and efficient manner. For some items such as music and software, customers can download the product directly to their computer. However, as more businesses look to sell physical products via the web, there is also a need for door-to-door delivery.
The solution is an effective fulfillment service capable of handling all of the stages from processing the order to delivery.
For products requiring physical delivery, a large portion of the cost of selling online can be attributed to fulfilling the customer's order. Fulfillment can, therefore, have a major impact upon the profitability of your operation.
The set of activities described below describes the various options for delivering both physical and digital products to your customers and provides guidance on how to ensure that you meet their expectations.
* Order processing
* Physical delivery of goods
* Outsourcing the delivery of your goods
* Delivering digital products
* Digital rights management
* Meeting customer expectations
(v) Planning for e-commerce
E-commerce plays an increasingly important role in the way in which products and services are purchased.
E-commerce systems such as your website can be used to market and sell to customers, and to provide after-sales support. E-commerce can also be an important part of strengthening relationships and improving the efficiency of your dealings with suppliers and other key trading partners.
The set of activities described below looks at the key issues to consider when planning for the introduction of e-commerce. It provides advice on how best to identify the opportunities for e-commerce within your business and the solutions available. It also emphasizes the need to plan for the ongoing development and maintenance of any e-commerce system at the outset.
* Identifying e-commerce opportunities
* Making an e-commerce site easy to use
* Trading partner relationships
* Implementing e-commerce
* Recognizing the ongoing commitment
* Who is involved in an e-commerce project?
4.2(c) Selling and the law
(i) Buyers' terms and conditions and unfair contract terms
All businesses routinely enter into contracts with other businesses to buy their goods or services - for example, when purchasing a new computer system, a training package, or office cleaning services.
When you purchase goods and services for your business, you face many of the questions private consumers do, when ensuring the quality of goods or services and seeking redress if problems arise. But as a business, you don't necessarily have the same buying rights and protection as individual consumers.
The set of activities described below explains the rights you have as a business purchaser of goods and services - it doesn't cover your rights or obligations when selling goods or services - either to other businesses or consumers. It outlines what you need to be aware of in the terms and conditions of your contracts and how you can improve the deal.
* Your rights when acquiring goods and services
* Examine the terms and conditions when acquiring goods and services
* The Unfair Contract Terms Act
* Use terms and conditions to get more from your supplier
* Remedies for breach of contract
* Terms and conditions for IT and online contracts
(ii) Consumer credit
If your business provides credit facilities to customers, there are a number of regulations you may need to comply with, many of which have been updated and strengthened by the Consumer Credit Act 2006.
The rules don't just apply to specialist credit businesses such as credit-card providers or money lenders. A shop or mail-order business that allows customers to buy on credit - or hires out or leases goods - will probably have to comply with them too.
In most cases, you'll have to apply to the Office of Fair Trading (OFT) to be licensed to provide credit. Licenses are only granted to those businesses that satisfy the OFT that they are fit to engage in the activities covered by the license.
The set of activities described below provides an overview of the regulations which apply to consumer credit, explains which businesses need to be licensed and sets out how to apply for a license.
* Does my business need a consumer credit license?
* How to apply for consumer credit licensing
* Rules on credit agreements
* Rules on advertising credit
* How the rules affect businesses that hire out or lease goods
(iii) Customer protection
If your business sells goods or services you'll sometimes have to deal with people who are unhappy with some aspect of the transaction.
This means you need to think carefully about your approach to customer service - and make sure you're aware of customers' legal rights. You should note that where your customer is a consumer that is not acting in the course of a business they have additional rights.
Knowing the basics of the law puts you in a better position if a dispute occurs. And respecting customers' rights will help you retain their custom.
The set of activities described below sets out the fundamental rights customers have when they buy goods or services from you.
* Customers' key rights when buying or hiring goods
* Customers' rights to reject goods and claim refunds
* What customers can't complain about
* Customers' key rights when buying services
* What customers can do if they think services aren't adequate
* Customers' rights to challenge unfair contract terms
* Consumers' extra rights when buying goods or services online, by mail order or phone
* Consumer credit and financial services
* Customer rights: jargon buster
(iv) Fair trading, trade descriptions and Trading Standards
It makes good business sense to treat your customers well and trade fairly.
You need customers for your business to develop and become more profitable. If your customers trust you and appreciate the goods and services you sell, they will return - and also recommend you to others.
But there are also many laws to protect customers from being treated unfairly. If you breach them, the penalties can be high and can even result in you losing your business.
Some of these laws, such as the Trade Descriptions Act, apply generally. Others are specific to particular trades. Trading Standards, which enforces many of these regulations, can help you stay within the law.
The set of activities described below provides an overview of fair trading and explains the law on describing products and services. It outlines the work of Trading Standards and advises on what you should do if a complaint is made against you.
* Fair trading
* Describing your products and services
* Working with Trading Standards
* What to do when things go wrong
(v) Privacy and data protection in direct marketing
Direct marketing is any marketing or advertising material that is directed at particular individuals. It includes messages trying to sell goods or services and those promoting an organization or its values or beliefs, such as material from charities or political parties asking for support. Direct marketing could be an email advertising car insurance or a phone call from a charity asking for a donation. It does not include calls that are purely for market research.
The set of activities described below explains what you need to do to comply with the Data Protection Act 1998 and the Privacy and Electronic Communications (EC Directive) Regulations 2003 when carrying out direct marketing activities.
* Data Protection Act 1998
* Data protection and marketing
* The Privacy and Electronic Communications Regulations
* Marketing regulations
* Privacy issues when using cookies
* Frequently asked questions about data protection
* The Information Commissioner's Office
* Data protection offences and enforcement
(vi) Product labeling and packaging
If your business is involved in trading goods you must be both clear and honest on all packaging and labeling. If you're misleading in any way you could find yourself committing a criminal offence under the Trade Descriptions Act.
There are other laws too which regulate the way in which goods are labeled, covering, for example, details of their composition or their price.
It is the responsibility generally not just of those making goods for sale but also of those retailing them to respect these laws. So it makes good business sense before you start trading of any kind to find out which laws would affect you and how.
The set of activities described below gives you an overview of the Trade Descriptions Act and the other main laws regulating the packaging and labeling of goods. It also details the special rules retailers must abide by - particularly those on retailing food and drink.
* What you need to know about packaging and labeling
* Check if special rules apply to your sector
* Special rules for retailers
* Packaging design
* Packaging and labeling for export
* Packaging and the environment
(vii) Returns and refunds, warranties and complaints
Even the best businesses are sometimes faced with a customer who isn't satisfied with the goods they've bought or who simply wants their money back.
Alongside improved consumer-protection legislation, awareness of consumer rights has increased dramatically over the last 30 years - and so have people's expectations of the sort of redress they can expect when goods aren't up to scratch. It's therefore essential to know what you're required to do when a customer complains.
But it's not only retailers that should be aware of the legislation that protects dissatisfied consumers. Anyone in business who provides goods should be aware of their obligations to customers.
The set of activities described below explains your customers' rights and the differences between warranties and guarantees.
* Your customers' rights
* What is a warranty?
* Extended warranties for domestic electrical goods
* What is a guarantee?
* Returns
(viii) Staying on the right side of the law: the basics
The sales process - from the initial approach to long after the sale is completed - is governed by a number of important legal requirements designed to protect your customers.
Playing it by the book can help your business build and maintain an honest and trustworthy reputation.
The set of activities described below will help you identify which laws apply to your business including online selling rules, distance-selling regulations and data protection rules. It will help you understand how to comply with these rules.
It also provides a brief introduction to general trading rules and the special rules for retailers or specialized sectors.
It also looks at late-payment legislation that could affect you if you are considering taking action against late payers or if you tend to pay invoices after their due date.
* Supplying satisfactory and safe goods and services
* Customers and data protection
* Paying your bills and getting paid on time
* Rules for businesses that don't sell to customers face-to-face
* Special rules for businesses that sell online
(ix) Sunday trading
Some shops that open on a Sunday face restrictions on their hours of trading.
Small shops with |