Article: Market Research And Sales Managers
The essential element of the sales manager's survival kit is good information, particularly in four areas: the company's sales, the structure of' the market, detailed knowledge of buyers and the strengths and weaknesses of the company vis-a-vis the competition.
Know The Company's Sales
Every company is sitting on a wealth of information which need not be difficult to revamp into a form which is useful. The first requirement is very simple: a regular (at least monthly) list of the company’s top twenty customers showing their purchases for the latest month, the budgeted sales for that month and the cumulative figure for the actual sales so far this year. In many industrial firms these top customers will account for over half the total turnover, so at a glance the sales manager is in a position to judge the performance of the accounts that matter. Awareness that a customer is falling behind on the budget will enable questions to be asked which could possibly lead to rectifying the situation before it gets worse.
An analysis of the product's sales, month by month, should be undertaken to show the sales split by user market. This is valuable in forcing the sales manager to focus his attention on the performance of markets rather than products and it may well highlight areas where the company's share could be increased.
Above all, patterns should be sought from the internal sales statistics. These could be trends in sales over a period of time or a snapshot of the latest period. The wealth of information available inside the company brings with it the temptation to analyse too much in the hope that something may prove useful. The result could be statistical indigestion. As is the case with every market research exercise, no analysis should be prepared until an answer is received to the fundamental question, "What will I do with the information when I've got it?"
Know The Structure Of The Market
It is difficult to formulate strategic objectives if no knowledge exists on the market size, competitors' shares, or the growth prospects of the market. Most industrial companies specialise in a narrow market sector and it is within this niche that facts will be collected. Even if the sales manager feels his or her knowledge of the market is only rudimentary, it is worthwhile putting it down on paper. This will help to focus a picture in the mind and, perhaps of greater importance, it will show information gaps which can later be filled as more facts come to light.
Wherever possible the market structure should be assessed from a number of different angles. This will add precision and confidence to the figures and it will increase the understanding of how the market is constructed. When building up a picture of the size of the market, a sales manager may find it easiest to make an estimate of each competitor's turnover. A cross check on the market size could be to relate the product to another on which figures are available. For example the consumption of industrial screening material is directly related to the outputs of coal, sand and gravel which are all well documented.
The future prospects for the market may in the first instance be an educated guess based on discussions with others who have an overview of the market; and once again a cross check should be sought, possibly using the forecast trends of a known independent variable which historically has proved to move in sympathy with the product.
Build Up A Detailed Knowledge Of Buyers' Needs
It is in this area that sales managers usually need least persuasion as to the value of marketing data. To know the total sales potential of every account, the key decision makers and the factors motivating their choice of supplier is an obvious aid to a planned sales campaign. In many companies a great deal of this type of data is contained in salesmen's reports but the absence of a formal recording system means it enters the archives to be lost for ever. There are numerous inexpensive software packages for tracking accounts and account planning.
Sales engineers should, of course, seek facts as an aid to selling and this knowledge, through regular calling at an account, ought to be kept up to date. It is nevertheless worthwhile considering a one-off exercise to compile data on all buyers so that thereafter it is only a question of updating the records.
Know The Relative Strengths And Weaknesses Of The Competition
All too often sales managers underestimate the competition in terms both of their products and their services. It can therefore be a surprise to see an independent survey which shows the position of one's own company measured against the competition's on dimensions such as reliable delivery, prices, product quality, product reliability or after sales service.
Knowing one's own weaknesses can, however, be extremely useful. After all, if it is possible to achieve a current level of performance with certain weaknesses, consider the improvement in sales which could be made if they were corrected.