Selling: The basics

Guide 17 min read

1. Determining your sales approach

Your approach to selling will vary depending on many factors within your business.

Insight gathering activities such as competitor research and customer analysis - along with your advertising, pricing, marketing, and distribution strategies - will all shape your sales process.

Likewise, the insights gathered during sales are particularly valuable and should be used to refine activity, including ongoing product and service development, pricing strategy, promotion approach, and sales channels.

No two businesses will have identical sales processes, as there is wide variation across different products and markets. Where your customers are located, and whether they are individual people (referred to as selling from Business to Consumer - B2C) or organisations (referred to as selling from Business to Business - B2B) will have a big influence.

Other elements include whether your product or service is:

standard or bespoke (i.e. tailored to a specific customer’s needs)
meeting an essential need or a luxury purchase
high or low margin
a one off purchase or a long term contract.

This introduction covers some of the main considerations that apply to any type of selling.

2. Setting sales objectives

Your sales objectives should link directly to your overall business and marketing goals and objectives, and should be more specific than simply ‘increasing sales’.

They will vary depending whether you are a new or well established business.

For example, sales objectives for a new business may include building a list of potential customers, securing meetings or enquiries, and achieving your first sales of a test product or service before gathering feedback and refining it.

For established businesses, sales objectives will be dependent on existing performance, and will likely comprise several different elements, including:

market position: e.g. establish or increase market share in a specific niche or location
financial: e.g. increase revenue, increase profit margin or increase cash flow
new customers: e.g. increase number of inbound enquiries, increase number of follow up conversations, reduce cost of acquiring new customers or improve conversion rate from new leads
existing customers: e.g. increase cross sales and upsales, increase the average customer value, increase repeat orders, increase retention rates to reduce churn repeat orders or identify and reduce relationships with unprofitable customers
sales process and operations: e.g. set up a system to monitor the sales pipeline, implementing a new performance reporting approach or reduce length of the sales cycle from lead to conversion.

Any objectives should be S.M.A.R.T (specific, measurable, actionable, relevant and time-driven). For example an objective to increase the number of leads would be ‘SMART’ if it said something like, “increase the number of leads by 10% from prospective customers in Scotland by the end of the year”, provided of course, that it was realistic. To be confident that the numbers are realistic, insights from sales forecasts would be applied.

For the objectives to be achievable, specific actions then need to be outlined in a sales plan to support the target, with sufficient budget and resources made available. Activities would be linked with objectives and strategies in other areas of your business, e.g. in HR, marketing and operations, such as:

bringing in more staff in different sales territories
reducing the amount of time spent by sales staff on non-sales activities
reviewing your branding to appeal to new markets
running advertising and marketing campaigns to drive awareness
purchasing customer relationship management software.

3. Sales forecasting

Information from your existing sales forecasts will have helped to shape the proposed sales objectives to ensure they are realistic. Once your sales objectives are set, ongoing sales forecasting will predict likely performance against your sales objectives and budgets. It should also provide early warning of any slip in performance that could affect cash flow.

Your forecasts should include predictions such as the number of new customers, level of customer drop-off and predicted value of sales.

For a complex, high-value B2B product, numbers of sales may be in the single figures compared with much higher volumes for lower value, simple B2C products.

New businesses

For new businesses, your sales forecasts must be based on market research and good judgement, as potential investors or lenders will scrutinise your rationale.

Top-down forecasting is often useful. Try to understand the size of the whole market in the region in which you’re selling, research predicted trends for growth or otherwise, and then consider a realistic target for your business to achieve.

You also need to consider bottom-up elements. For example, if you only have enough money to employ a part-time sales person at the moment, then that will limit the number of sales you can make in the short-term.

Existing businesses

Established businesses will feed insight from last year’s performance into the forecasts, such as:

how many new customers were acquired
the level of customer churn - in other words, what percentage of customers were lost and how this benchmarks against other businesses in your sector
the average sales value for each customer
seasonal factors which influenced customer acquisition and churn.

The impact of plans to launch new products, increase your sales team, work with intermediaries or open new premises, should also be factored in.

You should consider external factors that could affect sales to make some sensible assumptions, such as:

economic climate
industry and market trends for growth or decline
new direct or indirect competitors
any new laws or regulations on the horizon in your market (e.g. requirements for registration in the holiday home rental market) or that could affect your operations (e.g. new health and safety requirements).

If you have other staff in your business, sound them out on your numbers and invite feedback. Different perspectives, experience and knowledge about the market and individual customers is invaluable. The aim is that forecasts are ambitious but achievable, so they are motivating.

See section 6 below for more information on customer relationship management (CRM) systems that can support your sales forecasting by using data from historic performance and current sales pipelines.

4. The customer buying journey and your sales cycle

The customer buying journey and decision process will vary according to who your customers are, what they need or want, and the complexity of the product you are offering.

Customer buying journey

There are many different ways of expressing this journey. The Chartered Institute of Marketing uses the five-stage model.

Awareness - the customer becomes aware of your offering through your marketing activities
Consideration - they realise they have a need for what you offer and weigh up the alternatives
Purchase - they decide to buy your offering
Retention - they make repeat purchases
Advocacy - they recommend your offering to others.

Sales cycle

The stages of the sales cycle complement these, shaping the activities of your sales and marketing staff who aim to encourage and support customers through this journey. For many B2B and complex products, these activities will often be led by individual sales staff. For simpler, high volume products, a lot of this activity will be driven by automated communications, managed by marketing staff.

Awareness

Identify potential customers and sales leads - otherwise known as “prospecting” or “lead generation” by building your own database or buying a database.
Make contact with those prospects by arranging a meeting or marketing to them if you have permission.

Consideration

Research or qualify leads to encourage the customer to actively consider the offering, by speaking to them and understanding their requirements, or by using insights on how they are navigating through your website and responding to emails.
Present the offering, respond to any objections - perhaps by demonstrating the product in person or online, providing FAQs, or sharing testimonials.

Purchase

Negotiate if required, or use time-limited price incentives to close the sale, at which point there is now a sales contract in place.

Retention

Ensure the customer is satisfied via a follow up phone call or survey, and identify opportunities for upselling, cross selling or additional purchases of the same item.

Loyalty

Build a deeper personal relationship and understanding of their needs and trust to the level they feel confident recommending your offering, by staying in touch personally, or using engaging marketing and content to keep your offering front of mind and incentivising referrals.

Your unique process must be based on understanding your customers, including being able to listen to identify their requirements and building relationships and trust.

All staff should have deep knowledge of the product or service, including features and benefits, and how it compares with competitors.

Regulations

You must comply with all applicable laws and regulations. To secure the reputation of your business, throughout the process - especially when persuading and negotiating with customers - you must act ethically, and prevent ambitious targets leading to bullying or sharp practices. It is important to understand GDPR and your data protection obligations, and any other regulations that impact your business sales activities.

Regulators like the ICO fine businesses for spamming people with unsolicited marketing texts and phone calls from databases where people have not provided their consent, and for infringing data protection laws.

Adapting your approach

Once you understand the key stages of your customer journey you can align your sales cycle to this and use it to manage your sales pipeline, refining it through ongoing feedback.

You will adapt your approach for new customers compared with existing customers making repeat purchases, and for the different sales channels that you use, especially if you are selling at a distance, face-to-face, or through intermediaries.

5. B2B and B2C sales cycles

Business to consumer (B2C)

B2C sales cycles vary in complexity. Consumer purchases can be instant impulse purchases with a sales cycle of a few seconds - such as confectionery at a checkout - where pre-existing brand awareness and eye-catching packaging will be the most important elements of your sales process.

They can also be more complex purchases with a longer cycle. For sales that take more time to consider - e.g. luxury clothing or household appliances - you might focus on how they are presented physically or online to support that consideration. This might involve enabling comparison, finding different sizes or models, linking with complementary products, and providing detailed information e.g. fabric composition or maintenance guarantees.

More complex purchases such as cars, kitchens and bathrooms, or holidays, may involve different stakeholders in the family in the decision making, which may take weeks or months. They may have committed to a purchase early on, but negotiating the details will be the key stage of the process to secure a sales conversion. Appealing to the needs of each family member will be important, e.g. child friendly features.

Business to business (B2B)

B2B sales also vary in complexity. If you are selling a straightforward item to a small business - such as a photocopier - the customer buying journey may be quite straightforward, taking days or weeks.

In larger organisations or public sector bodies, even fairly simple purchases will probably be covered by some sort of procurement framework, with purchases only made from approved suppliers and you may have to go through a process to become an approved supplier, before you are able to make any sales.

For more complex items, decisions will involve the input from several stakeholders, maybe from different departments. For example, if you are selling an IT system in a healthcare setting, it’s not just the IT department who will be involved. The medical professionals will want to ensure it’s usable, admin staff will need to be confident it fits their requirements, and legal and information governance will want to be sure it’s legally compliant and secure. All this may be overseen by a dedicated procurement department too.

To achieve the support of all departments, you will have to adapt your sales information to suit the needs of the different stakeholders - for example, a medic will not want to trawl through a lot of technical detail. With such a complex purchase, the customer buying journey is likely to take months or even years.

If you are selling to the public sector, you will need to understand the procurement process for different bodies, from Pre-Qualification Questionnaires (PQQ) to Invitations to Tender (ITT), and be registered with the relevant portals that send notifications for public sector contracts.

In Scotland, that is the ‘public contracts Scotland’ portal.

6. Customer relationship management systems

Once you are established and marketing to high volumes of individuals, or managing a number of sales, you may wish to invest in a Customer Relationship Management (CRM) system to track your sales pipeline and keep all customer information in a single place.

These systems are used by B2C businesses marketing to high volumes of customers as well as B2B businesses making fewer, more complex sales.

A good system could help you manage the whole sales process:

capturing any leads generated from your marketing and sales activity
segmenting them for personalised communications and updates (by email or face-to-face)
tracking all touchpoints the prospect has with your business to implement marketing automation, where prospects automatically receive relevant communications depending on their actions
supporting sales conversion by communicating the right messages to the right prospects at the right time, whether that is automated or providing reminders to the sales team
identifying opportunities to cross-sell other products or services
building a longer term relationship to encourage customer retention, repeat purchase and word-of-mouth recommendations to others
managing customer service enquiries and follow ups.

A CRM can also help with providing management information, such as:

activity reports covering status of tasks for staff, and numbers of customers at each stage of the pipeline
sales forecasting, as mentioned earlier
reviewing where customers drop off if they don’t convert to a sale
gaining new insights into patterns of how customers behave and what they want, so you can refine your sales process.

The system should also make it easier to comply with your obligations around data protection, e.g. by managing unsubscribes or opt-outs, ensuring you only market to people with their consent, or provide relevant information to those who have made a purchase from you to honour the sales contract.

When choosing a CRM, you will need to research and shortlist options, request demonstrations and speak to other businesses that use the system. Make sure you understand how it can integrate with your other business activities, e.g. by helping you create custom forms for your website.

As you do this research, it’s a great way to observe how these software providers manage the sales process with you, and you will gain understanding of a slick sales process from a customer perspective!

Examples of well known CRM systems with options for small businesses include:

7. Sales promotion and merchandising

Sales promotion activity is usually focused on speeding up the sales cycle by attracting interest and encouraging customers through the next stage of the decision process towards purchase.

To be effective, you must first consider your ‘merchandising’ which is how you present your products and services in an attractive way, for example having a user-friendly professional website, or a comfortable, welcoming, clean space to shop or do business in.

Sales promotion activities include:

trial incentives to persuade customers to consider the product or service e.g. with product demonstrations, free samples, or free trials
gift incentives e.g. free gifts, vouchers, competitions and prize draws
price incentives e.g. time-limited discounts, money-off coupons
affordability incentives e.g. finance deals for buy now pay later
cause-related incentives e.g. fair-trade or those where a percentage of sale is donated to a charity
retention and repeat purchase incentives e.g. loyalty points
cross sales incentives e.g. bundling products together like meal deals
face-to-face presence at trade shops or pop-up shops
point-of-sale materials and product demonstrations.

While these activities can be very successful in driving sales, they need to be carefully managed with your overall pricing strategy. Strategies include:

premium pricing: if you’re using a high price to support an impression of quality, luxury and exclusivity, you will not want to undermine that with heavy discounts
loss leader pricing: if you’re already using lower and unprofitable pricing to quickly build interest then you will need to avoid reducing margins further so sales don’t become unprofitable.

Watch out for tensions between sales and finance objectives. If there is a business objective focused only on increasing revenue, then it will be much easier for a commission-led sales team to achieve this by selling items at the lowest price possible, giving away freebies, or agreeing to terms and conditions that are more favourable to the customer than the business. This can ultimately lead to the business being unprofitable in an uncontrolled way.

Generally, sales people should aim to maximise profitable sales, not just number or value of sales.

8. Legal considerations and trading standards

There are many regulations covering the sale of goods and services.

Business Companion is a Government-backed website that provides impartial free information on trading standards laws. A drop down box at the top of the page enables you to select Scotland as your location to access guidance specific to the laws that apply in Scotland.

Business Companion helps you consider your business from the perspective of the law and to help identify what applies to you. They provide quick guides to the main areas where laws impact your sales processes:

what you sell - as there are general laws covering goods, digital content, and services
where you sell it - different laws apply depending whether you are selling from your own premises, at the customer’s premises or at a distance (covered further in sales channels your options)
how you sell - providing information for your customers in a legal way, e.g. pricing and labelling
key topics - covering specific areas such as age-restricted products and safety
key activities - these are laws covering some of the operations in your business to support sales such as providing carrier bags, weights and measures, copyright and data.

There are handy lists of considerations for selling services and for selling and supplying goods.

Here we highlight a couple of areas - product safety and sales contracts.

Product safety

Products must be safe for customers and be labelled in line with legal requirements. You are responsible for this if you manufacture, distribute, or sell any products.

While some types of products and industries have specific regulations, the General Product Safety Regulations 2005 (GPSR) mean that when used normally, all products must be safe.

Under the Consumer Protection Act 1987, manufacturers of a product that causes harm to people or property because it is unsafe, can be required to pay compensation.

Key things to be aware of include:

you must be able to prove that products comply with regulations by maintaining technical documentation, labelling correctly, and supplying instructions
if a product you have sold has been involved in any risks or incidents, you must comply with your legal duty to report it to Trading Standards, or the manufacturer or supplier if it is not your own product
sometimes products may need to be recalled
you may need to take out product liability insurance in addition to standard business and employer liability insurance.

The government provides detailed advice about product safety for businesses as does the Office for Product Safety and Standards (OPSS) which has power to investigate and enforce action against businesses.

Many businesses work towards compliance with official standards to help them meet their legal obligations.

Sales contracts

When you sell a product or service to a customer and they accept it, you form a contract with them. It can be a formal written document perhaps requiring months of negotiation in the case of a complex B2B transaction and may require specific legal input.

Or it can be simple and unwritten, for example in a B2C transaction, it may be a basic purchase in a shop. The Consumer Rights Act 2015 applies to B2C transitions and covers the requirement for goods to:

be of a satisfactory quality
fit for a particular specified purpose
match the description, sample or model
be correctly installed.

If there is a breach of these requirements, a customer can reject the goods in the short term, claim for a repair or replacement, price reduction, and possibly even compensation.

Consumers are protected from unfair contract terms and unfair trading.

There are also rules protecting business customers.

Obtain legal advice if you are unsure

It is your responsibility to follow all legal requirements and regulations. You should seek legal advice to understand any regulations that may apply to your particular products or services.

9. Institute of Sales Professionals

The Institute of Sale Professionals is the Government-backed body that represents the sales profession in the UK and abroad, which provides qualifications and accreditation for sales professionals. They offer various insights for sales professionals, and being aware of their offering can help you with recruiting, managing, and training your own sales staff.

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