Sales Management Process and Basics explained
Sales Management: this article provides a practical explanation of Sales Management. Next to what it is (definition), this article also highlights the Sales Management Process, it’s relationship with Customer Relationship Management (CRM) and the the role of the Sales Manager. After reading, you will understand the basics of this marketing management discipline. Enjoy reading!
What is Sales Management?
The definition of sales management
Sales Management refers to the process of developing a marketing team, leading a marketing team, coordinating sales activities, and implementing sales techniques. The general goal of sales management is to help a business achieve its sales objectives or, ideally, exceed them. Sales management is part of an organisation’s total marketing mix.
This business discipline tries to effectively allocate people and other resources to achieve objectives, both in the long and short term.
Although there are countless activities in sales management, the core is limited to creating supply and demand predictions, planning a sales strategy, budgeting, training, recruitment and selection, setting quotas, and evaluating sales performance. Sales management is not specifically about managing just these activities, but rather the people who carry them out.
This is also the role of a sales manager. This person creates an environment and opportunities for salespeople to help them perform, and plays an important role in researching and resolving issues related to sales productivity.
Sales Management Process
Sales planning is a process of developing objectives and coming up with a plan to effectively achieve them. These sales management activities are what sales management is all about. The following elements are important to any sales plan:
1. Situation Analysis
Sales Planning involves first evaluating the current sales process for a particular product or service in a certain region or market. The current sales process needs to be carefully analysed, for instance with a situation analysis. One may use a SWOT-analysis or Business Process Mapping (BPM) for this.
2. Objectives
After the Situation Analysis has been carried out, you can start coming up with Sales objectives. The type of Sales objectives depend on the situation in question. For instance, one possibility is to focus on revenue, or you could look at the product margins by examining the procurement process.
Other objectives in sales planning might include: improving customer loyalty, reducing sales costs in relation to revenue, increase customer satisfaction, or generate more leads for potential customers. Make sure the objectives follow the SMART criteria.
3. Strategy
How the strategy will look depends entirely on the objective that was set by sales management. If they’ve decided to increase sales per sales person, they could decide to implement a bonus system that incentivises the sales force with monetary rewards for positive sales figures. If the goal is to increase customer satisfaction, this means improving customer service.
4. Sales & Operations Planning (S&OP)
Next the strategy has to be coordinated with all relevant parties. This is called the Sales and Operations Planning (S&OP). A good S&OP is vital in making the strategy successful.
It brings together supervisors from operational departments and determines whether and how the company’s resources can best be used and if it might be necessary to increase the budget. In short, S&OP means balancing the sales department’s objectives with the organisation’s available resources and capacity.
Sales and operations have different interests. For instance, the sales manager would like to see a wide range of products and services being offered to meet all customer desires and demands. Operations see a lot of hurdles when they hear plans like this. Their resources are limited, so compromises have to be made.
5. Sales Budget
Generating a Sales Budget based on the chosen strategy is an important step in structuring a sales plan. It takes projections of past and present sales figures into consideration in relation to the companies expenses. The more past figures are available, the more accurate the budget will be.
6. Recruiting, Training, and Managing Sales people
Salespeople have an important role in Sales Management. Regardless of how large or small the sales team is, it’s important that it’s managed properly. It all starts with recruitment and selection of the right candidates.
Before embarking on the search for these candidates, there has to be a clear idea of what they should be able to do, which skills they need, and whether additional training is required. These competencies can be determined using a Competency Framework with the help of the HR department.
New salespeople will first have to be introduced to the company, the products or services, the people they’ll be working with, and the customers. It is recommended to develop an onboarding process for this.
An onboarding process provides basic information about the sector and organisation’s position within it. Salespeople have to learn about the organisation’s goals and how they can be achieved. Some candidates require a longer onboarding process than others. If they’re new to the industry, it will take more getting used to than someone who has been in the business for a while.
Clear individual goals have to be linked to the salespeople based on the sales strategy. Make sure that these goals are reasonable considering the experience they have and for the region they’ve been assigned. Goals that are too easy may result in reduced revenues, goals that are too hard may undermine motivation and make people pessimistic.
Salespeople make the difference when it comes to sales figures, so they require careful monitoring. One famous method for this is analysing conversion ratios. This refers to the number of visits, contacts, or other communication instances that are necessary to sell a product or service to a customer.
A conversion ratio that’s too low can have different causes. Also take the salesperson’s experience into consideration. If it’s not related to the salesperson’s competencies, it could have something to do with a fundamental issue with the product or service. The responsibilities or regions that have been assigned to the salesperson might simply be too large.
Another frequently used method is conducting opinion polls. After a customer has been contacted, he/she will be asked to provide an opinion on the salesperson.
Improving the Sales Management process of small companies
The process of improving the Sales Management process of small or medium enterprises resembles the process as described above, with some differences. Below you will find all tips and recommendations to improve your sales.
Improving the sales management process of a small company can be a challenging task, but it is essential for driving growth and success. Here are some recommendations and tips to help improve the sales management process:
Define sales goals and targets
Establishing clear sales goals and targets will help to focus the efforts of the sales team and provide a clear direction for their activities. This can be done by setting achievable targets that are aligned with the overall business objectives.
Provide sales training
Investing in sales training will help to equip the sales team with the necessary skills and knowledge to engage with customers and close deals. This can be done through regular training sessions, online courses, or mentoring programs.
Utilize technology
Implementing sales management software or a customer relationship management (CRM) system can help to automate sales processes and provide real-time insights into sales performance. This can help to identify areas for improvement and optimize sales strategies.
Provide support and resources
Providing sales representatives with the necessary resources and support, such as access to customer data and communication tools, can help to streamline their workflows and increase efficiency.
Monitor and evaluate sales performance
Regularly monitoring and evaluating sales performance can help to identify areas for improvement and make data-driven decisions. This can be done by setting up performance metrics and regularly reviewing them with the sales team.
By implementing these recommendations and tips, small companies can improve their sales management process and drive growth and success.
Sales Management and Customer Relationship Management (CRM)
In Sales Management, people often talk about Customer Relationship Management (CRM). CRM refers to the actions, strategies, and technologies that are used to manage customer relations and other data.
The goal of CRM is to improve the relationship with the customer and help with attracting and retaining customers for revenue growth.
Within sales management, CRM can be discussed from different perspectives. If you’re talking about the technology behind CRM, it usually refers to a software tool that sales teams use to record leads and interactions between the company and customers.
CRM as a strategy is about the corporate philosophy and how customer relations can best be managed. CRM as a process is about the steps that are required to retain and strengthen customer relations.
Sales Management, the role of the Sales Manager
The sales manager plays a key part within sales management. The sales manager is responsible for meeting sales targets and is the person who generates revenue for the business.
Because of this responsibility, it is the sales manager who has to know what is going on around the office, particularly among the sales force.
The sales manager doesn’t work alone, but has a team. Naturally, the sales manager makes sure that they set targets that are realistic and achievable. He then delegates these duties, depending on the strengths and interests of the salespeople. He knows who can carry out the task in the most effective way. It’s his task to get the most out of every employee.
Motivation is a big factor. The sales manager can employ different measures to improve motivation.
For example, he may offer incentives to employees to encourage them to give it their all. The atmosphere in the team needs to be good too. That’s why one of the roles of the sales managers is to support their team and be at their side in times of crisis as well as success.
Benefits of effective Sales Management
Effective sales management is essential for the success of any sales team. By implementing a structured approach to sales management, sales representatives are able to operate at peak performance and deliver results that benefit the entire organization.
One of the key benefits of effective sales management is increased revenue. By providing sales reps with the necessary training, tools, and support, they are able to engage with customers more effectively and close deals more efficiently. This leads to higher sales figures and greater profitability for the company.
Effective sales management also helps to improve customer satisfaction by providing a seamless and personalized buying experience. This creates a positive reputation for the company and builds long-term relationships with customers, leading to increased loyalty and repeat business.
Moreover, effective sales management helps to identify areas for improvement and optimize sales processes, resulting in increased efficiency and productivity. This ensures that sales representatives are using their time and resources effectively, leading to greater success and revenue growth.
Sales Management summary
Sales management refers to the process of leading and supervising a sales team towards achieving their targets and maximizing revenue. Effective sales management involves understanding the needs of the market and customers, developing strategies to meet those needs, and providing the necessary tools and support for sales representatives to successfully execute those strategies.
One key aspect of sales management is sales training, which helps sales representatives improve their skills and knowledge to effectively engage with customers and close deals.
Sales management software and sales management systems can be used to facilitate this process by providing real-time insights into sales performance, identifying areas for improvement, and tracking progress towards sales goals.
An effective sales management system should also provide sales representatives with the necessary resources and support to efficiently manage their workflows, including access to customer data and communication tools.
By using real-time data and analytics, sales managers can make informed decisions about how to allocate resources, optimize sales processes, and ultimately increase revenue.
In conclusion, sales management plays a crucial role in the success of any sales team. By providing sales representatives with effective sales training, utilizing sales management software and systems, and providing real-time support, sales managers can help their team close deals, meet targets, and drive revenue growth.
Now it’s your turn
What do you think? Are you familiar with this explanation of sales management? How do you handle sales in your organisation? What do you believe are essential traits for a sales manager? What aspects always need to be included in the sales strategy in your opinion?
Share your experience and knowledge in the comments box below.
More information
- Cron, W. L., DeCarlo, T. E., & Dalrymple, D. J. (2010). Sales management: Concepts and cases. Wiley.
- Jones, E., Brown, S. P., Zoltners, A. A., & Weitz, B. A. (2005). The changing environment of selling and sales management. Journal of Personal Selling & Sales Management, 25(2), 105-111.
- Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of marketing, 69(4), 167-176.
- Ziglar, Z. (2007). Ziglar on selling: The ultimate handbook for the complete sales professional. Harper Collins Leadership.
How to cite this article:
Janse, B. (2019). Sales Management. Retrieved [insert date] from Toolshero: https://www.toolshero.com/marketing/sales-management/
Original publication date: 03/06/2019 | Last update: 02/12/2024
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Ben Janse
Ben Janse is a young professional working at ToolsHero as Content Manager. He is also an International Business student at Rotterdam Business School where he focusses on analyzing and developing management models. Thanks to his theoretical and practical knowledge, he knows how to distinguish main- and side issues and to make the essence of each article clearly visible.
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One response to “Sales Management Process and Basics explained”
Hello, Firstly, thanks for sharing this article. I have read this article. It has clear explanations of sales. This article has Nonprofits business use Sales Management there are explain. It is really helpful for a small business. Thanks, Shivam