This article provides a practical explanation of Sales Management. After reading, you will understand the basics of this powerful marketing discipline.
What is 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 and a Sales Planning
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:
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.
After the Situation Analysis has been carried out, you can start coming up with objectives. The type of 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.
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.
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.
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.
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 to 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.
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.
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.
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- 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.
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