Sales Management

Meaning

The word sales management is a combination of two words- sales and management. Sales is the
art of planning in the mind of another a motive which will induce favourable action. The
committee of American Marketing Association has defined it as- “Selling is the personal or
impersonal process of assisting and or persuading a prospective customer to buy a commodity
or a service or to act favourably upon an idea that has commercial significance to the seller.”

On the other hand controlling is any common activity to achieve a per determined goal. Hence,
“sales management is the planning, direction and control of selling of business unit including
recruiting, selecting, training, equipping, assigning, routing, supervising, paying and motivating
as these tasks apply to the personnel of sales force”.

Sales management originally referred exclusively to the direction of the sales force. Later the
term took on broader significance in addition to the management of personal selling.

Sales management meant all marketing activities, including advertising, sales promotion,
marketing research, physical distribution, pricing and product merchandising.

Definitions

The American Marketing Association (AMA) defines sales management as the planning,
direction, and control of personal selling including recruiting, selecting, equipping, assigning,
routing, supervising, paying, and motivating as these tasks apply to personal sales force.

According to American Marketing Association, sales management is “the planning, direction

and control of professional selling including recruiting, selecting, equipping, assigning, routing,
supervising, paying and motivating to the personal sales force.” It is also often referred to as
management of the personal selling part of a company’s marketing function.

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There are four major branches (all interrelated) in successful sales management:

(1) Top Level Policy Planning, which establishes a framework of policy within which the sales
objectives of a company or institution may be achieved, depending on an individual company’s
particular situation,

(2) Line and Staff Operational Planning, through which procedures are established in advance,
against which the quality and quantity of work may be controlled,

(3) Organization, the setting up of a structure of responsibilities and normal interrelations—

charting the organization, assigning responsibility, delegating authority, tracing accountability,
and clarifying the character of collaboration, and

(4) Administration, by which management meets planned objectives through guidance and
evaluation of activity, including Sales Training, Motivation, Coordination, and Execution.

Objectives

There are three basic objectives of sales management viz. increasing sales volume, contributing
to company profits and long term growth of an organization. Sales management has over the
years assumed broader significance as in addition to the management of personal selling, sales
management includes marketing activities like advertising, sales promotion, marketing research,
physical distribution, pricing and product merchandising.

The American Marketing Association’s definition makes sales management synonymous with
the management of the sales force but then the fact is that modern sales managers have assumed
broader responsibilities.

Sales managers are not just in charge of personal selling activity but also managing large and
often diverse set of sales people. They are responsible for organizing the sales effort both within
and outside companies. Sales managers have been found to build formal and informal
organizational structures within the company and outside the company, they serve as a key
contact with customers and other external publics.

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Sales management as such is a key function in many enterprises. Problems related to sales
management exists across a cross section of companies including manufacturing concerns, retail
institutions and service enterprises. Hence recruiting able and effective people in the job of
managing sales is extremely crucial for the profitability of a company.

There are three general objectives of sales management viz- sales volume, contribution to
profits and continuing growth. It is often observed that sales executives do not carry the full
burden in the effort to reach the above said objectives but then they do make major
contributions.

Objectives often get translated into more specific goals by breaking down and restating as
definite goals. Planning precedes goal setting. In planning, sales executives provide estimates on
market and sales potentials the capabilities of the sales force and middlemen.

Sales management is instrumental in charting the course of future operations. The activity
provides top management with informed estimates and facts for making marketing decisions
and for setting sales and profit goals. Sales management and the financial results of a company
are related.

Sales, gross margin and expenses are influenced by the performance of sales management
which go on to impact the net profit of a company. The cost of sales are not directly affected by
how sales are being managed within a company but then it can be indirectly affected since sales
volume must be large enough to permit maintenance of targeted unit costs of production and
distribution.

Other Objectives of Sales Management

1. Revenue Generation – One of the main objectives of sales management is to generate

revenue for the organization. The sales department is solely responsible to bring in the money.

2. Increase Sales Volume – Through efficient sales management, the organization wishes to
increase the number of units sold. This will ensure that the production facilities do not remain
idle and are utilized to the fullest.

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3. Sustained Profits – Sales management has an objective of improving the profits of the
organization through effective planning, coordination and control. Sales management strives to
increase sales and reducing costs, this ensures good profits for the organization.

4. Organization Growth – With the sustained and continuous sales management techniques,
the organization tends to gain market share and results in growth of the organization.

5. Market Leadership – With increased sales volumes and profits, ‘sales management’ enables
an organization to become the market leader.

6. Converting Prospects to Customers – Getting prospects to become customers is an art and

a science, it requires good planning and sustained efforts. This is accomplished through sales
management.

7. Motivate the Sales Force – One of the core objectives of sales management is to motivate
the sales force. Selling is a very stressful task, achieving sales targets can become very
challenging. Therefore, the sales management task is to ensure that the sales force is
continuously motivated through proper incentives and reward systems.

8. Compliment Marketing Activities – Sales management’s task is to support the marketing

functions of the organization. Marketing and sales need to go hand in hand to achieve the
desired results.

Sales volume, contribution to profits and growth are the three major objectives the sales
function is expected to achieve. Though these are broad corporate functions to be achieved by
the top management, sales contribute a great deal in achieving them. Corporate objectives are
communicated to the marketing department who in turn passes on the responsibility to the sales
department.

Sales provides invaluable feedback to the higher management while achieving these objectives.

Strategies of sales Management

1. Set Sales Goals

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Setting proper sales goals is an art. You want them to be ambitious enough to stretch your sales
team and ensure they give you their best effort. But you also need them to be realistically
attainable so that your reps don’t continually miss quotas and get discouraged.

To find the perfect balance, set S.M.A.R.T. goals, an acronym that stands for Specific,
Measurable, Attainable, Relevant, and Timely.

Specific: The more specific your goals are the better. This will give you and your team a
tangible target to shoot for.

Measurable: Make sure the goals you set are easily trackable. That way you can gauge
progress along the way.

Attainable: Like we mentioned, goals that are too ambitious will discourage your employees,
which is definitely not what you want when managing a sales team.

Relevant: Don’t simply choose goals at random. Aim for targets that are relevant to your
company’s overall objectives.

Timely: Lastly, goals without deadlines rarely get achieved. Make sure everything you aim for
has a desired due date.

Set S.M.A.R.T goals for your sales team and you’ll have more success managing salespeople.

2. Clarify Your Sales Model

There are two main sales models to choose from: the island and the assembly line. Let’s look at
each one in greater detail:

1. The Island: This is the traditional approach to sales where every salesperson on the team is
responsible for each aspect of the sales process. They generate their own leads, make their own
sales calls, close their own deals, etc. It’s an easy model to implement and manage because
there aren’t a lot of moving parts to worry about.

2. The Assembly Line: The assembly line method splits sales duties between four different
groups. There’s the lead gen team, sales development reps, account executives, and customer
success associates. Each group deals with leads and customers at different stages of the buyer’s

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journey.
Both models described above can be effective. The one you choose for your organization
largely depends on what phase your business is in. For example, the island method generally
works better for startups, but the assembly line methodology is generally ideal for established
brands.

3. Assign Clear Roles And Responsibilities

Everyone on your team should know exactly what their role is. If they don’t, you can’t possibly
expect them to consistently achieve objectives. The trick is doling out responsibilities that
correlate with personal skill sets. This is much easier if your company is using the assembly line
sales model, described above.

For example, you might manage an employee who is dynamite when it comes to generating
leads, but crumbles like a cookie any time he has to actually talk with a potential customer. This
person should be asked to join the leads gen team and allowed to focus on what he does best.

Do your best to assign tasks and responsibilities to those who have the best chance of
completing them successfully.

4. Create A Scalable Sales Process

One of the keys to managing a sales team effectively is creating systems and processes that
can scale. By implementing a systematic approach, you’ll enable your sales team to work more
efficiently and increase margins.

Your sales process should be customer-centric, clearly defined, repeatable, predictable, goal-

oriented, and measurable.

Develop a sales system that every one of your sales reps can follow. That way, when new reps
join your company and are onboarded , they can immediately begin selling at a high level.

5. Configure An Onboarding Plan

Since we just mentioned it, let’s talk about onboarding.

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Onboarding is the process of integrating a new employee into a company. It includes all of the
legal paperwork that must be signed, any training a new team member needs to go through,
introductions to other employees within the organization, and more.

To improve your sales team management skills, configure a consistent onboarding plan for all
new sales. Make sure it trains them properly and teaches them the scalable sales process you’ve
implemented.

Lastly, look for ways to improve your onboarding the process. The easier it is for new reps to
become comfortable selling your company’s products, the more success your team will have.

6. Set Up A Sales CRM

Unfortunately, most salespeople only spend 35% of their time selling. Which means your sales
team is probably spending two thirds of its time on tasks that don’t directly relate to selling
products and boosting revenue.

A good sales CRM can help your team win back a significant portion of their day — especially
if you invest in one with automation capabilities. Sometimes sales team management comes
down to simply providing your reps with the tools they need to succeed.

7. Identify Activity Metrics And KPIs

So many things in business are out of our control. For example, we don’t decide what the next
big trend is or when natural disasters happen. If we did, trends would hardly ever change and
hurricanes wouldn’t exist.

Sales activity metrics measure things that we can control. In most circumstances, we decide
how many cold calls to make a day, the number of times we’re willing to follow up with
prospects, etc. When managing sales reps, it’s important to take notice of these figures.

Track sales activity metrics like the number of leads created, number of calls made, and
meetings scheduled for each of your reps, as well as standard KPIs.

8. Create Transparency

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Marketing teams often talk about the need to be transparent with customers. As a sales team
manager, you need to be transparent too — with your sales team.

Craft a selling environment that’s focused on the key sales metrics you’ve identified for your
company and allows the natural competitiveness of your team to work for the common good of
your company. In other words, make each team member’s sales numbers visible and allow them
to compete with each other for top seller honors.

9. Confirm Commission Structures

There are many different ways to compensate your sales team. Should you pay them a base
salary + commissions or commissions only? Should they make higher commissions for selling
specific numbers of products? And what about residual and variable-rate commissions?

There is no one size fits all approach to sales team compensation. The key is finding the
right commission structure for your specific organization. Study the different structures out
there. Then choose one that fits your company’s needs.

10. Incentivize Your Team

A commission is a percentage of a sale, awarded to the salesperson who closed the deal. For
example, a $25 commission would be given to a seller every time he or she sells a product
worth $500 at a 5% commission.

An incentive, on the other hand, is a reward of some kind, granted to a salesperson who
achieves some predetermined level of excellence. Incentives are used to motivate sellers.

When managing a sales team, part of your job is to motivate them to work as hard as they can.
That’s why incentives are so powerful. Choose an incentive plan for your team that will get
them excited and want to put in extra effort.

11. Use The Volume-Versus-Value Ratio

The volume-versus-value ratio will help your sales team become more efficient. To implement
it, task your top sellers with the lowest volume/most important jobs, such as building

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relationships and securing referrals. Then assign your lower performing sales reps with high
volume/low pressure activities like generating leads.

This philosophy can also be applied to prospecting. Rather than trying to build giant lists of so-
so leads, focus on finding ultra-targeted prospects who have a high probability of buying.

12. Assign Territories Strategically

Territory assignment is an important sales team management skill. You need to make sure your
sales rep’s territories don’t overlap, that each rep has enough accounts to work, and that your
top sellers are given the highest value areas.

13. Empower Reps With Data

Data is the lifeblood of modern business. If your sales team doesn’t have the ability to source
up-to-date information for each and every lead they generate, they’ll waste a lot of time.

Succeed at sales team management by giving your reps the ability to quickly sort leads via
income, credit capacity, age of home, and more.

14. Enable Cross-Training

One of the best ways to train new and/or struggling sales reps is to pair them with a top seller in
your company. That way under performers can see, first hand, how to succeed at their jobs.

You do have to be careful with this sales team management strategy as not every sales master is
interested in mentoring others. We don’t suggest forcing your sales reps into mentorship roles.
But if you find a few willing participants, take advantage of the opportunity.

15. Set Up One-On-Ones

One-on-one meetings are the secret weapon for all management professionals. They will allow
you to build solid relationships with your employees, get a general feel for team morale, provide
constructive feedback, and learn new insights you can use to improve your sales processes.

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Be sure to prioritize these get-togethers. It can be easy to shrug them off because of a busy
schedule, but this is a mistake. Meet regularly with your team and watch your success soar.

16. Give Reps Detailed Feedback

As we just mentioned, one-on-one meetings are the perfect time to deliver feedback to your
sales reps. Just make sure you’re doing it the right way.

Feedback should be constructive and detailed. Tell your employees what they’re doing
right and where they can improve. As long as you’re delivering criticism in a respectful way,
your team will appreciate your candor. In fact, 65% of employees wish they
received more feedback.

17. Invest In Ongoing Training

If the only training your reps receive is during the onboarding process, your sales team
management approach needs work. Training should be an ongoing process.

Fortunately, there are plenty of ways to train your employees. You could, for example, send
them to sales conferences, invest in sales training courses, and invite notable sales experts to
come to your office and speak to your team.

You could also take a more DIY approach and ask your top sellers to share key strategies
they’ve been using during lunch breaks.

18. Establish Communication Channels

Communication is key to sales team management success. If you can’t contact your reps, or
worse, they can’t contact you, your company will fail to close as many deals as it could. Make
sure your team has multiple channels to get in touch with you, from any device — even if they
happen to be attending sales meetings in the field.

19. Prioritize Team Retention

Finally, if you want to retain your staff (trust us, you do!) then you need to make retention a
priority. Fortunately, implementing the strategies listed above will do a lot of the heavy lifting
for you in this regard.

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Employees want to work at successful companies where they feel appreciated and engaged in
their duties. By giving your team every chance to succeed, providing them with training
opportunities, and giving them regular feedback, you’ll create an environment they enjoy being
a part of.

But if you’re looking for bonus ways to retain sales reps, consider offering retention rewards for
employees who stay for multiple years or giving your top sellers more autonomy.

Functions

 Conducting market research to identify selling possibilities and evaluate customer needs
 Actively seeking out new sales opportunities through cold calling, networking and social
media
 Setting up meetings with potential clients and listening to their wishes and concerns
 Prepare and deliver appropriate presentations on products and services
 Create frequent reviews and reports with sales and financial data
 Ensure the availability of stock for sales and demonstrations
 Participate on behalf of the company in exhibitions or conferences
 Negotiate/close deals and handle complaints or objections
 Collaborate with team members to achieve better results
 Gather feedback from customers or prospects and share with internal teams
 listen to customer requirements and present appropriately to make a sale
 maintain and develop relationships with existing customers in person and via telephone
calls and emails
 cold call to arrange meetings with potential customers to prospect for new business
 respond to incoming email and phone enquiries
 act as a contact between a company and its existing and potential markets
 negotiate the terms of an agreement and close sales
 challenge any objections with a view to getting the customer to buy
 advise on forthcoming product developments and discuss special promotions

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  create detailed proposal documents, often as part of a formal bidding process which is
largely dictated by the prospective customer
 check the quantities of goods on display and in stock
 make accurate, rapid cost calculations and providing customers with quotations.
 negotiate on price, costs, delivery and specifications with buyers and managers
 liaise with suppliers to check the progress of existing orders
 record sales and order information, sending copies to the sales office, or entering figures
into a computer system
 represent the company at trade exhibitions, events and demonstrations
 feed future buying trends back to employers
 review your own sales performance, aiming to meet or exceed targets
 attend team meetings and share best practice with colleagues.

Technical and Soft Skills Required for Sales Executives

The primary responsibilities of every sales executive include demonstrating new

products and services, offering guidance, and addressing customer queries. Sales
is a stressful job, so individuals in this field of work need to harness the stress
and use it to achieve their targets. All this can be done only if the candidate
possesses the right skills. Some of the most indispensable soft skills a sales
executive must have are listed below.

 Ability to build a rapport with customers

 Simple, clear and customer-centric communication
 Critical thinking skills
 Excellent listening skills and ability to empathise with customers needs
 Work with the intention of benefiting the customer  
 Excellent business communication skills
 Problem-solving abilities  
 Time management skills  
 Storytelling skills

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  Ability to work in a collaborative environment
 Conflict resolution skills

Apart from these skills, there are certain must-have technical skills a salesman
can acquire through work experience, workshops, training courses, etc.

 In-depth knowledge of the products and services they are selling

 Understanding of competitor products  
 Knowledge of the latest industry-specific technologies
 Ability to set short and long term goals to achieve targets
 Functional knowledge of standard business tools, techniques, and software
 Information gathering skills
 Research and planning skills  
 Ability to create sales presentations  
 Knowledge of business policies
 Computer literacy that enables data collection  
 Working knowledge of CRM software that is used to collect and retrieve
details of customers and other prospects
 Ability to conduct market research
 Knowledge of Information management systems to make use of data
collected through software systems
 A skill assessment test can provide recruiters with an overview of the
candidate’s skills, abilities, and character traits. They can use this
information to make objective hiring decisions.

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